22 December 2010

It’s a dog’s life

“A dog is for life not just for Christmas” the saying goes and there is a lot of truth in that statement. When you acquire a pet it becomes a part of the family very quickly, and the cost of any medical treatment can become very expensive. This is why it is worth taking out pet insurance. The level to which you want to insure your pet is up to you but coverage which provides medical care can save you a lot of money. Most companies will give you an option of accidental or comprehensive cover.

Accidental will provide cover for your pet in the event of accidental injury, including costly items like consultations with your vet, specialist care, hospital stays and prescription medicines.

Fully comprehensive will be packed with reassuring features. It should cover 100% of your veterinary bills in the event of an accidental injury, it also covers you if your pet should suffer an illness.

21 December 2010

Credit Card companies challenged by Competition Watchdog

Major credit card companies have been challenged by Canada’s competition watchdog over the rules they force upon retailers.

Canada’s Competition Bureau last week filed for a Competition Tribunal against Visa and MasterCard claiming that the credit card providers’ mutual ‘no-surcharge’ rule, among other policies, is eliminating competition between them.

Under Visa and MasterCard’s current policy, retailers are charged between 1.5 and 3 percent per credit card transaction but are prevented by the ‘no-surcharge’ rule from adding on a surcharge to offset the extra cost.

As a result, many retails are offsetting this cost by adding it to the price of products, clearly disadvantaging the consumer.

Competition Commissioner Melanie Aitken claims that, “Visa and MasterCard's anti-competitive behaviour hurts businesses and consumers alike.”

“Without changes to the rules, merchants will continue to face high costs for credit card acceptance, while consumers, even those who use lower-cost methods of payment like debit or cash, will continue to pay higher prices.”

The Competition Bureau also plans to take action against credit card policies which prevent retailers from encouraging customers to use more cost-effective methods of payment such as cash and debit.

However, MasterCard fears that credit cold holders may end up being penalised by facing higher charges.

It is estimated by the Bureau that Canadian retailers pay around $5 billion per year in hidden credit card costs, one of the highest levels world wide.

14 December 2010

Canadians Debt-To-Income Ratio Higher Than Americans

The debt to income ratio of Canadians is now higher than Americans for the first time in over ten years according to information released on Monday.

The ratio of household debt to disposable income has climbed to a high of 148.1 percent, Statistics Canada announced on Monday, a 6.7 per cent rise on last year’s figures.

The Canadian ratio is now higher than that of the United States which is currently at 147.2 percent.
Bank of Canada Governor Mark Carney spoke in Toronto earlier this week about the rising debt amongst Canadians and the danger of borrowers being lured by historically low interest rates.

Mr Carney warned that whilst current low interest rates make borrowing seem relatively cheap, the costs will climb again and people may find themselves in financial difficulty, especially as the debt load of many Canadians is rising faster than their incomes.

Policy makers must now decide how best to safeguard Canada’s economy - reduce spending and risk limiting the country’s recovery or risk the population sinking further into debt.

Mr Carney said, “The responsibility obviously starts with the individual, it extends to the financial institutions, and then we as policy makers need to ensure that a suite of policies are appropriate to ensure sustainable growth.”

Canada’s income level has also fallen 1.5 percent during the last three months.

13 December 2010

Banking Reforms Met With Mixed Reviews

Banking reforms proposed by the Australian government over the weekend have been met with mixed reviews.

The reforms, which include banning mortgage exit fees from July 1st 2011 and providing small lenders with new funding avenues, were announced by Federal Treasurer Wayne Swan on Sunday.

Mr Swan has pledged to increase competition in the banking sector to help reduce interest rates and ease the burden for businesses and mortgage holders. In addition, he has empowered the Australian Competition and Consumer Commission to act on price signalling.

He stated that the package would "build up competition in our banking system, which will ensure that interest rates are lower over time".

Consumer group Choice welcomed several aspects of the reforms including the transferability of lenders’ mortgage insurers, mandatory fact sheets for home loan customers and the ban on exit fees. They also approved of the review of ATM fees and the credit card reform legislation.

However, economists fear that the proposed ban on mortgage exit fees could be potentially damaging for smaller lenders.

Shane Oliver, head of investment strategy at AMP Capital Investors warned that if banks are no longer able to charge high exit fees, they will be equally unable to offer low mortgage rates:

'If exit fees are banned for mortgages, it could actually force up mortgage rates for some of these non-bank providers'

The Green party also argued that whilst long overdue, the cuts in ATM fees were only part of the solution to a larger scale banking fee problem which costs many Australian households up to $1000 a year.

09 December 2010

Aussie Gains On High Employment Statistics

The Australian dollar made gains yesterday following the release of statistics which show the largest rise in employment since January.

The Australian Bureau of Statistics reported on Thursday that the country’s employment reached 54,600 in November, exceeding the expected increase of 20,000 and reducing the national unemployment rate by a further 0.2 percent.

Following the release of the data at 1130 AEDT, the Australian dollar increased half a US cent trading at 98.40 US cents, up from Wednesday’s close of 97.89 cents.

Adam Carr, senior economist for ICAP said that the positive influence of the employment figures on the economy was clear and may prompt the Reserve Bank of Australia (RBA) to raise the cash rate in next year’s first quarter.

"The RBA gave a fairly neutral signal to us when they met (on Tuesday) and this data today shows why the RBA's pause isn't going to be that long," Mr Carr said.

"The chances of them being on hold until June next year is, I think, effectively zero."

It is estimated that more than 50,000 people joined the workforce in October, creating the second largest employment rise in Australia since 2006.

Analysts hope that these latest statistics signal the continuing rejuvenation of the Australian economy.

08 December 2010

Sterling Strengthens On Back Of Manufacturing And Retail Highs.

The Great British pound strengthened against its rival currencies on Tuesday as it was announced that the UK’s manufacturing output had reached a seven month high.

Buoyed by news of higher than expected manufacturing figures and retail sales, the pound sterling climbed 0.95 percent against the euro and reached a two week high of £1.5821 against the US dollar.

UK retail sales grew a healthy 0.7 percent last month, maintaining October’s increase of 0.8 percent. The output of UK manufacturing also climbed, reaching 0.6 percent for October and exceeding the expected increase of 0.4 percent.

The manufacturing output rate is the highest recorded since March this year, prompting optimism for the UK’s economic recovery.

Briain Hilliard of Société Générale said that he expects further gains in November:

"Stronger utility numbers with the colder weather should also give a pick-up in industrial production. It shows the economic recovery is continuing, although of course we need to look at the services side too. The biggest influence on the Bank of England will be the inflation profile and we know that is problematic."

It is thought that the figures are unlikely to prompt the Bank of England to make any changes in interest rates over the coming months.

Meanwhile all eyes are on the performance of the Euro as Ireland’s toughest austerity budget is passed its first parliamentary vote.

07 December 2010

Canada Unemployment Reaches Two Year High

Canada’s unemployment has reached its highest rate in almost two years, according to the Labour Force Survey released by government agency Statistics Canada on Friday.

Unemployment rose to 7.6 percent in November, a significant increase from October’s rate of 6.2%. This translates to 1,426,900 million unemployed Canadians, far more than were initially made jobless when the recession hit in 2008.

A huge decline in the number of manufacturing related jobs is thought to one of the major causes of the unemployment rise. Whilst 1 in 5 Canadians had manufacturing related employment three decades ago, that number is now 1 in 10 – the lowest rate since data began in 1976.

The Statistics Canada survey also revealed a decline in the quality of jobs available over the last year with an increase in temporary, part time and poorly paid work.

Ken Georgetti, President of the Canadian Labour Congress said, “We have a problem with both the number of jobs being created and their quality. We have to focus on creating full-time, family-supporting jobs”
He stated that Canadian workers are still being affected by the deep recession of 2008 and that employments rates would be even higher if it were not for the determination of the Canadian people to find work.

The survey’s figures also highlighted an East-West divide in the country.

The employment rate in Ontario and eastern provinces is teetering above the national average whilst in Manitoba and western provinces joblessness is well below average.

01 December 2010

Australia's Economy Growth Lower Than Expected

Australia’s economy grew by just 0.2 percent in the September quarter, the Australian Bureau of Statistics announced yesterday.

The country’s gross domestic product (GDP) was measured at 2.7 percent, much lower than the 3.4 percent rise expected by market consensus. The result was also down compared to the 1.1 percent rise of the June quarter.
The Australian dollar immediately fell from 96.08 US cents to 95.65 following the release of the figures at 11.30am (AEDT) on Wednesday, although later regained ground.

The share market also closed flat with a mere 0.05 percent increase in the benchmark SP/ASX200 index and a 0.01 percent increase in the broader All Ordinaries index.
Despite a muted response from the markets, Treasurer Wayne Swan insisted that the GDP figures showed proof of a resilient economy.
'Today's GDP figures are another solid result for our economy in the context of a world economy which is fragile,' he told Canberra reporters.
'There are bumps in the road for our economy but Australia's fundamentals and growth prospects remain strong.' He added, 'we are determined to continue our plans to build a stronger, broader, more competitive economy.’

