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Unemployment continues to rise

Unemployment will reach 2.9million by 2010

The Confederation of British Industry (CBI) have released figures suggesting that unemployment is expected to peak at around 2.9million by 2010, with the economy also forecasted to contract by 1.7%.

These figures come after a fairly conservative forecast of a 0.3% growth to the UK economy, but due to the speed and ferocity of the financial crisis these figures have been substantially adjusted.

The CBI has also predicted that the UK will see a further cut of interest rates by the Bank of England to as low as 1.5%, from the current figure of 3%, and also a ease up of inflation to 1.7% from the current rate of consumer price rises at 4.2%.

 

Icesave Refund

The Financial Supervision Compensation Scheme (FSCS) have announced that the majority of the UK customers with Icesave, the collapsed Icelandic bank, will receive their money back in the next 2 weeks.

The Icelandic government, which has not compensated anyone thus far, have agreed to guarantee the first £18,000 of deposits, with the FSCS footing the bill of the remaining £32,000 up to the £50,000 threshold.

Chancellor Alistair Darling has confirmed that UK depositors will get all their money back, with the Treasury compensating those with deposits larger that £50,000, which is expected to cost them £800 million.

This payout means that customers do not have to apply to the Icelandic deposit guarantee scheme.

 

Low Deposit Mortgages

Figures released have shown that the financial downturn has all but eliminated the traditional low deposit mortgage.

The figures released by Moneyfacts, show the number of mortgage deals available for those with low percentage deposits have dramatically fallen, with deals available for those buyers who can put down a 10% deposit seeing a fall from 1,152 deals to only 66 deals over the past year.

First time buyers are likely to be affected most by this fall in low-deposit mortgages, despite the falling house prices in theory making houses more affordable.

 

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