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UK businesses struggle to survive

UK businesses feeling the full force of the credit crunch

Major UK retailers continue to struggle as the credit crunch gains momentum. MFI and Woolworths were taken into administration yesterday; owners of Curry's and PC World announced nearly £30million half year losses; and retail group Kingfisher released that B&Q's profits are down 9%, reflecting the increasing decline in consumer spending and the troubled housing market.

Woolworth's administrators now are embarking on a rescue mission, with rising concern about the 30,000 jobs at risk.

House prices fall, but not as fast

The mortgage lender Nationwide has released figures for November suggesting that house prices have fallen by 0.4%, reflecting a relatively small fall after the house prices saw a sharp drop in October.

Despite the relatively modest drop in house prices in November, prices have seen a 13.7% fall since November 2007. Further downward pressure is expected to be applied on the housing market whilst the economy is in recession.

Credit card firms have agreed to help borrowers

Credit card representatives met with Lord Mandelson to discuss whether the interest rates charged on credit cards should be cut to help borrowers who are struggling to pay their debts.

The credit card industry has agreed to come back to the government with a set of ‘fair principles' which are likely to include risk-based pricing, with interest rates charged on balances subject to the amount of risk associated with a customer. Card providers have also agreed to help struggling borrowers by suspending debt collections for 30 days if the borrower has been working with a debt advice agency to create a repayment plan.

Energy suppliers not passing on drop in wholesale energy costs to the consumer

Wholesale energy costs have continued to fall, but energy suppliers are resisting from passing on the full amount of the cost reductions to the consumers. Figures released suggest the household annual energy bills could be reduced by as much as £200. However, energy suppliers are proposing cuts of between 5% and 10%, which does little to offset the 40% increase seen this year.

Many consumers are now using in excess of 10% of their income on energy bills. Consumer Focus, a new consumer watchdog, has made tackling fuel poverty its top priority.

United Response launch ‘Making Money Easier'

United Response, a national charity that works with adults with learning disabilities, launched ‘Making Money Easier' on the 26th November 2008. Making Money Easier is a set of printed and online guides designed to make banking and other financial services more accessible and easier to understand. The scheme aims to enable those with learning difficulties to become financially independent.

 

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