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Economic Bulletin(Gordon Browns One Eye'd Head I Hope)


1. VALUE OF KEEPING THE POUND: £2,000/YEAR PER BRITON!

http://www.thesun.co.uk/article/0,,2-2006580615,00.html

THE average Brit is £2,200 a year better off than Europeans because we kept the pound.

Figures show households here enjoy a far better standard of living than in Spain, France, Germany or Italy.

Our 'purchasing power' per head is £2,214 higher than the average of the other four major economies.

And it is all because Britain did NOT join the euro, reports The Economist's The World in 2007 dossier.

The findings are a vindication of The Sun's Keep the Pound campaign. But incredibly the nation's leading foreign policy experts, Chatham House, last night called for Britain to JOIN the euro, SCRAP border controls and snub the UNITED STATES.

Their advice flies in the face of a study by City experts Grant Thornton showing the UK has boomed while euro countries have nosedived since the launch of the single currency.

The typical Brit is seven per cent better off than the French, 13 per cent above Germans, 16 per cent richer than Italians and 22 per cent more prosperous than Spaniards.

Their countries have been locked into the same interest rate since 2001.

Chancellor Gordon "cyclops" Brown freed the Bank of England to fix UK rates free from political meddling in 1997 -- and blocked membership of the euro.

Chatham House bosses said Britain needs to distance itself from the US after events in Iraq.

They reported that we need to ditch the pound and drop our immigration policies to prove ourselves 'good Europeans'. - Allow killing savage scum in from shit holes in North Africa they mean....

But Foreign Secretary Margaret Beckett said: 'This paper is threadbare, insubstantial and plain wrong.'

2. GORDON "CYCLOPS" BROWN DROWNS US IN DEBT

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/10/ccliam10.xml

Gordon Brown used his 10th pre-Budget report (PBR) to boast that he has presided over 'the longest period of sustained growth in British history'.

Cheered on by adoring Labour MPs, the Chancellor told the Commons that Britain had expanded 'for a record 38 quarters in a row – and will now continue into its 39th quarter, its 40th and beyond'.

Government debt, spending and tax burden charts - click to enlarge With his "one" eye now firmly on No 10, Brown claimed that his Treasury successor would take charge of an economy with 'the strongest of foundations to meet the global challenge' posed by India, China and the
other emerging giants.

But, amid the bluster, what did the PBR really mean? What is the UK's underlying fiscal position – and how is it changing? The short answer is that the Government's finances are sharply deteriorating. Brown was last week forced to announce a significant rise in both tax and government borrowing – despite the economy growing faster than expected.

Grinning at the dispatch box, the Chancellor reported that Britain had grown at an annual rate of 2.75 per cent so far during 2006/07 – well above his 2.25 per cent Budget forecast back in March.

But stronger growth is supposed to lead to higher revenues and reduced benefit spending – allowing government borrowing to fall. Why, then, did Brown last week disclose that he will now borrow £37bn in 2006/07 – £1bn more than his March prediction? And why did the PBR documents show that over the next five years total borrowing will be £7bn higher than
he calculated just eight months ago?

The truth is that the 'Iron Chancellor' has long shown a cavalier attitude towards fiscal management. Year after year, his borrowing has turned out to be much higher than his forecasts. Last week's PBR – less an economic statement than the latest staging post in a remorseless political campaign – was a classic Brown performance. Drunk on ambition, he did nothing to acknowledge the true scale of his liabilities, or the fact that his fiscal rules lie in tatters. Yet the man who presents himself as our next prime minister is living in a never-never land of debt.

New Labour's 1997 election manifesto pledged to 'save and invest, not tax and spend'. But Brown has undertaken the biggest spending spree in our history – pouring money into schools and the NHS, in particular.

Since 2000, real annual public spending growth has averaged 5 per cent, compared with 2 per cent during the previous 30 years. As a share of GDP, such spending has rocketed from 37.4 per cent in 1997 to 44.9 per cent today. Over the same period, government receipts have risen from 37.0 to 42.1 per cent – despite that manifesto pledge. This seemingly small percentage gap between public spending and revenue amounts to tens of billions of pounds. And every year, as part of his on-going bid to spend his way to popularity, Brown plugs that hole with borrowing.

This is not free money. It must be repaid by future taxpayers. That is why we should worry that Brown's borrowing is running out of control.

