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Welcome to the latest edition of our e-newsletter showing the progress of the British economy and ways of saving money.
In this month’s edition we will be covering:
This month’s Bank of England’s Monetary Policy Committee Bank Base Rate decisions.
The latest house price index
5 ways of saving money
Where to travel in the UK in 2010
Special offers from British companies
This month’s Bank of England’s Monetary Policy Committee Bank Base Rate decisions.
Bank of England Maintains Bank Rate at 0.5% and continues with £175 Billion Asset Purchase Programme 8 October 2009
The Bank of England’s Monetary Policy Committee this month voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totaling £175 billion financed by the issuance of central bank reserves.
The Committee expects the announced programme to take another month to complete. The scale of the programme will be kept under review.
The minutes of the meeting will be published at 9.30am on Wednesday 21 October.
The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A £75 billion programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The programme was increased to a total of £125 billion on 7 May 2009 and to a total of £175 billion on 6 August 2009.
Information on the Asset Purchase Facility can be found on the Bank of England website at http://www.bankofengland.co.UK/monetarypolicy/assetpurchases.htm. Purchases of £162 billion have been made under this facility since its use for monetary policy purposes was first announced after the Committee’s March meeting.
The latest house price index (Information from Nationwide http://www.nationwide.co.UK/hpi/ )
House prices now at the same level as September 2008
• House prices rose by 0.9% in September, the fifth consecutive monthly increase
• High supply of rental property raises questions about durability of price recovery
Monthly index * Q1 ’93 = 100 320.6 317.8 Monthly change* 0.9% 1.4% Annual change 0.0% -2.7% Average price £161,816 £160,224 * seasonally adjusted
The cost of borrowing is to remain at its record low of 0.5pc until at least 2011 and remain below 2pc until 2014, according to a study by the Centre for Economics and Business Research. Good news for people with variable mortgages and those with high fixed rates who will have lower rates as soon as their fixed terms finish.
The recent upward momentum in house prices has continued into September, with the price of a typical House increasing by 0.9% on a seasonally adjusted basis.
However, given that the housing market still faces considerable headwinds in the form of high unemployment, restrictive credit conditions and an impending withdrawal of the stamp
Duty holiday, it would be surprising to see house prices continuing to increase at the very strong rate seen in recent months.
Rents are still subdued even as house prices rise. The downturn in housing turnover over the last two years has prompted many home movers to let their old properties out rather than sell. The surge in so-called -accidental landlords- has limited the supply of property in the sales market and increased the stock of homes available to let.
The available evidence suggests that rents are currently lower than where they started the year, thus putting downward pressure on rental yields. Although the drop in yields has been offset by large declines in interest rates over the last year, one cannot expect rents and house prices to move in opposite directions indefinitely.
Nonetheless, the high incidence of -accidental landlords- is a fairly unique set of circumstances that complicates the future outlook for house prices.
5 ways of saving money
At www.Buybritishnow.com we have been looking at ways you can save money. Here are some tips you could consider to make you better off.
1. Refinance your mortgage – In spite of the economic climate there are several ways you can re-mortgage and alter your mortgage repayments.
Where your mortgage has been reduced due to the interest rate cut, consider overpaying so reducing the period of the mortgage.
Switch or change your mortgage to an offset mortgage which reduces your monthly payment depending on the amount in your current account..
2. Use your maximum ISA allowance – Individual Savings Accounts or ISAs were launched by the Government in 1999 and allow you to save and invest tax free.
With ISAs, you can start with small amounts and save up to £7,200 each tax year putting money in and taking it out whenever you like.
NEW ISA LIMIT FOR OVER 50′s – From October 6 2009, the ISA limit for over 50′s was increased to £10,200, £5,100 of which can be saved into a cash ISA.
3. Switch your insurances – Save by switching your House Insurance, Car Insurance, Travel Insurance and check out your Life Insurances.
If you use a financial advisor, use an IFA. Why use an IFA? Independent financial advisors are not tied to any one company so can offer very competitive rates on a wide range of packages. Your bank or building society may be very competitive on one product but not necessarily another. By using an IFA you will be getting “best of breed” in each distinct area be it in pensions, savings or mortgages.
4. Check your Energy Bills – Energy bills are due to cotinue to rise in the next few years. Make sure you keep on a low tarriff by checking with a comparison site or consider using someone like Utility Warehouse who maintains a low average price. Click below to check them out.
https://www.utilitywarehouse.co.uk/home/index.taf?exref=B61585
5. Check your Savings and Pensions – Regular savings are easier to maintain than lump sums. Keep an eye on savings rates and switch if necessary. Also, obtain a Pensions Forecast online by Clicking on http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensionforecast/DG_10014008
Where to travel in the UK in 2010
At Buybritishnow we have selected various ways of saving money and have articles on different ways and places to go in the UK. Check out this link for our regularly updated pages.http://www.buybritishnow.com/?cat=4
Special offers from British companies M&S are offering up to 50% discount off on-line purchases. Check this out on:
http://www.awin1.com/cread.php?awinmid=1402&awinaffid=95485&clickref=&p=http://www.marksandspencer.com/Up-to-33-off-Wine/b/246729031
Further British based companies that we have associations with can be found on http://www.buybritishnow.com/?page_id=52