World Watching

Money forever?

Official figures out today are expected to show public borrowing soared above £90 billion for the financial year – far exceeding the Chancellor’s own predictions.

Before Alistair Darling takes to his feet in the House of Commons to set out his plans for the next 12 months, economists believe data for the last financial year will reveal public sector net borrowing reached a record £92 billion.

The grim picture of the public finances is also expected to show that borrowing reached £16 billion in March.

The surge in borrowing would dwarf Mr Darling’s forecasts of £78 billion in borrowing in the full year in November’s pre-Budget statement.

At the time Mr Darling also predicted that borrowing would rise to £118 billion, or 8% of GDP, in 2009/10, but a recent forecast from the Ernst & Young ITEM Club said this could balloon to £180 billion.

Now, I’m certainly no financial genius.. BUT, if i can grasp the concept that it was endless borrowing that brought about this recession.. why cant our own government? and why is it carrying on borrowing at such a rate as it is?

Surely if the government had nationalised the banks instead of handing out obscene bailouts, pumped a bit of cash into industry to safeguard jobs, and put a freeze on banks repossessing homes the rest would follow?

For Sale?

Six of the UK’s largest mortgage lenders have reported they are taking part in a new Government scheme to help people who lose their jobs stay in their homes.

Lloyds Banking Group, which includes HBOS, Royal Bank of Scotland/NatWest, Northern Rock and Bradford & Bingley, all said they would take part in the Homeowners Mortgage Support scheme (HMS) immediately.

They were quickly joined by Cumberland Building Society and the National Australia Bank Group, which includes Clydesdale and Yorkshire Bank, while a number of other lenders, including some specialist firms, said they would offer the scheme to their customers as soon as possible.

But Barclays, HSBC, Nationwide, and Abbey and Alliance & Leicester, which are both part of Santander, said they would not be taking part in the initiative, under which people who have temporarily lost their income can defer some of their mortgage interest payments for up to two years.

The groups all said they had decided not to participate in the scheme, which offers a Government guarantee if the borrower defaults on their debt, because they already offer similar or better support to customers who get into difficulties.

But it is understood that they were also put off the HMS by the limited value of the Government guarantee, given their low level of repossessions, as well as the cost and administrative burden associated with taking part in it.

The HMS is restricted to people who bought their home before December 1 last year and who are owner-occupiers.

They must have an outstanding mortgage of less than £400,000 and savings of no more than £16,000 to take part in the scheme.

They must also have a regular household income, have been making regular payments for at least five months and be able to pay at least 30% of their interest each month.

The rest of the interest will be deferred for up to two years, although homeowners will still have to repay the money once they get their finances back on track.

A bit of help for the working man, it is interesting to note however that Barclays, HSBC and the Santander Group don’t want to be part of it.. But saying that, these 3 are, also i hear desperately clawing back all they can get their grubby hands on from their customers..

Royal Bank of Scotland has announced that it will give struggling homeowners at least six months before launching repossession action.
The NatWest parent said it was doubling the three-month breathing space currently offered to borrowers who fall behind with mortgage repayments.
News of the move comes days after the Government bought 58% of the bank’s shares for £15 billion – effectively bringing it under state control.
Stephen Hester, chief executive of the Royal Bank of Scotland, wrote in the Financial Times that the bank was “conscious that many people face anxiety” about repayments in the tough economic climate.
He said: “In our UK residential mortgage lending, and as a banker to small businesses, we are determined to serve customers well in the difficult times ahead and have commitments to Government that we intend to meet in letter and spirit.”
It is expected that other banks may also follow suit as the Government calls for greater help from banks for cash-strapped borrowers and businesses.
MPs are also reportedly working on plans for statutory codes of practice in the banking industry, which could replace the current voluntary system.
The move by RBS comes amid pressure from Chancellor Alistair Darling to ensure banks do more to help households in the current economic downturn.
RBS has already announced that it will guarantee overdraft rates and contracts for its business customers for at least a year. It will also return to “normal” lending levels, as part of the Government’s recapitalisation package for the banking sector.

Source: Virgin Media News

Our View:

It’s a sad state of affairs if it takes for a bank to be bought out by the state before it concludes that actually it’s customers are suffering under the present ecconomic climate. Once again the banks prove without doubt just how much contempt they hold their customers in.