Lunchtime news Monday 7 January 2024

Businesses are more pessimistic about the economy than any time in the past five years, and threaten to ‘talk the country into a recession’ according to accountants Grant Thornton. Only 14 per cent of the businesses are optimistic about the economy, compared to 43 per cent for the same time last year. In a separate survey, Lloyds TSB found only one in three were optimistic about the year ahead. Global economic uncertainty, fears over falling consumer spending, and lack of skilled workers are cited as the main concerns.

The uncertainty has had an affect on the potential sale of Northern Rock, according to the Sunday Telegraph. Potential buyers need to secure funding of at least £10 billion from investment banks, but as UK house prices fall, the banks are reluctant to lend money. Falling UK house prices have made it harder to estimate the overall value of the property that Northern Rock hold. PM Gordon Brown has insisted that the government is keen to avoid nationalising the bank, and Chancellor Alistair Darling said a decision would be made within six weeks.

In the meantime, the average cost of a home loan has soared to a seven-year high, according to Bank of England data, as mortgage bills are more than 20 per cent higher than two years ago. The typical homeowner is paying £135 a month more for their mortgage than last year, prompting fears of a rise in home repossessions as people struggle to pay debts.

You know times are tough when the Church of England starts dispensing debt advice. Drawing on texts from the bible and specially written prayers, the initiative aims to give hope to those suffering financially before it is ‘too late’.

But it’s not all doom and gloom. A report from Oxford Economics Consultancy has shown that the standard of living in Britain is higher than America for the first time in a century. Increasing incomes, free healthcare and longer holidays make the average Briton better off than their US counterpart. Gross domestic product (GDP) per head (an indicator of average incomes) in the UK is expected to be £23,500 in 2008, compared with £23,250 in America.

However, as many as 4.5 million people have left London and the South East during the past 10 years in search of a better quality of life. The leavers were replaced with a large number of migrants both from other parts of the UK and overseas, mostly young single people who were chasing work. Overall London and the South East had a net population gain of just under 400,000 people.

And finally, a coalition of 15 charities and campaign groups will today release findings of a survey into care for older people. Caring Choices raises concern about the level of funding for the long-term care of the elderly; calls for a simplified system of entitlements; and argues for a more choice in ‘personal care’.