The UK is one the largest economies in Europe and it is feeling the acute pinch of a deficit gone totally crazy. With shock inflation prospects hitting investors and borrowers, British families are starting to tighten their belts as dramatic rises in utilities and food costs are starting to kick in.
Analysts, however, are predicting that the worse is yet to come and inflation is now expected to climb past 5%. For homeowners, inflationary pressures leading to rises in interest rates will spell disaster for higher mortgage payments and more difficulty in selling their properties. Furthermore, as house prices fall, so will the equity in the houses which support much needed lending to make ends meet. Yesterday, the Bank of England warned of high inflation that will go on for three years and the signs are that lenders are taking note and starting to batten down their hatches.
So how can Brits prepare for some tough times yet to come with their finances? Here are some tips courtesy of the Telegraph:-
1) Cut your food bill;
2) Pay off as soon as you can any loans attached to your property;
3) Cater for your old age and buy multiple annuities;
5) Check out gold. The Telegraph reports that last week, Anthony Bolton of Fidelity said gold was the only commodity worth buying. “Gold is more like a currency than a commodity,” he said. “Almost every country has a big budget deficit at the moment so it is in their favour to see their currency depreciate. Countries hold gold as a protection against that.” Chinese investors were starting to take an interest in gold, he said, where previously they were buying American bonds.
6) And finally, get a good financial adviser who can advise you on cheap lending.
- Inflation shock hits savers and borrowers (telegraph.co.uk)
- Anthony Bolton: ‘Gold is the only commodity to buy’ – Telegraph (yzerfonteinchronicles.blogspot.com)
- The Bank of England employs witch doctors (blogs.telegraph.co.uk)
- Anthony Bolton: ‘Gold is the only commodity to buy’ (telegraph.co.uk)
- Bank of England Maintains Mellow Inflation Stance (blogs.wsj.com)
- Inflation report: Bank of England cuts growth forecast (telegraph.co.uk)
- Bank of England inflation report to pave the way for interest rate rises (guardian.co.uk)
- “As safe as the Bank of England?” and related posts (cicerossongs.blogspot.com)
- Bank of England downgrades growth forecast and warns of interest rate hike by spring (dailymail.co.uk)