The Treasurer pointed to several positives in the September quarter including a 0.6 percent increase in household consumption and the creation of 105,000 full time jobs.

30 November 2010

The Eurozone still remains unstable

Nouriel Roubini, chairman of Roubini Global Economics more commonly known as ‘Dr. Doom’ does not believe that the €85 Billion Bailout of Ireland is enough to stabilise the Eurozone. 

While many agree that such a small sum is not nearly enough to restore confidence in Europe,  Mr Roubini goes further and suggests that Spain’s current position is extremely unstable and the amount which the Spanish government is projecting as a figure to cut debt is far too small and next year it is likely that the Spanish will be asking for a bailout.

While it is not all gloom in Europe with Italy, Germany and the UK performing better than expected the danger of the debts of Spain and Portugal are very much apparent in the minds of investors.

The value of the Euro continues to decline against both sterling and the dollar. Meanwhile the Dollar goes from strength to strength. It’s position as a safe haven currency has been beneficial while uncertainty over the Korean peninsula continues.

29 November 2010

Australian share market reverses slow start

The Australian share market finished higher at close of trade on Monday, reversing a slow start to the week.
The market recouped its early losses with help from strong performances by energy, banking and healthcare stocks.

Markets experienced a sluggish start on Monday as a result of limited trade from Wall Street at the end of the last week owing to the US Thanksgiving holiday. EU debt concerns had also contributed to subdued trade.

The benchmark S&P/ASX 200 index gained 0.44 per cent to finish at 4618.5 points, while the broader All Ordinaries index increased 0.35 per cent to 4706.7 points.

Some of the best healthcare performers included Cochlear which gained 79 per cent to $80.95 and Sonic Healthcare which increased 1.28 per cent $11.88.

Energy stocks also buoyed the market with Woodside adding 76 cents to $41.71 and Santos up 6 cents to $12.37.

In currency, the Australian dollar dropped to US96.55 cents as Korean political unrest and EU debt concerns continued to impact the market. Flat data relating to Australia’s third quarter economic performance may also have had a negative impact.

26 November 2010

Pay Day Loans As A ShortTerm Money Solution

It is to unlikely that at some point in our life we will find ourselves in a tricky financial situation that requires a certain amount of leverage in order to find our way out. Sometimes, all it takes is a little extra cash flow to pay off an outstanding bill, make our money stretch to the next payday or perhaps to pay for an emergency repair (dishwashers, cars, dog’s leg...etc)

A payday loan is an intended short-term loan (usually to be paid back within 30 days) and is often considered to be an ‘emergency loan’ and used as a last resort in the sense that it should not be relied upon as a monthly get-out clause.

This kind of loan ranges from anywhere between $100-$1500. The amount borrowed is generally smaller than other lending companies. A payday loan will have noticeably higher interest rates because of the ‘short-term’ nature and this is normally set at about $25-$30 for every $100 borrowed. Therefore if you borrowed $500, you would end up having to pay back $750 within the 30 day period.

Because there are rarely credit checks for people acquiring payday loans, many people who use them are not financially stable. This can be a slippery slope especially when you consider the high interest rates. However, if used properly it can be a great short term fix.

Should there be loans granted with no credit checks? The majority of people are divided in opinion but it is no doubt that payday loans have helped a number of people out of varied financial black holes.

24 November 2010

New Year brings misery for commuters with 6.2% train fare increase

The price of rail fares will increase by an average of 6.2% in January, putting yet more financial pressure on the UK population.

The Association of Train Operating Companies (Atoc) announced the above-inflation increase today, claiming that changes in government policy have demanded that passengers pay more towards railway investment.

Although Atoc failed to report the specific price rise for each train company, it is thought that season ticket holders will be most severely affected with on average, 10.8% increases. Some commuters, such as those travelling from Ramsgate to London with Southeastern will see their annual season ticket price rocket from £3,880 to £4,376 an increase of 12.8%.

Chief executive of Atoc Michael Roberts said: "We know times are tough for many people but next year's fare increases will ensure that Britain can continue investing in its railways.

"Even with these fare increases, the money passengers spend on fares covers only half the cost of running the railways - taxpayers make up the difference.

"The government is sticking with the previous administration's policy to cut the taxpayers' contribution to the overall cost of running the railways.

Meanwhile, the leader of the TSSA rail union Gerry Doherty stated: "It is simply outrageous hard pressed commuters are being forced to pay fare hikes of up to 10% when they are themselves facing pay freezes and job cuts.”

The news comes on top of last week’s increases in energy costs and yet further economic concern over the eurozone crisis.

23 November 2010

Long Way To Go For Albertans

Alberta, a province in the West of Canada is in trouble post-recession.

New figures released by finance minister Ted Morton show that Alberta is heading towards the prospect of a $5 billion deficit.

This prediction exceeds the estimated deficit total that was made in the spring budget by a quarter million dollars.

The increased deficit total of $257million is linked to a number of factors including lower employment levels and a decreased number of visitors, all of which were catapulted into a downtrend by the recession. The province has also struggled to replace a once-huge revenue take decimated by the drop in the price of abundant natural gas

As well as the above contributors, Alberta saw financial losses due to an influx of emergency funding that totalled $534 million as money was used to fund a multitude of natural disasters such as flooding, mountain pine beetles and wild fires. The province also took a hit of $1.1 billion on the personal income tax ledger.

It is estimated that Alberta used funds of up to $38 million to renovate a Edmonton nursing home. Villa Caritas is used to house senior psychiatric patients who are moved out of Alberta Hospital.

Despite Morton describing such a downtrend as “the new normal” the Finance Minister assures the public that the next two years will see the return to a balanced budget as well as clarifying the unlikelihood of cuts.

“Our forecasts are always about in the middle of the private sector forecast...it means little or no expansion but it doesn’t translate into cuts.”

16 November 2010

Concern in Europe as Ireland resists EU ‘bail-out’

Speculation over the economic stability of Europe was fuelled today by the reported refusal of Ireland to accept financial assistance from the European Union.

With their economy in increasingly desperate shape, it was thought that Ireland would seek help from the European Financial Stability Fund which was set up earlier this year to support Greece through similar financial crisis.

It was rumored that Ireland would look to secure funds of up to 80 billion euros from the fund, however the Republic deny that any discussions are taking place.

The plummeting of house values and mounting development-related debts accumulating in the country’s largest banks have left Ireland with a total deficit of 32% of its gross domestic product.

The Irish government is proposing tax rises and spending cuts in its December budget with the aim of generating 6 billion euros by next year. However, it is feared that such cuts will only serve to deepen Ireland’s recession and end up costing the government in benefit payments and falling tax revenues.

It is thought that Ireland’s reluctance to accept the EU ‘bail out’ is due to fears of relinquishing economic control and jeopardising their sovereignty.

This decision is proving unpopular in the rest of Europe which is keen to avoid financial problems in one country escalating into economic crisis on a wider scale. It is also having a knock on effect on the performance of the euro which is plummeting against the increasingly strong US dollar.

10 November 2010

All Eyes On China As Pressure On the Superpower Mounts

Pressure on China is at an all time high with top economists and countries warning the superpower that unless it changes its dangerous trading strategy, economies world-wide will be severely harmed as the imbalance between countries continues to grow.

The Prime Minister, David Cameron, commented on the air of danger that China has created saying that the trade surplus, which overtook economist’s predictions, had created a ‘dangerous tidal wave of money’ which is now flooding the global economic landscape.

The trade surplus for October was recorded at $US27.15 billion. This is despite the fact that the previous month’s trade surplus was nowhere near as grand; in fact, it declined to just $US16.9 billion

The Prime Minister was not just concerned with China freeing up its own economy, but he was also commenting on China’s rigid political system which leave civilians with little political freedom.
In a public speech at Peking University, he argued that the two liberties are inextricably linked with one naturally implying the other. The Prime Minister, who is on a state visit to Bejing added pressure on China over its Yuan currency as well as challenging the communist regime and asking from China, “a greater political opening.”

Brian Jackson an economist from Royal Bank of Canada, commented:

“Chinese exports and imports are both continuing to record impressive growth, defying concerns about weaker demand both home and abroad. But the disparity in global trade balances is the key point that will likely attract attention as senior officials fly in to Seoul for the G20 meeting.”

However, Cameron tried his upmost to abstain from making moral judgements over China as he commented that Britain was nor perfect either, in an attempt to smooth over any offence taken by the hosts of the speech in Bejing.

08 November 2010

HSBC Stands Up To Banking Levy

On Friday 5th November, HSBC renewed the prospect that it might quite London following George Osborne’s banking levy; this was coupled with the outlines to halt inflated bonuses for bankers.

The bank commented that such changes would mean that HSBC could not sufficiently compete with other banks because they were no longer on a “level field” with their competitors.

