A round-up of the main news stories from this week. Points to anybody who can name the film featured in the bulletin without help from a search engine.
Funding for Lending Blamed for Savings Crash
The scheme created by the Bank of England to kick-start the economy has been blamed for a slump in savings accounts rates. With banks able to access cheap sources of finance through the Funding for Lending scheme, they have had no need to attract deposits from savers. The best performing accounts in each major savings category on Which4U have fallen by between 14% and 20% since September. And with inflation rising again in October, it is becoming increasingly difficult for savers to make real-term returns on their deposits.
Payday Loans Could Affect Future Mortgage Applications
Borrowers who turn to payday loans could face problems in the future when it comes to larger lending such as mortgages. The Financial Ombudsmen Service says it has seen evidence that mortgage lenders have been discriminating against those who take out payday loans. Despite often proving a cheaper short-term option than bank charges, payday lending suggests to lenders that borrowers are struggling to manage their finances.
Credit Cards Recommended for £100+ Payments
Experts are recommending the use of credit cards for more expensive purchases as retailers continue to fail. With Comet becoming the latest stricken retailer to enter administration, experts are reminding people that payments between £100 and £30,000 made by credit card should be covered by the card provider – a form of protection that is not available with cash or debit card payments. Comet joins retailers including JJB Sports, La Senza and Clinton Cards to run into trouble this year.
Inflation Outpaces Pay in 21st Century
And finally: Brits have lost ground on the cost of living, with inflation having outpaced the rise in pay since the start of the Millennium. According to the Office of National Statistics, average pay for full-time workers has risen by 40% since April 2000, but retail price inflation has risen by 43%. The cost of living has risen by almost twice the average rate of pay since the start of the recession, though in the past year, the pay gap between men and women has reduced to below 10%.
Also, on the Finance Blog this week:
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