UK Job Market and Inflation Causing Problems in Consumer Households

New research shows that things are not looking too great in the United Kingdom right now in terms of job opportunity for those who are looking and stability for those who are already employed. Research has come from the Chartered Institute of Personnel and Development, known as CIPD for short, that shows an economic recovery from the private sector alone is going to be tough. The issue stems from the fact that major losses in jobs in the public sector has put too much pressure on the private sector. The Government is being questioned by experts who decry this move and the effects it appears to be having.

Manufacturing confidence is sinking rapidly and this is hurting the labour market, as well as showing up in terms of an economic divide between the North and South in terms of jobs. In addition to this, more major employers are looking to reduce their workforce – something that is not good news for many in the UK right now. A survey showed that most employers are planing to fire, not hire, workers in the coming 3rd Quarter. Over the coming year, even more cuts are what companies are looking to make and this is information comes from a survey which had a sample size of over a thousand employers to work from.

As companies continue to tighten up their budgets, consumers feel the pinch on their household budgets. Debts rising at the national level mean more public sector cuts and then, in addition, is the slowed growth of the UK economy in general paired up with rising inflation. None of this bodes well for those that are trying to keep themselves afloat at this time. This is leading many to seek out debt solutions so that they are not caught in a financial landslide should things get worse with the economy in the future, as predicted now.

Those looking to find the right solution for their own personal debts should consider the links on this site. Often, a solution is easier to find than one might have imagined. Today there are a variety of options. Explore the opportunities and you may well find that getting out of debt and keeping your life straight at the same time is easier than you thought.

Over 3 Million British Households Facing Financial Troubles

The media in the United Kingdom is abuzz with the news that a recent release of research points to tough times for nearly one tenth of the nation’s entire population. According to this research from a trusted group that keeps tabs on British households, pressure is mounting and nearly 3 million are vulnerable beyond the 3 million who are already in trouble. This includes over 1 million people who are finding it tough to make their mortgage payments.

Of the homes surveyed, more than 3 million are 3 or more months behind in their debt repayments or have a type of debt action being taken against them already. Nearly this same figure of people are currently battling to keep up with their household bills because costs have been rising in the past year. Those who earn around £13,000 tend to have a significant portion of debt that is typically unsecured and almost twenty percent higher than their yearly earnings. This is far higher than those who earn two or three times as much per year who have just over 90% of their income in the form of current unsecured debts. Unfortunately, those that are in the most vulnerable group with over 120% of their incomes in debts are also the same group that are receiving benefits.

The biggest factor, say many UK economists, is the fact that those who earn the least experienced a drop income of nearly 6% over the past 5 years. This might seem small, but in these lower earning brackets, the impact is immense and leaves no room at the end of the month for those that are struggling. Fuel costs are one of the biggest contributors to this problem with a nearly 15% rise in costs just for electric and gas bills shooting up by almost 20% in the next 5 years according to analyst outlooks. If this sharp of a rise does happen, these citizens would be hard pressed to free themselves from debt to move forward with their financial lives.

Those that own homes, too, are struggling this year and with interest rates socking them for higher payments, particularly at the annual level. This is restricting the market by having fewer households eligible to own a home at all. When unsecured debts enter the picture, many households, even those that earn well, have precious little left over each month.

Debt struggles in the UK are certainly nothing new. If you are struggling with debts yourself, we invite you to peruse the links on this site which has been created as a neutral source to services that can help. Getting out of debt is always possible, it is simply a matter of choosing the right solution for your situation.

Gas Prices Set to Rise in UK Making Life More Expensive

British citizens are getting some rather confused messages via the media these days, ill set against a backdrop of heavy consumer debt. It turns out, there is a gas glut that leading experts predict will be in place for quite some time to come. According to the Energy Networks Association and the International Energy Agency, the next decade will see vast amounts of gas available for consumption. However, a brief look at the bills of the Scottish and Southern Energy or British Gas customer bills shows that the cost of this gas has actually risen by between 7 and 9 percent, confusing a great number of customers.

With many suffering debts from past credit splurges, or simply due to the economy’s rising prices, and looking to debt management as a way to get by, this could set those trying to regain financial ground back even further. Advocates say forging ahead is crucial in the elimination of debts, but these rising basic costs are certainly a puzzling and disappointing revelation for many.

What folks in the United Kingdom are struggling with understanding is due to the way the news about excess gas supplies is presented to them. Tighter supply originating from Europe is being combined with an abundance of the substance being brought over from the United States. Since Britain continues to turn to the North Sea for approximately thirty percent of its gas supply and nearly fifty percent from the European pipeline, that leaves only fifteen percent to come in via cargo ships from the US.