The banking levy by Osborne would mean that HSBC-as well as all other banks would have their annual income capped to £2.5bn with no capacity to stretch beyond this limit. HSBC publicly spoke out about the changes during a series of conference calls with journalists and City analysts.

The chief executive of the bank, Mr Geoghegan complained that HSBC was being targeted simply because it was based in London. He commented that this situation was akin to “tax on emerging markets growth” which is where HSBC accumulates most of its income.

On the situation Mr Geoghegan commented, "Policymakers need to understand the consequences on the wider economy and growth." He continued, "Along with many other international banks, HSBC already complies with the Financial Stability Board's global principles on remuneration. If the EU takes those principles further and applies additional requirements to European firms operating in emerging markets, it would place those firms at a disadvantage to their regional competitors and to those based in North America."

01 November 2010

Home Loans For Those With Bad Credit Histories

As the recession begins to make its tentative steps towards some sort of recovery, prospective buyers who have been turned down elsewhere, begin to find they can apply for mortgages once again.

Whereas the pre-recession market housed such ‘sub-prime’ candidates and indeed this is what most thought caused the financial breakdown, post-recession it has been virtually impossible for those persons with a bad credit history to acquire a mortgage.

Now, almost three years on, a handful of lending companies have begun to repeat the sub-prime practise, with companies including Precise Mortgages, Kensington Mortgage Company and Aldemore lending to those customers with a flawed credit history.

So why are companies starting to lend to these kind of clients again? Such clients can be a massive earner for lenders due to ‘bad credit’ products holding much higher interest rates than standard financial products. Not only this, but the market for sub-prime products is enormous, with so many people unable to attain home-loans in recent months; banks understand that where there is demand, they should really be supplying.

Financial data shows that mortgage lending has declined by from £162 billion to a £112 million from August to September and this has encouraged the beliefs of economists who are predicting the likelihood of a double-dip recession.

29 October 2010

Savers Left In The Dark

Many of us feel that we are not getting the most out of our savings. Now, new research actually suggests we are being purposefully left in the dark.

In a new piece of research from Which?, it has been revealed that those people who are putting their money into savings in both banks and building societies are not getting out of the service what they ought to be.

It is reported by the company that savers are missing out on as much as £332 (an average marker) because they are not being properly informed by the banks and building societies in question, about the correct interest rates they should be earning.

What the survey research shows that it is only through consumer ignorance that the correct interest rates are not being paid and that this ignorance is directly equated to the banks withholding information to the consumer.

In what was an enormous downsizing operation, the amount of interest that was paid to savers was cut back by half in the 2008-2009 period, seeing a reduction from £39 billion to just £19.2 billion.

The research firm discovered that almost half of the 1,200 plus savings accounts available in the UK pay just 0.4 pc after tax interest with many paying less than this. In what seems almost a contradiction of terms, an average savings account in the UK would earn you just 80 pence for every £1,000 saved, leaving many asking what the point is in using such an account.

Many banks, it is reported, do not even make their interest rates public-instead they choose to withhold any fluctuations, crediting the saving consumer with an interest rate that they decide and that is in their hands to manoeuvre if they so wish.

It is thought that only a handful of banks (which include Yorkshire BS, Skipton BS, Barclays and HSBC) actually print their rates.

25 October 2010

One Size Fits All-New Pension Scheme

In what is set to be one of the biggest changes in the cut-back process, the government has decided to stop varying pensions and to install a ‘one size fits all’ alternative that will entirely disregard individual personal financial situations or circumstance.

The change is being made in order to simplify the pensions scheme which was been in action for the last 50 years. What will happen is that all pension payments will be reduced (or increased) to £140 a week so everyone in Britain is receiving the same amount.

The new plans are likely to be announced as the year draws to a close in a Green Paper. One of the benefits of the new scheme will be that people will no longer be ‘means tested’ which is thought to be quite a humiliating process.

Another benefit is that couples whose pension was divided between them in the present scheme (at a basic state rate of £156.15) will now be inflated as each of them receive £140 a week. This would mean that couples could have an annual state income of £14,560 in the new plans.

As well as benefits for couples, the system will benefit single pensioners who receive the basic state pension as they will see their weekly income rise from £132.60 to the new £140 level.

The dominant feature in the change is to account for a number of loop holes in the pension system which often affected women who could not qualify for a full state pension because they had taken time out to raise their children.

Ministers aim to introduce the new pension in Parliament by the end of 2015, wanting it to be firmly installed before the retirement age plans are put in action (which will see the pension age for women rise to 66).

13 October 2010

US Bankers Still Receiving Big Payouts

The myth that bankers are no longer receiving enormous payouts has well and truly been shattered thanks to new research founded by the Wall Street Journal.

The figures which reveal the banking giant JP Morgan salary pay-outs, reveal US bankers are getting record breaking compensation for the second year in a row. In what seems almost inconceivable, the research that studies three dozen banks, hedge funds and money-management firms, shows that these companies will pay out £90 billion in salary and benefits this year alone.

The data flies in the face of new measures that were set to put a cap on bonuses and salaries and it also reveals that top bankers have not suffered in the slightest despite the state of the US economy and its recovery. Far from being negatively affected by the US recovery, salaries have gone up by 4% since this time last year, third-quarter figures reveal.

Charles Elson, director of the Weinberg Centre for Corporate Governance told the Wall Street Journal,
“Until the focus of these institutions changes from revenue generation to long-term shareholder value, we will see these outrageous pay packages and compensation levels.”

The research also shows that Goldman and Sachs is expected to raise compensation pay to $16.8 billion which is a rise of 3.7% despite the fact that revenue is set to fall to $39.1 billion.

07 October 2010

Alarm Bells For Homeowners

In one of the quickest declines the UK housing market has ever seen, house prices in the UK have plummeted by 3.6% in a single month, leaving homeowners with their heads in their hands, unable to believe the loss in value of their houses. It is thought that contributing factors could be the number of houses on the market as well as a decline in prospective buyers due to the unstable economy.

Halifax have commented that the decline is set to continue. A spokesperson from the firm commented:"A shortage of properties for sale contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months has reduced the imbalance. At the same time, renewed uncertainty about the economy and jobs has caused consumer confidence to falter recently, dampening the demand for home purchase."

06 October 2010

Millions Of Pounds Missing Because Of Currency Firms

Crown Currency Exchange has potentially let down as many as 13,000 customers. Yesterday, it was announced that the overseas firm had slipped into administration. The effect is that their customers will not receive the money they have pre-ordered, which, in total amounts to £20 million.

This situation came about despite there being serious worries about the companies’ health from over a year ago. Concerns were voiced by the Financial Services Authority but yet, for some reason the issues were overlooked and even the authorities failed to take action against the firm which is based in Cornwall.

Even though this situation has left thousands of people, hundreds of pounds short-in some cases, thousands-the government is unwilling to tighten the regulation of similar currency firms. This is exactly what insiders are saying caused the problem in the first place and understandably, customers are furious today that changes are not being made.

A Treasury spokeswoman comments on the situation:

“Crown Currency Exchange’s business model was exceptional-it involved taking forward exchange risks. It would not be appropriate to crack down on the vast majority of currency exchanges that do not take such risks.”

Tightening up such firms would involve taking appropriate precautions that would leave customers money safe, even in a worse case scenario, with a firm going bust. This could be as simple as enforcing an law that forces currency exchange firms to keep customer cash and business cash separate.

30 September 2010

Budget Tips For Everyday Life

1. Budgets may be a pain but they are essential for a healthy financial life.

They're the only practical way to get a grip on your spending - and to make sure your money is being used the way you want it to be used.

2. Creating a budget generally requires three steps.

- Identify how you're spending money now.

- Evaluate your current spending and set goals that take into account your long-term financial objectives.

- Track your spending to make sure it stays within those guidelines.

3. Use a chart on your computer to track your progress.

If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.

4. Don't drive yourself nuts.

One drawback of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.

5. Watch out for cash leakage.

If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, it's time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.

6. Spending beyond your limits is dangerous.

But if you do, you've got plenty of company. Government figures show that many households with total income of $50,000 or less are spending more than they bring in. This doesn't make you an automatic candidate for bankruptcy - but it's definitely a sign you need to make some serious spending cuts.

7. Beware of luxuries dressed up as necessities.

If your income doesn't cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.

8. Tithe yourself.

Aim to spend no more than 90% of your income. That way, you'll have the other 10% left to save for your big-picture items.

9. Don't count on windfalls.

When projecting the amount of money you can live on, don't include dollars that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains.

10. Beware of spending creep.

As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation. It's better to use those income increases as an excuse to save more.

28 September 2010

Fears Over Debt Management Companies

Oh dear. It is not a very bright day for debt management companies. With the news pouring in of more and more companies who face losing their license, one cannot help but feel worried and vulnerable.

Following an enquiry from The Office of Fair Trading, it has been discovered that as many as 129 firms are guilty of some degree of malpractice. The wrongdoing ranges from giving out biased or influencing advice (when in fact it should be impartial and honest) to misleading advertising and even some firms posing as ‘free’ government organisations.