In his budget five years ago, the Chancellor said he would borrow a total of £28bn between 2001 and 2006. He has, so far, taken on debts of £129bn during that period. His prediction was a jaw-dropping £100bn astray. Since 2002, borrowing has exceeded £30bn – more than Brown's five-year total – every single year. That's why 'prudence', Brown's former mantra, wasn't mentioned once in either his March budget or this latest PBR.

Last week we learnt that the Chancellor intends to borrow another £182bn on our behalf between now and 2012. So he will be taking on extra debts annually, amounting to one and a half times the UK's total council tax receipts. And, on past form, even this vast amount could be
an underestimate.

This borrowing binge has shattered the Chancellor's much-vaunted 'golden' rule, which requires government spending to be balanced over the course of the economic cycle. But Brown keeps moving the goalposts in an absurd bid to convince us it remains intact.

In each of the past four Budgets he has raised his borrowing estimate while pushing forward the expected date when his accounts would move back into surplus. Last week he also shifted the end-date of the economic cycle – for the third time in as many years. By defying expert opinion, and unilaterally deciding that the cycle has now ended, Brown can assert that a new cycle has begun.

That allows him to borrow anew over the next three years – as the general election approaches – while claiming that he can exercise restraint before this new cycle ends some time around 2012 (when the election will be past). This arcane accounting trick gives Brown the fiscal wriggle-room to amass an election war-chest – at our expense – while arguing that his 'golden rule' remains intact.

Such behaviour insults our intelligence and undermines this country's hard-won reputation for fiscal probity. If this is how Brown treats statistical concepts in public, imagine the liberties he is taking behind the scenes. Little wonder the 'golden' rule is now derided. 'The cycle is lengthening and shortening like a yo-yo,' says the Institute for Fiscal Studies. The Item Club says the rule is now 'simply a farce'.

Brown's bull-headed refusal to recognise that his own code has been broken – and to take appropriate action – speaks volumes. Clearly, his blind political ambition now far outweighs any vestige of fiscal responsibility.

The other part of Brown's fiscal code, the 'sustainable investment' rule, is also now in jeopardy. This requires government debt to remain below 40 per cent of GDP. PBR documents show such debt climbing to almost 39 per cent over the next three years. But many economists judge
that if the Chancellor's off-balance-sheet liabilities are included, this rule, too, has been breached.

Brown has made extensive use of the private finance initiative (PFI) to fund public sector building projects. Under PFI, billions of pounds of liabilities don't appear on the Government's books. But taxpayers are paying through the nose so that Brown can flatter his figures.

The Chancellor has signed more than 700 PFI deals since 1997 – buying public services worth £43bn. The long-term price we will pay is £150bn. Throw in public sector pension liabilities and other off-balance-sheet debt and Brown's 'sustainable investment' rule also lies in ruins.

Try as he might, the Chancellor can't hide the reality that his finances are now under serious pressure. Treasury revenues are being squeezed by higher inflation and interest rates, which raise the cost both of index-linked benefit payments and of debt-servicing. Meanwhile, lower
oil and gas prices have reduced receipts from the North Sea, the Chancellor's erstwhile favourite cash cow.

Since the 2005 election Brown has, when measures buried in this latest PBR are taken into account, raised taxes by £6bn a year. That has added £200 per annum to the average family's tax bill.

That's because he is quite simply running out of money. Which is why, as his desperate bid for public acclaim continues, he feels driven to make false spending announcements. For all the fanfare of a 'new start for schools', the PBR delivered a mere £20 extra per pupil per year.

In fact, careful reading of the PBR suggests government departments may be in for a shock next June when Brown unveils his spending plans. Instead of 4-5 per cent, spending will rise in real terms by more like 2 per cent a year – which will feel like a serious cut. Expect the
salaries of teachers and nurses to be frozen. Expect public sector strikes.

As his leadership campaign cranks up, though, Brown's ability to restrain public spending and avoid further breaches of his rules remains in doubt. So far this year, public spending has already risen by 7.1 per cent. If it is to stay on course, and achieve Brown's 5 per cent ceiling
(raised last week), spending must be constrained to only 2.3 per cent between now and April. Given the key role public sector unions will play in crowning Brown Labour leader, I doubt that will happen.

