A recent study by the Alliance and Leicester has found that almost three quarters of UK adults are cutting back on spending as they deal with the rising costs of living in Great Britain.
The view of around 35 percent of those surveyed by Alliance and Leicester is that their disposable income is decreasing, and will continue to do so as they watch fuel, food and general household bills move ever upwards. Sacrifices are being made in clothes shopping, with nearly 40 percent of people saying they will be reducing their spending, followed by socialising, with around 36 percent of respondents cutting back.
An Alliance and Leicester spokesperson said that the majority of people are feeling things are getting harder now, adding that it is good to see the people of the UK being aware of the situation and doing something about it rather than ignoring what is happening.
The May Fundamentals report produced by Legal and General suggests that the economic outlook for the UK is a negative one.
There are some positive factors said the Legal and General, such as low unemployment, the weaker pond helping exports and the fact that consumer spending is still active. However they see more negative elements than positive ones which leads them to rating the economic forecast as poor.
Key pointers include the much more difficult lending conditions facing borrowers, higher levels of debt and also a rate of inflation that is rising much too quickly. All in all the Legal and General view is that, unless changes are seen in this factors the UK economy could face real difficulties.
The Prime Minister, Gordon Brown, apparently told the people of the UK that Northern Rock could be sold for a profit in the future while his own advisors had said otherwise.
Gordon Brown had stated in a press conference in February that Northern Rock could be sold for a profit when the financial markets had recovered, though the advisors brought in to look at the options for Northern Rock had said a GBP450 million loss was the best possible outcome, with the most likely result being a loss of GBP1.28 billion. This figure was based on stable house prices, so in the current climate the loss is expected to be even greater.
The Treasury has stated that its purpose in buying out Northern Rock was to stabilise the bank and also the rest of the financial sector, not to make a profit. However Mr Brown should not have misled the public by saying a sale would generate a profit. Oh to have an honest politician, we can but dream.