This news shows that going it alone on the internet in search of these firms can be very risky indeed, especially when we know that by the end of this year alone, over £250 million will be paid to debt management companies.

Price comparison websites offer you a safe environment to get advise and/or help if that is what you choose. The companies have already been reviewed by the website and so you can be sure that the companies they showcase are respectable.

27 September 2010

To Pay Or Not To Pay

For the 2010/2011 academic year, interest rates for student loans are now either 1.5% or 4.4%. The rate varies depending on when you took the loan out i.e when you first started university. If you started university between 1990 and 1997 then you will be subject to the 4.4% interest rate. After this the 1.5% applies, depending on whether the Bank of England’s base rate stays at 0.5%.

Interestingly statistics show that the number of outstanding loans for the latter, comes in at a whopping 3,300,000, with the old school 4.4% loan coming in with 355,000 outstanding loans.

We are now a whole generation of Britons with student loans as so many of us go down the higher education road. So what does it mean when people say that student loans have no real cost? This is said because there is no real interest cost because the most you will ever pay is the rate of inflation i.e the rate at which prices are rising. Therefore, a student loan is essentially very different from other commercial loans where you must pay back extra cash on top of inflation rates.

To question is then is it worth paying back your student loan? An article I read today argued that in actuality, you are much better off putting that monthly payment into a high interest savings account, or into another investment because over a ten year period, you would have earned back enough money to pay off your loan, and more. The article was saying that you should prioritise those things with higher interest rates such as credit card bills and bank loans as your student loan is not going to gather much interest at all. Low interest loans do not need to paid off quickly; even if they sit unpaid, they will not collect a huge amount of interest at all. You might be better off not paying it off in this case.

It is something to think about anyway before you go rushing into paying off that student loan...

20 September 2010

Minimising The Cost Of Divorce

With the cost of divorce so high these days, perhaps couples will think twice before heading to their nearest divorce lawyers. It might even encourage couples try and resolve their differences rather than to eternally agree to disagree...you never know.

According to experts, divorce costs are at an all time high and back at pre-global financial levels. The rising costs have much to do with key amendments to family, superannuation and tax laws in recent years, which means that there is a wider range of assets being split in marital property settlements. Even the superannuation savings of de facto couples can be divided.

Adding to this is the news that more couples are breaking up after longer marriages and thus the accumulated wealth that must be divided is proportionally higher. It is estimated that the number of couples getting divorced between the aged between 50-55 has quadrupled in the last ten years.
With statistics from the Australian Bureau of Statistics showing that 40 per cent of marriages are likely to end in divorce, couples should enter into marriage with an acute awareness of the facts. Australia saw as many as 47,000 divorces in 2008.

It would be wise to construct a pre-marital contract which states terms of a divorce if a couple were to split, rather than wait until its too late. A secured pre-marital deal might be essentially unromantic but nobody knows what will happen after marriage. It is wise to be prepared and realistic. A pre martial contract can ease some of the stress and financial difficulties of a divorce.

16 September 2010

Consumer Confidence Dwindles- Fight Back!

With today’s report from the Office of National Statistics revealing that retail sales have dropped in the month of August, we have to wonder whether we Britons have hidden our wallets away and resigned ourselves to evenings spent in watching X Factor and playing backgammon.

With more ominous data pouring in as a result of the terrible environmental and humanitarian floods disaster, major retailers have warned us that the price of cotton is set to sky rocket due to the cotton plantations being demolished in the flood waters.

However, I wonder whether the statistics truthfully reflect our shopping sentiment. I for one know that just because the price of cotton is on the up and despite the negative data released today, when I want to shop, I will. I think most people share this sentiment, and as Britons we are, as a nation, fairly resilient when it comes to financial crises.

Here on Which Way To Pay we showcase a number of different credit cards, which although they are not the answer to all financial problems, can be extremely useful when you need a bit more financial flexibility. Simply having a credit card helps you to build up a good credit rating so even if you are not intending to use a credit card, it is definitely worth applying for one.

Have a good day,

Which Way To Pay

15 September 2010

Clothing Prices Set To Soar

The price of cotton is set to soar. Believed to be linked with the large scale floods in both China and Pakistan, the price of raw cotton is up from ten cents a pound to an unbelievable rise of 83 cents a pound in the last month alone, along with the rise in VAT to 20 per cent.

This drastic increase will hit low budget high street chains such as Primark and H&M most forcefully seeing as these stores use cotton as their majority material. Consumers will have to rethink their perception of the store which is most notably known for selling £2 t-shirts and £4 jeans.

Primark Finance Director John Bason warns: “The pricing environment is a tough one for the consumer.” Customers will have to start thinking about the impact these environmental changes will have on them.

Consumer campaigners are angry at retailers for changing the prices, only when it benefits them. Campaigners have been urging retailers for years to increase their prices in order that long suffering foreign workers are paid more fairly.

Dominic Eagleton, from Action Aid comments: “For years, major retailers have been telling us they want to put prices up to help foreign workers-but don’t want to upset customers over here. This statement though, would suggest that when it suits companies they can raise prices after all if they want to.”

09 September 2010

Claiming Online

Using a claims service has never been easier - simply click on a particular firm's website, fill out an initial form regarding your claim and you will generally be contacted within a short space of time.

There are so many types of claims, and for each one there are countless specialist services - injury claims, PPI claims, work claims, credit card fee claims...

But is it safe to use an online claims service? Well, as long as they are regulated and registered, run by people that are either trained lawyers or solicitors or claims experts you should be in the right hands. If in doubt it is possible to visit a standard solicitor (such as a famiily solicitor).

26 August 2010

PPI Claims Keep Going Strong

Are you one of the millions of unemployed people in Britain? Have you bought cover on your insurance and thought that now you have lost your job, you are at least covered on your repayments?

Over 800 people a week are now complaining that their Personal Protection Insurance (PPI) was nothing but a scam, and that they were mis-sold their policy.

Insurers and lenders are claiming that there is no wrongdoing from their side, and that they have never mis-sold loan insurance.

But the cases are being looked into by the Financial Ombudsman Service (FOS) although many cases are being upheld, which means that lenders must pay compensation to customers.

The FSA has stepped in and is banning all selling of single-premium PPIs and the selling of loan insurance at the same time as the loan.

There is cynicism over the case, as some are saying that the number of complaints is so high only thanks to media attention and watchdog campaigns. Either way, if you are one of the many unemployed, you may be less than impressed to find that you are not covered...

25 August 2010

Ireland is Downgraded

As if the euro zone needed any more blows, Ireland has had its credit rating downgraded to AA- by Standard & Poor's rating agency.

Ireland's own credit rating agency saw S&P's downgrade and subsequent analysis of the Irish economy as incaccurate and exaggerated (with a huge deficit of GDP expected for 2010).

The euro currency itself actually jumped on the foreign exchange market, due to a report that showed German business confidence rose to unexpected highs in August.

23 August 2010

Australian Federal Elections

Over in Australia, federal elections held over the weekend (unlike in the UK, where elections are held during the working week) brought an unclear result, similar to the results of the UK general election in May.

The news left Australian share markets fairly cautious at open in Sydney, with moderate losses for all main indices such as the ASX 200.

Meanwhile oil managed to emerge from its 6-week lows of last week to reach a slightly improved $74 a barrel halfway through the day Monday.

19 August 2010

Alternative to Credit

The OFT intends to make changes to the way in which credit card claims are made, something which had provided a loophole: the 'original agreement'.

People who are thinking of claiming against their lender for credit card charges or a large debt might find it a bit trickier under new guidelines.

If the lender was unable to produce an original agreement document within 12 days of the borrower requesting it, the debt became unenforceable. Not bad - but now lenders are likely to be allowed to produce a 'true copy' of the document. This will suffice as evidence against the borrower.

If you think it might be too risky to take a credit (or if you can't get one) there are alternatives - the prepaid card is a great way to pay without borrowing money.

11 August 2010

Shares Fall on Downbeat Outlook

Financial markets around the world tumbled on Wednesday amid a general mood of gloom and nervousness.

After retreats in Asia and the Asia-Pacific region, markets fell in Europe before bringing the mood to Wall Street. All main indices fell sharply while currencies such as the Canadian dollar and the Australian dollar fell too.

Overall there is a very pessimisstic wind among markets, with careful or downbeat warnings from central banks.

06 August 2010

80 Per Cent Rise in Wheat Price

Could the price of a loaf of bread or a bowl of pasta be on the rise?

As if consumers need more price hikes in the aftermath of the deep recession (which is still threatening to return)...

Due to a strict export ban on wheat in Russia, which is in place until December 1, wheat prices on the futures market have surged by 80% since June.

While traders cope with the massive rise, regular consumers are beginning to worry about the price on the high street.

So far, market insiders have said that the situation remains contained.