After years of high borrowing, this Chancellor simply lacks the political grit and judgment to exercise restraint. So he will be forced to raise tax even more. Brown has already raised the tax burden sharply since 1997, while our competitors have been moving in the opposite direction. He claims his PBR 'drives forward the great economic mission of our time – to meet the global challenge'. Really?

It seems to me his legacy is one of high and rising taxes and unreformed public services. Thanks to his borrowing binge, we face more than a decade of high government deficits. Even his central boast, that the UK is 'a uniquely high-growth economy', is nonsense. We have just fallen to 22nd out of 25 in the EU growth league – hardly world-class. As with so many other home truths, the Chancellor failed to mention this during last week's PBR. He was too busy dreaming about life in No 10.


3. BROWN CONSIDERING SALE OF NATIONAL ASSETS

Once-off asset sales are a terrible way to balance the budget, as when the assets are sold, they're gone! And the fact that the government is selling assets for 'more than book value' doesn't mean they're striking a hard bargain, it only means the book values are conservatively reckoned.

www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/11/cnselloff11.xml

Gordon Brown is sitting on assets worth up to a possible £1,000bn - a treasure chest large enough to ease the funding shortfall that emerged in last week's pre-Budget report. The valuation has being calculated after it emerged the Government is making sky-high profits from selling its assets.

In recent months, the Government has sold agricultural warehouses, embassy buildings and civil servants' housing - all for considerably more than their official book value. The sales come as part of Mr Brown's drive to raise £30bn by 2011 from government asset sales. Accountants and property experts have raised eyes at the sums being achieved. The British embassy in Bangkok, for instance, sold off 3½ acres 'of the noisest, most polluted and least used part' of its 13- acre compound to a shopping centre. For this small sale, it received £50m. The entire complex was valued at £8.8m in the 2001 National Asset Register.

The Department for Environment, Food and Rural Affairs in recent months has sold Tangmere Grain Store in Cheshire for £4.05m to property developers. It was on the books at £647,000. And this week the Ministry of Defence is expected to announce the short-list of buyers for the
Chelsea Barracks, 13 acres in central London, valued at £58.5m on the NAR. Jon Milward, the property agent selling it at Drivers Jonas, said he would be 'disappointed' if he didn't get £500m.

Dubbed the modern Domesday Book, the NAR, first issued in 1997 and reissued in 2001, lists every single Government asset, from computers and vehicles to embassies and No 10 Downing Street. The total value in 2001 was £270bn.

The Treasury is working on a new NAR, due to be released next summer. However, some are questioning whether the exercise is a waste of time if the Government's valuations bear no relation to market reality. Vince Cable, the Treasury spokesman for the Liberal Democrats, said
the NAR was 'largely meaningless'. The 700-page document throws up various anomalies, such as Kew Gardens, which occupies 300 acres of the finest land in south London, valued at just £2.3m.

Ruth Lea, director of the Centre for Policy Studies, said: 'It strikes me as a completely futile exercise and a waste of money.' Assets are valued on an existing use basis. Property experts say the recent sales suggest that if the buildings and land were valued at market rates the total haul would easily reach £1000bn, especially considering the surge in property prices since 2001.

However, while the most recent sales have highlighted the flaws with the NAR, some have congratulated Mr Brown's timing - in sharp contrast to sale of the country's gold reserves, which are at close to a 20-year low.

4. IS CHINA ABOUT TO DUMP ITS DOLLARS?

A huge high-level delegation, with not one but several American cabinet members, is in Beijing right now, negotiating ... something very important, one must assume. Our guess is, what bribe China will get for not pouncing on America's imperial disintegration in Iraq as the right moment to put the boot in on the dollar, ringing down the curtain on the era of American-dominated globalism. As this bulletin has noted before, globalism depends on a strong dollar, because
it depends on America's ability to sustain its $700,000,000,000 per year trade deficit, a surplus of the same amount for the rest of the world. Whether the speculations below are true or not, remains to be seen, but the possibility is sufficient, that it's worth reading them.

www.halturnershow.com/ChinaToDumpUSDollars.html

Sources with a U.S. Delegation in Beijing have told The Hal Turner Show the Chinese government has informed visiting Bush Administration officials they intend to dump One TRILLION U.S. Dollars from China's Currency Reserves and convert those funds into Euros!

China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse in value Monday.

