LONDON, Oct 8 (Reuters) - Uncertainty about the Bank of England's quantitative easing policy poses a risk to sentiment on the British government bond market, the head of the UK Debt Management Office said in an interview published on Thursday.
Earlier on Thursday -- but after the interview in the Independent newspaper was published -- the BoE said its planned 175 billion pounds of asset purchases, mostly gilts, would be complete by next month and gave no indication of whether it intended to do more.
DMO Chief Executive Robert Stheeman, who is responsible for selling a record 220 billion pounds ($354 billion) of gilts this fiscal year said that markets could cope with an end to QE but uncertainty about its future could be damaging.
'I think there will be probably at one point in the not too distant future a lot of uncertainty creeping into the market about the future of QE,' Stheeman was quoted as saying.
'Even if (the BoE) decided to stop, I don't think that's a downside risk. The downside risk is the uncertainty,' he added.
Stheeman said market volatility, rather than the total volume of gilts to be sold, was key in causing debt auctions to fail, noting that his last failed auction in March came in the run-up to Britain's budget.
SOURCE
Sunday, October 11, 2009
Monday, September 7, 2009
Rising Loan Rates Widen Base Rate Gap
As loan rates have continued to rise over the past year, borrowers can now expect to pay around 10.32 per cent APR for a £5,000 loan, moneysupermarket.com has revealed.
According to the price comparison site, the gap between the average loan rate and the Bank of England's base rate has now increased from 3.4 per cent last year to 9.8 per cent this year.
The figures show that borrowers can expect to pay around eight per cent for loans upwards of £10,000 which is an estimated one per cent increase on rates last year.
For instance, a £25,000 loan now has an average APR rate of 8.7 per cent compared to 7.7 per cent this time last year.
Reacting to this news, Tim Moss, head of loans and debt at moneysupermarket.com, said: "Despite the Bank of England slashing the base rate to 0.5 per cent in March, loan rates have continued to rise, leaving consumers paying through the nose for their personal loans. Borrowers looking for a smaller loan of around £5,000 will be hit harder than those looking to borrow more.
"We have seen a recent glimmer of hope as loan rates crept down slightly in August. Competition seems to be returning to the loan market which is great news for consumers – however lenders will need to continue reducing rates if they want to draw customers back, particularly those who want to reconsolidate their debt."
Meanwhile, research carried out by Moneynet.co.uk has found that the number of lenders has fallen by more than 50 per cent since August 2004 when there were 62 lenders compared to 29 this year.
Mr Moss said that as banks and building societies have become more cautious about who they lend to, it is becoming increasingly difficult for consumers to get a competitively priced loan.
He also urged borrowers to keep a close eye on the best deals, but to only apply for loans that they are capable of being accepted for, he added: "With lending criteria becoming more and more stringent, it's important to keep your credit record as clean as possible and not taint it with failed applications for loans."
Article written by Andy Davis for www.fairinvestment.co.uk
According to the price comparison site, the gap between the average loan rate and the Bank of England's base rate has now increased from 3.4 per cent last year to 9.8 per cent this year.
The figures show that borrowers can expect to pay around eight per cent for loans upwards of £10,000 which is an estimated one per cent increase on rates last year.
For instance, a £25,000 loan now has an average APR rate of 8.7 per cent compared to 7.7 per cent this time last year.
Reacting to this news, Tim Moss, head of loans and debt at moneysupermarket.com, said: "Despite the Bank of England slashing the base rate to 0.5 per cent in March, loan rates have continued to rise, leaving consumers paying through the nose for their personal loans. Borrowers looking for a smaller loan of around £5,000 will be hit harder than those looking to borrow more.
"We have seen a recent glimmer of hope as loan rates crept down slightly in August. Competition seems to be returning to the loan market which is great news for consumers – however lenders will need to continue reducing rates if they want to draw customers back, particularly those who want to reconsolidate their debt."
Meanwhile, research carried out by Moneynet.co.uk has found that the number of lenders has fallen by more than 50 per cent since August 2004 when there were 62 lenders compared to 29 this year.
Mr Moss said that as banks and building societies have become more cautious about who they lend to, it is becoming increasingly difficult for consumers to get a competitively priced loan.
He also urged borrowers to keep a close eye on the best deals, but to only apply for loans that they are capable of being accepted for, he added: "With lending criteria becoming more and more stringent, it's important to keep your credit record as clean as possible and not taint it with failed applications for loans."