02 August 2010

Sterling Rises to 11 Month Highs

The pound is on an immensely strong day on the foreign exchange market; it has reached an 11-month high against a basket of currencies while versus the US dollar it has reached a 6-month high.

After a round of good earnings data - with big bank HSBC posting better-than-expected profits for the first half - the pound is certainly more attractive for international investors today.

The dollar, meanwhile, is on a broadly weaker streak.

20 July 2010

Which is Your Top Forex Service?

The top foreign exchange companies have today posted their pre-tax profits and show an interesting round of results.

With a few position changes - the most notable of which saw forex broker HiFX retreat from #3 to eighth place - the table of results showed that there is a major jump between the profits of the top two and the rest. Why?

The answer lies in the services that such companies offer. Sure, they are all under the umbrella of 'foreign exchange' but while some offer vast coverage of global travel money (including airport bureaux de change), others offer pure foreign exchange for delivery services.

So, the next time you look for a good foreign exchange service, don't rely on their profit margins to decide which one is worthy. You might find that the smaller firms can offer a much more streamlined and expert service than the big guns at the top.

29 June 2010

BP Shares Affected by Storm Alex Comment

BP shares have fallen again today after the company announced on Monday that its oil spill operation might be hampered by the tropical storm Alex.

The company's total costs for the cleanup and all the other facets of the disaster including claims are now estimated at $100 million each day.

BP shareholders have been affected not just by share prices in the company falling by half this year, but by the fact that dividends will now not be paid out this year.

Around 80,000 claims have been made over the oil spill which began on April 20.

22 June 2010

Osborne's Budget

The Emergency Budget is being announced today by brand new Chancellor George Osborne.

As had been widely expected, the report is filled with tough spending cuts and measures designed to reduce the huge deficit that the country is currently clouded by.

But while most Britons are bracing themselves for a time of bargain-hunting and tighter purse strings, there are some sectors that have reacted angrily at the way that they have been affected. One such group is that of public sector workers such as nurses and teachers, who are facing pension cutbacks.

Tax rises, pay freezes....welcome to the new British climate. The only hope is that it will do the job to get the economy back to stability.

21 June 2010

Currency Peg Between Yuan and US Dollar to Ease

The People's Bank of China (China's central bank) over the weekend made a surprise announcement: it intends to ease up on its peg against the US dollar.

Markets reacted with a jump in the yuan and Asian stocks, however these cooled somewhat as it became clear the Bank does not intend to make any fast changes. Monday's daily rate remained unchanged since Friday - proving that while a change is afoot, it will very much be at their own pace.

China's currency peg with the US dollar had put China under intense strain in its relationship with the US since mid 2008. The decision to ease up has come just ahead of the next G20 meeting in Toronot, Canada and many hope that trade and political relationships will improve as a result.

18 June 2010

Gold To Hit New High?

Gold hit a new record high on Thursday, reaching well over $1,245 an ounce on the New York Mercantile Exchange. As investors headed away from the US dollar amid poor US economic data, gold became even more popular as a safe asset.

The euro is also on an interesting week, heading for what could be its second straight week of gains. Earlier this month, the currency had slumped to four-year lows against the US dollar. Now, it has hit 3-week highs.

The euro was enjoying renewed interest among those investors seeking riskier assets. This was due in part to an auction of government bonds in Spain, which saw healthy demand.

17 June 2010

BP Cutbacks Surprise Investors

The oil giant BP has announced that it plans a $20 billion fund to pay for claims arising from the oil spill disaster in the Gulf of Mexico.

As part of its measures to pay its penalty, BP has also cut dividends for the next three quarters. The dividend payout for the first quarter due for June 21 has been cancelled, as have those in the second and third quarters.

Investors were surprised by the scale of BP's cutbacks - it also plans to sell assets and trim its investment programmes. Most had predicted that the company would pay dividends in shares for a quarter or two. UK pension funds are affected by this, as many have heavy investments in BP.

15 June 2010

Greece Downgraded to Junk - by Moody's

Greece recived another junk rating this week, this time from another top credit ratings agency, Moody's. Down to Ba1 from A3, Moody's is the second agency to downgrade Greece's government bonds.

The country, which has been at the heart and core of the European debt crisis, has pledged to reduce its deficit from 14% of GDP to 3% by 2014. So far, it says it is ahead of schedule on this mission.

Still, a downgrade seemed inevitable, though Moody's did add that this rating was now stable for at least 18 months.

The euro, which has seen some investor interest on the foreign exchange market over the past few days, has taken the main rap from the European crisis.

10 June 2010

UK Pensions Affected by BP Price Falls

UK pension funds are unlikely to be overjoyed at today's share market - BP share prices fell to 13-year lows in early trade before recovering slightly. As largescale investors in the troubled oil giant, UK pensions could be hit by possible dividend cuts from the firm.

Anti-British sentiment surrounding BP is apparently growing in the US, and anger around the oil spill disaster in the Gulf of Mexico is a daily emotion for politicians, investors, activists and the man on the street.

With widespread BP share selling on the market, the company's only reaction was that it did not see any reason to justify share price falls...

09 June 2010

Rise and Rally in Global Markets

A report showing that China's exports grew by around 50% in May compared with a year before has led to a rise in many global markets, including US index futures, commodities and the European share market.

Meanwhile sales of government debts led to declines in UK and German bonds. Governments in numerous European countries are selling bonds today in order to combat high public debts.

The news of China's growth comes at a time when many developed economies are experiencing a spate of slow economic activity.

08 June 2010

Australian Sharemarket Buoyed despite Global Falls

The Australian sharemarket managed to steer clear of the losses seen on Wall Street and in Europe on Tuesday - gains were seen on shares in mining companies and banks.

Since the end of last week shares around the world have been declining on the back of fears that the global economy is at risk of falling under the European debt crisis.

While US Treasury chief Bernanke assured markets that the US economy was stable, investors were still very jumpy around European assets.

It seems that now, investors are likely to stay wary of EU assets - while in Australia it was so-called 'bargain-hunting' that apparently led investors to keep the market afloat on Tuesday.

07 June 2010

Euro hits new 4-Year Low

Monday saw global stocks fall as renewed fears over the European debt crisis and the health of the US economy left their impact on investors.

After a low end to the week last week, with worse-than-expected jobs data in the US, and new focus on problems in the Hungarian economy, on Monday fresh fears of a double-dip recession affected markets which are already hyper-sensitive.

After overnight falls in Asia and Sydney, the euro fell to its lowest level in over four years against the US dollar on the foreign exchange market.

Good news for US travellers to the European mainland perhaps, but for already suffering European economies it brings another blow.

04 June 2010

Ready to Start on the Property Ladder?

According to latest figures from Halifax, house prices fell for the second month in May this year. In May they declined by 0.6% while in April prices fell 0.1% - so are we facing another housing market slowdown?

Generally, housing experts are erring on the side of pessimissm. Predicting flat prices for 2010, they say that there are concerns that the market is becoming slow.

But compared with a year ago in the same period, prices are much higher by nearly 7%! And with interest rates at their currently very low rate, now might be an ideal time to get buying and start the game of the property ladder!

Many Brits are still choosing to look abroad for their property bargains - with the weak euro and even lower prices in places like Spain, an overseas mortgage is looking more than possible...

03 June 2010

Global Stocks Surge

Stock markets around the world surged today, as investors ploughed into riskier assets. The US dollar and the Japanese yen took the knock while currencies like the Australian dollar enjoyed gains.

The main reason for the global surge was better-than-expected US housing data, which was greeted with cheers from investors. Now, the positive sentiment looks set to be rounded off with another round of good data on Friday, as US jobs figures are announced.

As ever there are warnings that the market sentiment may not last. The euro, while enjoying the renewed interest, could still be on a widely downward trend say currency strategists.

But for now, investors are enjoying a rousing day. Will tomorrow bring more of the same?

02 June 2010

US Begins Oil Slick Probe

The US government has begun its probe into the BP oil spill disaster in the Gulf of Mexico.

News that a criminal investigation was to take place sent US shares tumbling in the US on Tuesday, with energy in the lead. BP shares broadly lost value as investors shied away from its tainted reputation.

The cleanup operation in the Gulf of Mexico continues. There are still frequent reports that the efforts to contain the oil slick are just driving clouds of the murky liquid down, deeper into the waters.

The latest estimate for the end of the clean is August. The amount of damage that the oil will have achieved by then is hard to imagine and will certainly give BP a tough time ahead.

19 May 2010

Can You Borrow Today?

How easy is it to borrow money in these economic times?

With daily fears erupting on the financial markets regarding the fate of the euro, and banks facing widespread levies to prevent future risk-taking, you'd be forgiven for thinking that getting an unsecured loan was all but impossible.

However, there are ways you can borrow - the only question is how much can you risk?

Thanks to independent lenders offering payday loans and bad credit loans, borrowers can access cash quickly regardless of their past financial records. So, even if you have a poor credit rating you can still borrow up to a significant amount.

