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2010 Personal Finance Review For The UK

by Jim ONeil on December 23, 2010

in Personal Finance News

The year 2010 was not pleasant for residents of Britain, as many of them struggled to emerge from the recession. Whether you were a borrower or a saver over the past year, you have likely felt the pain. A review of 2010 from a personal finance perspective reveals that this year has been fraught with issues.

The Bank of England has held interest rates at a low 0.5 percent, making things difficult for savers as they saw their real rates of return close in on zero percent. Though the economy has begun growing, these rates of return have not been, partially due to rising inflation that has eroded money’s real spending power. It has not been unusual for savers to lose money by opening a savings account.

Things were not much better for borrowers this year. Banks lowered mortgage interest rates but tightened their lending criteria, which restricted who was eligible to apply for a mortgage. Only those who make a 40 percent or higher deposit can get the best deals. To make things worse for borrowers, economists predict inflation will lead to rising interest rates in 2011.

One positive in this bleak year was the stock market, which experienced a general upward trend. Every fund in the UK All Companies sector has experienced a positive return thus far in 2010, which is a rare achievement. However, if one has a good memory, some sharp declines can be recalled like the FTSE falling under 4800 in July.

When it comes to investing, the shining star was commodities, and not just oil and gold. Corn, cotton, copper, and chocolate prices rose, good for investors but bad for consumers. Though some fear a “commodity bubble,” oil and gold prices are not expected to dip in the near future, especially with demand supported by emerging economies like India and China.


I mostly turn to Reuters or Associated Press when I'm looking for news relating to the UK loans and finance sectors.

In my opinion anything that isn't a news agency will be a little more biased and more bothered about selling news than providing news to people.

Selling news is a business after all, more than anything else. I did however find this post quite useful, hence my comment here:)

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