Article written by Andy Davis for www.fairinvestment.co.uk
Wednesday, September 2, 2009
Debt FAQ in England Wales
Here are some of frequently asked questions regarding debt in England, Wales.
My debts are getting out of control and I can’t possibly pay them all. What can I do?
If you're in debt, don't panic. But it's important to do something, because the problem won't just go away. Don’t ignore calls or letters from the people you owe money to (your creditors). Contact them to explain why you’re having problems. Most organisations will be more helpful if you approach them first.
The first thing you need to do is make a list of all your creditors.
Once you've done this, you need to work out which ones are priority debts. A priority debt is one that could have serious consequences if unpaid. Not paying your rent or mortgage would leave you homeless, or not paying your gas or electricity bill could leave you being cut off and taken to court.
Non-priority debts are ones which have less serious consequences if you don't pay them. They include things like overdrafts, loans, hire purchase, credit card accounts and catalogue debts. However, if you don't pay your non-priority debts your creditors may take you to court.
When you have decided which are priority debts, work out how much you can realistically afford to pay back. To do this, you will need to make a list of all the income and expenses for your household.
In England and Wales, you can print off a budget sheet to help you do this. See Budget sheet in Credit and debt fact sheets.
Check your income and see if there are any benefits or tax credits you are entitled to that you are not getting. Look carefully at your spending and see if there is anything you are able to cut down on. For example, you could shop around for a cheaper gas or electricity provider, or look at cheaper mortgage or insurance providers.
An advice agency can help you draw up a budget and help you increase your income if this is possible.
When you've worked out how much you have left over after paying your expenses, contact each of your priority creditors. Show them your budget and try to make an arrangement to pay back what you owe.
If you can’t afford to pay anything to your priority creditors and your situation isn’t likely to get better, the outcome may be very serious. Get advice straight away.
How you deal with your non-priority debts will depend on whether you have any money left over from dealing with your priority debts and paying for essential household expenses like housing costs and food. If you have money to spare, you may have several options for dealing with your non-priority debts. However, if you have little or no money left, have nothing of value to sell and think your situation isn't likely to get better, your options will be very limited.
Be very careful about taking out further loans to pay off existing debts. You may end up paying back a lot more than you borrowed and the interest rates may be extremely high. Some loans can be secured against your home and you could end up losing it if you fail to make repayments.
I have been refused credit to buy a new washing machine. What can I do?
If you have been refused credit, you can re-apply to the same company or try somewhere else. If you are still refused credit, it may be that you have a low credit score. This means that the shop selling the washing machine has used a credit reference agency to look at your credit rating. The shop should have told you that they would use this method to decide whether or not you can have a washing machine on credit.
You can ask the shop which credit reference agency it has used. Write to them and ask for a copy of the file they hold on you. You will have to pay a fee for this, but it is usually quite low. If you think your record has incorrect information about you on it, you can ask the credit reference agency to correct it.
You might also want to look into other methods of paying for your washing machine.
I have a county court judgment against me over an unpaid credit card debt and the card issuer has threatened me with bailiffs. What can I do?
The first thing to do is to try and negotiate with the company. Even if you can't pay the debt in full, you could try to agree a set amount to pay weekly or monthly.
If you cannot come to an agreement with the company, they will need to get a warrant of execution from the courts before they can send in the bailiffs to remove property from your home in payment of your debt. If they already have the warrant, you should apply to the court to have it suspended.
If the bailiffs arrive, you do not have to let them in and they cannot generally force their way in. However, they are allowed into your property without your permission if they can enter without breaking in. This is called 'gaining peaceful entry' and includes getting in through an open window, or a closed but unlocked door.
Bailiffs are not allowed to take basic clothing, bedding, furniture or household goods, and any goods they do take will be sold at auction in order to pay off your debt.
Please take note that all of these Frequently Asked Questions applies to England Wales.
SOURCE : Frequently Asked Questions About Debt
My debts are getting out of control and I can’t possibly pay them all. What can I do?
If you're in debt, don't panic. But it's important to do something, because the problem won't just go away. Don’t ignore calls or letters from the people you owe money to (your creditors). Contact them to explain why you’re having problems. Most organisations will be more helpful if you approach them first.
The first thing you need to do is make a list of all your creditors.
Once you've done this, you need to work out which ones are priority debts. A priority debt is one that could have serious consequences if unpaid. Not paying your rent or mortgage would leave you homeless, or not paying your gas or electricity bill could leave you being cut off and taken to court.
