Well it looks as if Britain is heading for its first double-dip recession in 37 years after the economy slumped in the final quarter of 2011 and officials warned of a new threat to many jobs. With almost three quarters of the general public saying they were worried that another recession would have a severe impact on them and their family, while just 13 per cent said they would not expect to be affected it is hard not too worry.

The fresh crisis in Britain’s factories dealt a blow to the Coalition, which has pinned its hopes for recovery on UK industry. The economy’s worse-than-expected performance, which put annual growth for 2011 in line with forecasts at 0.9pc, came as the Bank of England revealed that the private sector is planning job cuts – undermining hopes that it might pick up the slack from the roughly 110,000 public sector redundancies expected this year. Even if the economy does manage to grow in 2012, it’s highly likely that the year will start with a return to recession. We may already be in it given the fall in output at the end of 2011.

And let’s not discount the threat posed by the unstable global markets. The Eurozone debt crisis continues to rumble on, while the US is looking increasingly likely to slide back into recession itself. David Cameron warned that the global economy is close to “staring down the barrel”, while IMF chief Christine Lagarde claimed the global economy has entered a dangerous phase where heavy debt burdens could “suffocate” a recovery.

We’ve already seen £200 billion worth of money rolled out in this fashion and that could be expanded as early as October, when the Bank of England holds its next base rate meeting. Another, more controversial, option would be to cut the base rate from its current record low of 0.5%. The Bank of England’s rate-setting committee caused quite a stir when it revealed that it had discussed the possibility earlier this month.

According to the ONS, manufacturers bore the brunt of the quarterly slump, declining 0.9pc – the steepest fall since the start of the recession in 2008.  However, some hope was offered by an improvement in the CBI industrial trends survey for January. Although orders remained below normal, economists said the data suggested the deterioration in the industrial sector had “troughed”.

Thousands of people face home repossession every year. There could be a variety of reasons for this – failing to meet mortgage arrears, divorcing or separating, constrained by secured or unsecured debt. Through increasing house prices, rising inflation and loss of jobs many home owners throughout the UK are facing eviction and having their homes repossessed. Imagine the fact that you have put all your hard earned cash in to your home and built up a residence you can be proud of just to have your home repossessed and taken away.

The first step towards repossession is the sending of a letter from your mortgage company informing you that you are behind in your payments, and asking you to contact them to explain what you intend to do to remedy the situation.

If you don’t respond within a reasonable time-frame, you’ll be sent another letter underlining the seriousness of the situation and warning of possible legal proceedings if you don’t make contact.

If you ignore this, a solicitor’s letter will be sent giving you 7 days to contact the lender and make an acceptable proposal, or court proceedings will begin without any further notice.

Once it gets to court it’s important to bear in mind that the judge has the power to immediately grant a repossession order if he considers the situation to warrant it. It’s more likely, however, that the judge wll attempt to broker an agreement between the debtor and the creditor which will avoid the need for repossession. This is especially true if children are living in the property in question.

Whatever the judge’s unwillingness to grant a repossession request lightly, if all else fails it will certainly come to this. There will, however usually be one last chance to avoid losing your home as not all orders are acted on immediately, rather being held in reserve by the lender to ensure future payments are made and arrears cleared in some way, even if this takes a long time.

Millions of UK households face financial peril if interest rates rise as expected.

Danny Gabay, the leading economist of Fathom Consulting, believes that if the country expects to fully recover from the recession, then the Bank of England needs to find a way of helping those who took out mortgages beyond their means.

The warning that, so called ‘zombie households’ may find their ‘fool’s paradise’ fall into financial disaster when the interest rates rise, is a fear that is mirrored by many of the leading UK economists.

Mr Gabay couldn’t put a figure on the amount at risk, but according to data collected by the Council of Mortgage Lenders, approximately three million homes will be in serious danger of repossession if interest rates increase by two per cent.

With rates currently at low levels, 1.3 million households are still struggling to cope with mortgage repayments, which eat into over 35% of their post tax income; a figure specified by the Financial Services Authority (FSA) at which a loan has become ‘unaffordable.’

“It is an extraordinary position to be in,” Mr Gabay revealed.

“Fixing government finances is important but is only part of the problem. The other, larger part, is fixing household finances, where in fact the crisis began.

“It is very politically convenient to believe that the crisis was caused by greedy bankers but nobody made people take out mortgages of five times their income. Lots and lots of people borrowed too much.”

