The average household is £5 a week worse off that last year, according to research by the Centre for Economics and Business (CEBR). Although earnings increased, the cost of living rose by 4.9 per cent meaning disposable income has fallen to £138 a week. And as Alistair Darling’s first budget is due next week, it is believed that ministers are growing concerned about rising fuel and mortgage costs. A further report is to be published alongside the budget, calling for the introduction of more long-term fixed-rate mortgages, as well as vouchers to help the poorest households with their gas and electricity bills.
And it can’t come too soon for some. Homebuyers have been hit with a new blow, after two banks raised their mortgage rates, increasing the cost of a £150,000 mortgage by £270 a year. Abbey has raised its tracker mortgage, while Halifax has raised its fixed rate mortgage, by between 0.1 and 0.15 per cent. A spokesperson for the research said that banks are paying ‘absolutely no attention to what the Bank of England does as far as interest rates are concerned’.
Around one in five mortgage holders (2.3 million people) are worried about meeting their repayments in the next 12 months, according to the Financial Services Authority (FSA). However when mortgage holders were asked how they would meet the increasing costs, a quarter said they had made no plans to address the problem. The FSA is so concerned about the situation that it is launching a £2 million advertising campaign and advice guide for homebuyers, as part of the £12 million pathfinder project the government launched yesterday. The initiative is especially focused on people whose fixed rate or discounted deals are coming to an end this year.
And it’s not just the customer feeling the pinch – British banks have lost more than £12 billion on 2014 as a result of the US property market collapse. Yesterday, HSBC announced the biggest loses of any British financial institution , after being left with £8.7 billion of debt in the US sub-prime market. It is feared that they will rein in their lending even more, worsening the credit crunch and holding back economic growth.
And finally, do you know who said: ‘You must defend those who are helpless and have no hope. Be fair and give justice to the poor and homeless’? If you answered Bob Geldof, you and a quarter of Britons are wrong, and confusing your Sir Bobs with the bible. According to the Bible Society, there are more than 2,000 verses in the ‘good book’ dealing with poverty and injustice, which will be highlighted in a new ‘Poverty and Justice’ Bible, along with practical suggestions on what individuals can do to alleviate such problems.