Non-priority debts are ones which have less serious consequences if you don't pay them. They include things like overdrafts, loans, hire purchase, credit card accounts and catalogue debts. However, if you don't pay your non-priority debts your creditors may take you to court.
When you have decided which are priority debts, work out how much you can realistically afford to pay back. To do this, you will need to make a list of all the income and expenses for your household.
In England and Wales, you can print off a budget sheet to help you do this. See Budget sheet in Credit and debt fact sheets.
Check your income and see if there are any benefits or tax credits you are entitled to that you are not getting. Look carefully at your spending and see if there is anything you are able to cut down on. For example, you could shop around for a cheaper gas or electricity provider, or look at cheaper mortgage or insurance providers.
An advice agency can help you draw up a budget and help you increase your income if this is possible.
When you've worked out how much you have left over after paying your expenses, contact each of your priority creditors. Show them your budget and try to make an arrangement to pay back what you owe.
If you can’t afford to pay anything to your priority creditors and your situation isn’t likely to get better, the outcome may be very serious. Get advice straight away.
How you deal with your non-priority debts will depend on whether you have any money left over from dealing with your priority debts and paying for essential household expenses like housing costs and food. If you have money to spare, you may have several options for dealing with your non-priority debts. However, if you have little or no money left, have nothing of value to sell and think your situation isn't likely to get better, your options will be very limited.
Be very careful about taking out further loans to pay off existing debts. You may end up paying back a lot more than you borrowed and the interest rates may be extremely high. Some loans can be secured against your home and you could end up losing it if you fail to make repayments.
I have been refused credit to buy a new washing machine. What can I do?
If you have been refused credit, you can re-apply to the same company or try somewhere else. If you are still refused credit, it may be that you have a low credit score. This means that the shop selling the washing machine has used a credit reference agency to look at your credit rating. The shop should have told you that they would use this method to decide whether or not you can have a washing machine on credit.
You can ask the shop which credit reference agency it has used. Write to them and ask for a copy of the file they hold on you. You will have to pay a fee for this, but it is usually quite low. If you think your record has incorrect information about you on it, you can ask the credit reference agency to correct it.
You might also want to look into other methods of paying for your washing machine.
I have a county court judgment against me over an unpaid credit card debt and the card issuer has threatened me with bailiffs. What can I do?
The first thing to do is to try and negotiate with the company. Even if you can't pay the debt in full, you could try to agree a set amount to pay weekly or monthly.
If you cannot come to an agreement with the company, they will need to get a warrant of execution from the courts before they can send in the bailiffs to remove property from your home in payment of your debt. If they already have the warrant, you should apply to the court to have it suspended.
If the bailiffs arrive, you do not have to let them in and they cannot generally force their way in. However, they are allowed into your property without your permission if they can enter without breaking in. This is called 'gaining peaceful entry' and includes getting in through an open window, or a closed but unlocked door.
Bailiffs are not allowed to take basic clothing, bedding, furniture or household goods, and any goods they do take will be sold at auction in order to pay off your debt.
Please take note that all of these Frequently Asked Questions applies to England Wales.
SOURCE : Frequently Asked Questions About Debt
Friday, August 21, 2009
Money Saving Tips : Maximizing Credit Cards
Last weeks post talks about some money saving tips that you can do. Here are more tips. This time it's about Credit Cards and Rewards Cards.
Source : Smart Spending Credit Cards
- Get a rewards card. There are many reward cards that pay out in cash or points that can be redeemed for travel or products. Many of these cards don't have an annual fee. I recently traveled to my college reunion for free using points earned from a credit card. My favorite rewards card is American Express Gold Card. It does have an annual fee, although follow this link (American Express) to apply and the first year fee is waived. You can also check out my review of several travel reward credit cards
- Don't pay interest on credit cards. This is obvious, but I soon as you fail to pay off the credit card in full, the high interest payments start to eat away at your monthly budget. If the temptation to spend more than you can pay on a credit card is to great, get rid of the credit card (and ignore the previous tip!).
- Take advantage of 0% credit card offers. I've saved thousands of dollars using 0% balance transfer credit cards. Again, as long as the cards won't cause you to spend more, they can offer substantial savings. Make sure, however, that you keep an eye on the balance transfer fee, which can wipe out your savings.
Source : Smart Spending Credit Cards
Friday, August 14, 2009
Money Saving Tips
One of the best ways to bust debt is to save. For the next posts, UK Debt Busters will be sharing some tips on how to save money painlessly.