According to this Senior source, China told the U.S. delegation they no longer have faith in U.S. Currency for several reasons:
1) The Federal Reserve Bank ceased publishing 'M3' data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.

2) The U.S. Dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 Billion simply by holding U.S. Dollars in its reserves.

3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.

For these reasons China has decided to implement an aggressive sell-off of US. Dollars before the rest of the world does so. China reportedly told the US delegation; 'we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts.'

Early this week, in an unusual move, the Bush administration sent virtually the entire economic 'A-team' to visit China for a 'strategic economic dialogue' in Beijing Dec. 14 and 15.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lead the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation is Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan
Schwab.

The Bush administration wanted to get China's cooperation in preventing a dollar collapse. The Hal Turner Show has been told the effort failed.

According to the source, Fed Chairman Bernanke left the meeting 'pale and in a cold sweat' as the implications of China's decision seemed to sink in.

The implications are enormous: The U.S. Dollar is likely to collapse in value against all other major currencies as early as Monday, December 18.

This would cause a worldwide sell-off of dollars, create almost immediate hyper-inflation' in the US and also impact world markets at a level 'worse than the Great Depression of 1929.'

Jonny Arabs to the rescue?

In a strange twist of fate, Arabs and OPEC may come to the rescue of the U.S!

Senior officials in OPEC made clear that they too would be severely harmed if the U.S. Dollar collapsed, and hinted they 'would not be inclined to sell oil to any particular nation that intentionally caused such a collapse.'

This was a thinly veiled threat to China, which depends heavily on OPEC oil for its rapidly developing energy needs.

The OPEC officials even went so far as to say 'Since China lacks the ability to project their military power, OPEC nations need not worry about any Chinese military response to an oil cut-off.'

Such brutally candid remarks will not sit well with China; and signal ominous things for the U.S. .

Arabs and OPEC will want something in return for saving the U.S. from economic collapse and it is already widely speculated what they want will be a complete change in U.S. backing of Israel in the Middle East.

If such demands are made by the oil-rich Arabs, the U.S. would be left with little choice but to virtually abandon the Jewish state to preserve itself.

More details will be reported here as they become available.

LONDON STOCK EXCHANGE TO BE SOLD?

http://www.thisismoney.co.uk/news/special-report/article.html?in_article_id=415558&in_page_id=108

It is, arguably, the last significant City of London institution with the Union Flag still fluttering over its ramparts.

One by one, great broking houses and merchant banks of the Square Mile have fallen to America, Japan and the Continent, leaving the Stock Exchange as a lonely, British-owned survivor from what has been called the era of 'gentlemanly capitalism'.

Now, having seen off successive waves of foreign takeover bids, the Stock Exchange appears destined to fall to America's Nasdaq exchange.

As Treasury minister Ed Balls made clear in an interview with the Evening Standard yesterday, it will go with the Government's blessing after more than 300 years of British ownership.

But does it matter for the millions of investors around the world who use London for their share dealings and for the wider British economy?

Critics such as Mayor Ken Livingstone warn that the takeover could have very serious implications for London's position as the world's pre-eminent international finance centre.

In a letter to the Office of Fair Trading, Mr Livingstone says the proposed takeover risks the traditionally free-wheeling City being throttled by US-style regulation and warns that investment in the Stock Exchange could be curtailed.

However, most senior business commentators contacted by the Standard said the deal should go ahead.

Former CBI chief Sir Digby Jones said Britain would be seen as hypocritical if it preached free markets to the rest of the world and then pulled up the protectionist drawbridge when one its own key assets was under threat.

Many agreed that there should be no restrictions on ownership, although Kelvin MacKenzie, former editor of The Sun and now chairman of marketing group Media Square, said companies from countries with tight takeover restrictions of their own such as France should be kept out.

But with the Government giving the green light, it is up to the market to decide.

HIGHEST INFLATION SINCE NEW LABOUR FUELS WAGE DEMANDS

http://money.guardian.co.uk/news_/story/0,,1970925,00.html

Britain's pay negotiators held the fate of interest rates in their hands last night after the highest inflation since Labour came to power fuelled Bank of England concerns about the looming wage round.

News that the measure of the cost of living used as the benchmark for negotiations between employers and unions rose to almost 4% last month - with further increases likely - left the City convinced that Threadneedle Street would raise the cost of borrowing in the new year unless there was a sudden weakening in the economy.