Easy it might be to borrow the money - is it easy to pay back? Regardless of the type of loan you take it is always worth thinking of tomorrow.

18 May 2010

Sterling Retreats

An interesting morning in the London session, as the pound rose initially after backing down against the US dollar. The reason for the rise and fall was the announcement of April inflation figures.

The ONS revealed that inflation for April rose by 3.7%, higher than had been expected by economists.

For the pound, this means weakness is likely because investors now expect that interest rates will be raised sooner than expected on the back of high consumer prices.

As for the country's large deficit, the new coalition government is set to introduce 6 billion pounds of spending cuts as early as next week.

17 May 2010

Will the Euro Survive the Crisis?

Once again technical difficulties have prevented Which Way To Pay from posting updates recently - but we're back and those who are abreast of the latest economic news will know that the European debt crisis is still very much top of the list.

Gone are the days when it was said that the crisis was purely localised to the region. Sure, currently only euro zone countries are directly affected by the euro's battering on the currency exchange and other financial markets. But countries as far as Australia are now also feelingt the knock-on effect from the troubles which have dominated the agenda for Merkel and friends.

In the US, there is increasingly commentary about the longevity of the euro as a single currency. At inception in 1999, the euro was hailed as the next US dollar, a leading world currency. Now, even those as prominent as Fed Chief Paul Volcker are saying that there is a danger that the euro could actually topple.

Is it possible that the days for the 16-nation currency are numbered?

12 May 2010

New Government in Britain

Britain has a new Prime Minister, and a new coalition government! David Cameron, the leader of the Conservative party is now the PM of the country with Nick Clegg, leader of the Liberal Democrats as Deputy.

A round of groan-worthy jokes are already in circulation, including the classic "Con / Dem nation..."

So, will the new leading parties be able to fix the country's economy? Will ordindary people find it even trickier to borrow money or get a personal loan in the new climate?

Businesses are already anticipating that public spending cuts will be high-priority.

10 May 2010

Euro Surges after Lows

EU finance ministers and central banks have agreed on an emergency loan which can be called on by any of the 16 euro zone member countries if they are at risk of falling into severe credit problems like those of Greece.

The fund, agreed on over the weekend, caused the euro to surged while global stocks also rose. International investors are finally calmed by the European situation which last week threatened to reach to severe levels.

It is also hoped that negative speculation surrounding the euro will now slow down and that the currency will be stabilized - at least, that is the hope.

06 May 2010

Election 2010 - D Day

Election day has dawned at last! With over 40 million people registered to vote and a tensely-awaited result, it looks set to be an exciting one. At least, that is how it looks for observers - for the financial markets around the world, the best word to use is perhaps less 'exciting', more 'nervous'.

With a hung parliament now widely expected, the UK could be in for more in the way of slow economic recovery. The deficit, already sky high, is expected to reach 12% of GDP this year - higher than that of Greece!

Talking of Greece, the euro fell once more on the worrying situation there. On Wednesday, riots erupted during the 48-hour general strike, resulting in the deaths of three people.

28 April 2010

Oil Companies Post Healthy Profits

Shell, the oil company, has announced big profits for the first quarter of 2010, up by nearly 50% on last year.

The company announced its news after other oil giant BP also announced big returns for the first quarter.

According to both companies the outlook for oil in this year remains firm. Currently a barrel costs around $75 having already peaked at over $80 earlier this year.

A far cry from the end of 2008, when the commodity had sunk to severe lows; after having reached $147 in the summmer, by Christmas a barrel fetched a mere $30.

Since then oil has steadily climbed as demand has risen and global recoveries have taken place. The recent air chaos over Europe which did cause a dip in demand from air companies, has not so far had a major effect.

Meanwhile Greece has had its credit rating slashed by S& P's, down to junk status. The news has caused more euro woe on the foreign exchange market as it plunged in early trading.

23 April 2010

Greece Caves in and Calls for Bailout

Greece sent the euro shooting up today - yes, up! But why?...

Well, today they finally announced that they would be accepting the large bailout package which has been put together by other EU nations (well, those in the Eurozone) and with help from the IMF.

The news brought some relief to investors, who can now foresee that Greece might be able to clear up its financial mess.

However, foreign exchange market insiders commented that the relief to investors is only likely to bring short-term interest in the euro and that the IMF's involvement could be bad in the longer-term for the euro.

16 April 2010

Politics Lead to Pound Drop

Politics are taking over the news in the last few weeks up to the general election on 6th May. Last night ITV showed a debate between the three main party leaders:

- Nick Clegg (Liberal Democrats)
- David Cameron (Conservatives)
- Gordon Brown (Labour)

Before the debate was beamed out to UK households, the Conservative party had managed to gain a better lead over the Labour party leading a rise in the pound sterling on the foreign exchange market..

After all, it seemed as though a clear majority winner was on the cards after all. Then, Nick Clegg as the party leader least likely to see his party win the election, managed to win over the majority of audiences up and down the country with his convincing rhetoric.

Cue: drop in the pound as fresh uncertainty enters the race towards 6th May. Is a hung parliament back on the cards?

15 April 2010

Opinion Poll Shows Tories are Gaining Ground

According to an opinion poll, the Conservative opposition party have managed to gain more points in their lead over the Labour party in the run up to the elections.

The news that one party may make a clear majority win over the other caused the pound to shoot up to a seven-week high against the US dollar and the euro on the foreign exchange market.

Overall the pound has had a relatively strong week, due mainly to positive data from the retail sector while latest figures showed a shrink to the country's trade deficit.

Whether or not the Tories will prove better leaders (if they really do win) or whether investors are simply happy that there is a clear leader at all remains to be seen.

14 April 2010

Pound Rises on Narrowed UK Trade Deficit

More positive news from the UK economy this week, the latest of which was even better than expected! The UK trade deficit narrowed notably in February, and became smaller than it had since 2006.

As a result, the pound rose by a small amount on the currency exchange market. Currency analysts, ever cautious, said that there were some improvements overall to be seen with regards to the British economy and that this might have an effect on the pound in the medium term.

It was stated that the weaker pound may have helped exports to improve - every cloud...!

13 April 2010

Retail Sales Surge in March

Post Easter break, and the sales figures for the UK retail sector look good for March. The latest flurry of surveys, out at the beginning of each new month to show the last month's performance for the economy show that shoppers were out in full force in preparation for Easter.

Falling at the beginning of April, consumers hit the shops in March and made the most of aggressive price cuts offered at most supermarkets. Retail sales were up by their fastest rate in nearly four years.

Meanwhile the euro started this week on a surge of strength thanks to a reported €30 billion bailout package for Greece, which was agreed upon by EU leaders and the IMF. The package - which is essentially a massive loan with a relatively low interest rate (around 5%) - may not be called upon, say Greece. They hope that their austerity measures will be sufficient to cut the deficit there.

30 March 2010

Pound up against Weaker Dollar

The pound rose against a broadly weaker dollar in this morning's currency trading, but investors are still focused on the political uncertainty which overshadows the run-up to the May general election.

Later today the final adjustment to fourth quarter GDP figures will be made, and some hope that it will rise once more. Starting with 0.1%, it was then revised to 0.3% - will it reach any higher?

Meanwhile in the City, the FSA is carrying out a massive crack down on insider trading, the activity which has been illegal since 1980.

26 March 2010

EU leaders Agree on Greece Plan

The IMF has joined EU leaders for a large aid package for Greece, the total of which has now reached €22 billion.

Initially, the leaders of various EU countries were not keen on rushing to the aid of Greece, which is struggling under the weight of its massive deficit.

Germany for one was less than impressed with the idea of paying up in order to rescue Greece's economy. After all, argued Chancellor Merkel, surely we should all be trying to rescue our own economies before handing out cheques to the others?

Other leaders were more supportive including France. Nikolas Sarkozy and others argued that by helping Greece, the entire Eurzone is rescued from the constant pressure on the euro.

Whoever has the better argument it seems that the IMF's agreement to step in was enough to rein everyone into the plan. The euro rose against the US dollar and the pound after the plan was announced, but will it last?

23 March 2010

Germany proposes Bank Levy

It's pay-back time in Germany. The government, run by Angela Merkel of the conservative CDU party and her coalition party the FDP (headed by foreign minister Guido Westerwelle) are set to introduce a levy on banks for the massive bailouts they received during the financial crisis.

The levy is set to dissuade banks from relying on the state to rescue them in future, if they reach critical moments like those of the end of 2008.

Germany is so far the only country which is proposing to carry out such an action. Other big economies like the US and UK have set up a tax on financial sector bonuses to prevent further risk-taking, espcially through speculative currency trading or shares dealing.

19 March 2010

European Shares up with Banks in the Lead

Today European shares rose in the morning thanks to an announcement from Lloyds Banking Group. They expect to make profits in 2010, meaning good news for all - consequently banks led the share rise.

