UK economy suffers as the imports-exports trade gap widens
The gap between UK imports and exports for the first three months of 2016 stood at £13.3 billion, up from £12.2bn in the fourth quarter of 2015, according to the Office for National Statistics (ONS). Analysts said this was further evidence of the impact of global economic weakness on the UK. Economic growth has already slowed to 0.4% in the first quarter.
The ONS said the UK trade gap widened because of a £1.9bn rise in imports such as machinery, cars, clothing, jewellery and footwear. Exports increased by only £500 million, led by chemical products.By contrast, Germany’s trade surplus hit an all-time high in March as its exports surged. These rose by 1.9% while imports fell 2.3%, but the bad news was that this was partly down to weakening domestic demand in Germany.
Old copper coins it as penny breaks world record at auction
A rare 1933 penny – one of only four in existence – has sold for a world record price of £72,000 at a London auction. The coin sold is known as a Pattern version, as it was presented as a prototype, but never went into production. This was the first time that any of the 1933 Pattern coins have come up for auction.
The reason why so few 1933 pennies were produced was that the Royal Mint had a surplus of penny coins in 1932, so did not need any more in the following year. Most of the 1933 pennies are in private hands, although one of the Pattern versions is in the Royal Mint’s museum. Others, it is thought, may have been buried under buildings as part of a time capsule.
The sale price achieved was nearly double initial estimates.
Deceased home owner Impersonation con bags £112,310 on average
Fraudsters are impersonating home owners who have recently died to steal money in mortgage transactions, new research shows. Cases are increasing of thieves using the identities of people who have just died to make mortgage applications to lenders, says credit specialist, Experian. The average loss to this fraud across England and Wales, according to City of London Police fraud investigators, is £112,310.
In the impersonation fraud, criminals find details of people who have just died and then use their identities to make mortgage applications. They then use a rogue or fake solicitor to receive the funds, which are cashed in and disappear.
European bank scraps 500 note to counter money laundering and terrorism
The European Central Bank (ECB) is to phase out the 500 note, because of its association with money laundering and terror financing. While many honest people know what the note looks like, few have ever seen one. The fuchsia-coloured note, the highest denomination of the eurozone’s seven banknotes, will no longer be printed or distributed from 2018.The move comes after months of mounting pressure from France. It has been working to clamp down on terrorist financing in the wake of last year’s attacks in Paris, but the change came up against stiff, if illogical, opposition from Germany.
The 500 note is so prized by criminals that it reportedly trades above its face value. An EU study last year concluded that the notes were in “high demand among criminal elements”, not least because they allow large amounts to be carried in small bundles for transport. After 2018 the highest value euro note will be 200.
Inflation hits young more than pensioners, new study finds
Young adults in the UK are facing inflation rates three times higher than those for pensioners, according to a new analysis that highlights the pressures of the cost of living on those who became adults after 2000 – a group dubbed the millennials.The widening generational inflation gap is being driven by the under-30s spending proportionally more on things that are getting more expensive. These include education, dining out, rent and household bills. This group spends less of its budget on groceries, compared with older generations, so has not enjoyed the same boost from falling food prices.
The under-30s experienced an inflation rate of 0.9% in March, compared with an official headline rate of 0.5%. By contrast, inflation was just 0.3% for the over-65s. This, however, ignores the fact that low interest rates have kept down mortgages for young people, while older people dependent on savings income have seen that devastated by record low savings rates.
£600m lying forgotten in child trust funds
Nearly a million children in the UK have lost touch with their Child Trust Funds (CTFs), according to research. This suggests one in six of the long-term, tax-free savings accounts for children are not registered to an up to date address. The total amount lying forgotten is estimated at £600 million. Most accounts hold £250, but some, mainly those for lower income families in receipt of Child Tax Credit, could have up to £1,000.
CTFs were introduced in 2005 by the then Chancellor Gordon Brown, for every baby born since September 2002, to encourage parents to save for their children. The scheme was replaced by Junior ISAs in 2011. An initial £250 voucher was given to parents on opening the account and low income families received a further £250.
Study highlights chasm between the haves and have nots
British workers on an average salary would need to toil away for 348,063 years to earn the fortune of the wealthiest UK residents, a new study suggests. Those are the Indian-born British siblings Srichand and Gopichand Hinduja, who are worth around £10 billion.
However, this is better than the have and have not position in many other countries. In Brazil it would take a worker over five million years to reach the £19bn fortune of Jorge Paulo Lemann. To earn the £51bn fortune of Bill Gates, people on average hourly wages in the US would need to work for 1m years. In China people would have to work for 3m years to earn the income of its richest billionaires.
Savers’ interest rates hit record lows
Interest rates for savers have fallen to record lows, after hundreds of cuts in recent months and more than a thousand in the past year. Savings rates plummeted after the Bank of England slashed its base rate in the financial crisis, but since last autumn, as the economic outlook has worsened, they have fallen even further. Tax-free ISAs, fixed rate bonds and easy access accounts are all at or near their lowest points.
While low interest rates are welcomed by mortgage and other borrowers, they undermine the hopes of those at or near retirement age who had hoped that income from their pension and savings nest eggs would help pay their bills.
Iron and steel drag UK industry down
UK industry has fallen back into recession as it has shrunk for the second quarter in a row, according to the Office for National Statistics (ONS). This is the third time UK industry has been in recession in the past eight years. Although industrial production rose 0.3% from February to March, it fell overall by 0.4% in the first three months of 2016 and in the last three of 2015. Compared with a year ago, manufacturing production in the first quarter fell 1.9%, the biggest fall since 2013.
The greatest fall in output came from the iron and steel sector, which saw production drop in March by almost 40% compared with a year earlier. The oil and gas industries saw sharp gains, but manufacturing and construction are proving a drag on the entire economy, slowing UK economic growth. to rise until well into 2017. This means cheaper borrowing costs, which boosts consumer spending power.
Hope snuffed out for interest rate rise
The Bank of England monetary policy committee has agreed unanimously to leave interest rates at their record lows. This snuffs out suggestions that rates could rise by the end of the year, and it could now be the end of 2017 or even 2018 before rates ease upwards. That is linked to the stalling of UK economic growth, with the Bank reducing its forecast for the rest of this year from an initial 2.2% down to 2%.
Along with this report of slower growth came a controversial warning from the Bank of England governor, Mark Carney, that a Brexit outcome in the June referendum could tip an already fragile UK economy into recession.
Energy firm counts cost of not switching
Households supplied by one of the big-six energy providers are collectively paying £4 billion more every year than they need to by staying on a default tariff rather than switching to a cheaper alternative, an energy firm has claimed. This increased by a quarter from £3.4bn, or £234 per household, in 2015, according to First Utility. The reason for this is the big price difference between a standard big-six tariff and the cheapest tariff on the market.
Most UK households are supplied by one of the big six, which statistically maximises the figure for what households are losing. Those paying the most for not switching are in the East of England and the East Midlands.