Members of the Bank's monetary policy committee have been worried for some time that the pick-up in price pressure will prompt pay bargainers to push for more generous settlements, thus leading to an upward spiral in inflation.

January is the key month for pay settlements and, after the MPC's decisions to raise interest rates by 0.25 percentage points in both August and November, the City's money markets expect a similar-sized rise - to 5.25% - in February.

Inflation as measured by the all-items Retail Prices Index stood at 3.9% in the year to November, while the government's preferred measure of the cost of living - the Consumer Prices Index - was up from 2.4% to 2.7%, the highest since the index was launched in January 1997.

Gordon Brown expects the Bank to set interest rates so that inflation, as measured by the CPI, keeps to the government's 2% target. Mervyn King, the Bank's governor, is obliged to write an explanatory letter to the chancellor should inflation deviate by more than one percentage point either side of its target.

Opposition parties were quick to seize on data indicating that pensioners were facing higher inflation rates than the rest of the population because of the large share of their incomes spent on food and energy. The ONS said food prices were up 4.9%, electricity bills had risen by 27% and gas bills by 39.9%.

Shadow chancellor, George Osborne, said: 'Official inflation is now considerably higher than when Gordon Brown became chancellor, and the real cost of living for many people is rising even faster.'

Vince Cable, the treasury spokesman for the Liberal Democrats, said: 'With the government's measure of inflation now at its highest level ever, vulnerable groups such as the elderly will feel the pinch over the festive season.'

Business groups also expressed concern. 'What we don't want to see is the 3.9% headline rate RPI form the basis for inflationary pay awards in the new year,' said Graeme Leach, chief economist at the Institute of Directors. 'The chancellor's GDP forecasts look very optimistic given the interest rate risk.'

CPI inflation began the year at 1.9% but has risen steadily throughout 2006. RPI inflation stood at 2.3% in January and the RPI excluding mortgage interest payments - used as the government's inflation yardstick until the switch to the CPI in 2003 - has risen from 2.4% to 3.9%, its highest in 13 years.

After beginning 2006 with a lower inflation rate than the 12-nation Eurozone (1.9% compared to 2.4%), the position has been reversed.

The Eurozone's inflation rate in October, the last month for which figures are available, stood at 1.6%.

After Mr Brown's decision to increase fuel duties and air passenger duty, Neville Hill, economist at Credit Suisse, predicted RPI inflation would rise to 4.4% and CPI inflation would jump to 2.9% in December. He added that there was a 'small but significant risk' CPI would hit 3.1% over the coming months and thereby prompt a letter to the chancellor from Mr King.

Consumer price inflation shot up to record highs yesterday, driven mainly by transport costs. On the high street, shops appeared to be passing on the summer's higher energy costs by pushing up prices. Core inflation, which strips out energy, food, alcohol and tobacco, was 1.6%, up from 1.4% in October. This was due to price rises of digital cameras, video recorders and holidays. Meanwhile, food cost more after bad harvests during July's heat wave. However, while goods price inflation was 1.8%, service sector inflation, which accounts for three-quarters of the UK economy, was at 3.7%.

BRITISH WORKERS FEAR OFF-SHORING

http://www.yorkshiretoday.co.uk/ViewArticle2.aspx?SectionID=1299&ArticleID=1929485

THE public is growing increasingly concerned about the threat of British jobs moving abroad, a report has revealed.

More than 80 per cent of people believe enough jobs have moved offshore, with 65 per cent saying more investment is needed in skills and education to maintain the UK's present competitive economic position.

The Deloitte/YouGov survey of attitudes to global economic competition also showed that only four per cent of respondents support the continuation of off-shoring and almost one in three believes UK companies should be forced to bring jobs back to the UK.

Public attitudes towards off-shoring have become more negative since the survey was initially conducted in January. Then, about 29 per cent said they could see the advantages of off-shoring, compared with 13 per cent now.

Several announcements have been made in the past 10 months on plans to increase off-shoring across a variety of sectors.

In September, Norwich Union owner Aviva – which employs about 5,000 workers in Yorkshire – announced plans to shed 4,000 posts across its UK operations with 1,000 jobs moving to India.

However, earlier this year a survey revealed that the boom in offshore out-sourcing to places such as India and eastern Europe has not resulted in the large-scale job losses in UK call centres that many predicted.