Lloyds is still 41% owned by the Government, after they were forced to bail out the ailing banking giant last year. This was due to the financial crisis and the difficult takeover of Scottish bank HBOS.

Now it looks as though things are taking a turn for the better. However, there is always one spanner in the works and today it was thanks to a BoE official who warned that there is still the risk of a double-dip. In other words, that the recovery of the economy could take a sharp knock downwards.

The comments sent the pound down on the currency exchange market.

09 March 2010

The Pound Extends Losses while Greece Calls for Fairer Treatment

The saga continues. Now Greece is lashing out at the USA for the apparently careless way in which traders and speculators are treating the euro. Greece's prime minister Mr Papandreou accused speculators of acting with greed, betting against the euro single currency and on default for Greece. He called for US officials to reign in such behaviour and to tighten up the way in which the financial market is regulated.

To be fair, he isn't alone. France's President Sarkozy also called for an end to speculators taking the situation 'too far'. He stated allegiance with Greece and said that if they need support, they will get it.

So, are foreign exchange traders being too callous with the fortune of Greece (and the other nations in the 'PIGS' group (Portugal, Italy, Greece and Spain)?

Meanwhile, the pound has extended losses this morning as weak housing data was released, as well as ratings agency commenting that Britain's credit profile had "deteriorated".

04 March 2010

Euro Rises on Greek Plans

Euro selling eased slightly in the foreign exchange market late last night - hooray! Thanks to a new plan to reduce deficit announced by Greece, investors were able to re-introduce a small amount of risk appetite.

As protesters and demonstrators took to the streets in Athens to battle the austerity plans (including a rise of VAT from 19% to 21%), international investors became ever so slightly more relaxed in relation to the euro.

The euro wasn't able to gain against the pound, due to the latter's advances following positive UK data.

03 March 2010

Pound Rises on Good Data

The pound rose today against the euro and the US dollar after better-than-expected UK economic data.

For one, consumer confidence is apparently at its highest level in two years - what happened to those awful January retail sales figures? - and the services sector reported a good improvement February.

What with GDP growth for the final quarter of 2009 being raised to 0.3%, anyone would think that the country is in a pretty good state. Indeed, it was the fact that the recession was over that apparently made consumers head out and shop with less caution. Not only that but consumers are also very confident about the next six months - the most confident than they have been since 2004!

But this week alone, the pound was receiving a fair knock in the currency exchange market, as investors shied away from the uncertain political future of Britain. The short term outlook for the pound remains shaky though any better-than-expected data has sent some investors head back for the currency.

02 March 2010

01 March 2010

Copper reaches $7,600 a tonne

Copper prices surged at the weekend in the aftermath of the huge earthquake in Chile. Commodity futures raders on the London Mercantile Exchange (LME) panicked when the 8.8 scale quake hit, worrying about copper supplies - Chile is the world's largest producer of the precious commodity.

For indeed, while a natural disaster often has tragic and traumatic effects - hundreds dead and more missing, many areas in ruins - it also has a direct effect on financial markets.

Copper is expected to reach $8,000 a tonne in the short term - on the weekend it reached $7,600.

24 February 2010

Online Accounts with Foreign Exchange Brokers

Welcome to the Foreign Exchange market, membership - global, daily turnover - well over $3 trillion.

The foreign exchange market is the largest liquid market in the world and is now highly populated with private investors alongside the corporate foreign exchange investors. While companies traditionally buy and sell currency pairs as part of their profit-making arms, private investors can trade directly for returns.

Most foreign exchange brokers now offer an online service alongside the more traditional telephone execution method - this allows for 24 hour trading and as many daily trades as possible.

18 February 2010

Pound rises on MPC minutes

The pound rose against the euro after the Monetary Policy Committee of the Bank of England released its latest meeting minutes.

It was shown that all nine members of the MPC had voted against increasing quantitative easing. This did surprise some economists but it was suggested that the committee's unanimity was only just reached.

Apparently they were worried that if they increased QE, the public would get a negative impression on how they are dealing with inflation.

Inflation was 3.5% in January, much too high when you consider the government target is 2%. Yet in the medium term it is forecast to be 'below target' - something which would actually warrant more asset-buying to drive it nearer to target.

17 February 2010

Euro gains after Weeks of Sell

Has anti-euro sentiment gone too far in recent weeks? Some currency exchange analysts seem to think so; and as if by magic the euro climbed on Tuesday - is risk appetite back among investors?

Greece's fiscal problems have really given the euro what some have described as a fair battering over the last few weeks. But are currency traders cautiously heading back to the eurozone single currency?

Meanwhile there is a lot of key data being announced this week, much of which will surely have an affect on the pound.

Yesterday, CPI figures were released showing that inflation rocketed to 3.5%, well above the 2% target. This didn't seem to bother markets much, though BoE minutes and retail sales figures to be announced might prove important for the pound. Will it retreat or wobble under pressure?

11 February 2010

Sterling in 2010

Where is the pound heading? The Bank of England believes its depreciation - helped by the asset-buying scheme which was frozen last week - will prove positive in the time to come. Currently, it sits between the euro's weakness (thanks to the fiscal problems in Greece) and the strength of the US dollar, which is being used as a safety net.

Since EU members have started to talk of providing boosts for Greece to help it out of its deficit problems, the euro has bounced back a little. Yet in the week to 2nd February, speculators bet against the euro in record numbers. Short positions reached around 400,000 according to some reports.

So, are the UK's economic problems as bad as those of Greece? The Bank of England Governor Mervyn King says not, saying that the two countries cannot be compared. Judging by the amount of investor nerves on Greece, one certainly hopes so - the UK needs all the help it can get. A quarter of negative growth is expected for Britain this year.

09 February 2010

January Retail very Low

January retail sales on Britain's high streets were at their worst in 15 years - not a great start! In December, despite freezing weather shoppers had been out shopping in droves - why did they stop in January?

Well, for one VAT returned to 17.5% after having been at 15% for a long while. Another factor is, believe it or not, the continuing cold weather and snow - it makes people want to stay at home.

It's not all bad news though - online shopping is as healthy as ever and continues to gain strength. Food sales are also not doing too badly.

Meanwhile currency speculators are still nervous around the sterling - despite a cautious edge up this morning against the US dollar - at 0.1% it wasn't a huge rise but nevertheless better than Monday's 8 1/2 month lows.

05 February 2010

Stocks Fall in EU and USA

On Thursday (yesterday), stock markets in both the US and Europe experienced sharp falls. Why?

Well, for Wall Street the downer came thanks to unemployment claims figures which were released. They were worse than expected - making investors jumpy about what is going on with the economic recovery. Will it ever gain stability?

In Europe, there were renewed fears about Portugal. Is it going to be the next Greece? Government bonds there fell in demand - and as investors are already nervous about the situation and whether EU stability will be weighed down by Portugal, shares took a dive.

One or two economists reacted to Wall Street's drop by saying that investors had been "spoiled" by gains since March last year and that the market still needs to finish correcting.

04 February 2010

Greece Deficit over Four Times too High

The nerves over Greece's economic problems have really hit the currency exchange market - and there is risk that this jumpiness will spread to other European Union countries who are in trouble.

The euro has really suffered the knock - but for how much longer?

Did you know that Greece has a budget deficit over four times higher (at 12.7%) than is allowed by the EU rules? It now plans to reduce this to less than 3% by 2010 - an ambitious intention!

So ambitious, most of Brussels is in doubt that they will achieve it - but the European Commmision has vowed to support Greece (and will keep a heavy eye on them too).

After all, surely it is better that they reduce the problem than ask for a big bail out from other EU countries?

03 February 2010

Consumers are Happier!

Good news! Consumer confidence was up in January - and by nearly three times more than in January 2008.

January 2008 was a time of deep doom and gloom about the economy, yet no-one expected that the recession would continue as long as it did...

So, are more people out and about shopping and being happy consumers? Well, not quite - but the outlook seems to have improved. Now that the country has officially exited the downturn (though at 0.1% it was hardly earth-shattering) it looks as though overall there is a more positive outlook.

Meanwhile, the currency exchange market is eagerly waiting for the BoE's latest decision on the asset-buying programme ---- will it continue? Or is it time to slow it down - one might think consumers would probably say we're ready to stand alone!

01 February 2010

The Pound Tumbles

Speculators are eagerly waiting for the next Bank of England decision - which will happen on Thursday.

On the currency exchange market this morning, the pound took a dive against the US dollar and the Euro. Speculators are worried that the Bank will decide to extend its massive QE (quantitative easing) programme - a fact which would cause large amounts of pound-selling.

In addition, there was a flurry of concern about Britain's political climate: surveys published over the weekend showed that right now, neither of the two main parties (Labour and the Tories) would get a majority win at the general election.

Seems as though neither Gordon nor David can be sure that they will be governing the country come summertime.

28 January 2010

Bankers Refute Drastic Changes

In Davos (Switzerland) the World Economic Forum is well under way. Day one (yesterday) kicked off with some firey talks between bankers and UK and US administrations.