More of this until the next posts.
This guide is from DoughRoller' Smart Spending articles.
- Combine your cable, internet and telephone service. Companies now offer combined services that not only cost less, but offer the convenience of a single bill.
- Slow down your internet service. I went to the slower internet service option with my cable company and saved $15 per month. And I haven't noticed a difference when surfing the Net.
- Send away for and follow up on rebates. After you buy a product with a rebate, send in the form that day. Then mark your calendar to remind yourself to follow up with the rebate company if the check hasn't show up.
- Buy a refurbished Mac: I've written about this before because it is a great way to buy not only computers, but iPods and iPhones as well.
- Convert to a gas water heater. They are more efficient and will save you money in the long run.
- Request a reduction in the interest rate for your home equity line of credit. I did and my mortgage company agreed to reduce the rate by more than 0.50%. And if you are looking for a home equity loan, LendingTree Home Equity Loans is a great place to check out available options.
- Refinance you mortgage. If you can reduce your interest rate by one percent or more, it is often beneficial to refinance. This is particularly true for those with high rates due to less than stellar credit scores. If your score has improved, you may qualify for a better rate. I would start by asking your current mortgage lender about lower rates. Here's a refinance calculator to help you determine if refinancing is right for you.
- Get rid of Private Mortgage Insurance. If your down payment was less than 20%, you are probably paying PMI. Once you have a 20% cushion through reducing your debt and home appreciation (yes, prices do go up from time to time), contact your mortgage company to start the process of removing the PMI.
More of this until the next posts.
This guide is from DoughRoller' Smart Spending articles.
Friday, August 7, 2009
UK Debt Buster Guide Step Five : Keep in Touch with your Creditors
This is the last step of our Debt Buster Guide. This is the difficult part. Keep in touch with your creditors.
If you have reduced borrowing costs and cut spending but are still struggling to repay your debts then talk to the lenders involved. Tell them you are having difficulty keeping up with repayments. In some cases lenders may be prepared to help, perhaps freezing interest on the debt or lowering monthly repayments. After all most banks would prefer it if they at least recoup some of their money, perhaps over a longer period of time, than have you go bankrupt which could mean the debt being written off altogether.
However, while you are talking to them don’t stop making minimum repayments. Similarly don’t avoid the issue by ignoring calls or letters from your bank or credit card company. This will set alarm bells ringing and your creditors who are likely to take drastic action – such as calling in the bailiffs.
Source
If you have reduced borrowing costs and cut spending but are still struggling to repay your debts then talk to the lenders involved. Tell them you are having difficulty keeping up with repayments. In some cases lenders may be prepared to help, perhaps freezing interest on the debt or lowering monthly repayments. After all most banks would prefer it if they at least recoup some of their money, perhaps over a longer period of time, than have you go bankrupt which could mean the debt being written off altogether.
However, while you are talking to them don’t stop making minimum repayments. Similarly don’t avoid the issue by ignoring calls or letters from your bank or credit card company. This will set alarm bells ringing and your creditors who are likely to take drastic action – such as calling in the bailiffs.
Source
Thursday, August 6, 2009
UK Debt Buster Guide Step Four : Get Free Advice
Nothing beats an expert's advice. So UK Debt Busters' fourth step is to get free advice.
Those with serious debt problems need advice. But be extremely wary of many of the debt counseling services currently being advertised. Most of these are commercial operations that are interested only in selling you more credit or charging a fee to manage your debts. They do not provide independent advice and can end up costing you an arm and a leg.
However, there are a number of helplines and advice services available. All will listen to your problem and suggest constructive steps you can take to get on top of your debts. They are: the Consumer Credit Counselling Service 0800 138 1111; The National Debtline 0808 808 4000 and Citizens Advice - the address and phone number of your local branch will be in the yellow pages.
Source
Those with serious debt problems need advice. But be extremely wary of many of the debt counseling services currently being advertised. Most of these are commercial operations that are interested only in selling you more credit or charging a fee to manage your debts. They do not provide independent advice and can end up costing you an arm and a leg.
However, there are a number of helplines and advice services available. All will listen to your problem and suggest constructive steps you can take to get on top of your debts. They are: the Consumer Credit Counselling Service 0800 138 1111; The National Debtline 0808 808 4000 and Citizens Advice - the address and phone number of your local branch will be in the yellow pages.
Source
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