This, combined with the fact that liquefied natural gas, or LNG, being shipped from Middle Eastern nations like Qatar has experienced problems compounds the issue. In addition, a great deal of LNG ends up heading to Asia because customers there are willing to pay more than those in the UK. Demand has spiked following the global recession, as well. All of these factors have lead to an upswing in UK gas prices that has surged by more than 25 percent in 2010 alone.

This week, the station at Isle of Grain will receive the very first shipment of LNG from the US and that puts the National Grid in good shape, say economists. Even with the issues, the prices of wholesale gas should be falling, but energy suppliers have proven loathe to lower their prices, despite the fact that they are quick to raise them whenever possible. However, even wholesale prices are lower so the rise in what consumers pay is troubling to analysts who say that they should not need to pay as much as during far more severe price increases.

A lack of transparency in how gas suppliers get their gas and what they pay for those supplies is considered to be part of the reason the companies seemingly are able to raise consumer prices when many are hurting as they continue to lower their own prices. More word is expected to come on this issue as journalists continue to investigate a real crunch on British citizens from the gas utilities.

Slow Home Sales in UK Said Due to Lack of Mortgages

Typically, during the Autumn months, the United Kingdom’s housing market tends to see something of an upswing, but that is not the case in 2010, say house building groups across the nation. Instead, due to a lack of mortgage finance, first time buyers are being left completely out of the loops when it comes to being eligible to purchase a new home.

This comes as no surprise to consumer finance experts who say that with so many people in debt now, it is nigh to impossible for them to even consider taking on more debt. Those struggling are still being advised to pursue Debt Management Plans if their debt is small since most advocates view this part of the recession as the lower mid point of the cycle, meaning that those who take care of their debts now will be in a good position once the lending and housing markets bounce back.

Leading builder Persimmon says that the sales levels for September did rise each week, but the typical Autumn jump was nowhere to be seen. Even the amount of consumers merely looking was down sharply from a year before.

In terms of the British housing market, Autumn is the 2nd most important season with Spring being the clear leader, traditionally speaking. Summer being the time to take a holiday, the market generally surges again in September. This is making builders nervous as they fear that the housing market is is definitely starting to head back down further than before.

House prices, too, are looking as if they will experience a very steady decline, according to estate agents. Even Halifax and Nationwide, mortgage lenders, have seen released data that shows falling prices across the UK. Despite the lower prices, however, the availability of mortgages remains scarce. Consumers face large deposits and this means that with such poor terms, first time buyers are practically locked out of the market which, in turn, strikes directly at the profits of builder. Redrow even termed the current situation a ‘mortgage famine’ and has complained that it is not a good way to help the economy rebound.

While the market looks bleak for buyers, the industry itself is managing to handle its own debts with builders like Persimmon restructuring their operations to adjust to current economic realities in Britain.

Bank of England Holds Rates and Follows US Example

Recent news from Chancellor George Osbourne has revealed that the Bank of England in the United Kingdom will follow the example of the United States’ Federal Reserve, emulating that central bank’s plan to inject more cash into its national economy if the economy gets unstable once again. Due to the fact that the BoE has said it will keep interest rated at just half a percent for now and not print money, the value of the pound shot up in the global currencies markets.

Still, Osbourne left many analysts believing that he plans another round of QE, the term for quantitative easing. In an address to the Commons Treasury Select Committee, Osbourne shared that his economic policy making principle is derived from the Bank’s strong fiscal policy that gives monetary policy a greater level of flexibility.

As for an alleged Plan B, in case the UK economy does begin to stall more widely than just the housing market, Osbourne pledged to allow the Bank’s committee on monetary policy to do what they deem necessary to save the economy. Last year alone, the BoE injected £200 billion into the economy by way of QE, but that programme ended some time ago. Critics claim that for all the money spent, very little of it has made an impact on those at the bottom of the British economy who continue to struggle with heavy debts, more economic restrictions, higher cost of housing, tougher financing and a lack of jobs.

These QE programmes typically mean that the BoE buys UK government stocks from investors that hold them, paying those investors in cash. That then puts new funds into money markets in which banks lend to one another. This could be why the average British citizen is seeing precious little in terms of meaningful effects of QE. Economists on the other side of the fence note that these types of programmes are long term investments and could take years to pay off.

This move by the UK closely follows what happened days ago in the US when that country’s Federal Reserve bank decided to inject more than £370 billion into its own economy due to the fact that America is currently seen as being in a ‘jobless recovery’. That translates to US citizens facing similar struggles to those taking place by the average consumer in the UK.