Big banks are certainly willing to refute that making them smaller will fix the world economic calendar, in particular the way in which large western economies conduct their financial sectors. Yet leaders from the US, UK and now France are all on course to fight a tough battle to make major changes.

Meanwhile, the pound continues a strong performance against the still-suffering euro. How long will Greece's fiscal problems weigh heavy on the Eurozone single currency? Apparently, now Portugal is also beginning to add pressure to the euro.

Critics of the single currency spanning such varying economies will be surely having a field day (or week, even month)!

27 January 2010

Recession is over....Just

The markets certainly wasn't happy with the fact that the UK only just scraped out of recession in the fourth quarter!

Yesterday morning, there was a mood of keen anticipation on where the final figure would lie - would it be as much as 0.4% of GDP growth? Many dared hope, while others went with the lowest forecast of 0.2% just to be on the cautious side.

Well - no-one expected the final number to be 0.1%. So, the United Kingdom did leave the recession - but by a margin.

The pound, which had been enjoying the gains thanks to the positive outlook, took a dive on the news.

Will the UK be the only country with such a dire total? And will the first quarter be better - or worse?

26 January 2010

Sterling Boosted by Fourth Quarter Hopes

Markets are waiting eagerly for an announcement due later today, in which they hope to hear that the United Kingdom exited the recession in the fourth quarter.

The forecast has alredy caused the pound to gain some ground against the euro in this morning's early trading - it gained 0.3 per cent.

Most experts are expecting that growth was somewhere between 0.2 and 0.4 per cent - let's hope that they are right...

If growth is worse than expected then the pound might be first in line to take a beating!

25 January 2010

Shares Fall

The shares and currency market is experiencing a concerning time for traders and investors - thanks mainly to US President Barack Obama's plans for major changes to the banking sector in the US, many large bank shares fell in this morning's early trade (London session).

The currency market also took a hit at the end of last week, with the pound sterling falling against the US dollar.

Meanwhile the dollar fell against the euro and the yen, also because of the Barack Big Bank Shakeup. Currency exchange traders seem to run to the yen whenever there is uncertainty in the US, while selling the dollar in droves.

21 January 2010

China GDP in Double Figures

China's economy is so strong, it has even pushed double figures into the picture for 2009.

This seems entirely different to the struggling recovery of the UK and other western nations, yet China is now on course to take on the crown of World's Second Largest Economy - putting Japan beneath it.

Chinese officials claim that thanks to the 150 million people in China living poverty, it is unlikely that they are strong enough to take over from Japan. Indeed, they remind us that China is still a so-called 'developing country'.

Developing indeed, with GDP at over 10 per cent for the last quarter of last year (when compared with the year before). Many will now be studying their financial charts and data to see how markets react to the news.

19 January 2010

Markets open Cautious

Currency exchange investors are cautious this morning as they await a key speech from the Bank of England's governor, Mervyn King. They are hoping he will give some indication that the current asset-buying scheme will be called to an end. So far, around 11 billion pounds have been spent on the programme.

Meanwhile, the FTSE 100 opened down as investors shied away from taking large positions - this was partly due to them waiting for key earnings data from the US.

And finally, the CPI index for the UK which measures inflation showed an increase for December. Again this is likely to affect markets but many inflation experts say that the jump is likely to be temporary.

Happy Tuesday.

18 January 2010

IMF warns of Double Dip

Watch out for those emerging economies, say the financial advisors. They are the hot tip for many investors and now the head of the International Monetary Fund (IMF) has said that developing nations are recovering much better than the advanced ones.

Mr Strauss-Kahn made his comments while announcing the latest forecasts for the global economy. Overall it is expected that the world economy will grow by 4.1 per cent in 2010.

But Mr Strauss-Kahn warned that developed economies should take care with regards to their fiscal policies - and not remove the strategies too soon, so as to avoid another downward turn.

He said that it would be crucial for governments to tackle their public debts in the coming time - which the UK knows all too well.

Meanwhile, the euro fell to 4-month lows against the pound this morning, reaching to below 88 pence.

15 January 2010

Claims for Credit Cards

People who are thinking of claiming against their lender for credit card charges or a large debt might find it a bit trickier under new guidelines.

The OFT plans to make a matter clearer which until now was often a handy loophole: the 'original agreement' topic...

If the lender was unable to produce an original agreement document within 12 days of the borrower requesting it, the debt became unenforceable. Not bad - but now lenders are likely to be allowed to produce a 'true copy' of the document. This will suffice as evidence against the borrower.

Annoying for those who are already in the process of trying to write off their debts. But there are some things one could do: one could find a really good claims service to try and find a solution. Or one could go to the root of the matter: think carefully before taking a credit card or loan and make sure you are prepared for repayments!

If you think borrowing is not your game, there are alternatives - the prepaid card is a great way to pay without borrowing money.

14 January 2010

German Economy in Trouble?

In a picture of role reversal, the German economy has been told that its economy shrank by a worse-than-expected 5 per cent in 2009. What's going on?

Until now, among the developed economies it was the UK which was the proverbial naughty child in the corner. After having partied hard until the bank crash of the end of 2008, the UK watched its currency fall to near parity with the euro for 2009.

While other nations gradually emerged from the recession towards the latter part of 2009, the UK seemed to be left behind. After all, its fall was far greater than that of its European counterparts France and Germany - they hadn't been quite so careless with borrowing and risk-taking so they didn't have so far to fall.

Yet now it is expected that - finally - Britain will be told that its economy left the recession in the fourth quarter. Meanwhile, Germany is concerned that its fourth quarter results will be less rosy.

Indeed, some even think there may be a sharp fall. Yet there are economists who predict a mild level of growth - but encourage a careful reaction so as not to damage the fragile situation.

13 January 2010

Pound Gains on Good Retail Sales

The pound sterling enjoyed an early week boost this week, as good data on the British economy was released.

According to the figures, retail sales were up year-on-year in December, with many shops reporting good sales figures for the Christmas shopping period. Indeed, on Boxing Day there were some record numbers recorded for some high street chains.

In addition to the good retail numbers, there was better-than-expected news on the UK's trade deficit - it shrunk enough for some economists to predict that the country exited the recession in the fourth quarter.

Currency exchange traders and experts will be keeping a close eye on the pound in the first half of this year, as it reacts to the country's general elections.

11 January 2010

CFDs, Spread Betting - too Risky for New Rules?

Severe weather might be causing new chaos across Europe, but in the financial world there is an air of cleaning up. As the world recovers from a severe period of recession, world leaders are beginning to figure out new strategies for the world economy.

Many wonder about the role of speculative trading - CFDs, Futures and spread betting are all in the spotlight. Will there be great changes to the way that derivatives are traded or will it be business as usual?

According to experts, there are links between the nature of speculation within the financial community, and the fall of many key banks towards the end of 2008. Yet there have been no indications as yet that retail traders (in other words, regular individual investment traders) will be greatly affected by possible changes.

Yet trading in derivatives for large corporations - especially investment banks - might be monitored much more tightly to prevent another breakdown in the future.

07 January 2010

Snow means Oil is Up too!

Snow, snow, snow. It seems to be creeping in everywhere and as usual is leaving a trail of mayhem in its wake.

Everytime a large amount of snow hits the UK, a general chaos hits roads, public transport and general life. Schools close, businesses complain about low sales - pretty much everything can be blamed on the weather when it snows.

One industry is pleased about the cold snap - because demand for its product rises. Oil has gone up in price again, thanks to very cold weather in the UK, Europe and the US.

On Tuesday, New York crude even reached to beyond $80 a barrel. Good news for commdodity investment traders who had been betting on a price rise in the early New Year!

06 January 2010

The Rise and Fall of QE

Apparently QE is working, say analysts based on the latest data release.

QE or quantitative easing is the process whereby a country's government boosts its economy with fresh money.

Sometimes referred to as a money-printing scheme, it is often controversial thanks to the similarities it often draws to incidences in modern history where inflation rose to uncontrollable levels.

Both in Weimar Germany (in the 1920s) and in recent Zimbabwe, so much money was injected into their economies that hyperinflation resulted - making money as good as worthless.

Yet this current QE programme - which the governemnt is using 200 billion GBP for - is apparently much stricter and unlikely to lead to such drastic conditions.

They'd better be right about that!

05 January 2010

Fresh Start as Shares Climb

New Year, New Hope? There are so many clichés at the start of a New Year about fresh starts and new ideas, but there really does seem to be some optimism surrounding financial markets at the start of the working week this 2010...

Share indices, manufacturing, commodities - trading charts showed they were all up on Monday, and not just in particular parts of the world. No, there was good news in the UK, the US, mainland Europe and in Asia!

It is not just Gold that is enjoying an upward trend in the past months - copper, its less glamurous cousin on the precious metals list, is also enjoying a boost. Keep an eye on that, prospective commodity retail traders!

So - does the year ahead show signs of better economic health for nations around the world, or is this just typical for early trade each new year?