Sir Win Bischoff, Chairman of Citigroup, expects house prices to fall for the next two years before they begin to stabilise. He believes the impact of the credit crunch and turbulence in the financial markets will continue throughout 2009. And as Sir Bischoff is the head of one of the biggest banks in the world, he is someone we should listen to. (more…)

As expected, the Bank of England’s Monetary Policy Committee have kept interest rates on hold at 5%. With inflation at 3.3% against a target of 2% this was the only decision the MPC were likely to take, despite incresing economic concerns and fears that the UK could be entering a recession. If there are further signs of a downturn, the Bank must be prepared to act quickly and cut rates.

Today it was the turn of Bovis Homes and Redrow to add to the doom and gloom of the housing sector. Both companies will cut 40% of their workforce which will mean 400 job losses for Bovis, whilst Redrow will shed 550 posts. (more…)

The Bradford & Bingley, Co-operative bank and First Direct have today raised the cost of their fixed rate mortgages as Banks find it increasingly difficult to raise finance to fund mortgage deals. The Co-op saw the biggest rise as they increased their rates between 0.7% and 0.9%. The move by these three banks now takes the average cost of a fixed rate mortgage to over 7%. (more…)

The Governor of the Bank of England has warned that consumer inflation could top 4% this year as increases in food and energy costs continue to push up inflation. Mervyn King was speaking after the Office for National Statistics (ONS) said the Consumer Prices Index (CPI) rose by 3.3% in May. (more…)