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I saw the following page on the BBC website today:

http://www.bbc.co.uk/news/business-15748696

It shows who owes what to who. An interesting overview.

There are a few figures to hit the headlines today. Following from the inflation report yesterday we also see the quarterly inflation report from the Bank of England.

The Labour statistic figures were released today and showed an unemployment rate of 8.3%, the highest since 1996. The total number of people unemployed rose 129,000 to 2.62 million, which is the highest since 1994. The release also showed that total pay excluding bonuses rose 1.7%, which is not so good considering inflation stands at 5%.

The Bank of England quarterly inflation report had a mix of good news and bad news. The good news is that they expect inflation to fall sharply in the new year, perhaps below the 2% target rate. The bad news is that the European woes have caused the global economic outlook to worsen. As such the Bank of England has decreased the UK’s projected growth rate.

Some good news today, the annual rate of inflation has decreased. The Consumer Prices Index (CPI) has fallen to 5%, down from 5.2% the previous month. Perhaps what is most encouraging is that there was a noticeable fall in the price of food and fuel.

Inflation has been felt by many in the recent months. Increasing food and fuel prices in particular have affected family finances. With wages failing to keep pace with inflation, it has been felt by many. Individuals experiencing bankruptcy and those in debt are perhaps the most affected.

The Bank of England has a target annual rate of 2%. Today’s figure is clearly well above that although it is expected to reduce in the medium term. It has to be said though, a large amount of uncertainty remains.

The price of fuel has reduced because crude is being priced lower on the market due to the current economic climate. This can very quickly change. Energy bills have increased. Food is lower due to good harvests and heavy discounting by supermarkets. The Office for National Statistics reported that the largest monthly change came from price falls for vegetables (2.4 per cent), fruit (1.6 per cent), milk, cheese & eggs (1.2 per cent) and meat (0.7 per cent).

In its quarterly labour market outlook report the Chartered Institute of Personnel and Development (CIPD) has today reported that it expects the labour market to worsen in the short and medium term. During the survey 1000 employers were questioned. The press release can be found at http://www.cipd.co.uk/pressoffice/_articles/LabourMarketOutlook.htm.

This makes quite depressing reading as it indicates higher unemployment in the future. The latest set of unemployment figures are expected out in the next couple of days.

An interesting question that I often have in discussions with people is about protecting yourself. Is there anything that you can do? Many people in debt may be pushed further towards bankruptcy if they were made redundant. Knowing what to do is tricky. Some suggestions are:

• If at all possible keep funds available should redundancy happen
• Get advice regarding unemployment insurance
• If you are in debt, seek advice
• Try and identify if you are at risk
• If you are at risk then have a contingency plan. There is no harm in having the C.V. up to date and ready to go

It is understandable that these times of uncertainty are the biggest worry of all. By taking steps to protect yourself you may lessen the worry a little.

You may be forgiven for thinking that you have heard very little in the news regarding repossessions considering the economic turmoil over the last few years. Considering, economically speaking, that all hell has broken loose since 2008 you’d expect to be hearing much more. Well now and again the news is popping up.

Today the Council of Mortgage Lenders (CML) made a press release stating that the number of repossessions for the third quarter of this year remains relatively stable and that the number of arrears has fallen slightly. All in all I would say that it represents a scenario of no change and probably at little or no surprise.

There are a number of reasons that I am not expecting the number to shoot through the roof.

Firstly, interest rates remain at an all time low. Although inflation and unemployment has recently began to bite a mortgage is usually an individual’s biggest expense. Therefore as interest rates increase it is likely to increase the number of repossessions. Of course, the longer inflation is high and unemployment continues the greater their impact on the repossession figures also.

Secondly you may remember a couple of years ago that the mortgage pre-action protocol was introduced. The effect of this protocol was to ensure that lenders and borrowers act fairly with each other.

Other factors, such a s asset prices have also contributed to the lower number of repossessions. The nature of this recession is very different to others. There is a shortage in supply of credit and banks have been hit hard. Asset prices have decreased.

Although I am no expert all of this suggests to me that repossessions are relatively low considering the scale of the recession. As previously mentioned though, interest rates will be the catalyst. With serious woes in Europe the LIBOR rate, which is the interest rate at which banks lend to each other, is increasing. Unfortunately this may have the effect of pushing up mortgage rates. This is something that we are starting to see now and we will not know for sometime to what extent this will affect us.