According to the Yorkshire and Humber Contact Centre Network (YHCCN), which is supported by Yorkshire Forward, about four per cent of the region's working population are employed in call centres.

This represents about 55,000 full-time jobs, without including part-time employees, and makes Yorkshire the third biggest region in the UK for call centres.

The UK Contact Centres in 2006: The State of the Industry report, by analyst ContactBabel, shows the UK call centre industry grew by 5.5 per cent despite the fear that offshore outsourcing would lead to UK jobs disappearing

Chris Digby, consulting partner at Deloitte in Leeds, said: 'Clearly people have personal concerns over job security that are behind the negative attitudes to off-shoring and we expect massive increases in the financial services sector alone.

'A growing awareness of the increased mobility of both resource and labour is causing anxiety, with 17 per cent of respondents believing that off-shoring presents a threat to their own jobs while a further 25 per cent think the increasing number of workers migrating to the UK is the biggest threat to their job security.'

When asked which countries posed the biggest challenges to the UK economy over the next five years, the emerging economies of China and India came out top, followed by the US and Japan.

This time last year, a separate Deloitte report, Trading Places, ranked the UK as sixth most competitive place to do business, among 25 major world economies.

However, this ranking was projected to slide to 12th place within the next five years if Government and businesses do not work together to ensure that the skills, investment, enterprise and innovation continue to keep the UK competitive.

HOUSE PRICE CRASH EXPECTED BY 24% of UK ADULTS

http://firstrung.co.uk/articles.asp?pageid=NEWS&articlekey=3486&cat=47-0-0

The first cracks in Britain's personal debt laden economy were revealed today as debt solutions consultancy, Thomas Charles (www.thomascharles.com) announced a widespread lack of faith in the stability of the UK housing market.

According to research published today, almost 1 in 4 (24%), or 11 million UK adults, expect property prices to crash within 18 months.

The research, conducted in conjunction with YouGov with 2,353 respondents, also revealed that almost 1 in 5 (19%), or around 9 million adults, expect a crash to come within 12 months, with 1 in 3 (29%), or 13.5 million adults, expecting a crash within 24 months.

Regionally, Londoners were found to be most concerned with 28% expecting a crash within 18 months while the South West remain cautiously optimistic at 18%.

Young adults, 18 - 29 were shown to have the least faith in the market, with 27% predicting a crash within 18 months, compared with 23% of 30 - 50 years olds and 21% of over 50s.

The research also revealed the recent rise in interest rates to 5% in November as a contributing factor to the predicted market slow down.

When asked 'by how long do you think rising interest rates will delay your first step onto the property ladder', 30% of non-home owners, or 4 million adults in the UK, reported some delay, with almost 1 in 5 (19%), equivalent to over 2.5 million UK adults, reporting a delay of 3 years or more - enough to have a significant impact on the housing market.

Regionally, the hitherto soaring London market was shown to have seen the greatest impact as a result of the November hikes. 35% of Londoners reported some delay in their house purchasing plans, followed closely by the West Midlands at 34%. Figures were lower in Scotland where 16% report a delay and a comparatively small 6% report a delay of at least 3 years.

Again, young adults, 18 - 29, were shown to be most affected by the hike with 44% reporting some delay in their first step onto the property ladder, compared with 29% of 30 - 50 year olds, and 5% of over 50s.

James Falla, Director of Thomas Charles, commented:

'The research shows that a high proportion of UK residents have lost their faith in the stability of the UK housing market. With interest rates rising and bad debt soaring, fewer and fewer people can afford to gamble with a mortgage. Young people are particularly affected since they are likely to have substantial unsecured debt and no equity, making it almost impossible to take that first step onto the housing ladder.

We may begin to see a trend whereby those with equity tied up in their homes may begin to sell up to preserve their capital, sparking a crash in the near future.'

Earlier this year, Thomas Charles revealed that the number of adults in the UK in over £10k of unsecured debt had risen to 8.4 million with 2.5 million struggling to meet repayments 1.1 million on the brink of insolvency.

Consumers wishing to contact Thomas Charles for advice on debt can do so via the company's website (www.thomascharles.com)

**For sound fiscal policies dont forget, vote Labour...

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2 people have spoken:

The Bournemouth Nationalist said...

Thanks for the welcome Fido ;-)

Fidothedog said...

My pleasure, would have posted your comment before but have been offline a while.