On word of Osbourne’s announcement, the value of the pound shot up to $1.6263, a full 1% higher and the highest level seen since January of 2010. In addition, the economy does seem to be rebounding with increases in service sectors, manufacturing industries and exporting of goods. Housing prices, as well, are on the way up once again.

UK Retail Seems to Indicate Coming Double Dip Recession

The retail industry in the United Kingdom today is not looking good according to recent reports that have just compiled the data for the month of August 2010. Since research takes some time to be compiled and organized, it often comes out later than what many expect and this month many also did not expect to see sales fall by nearly half a percent, raising the level of worry that a double dip recession may indeed by in progress. Official figures from the Office for National Statistics have shown that spending on high street fell for the first time since since the beginning of 2010, not a good sign since consumers are already growing anxious over austerity measures that will slash deep into public spending.

The dip in buying activity at the consumer level has given yet another bit of evidence which suggests the economy is further cooling since the middle of the year and that means that the “mini peak” enjoyed by the economy during the 2nd quarter of 2010 may already be at an end. That was the first signal of a potential spike after 6 straight quarters of decline that began back in the Spring of 2008 and lasted until Fall of 2009. This mini recovery was looking good and showed unemployment falling, stronger sales at retail, greater economic activity over all and even a rise in manufacturing in the UK. That brief burst in early 2010 was, in fact, the fastest jump in economic activity since 2001, but now it appears as if things have come to a screeching halt.

Some are blaming Government figures such as George Osbourne for the changes, but analysts remain skeptical over this. The Chartered Institute for Purchasing and Supply gave a brief picture of what was happening in the manufacturing, construction and services sectors and in September these were already looking to be set to slow. Industrial trends were looking quite similar and output from factories in the UK may be increasingly, but only mildly so. None of this paints a good picture for consumers already loaded with debt and hoping for job opportunities as a way to pull themselves free of their burdens.

The housing market, too, has begun a serious decline and first time buyers are scarce overall. Home buying is already at half the level it was before the economic crisis that began to be noticed in 2008, but prices are falling which could be a good sign for the UK public at large – if they were able to find jobs and if other items in their daily lives were not so expensive. Since the Government has ended the ‘cash for clunkers’ programme, sales of new cars are also plummeting as consumers decide to opt for used vehicles instead of springing for financing deals which could end up punishing them with greater debt over time.

In London, retail sales have been abysmal say economists, and the August figures are deeply troubling. Since retail is a prime indicator of consumer confidence, the fact that it is already beginning to slide does not bode well for the UK economy and is likely a reflection of fewer jobs, greater debt and a variety of other factors that are proving difficult for average citizens to handle.

Higher Clothing Prices Plus Shopping Addictions Bad News for UK Debtors

Things continue to look rough in the United Kingdom today as a growing number of threats to consumer keep seeming to pull money directly from their wallets, say economic advisors. Word has come from the CEO of Net, Lord Wolfson of Aspley Guise, who is warning that prices for clothing are about to rise in 2011 because prices on cotton have gotten difficult for those who manufacture clothing to deal with without raising their prices. Wages are on the rise in many places around the world and this means higher prices for end level retail consumers, not only in the UK, but in other more economically advanced nations. Low rates of growth in sales are set to plague the economy in the coming years and this is another reason that retail leader Wolfson says this is the ‘new normal’ for the present economy.

What consumer advocates point out is that when combined with the rising problem of the so called shopping addictions, whereby UK consumers have huge credit or store card debts for their fashion fixes, the problem could spiral out of control. Many have not yet considered a debt management plan as a means to rid themselves of the debt and continue to spend faster than their income can keep up. This has led to many buying their way straight into the hole and advocates worry higher prices for basic clothing will only compound the negative effects of this trend.

With consumer credit access getting tighter by the year, many believe that this trend will hold and credit will continue to get more scarce in the consumer markets of the UK. Consumer growth in general will be much more controlled under the Government’s new measures intended to reduce debt and this means higher VAT along with a very subdued economic outlook wherein slow and steady growth is far more desirable to those in the Government than the previous boom and bust cycles for which most of the Western world has been known for decades.

Wolfson went on to say that he personally does not believe a double dip recession is on the way, but that consumer spending will be weak due to the cost of basic goods. He did say that he expects his own company, Next, to grow despite the overall tone of the economy in the next 3 to 5 years. Through a strategy of buying back their own shares, Next intends to raise investor profits and make each share earn more.

This thinking, Wolfson said, is not intended to be a pessimistic look at the economy but a realistic take from him on a new reality UK consumers face today where goods will cost more and credit will be less available. Personal finances advisors add in that credit could be scarce to none for those who have not handled debt over the course of the next year or so as debt continues to be seen as a major problem by many entities beyond the banking system.