News Summary: 27 July
A round-up of the main news stories this week. (Transcript Below).
UK Falls Deeper into Recession
The UK has fallen even deeper into recession, with GDP falling by 0.7%. The Office of National Statistics pointed to the struggling construction sector, where output fell by over 5%. Shadow Chancellor Ed Balls told the BBC that the Chancellor should admit now that he’s got it wrong.
We need some action from the Chancellor, not excuses, not political slogans, not short-term thinking, not digging a deeper hole for him, the government, and the country.
Shadow Chancellor, Ed Balls MP.
Virgin Money Buys Up Northern Rock Mortgages
In better news for the Treasury, Virgin Money has bought up mortgage assets from Northern Rock’s holding company in a deal that pays back £538 million to the taxpayer. Virgin took over Northern Rock earlier this year after agreeing a £747 million fee. It says that it will contact all mortgage holders affected by the transfer before the handover is completed.
British Gas Posts Rising Profits
British Gas has announced a £345 million profit for the first half of the year, a rise of 23%. This takes the profits of its owner, Centrica, up to £1.45 billion. Consumer groups say this reflects how quickly energy companies act to raise tariffs when oil prices have risen, and how slowly they reduce them when prices fall again.
Savers Clueless About Their Rates
Over half of British savers have no idea about the rates they are receiving on their savings accounts, according to the Nationwide Building Society. Almost two-thirds are unsure if they are receiving the best rates that their banks can offer. With many accounts sustained by temporary bonus rates that expire after just 12 months, there are concerns that many savers will be receiving next to nothing on their savings. Which4U’s guide on savings and bonus rates could help savers to deal with this problem.
New Rules for Packaged Bank Accounts
And finally, the Financial Services Authority has announced a set of new regulations that will affect the way that packaged bank accounts are sold. Customers who pay a fee of up to £40 for their current accounts are often unable to claim on the insurance policies. From March next year, banks will be forced to take stricter measures to ensure that customers will be eligible for the policies they are paying for. The regulator said that it’s important that bank accounts don’t become the next big mis-selling scandal for banks.
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