This leaves a economists in a difficult position, as interest rates cannot be sustained at their lowest level in 300 years, but with so many borrowers unable to afford an increase, the Bank of England may need to postpone any adjustments for at least a year.

According to Mr Gabay, banks will be reluctant to see the interest rates rise, as they’ll be lumbered with crippling, bad loans.

If the government create a ‘bad bank’ to house all the bad loans, Mr Gabay believes this measure will relieve the difficult situation, as potentially writing-off big debts is causing a reluctance to lend.

“The solution we are suggesting will be very painful in the short term but if we face up to our debts we can move on,” Mr Gabay added.

“We are in a situation that I am very worried about.

“Too much money has been lent against assets which have fallen in value but those losses have not yet been fully recognised.

“We are being kept alive on a near-zero interest rate drip and we can’t move forward.”

David Blanchflower, formally of the monetary policy committee is fully behind Mr Gabay’s review of the current situation.

Mr Blanchflower said: “Anyone who thinks that rates should be raised now or in the next year or two is living on another planet.”

The threat to people living on the edge with their mortgage repayments is very real, according to Sukdhev Johal, reader in business policy at Royal Holloway, University of London.

“There are many people living in a fool’s paradise because of low interest rates,” Mr Johal stated.

“Everything is against people who have over-borrowed, including the threat of negative equity and rising unemployment. The only lifeline is low interest rates and if you take that away you could have properties coming on to the market in a fire sale.”

Liberal Democrat and Deputy Prime Minister Nick Clegg has spoken in defence of the coalition’s budget analysis.

The Institute of Fiscal Studies (IFS) criticised the budget for hitting poorer families harder and being “regressive,” but Clegg refused to accept the opinion which he deemed to be “by definition partial”.

The IFS has already questioned how ”progressive” the government really is.

In his visit to the Disasters Emergency Committee HQ in London, Mr Clegg revealed ”it does not include the things we want to do to get people off benefits and into work.”

Due to the recent restructuring of the benefit system, government cuts to will hit low-income families with children the hardest; losing out by approximately 5%.

The End Child Poverty campaign commissioned and helped to fund the think tank’s report, and fail to see the restructuring as a step forward.

“This government really needs to start matching what it’s saying about fairness and what it’s actually putting into practise with Budget decisions,” explained Fiona Weir, on behalf of the campaign group.

According to figures calculated by the IFS, those deepest affected will also be the poorest, who could lose out by up to £422 between the budget and April 2014.

The report reveals how richer groups will lose out more financially, however, those at the poorer end of the scale will feel the cuts the hardest.

“If you just look at who is receiving benefits then in a sense you don’t ask the most important question of all, which is how you can relieve poverty and make Britain fairer by getting people off benefits and into work,” Clegg explained, covering for David Cameron during his holiday.

The Treasury is fully behind the budget and gives full backing.

According to the Treasury, the IFS has made some glaring omissions in its analysis. Employment improvements as a result of the budget and pro-growth effects.

The FIS report came to some stark conclusions: “Once all of the benefit cuts are considered, the tax and benefit changes announced in the emergency Budget are clearly regressive as, on average, they hit the poorest households more than those in the upper middle of the income distribution in cash, let alone percentage, terms.”

Speaking on behalf of the FIS, James Browne said: “However, when you also include the measures that were pre-announced by Alistair Darling in previous Budgets and pre-Budget reports, the overall package does seem somewhat regressive, particularly within the bottom nine-tenths of the income distribution.”

Whilst discussing the matter, Alistair Darling stated: ”Just last week George Osborne told us that his Budget was ‘fair’.

“But it’s decisions, not warm words, that count. Today there’s conclusive evidence that far from being fair, the coalition has hit the poorest hardest, especially those with children.”

The US unemployment rate has risen above 10% for the first time in 27 years, leaving the US in a state of despair.

President Barack Obama will hold a jobs summit on Thursday, focused on job creation.

Although he has included business leaders amongst the 130 experts attending the summit in Washington, Republicans in Congress will opposed to any major spending plans.

President George W Bush has already frustrated them by spending billions on bailing out the banks and car makers.

The “big government” image and creating big financial defecits to be paid for by future generations are unpopular in Washington.

Economy.com’s Mark Zandi believes deficits are a major worry, but we can’t afford to be concerned about it now.

“That’s a problem not for 2009, not for 2010. That’s a problem for 2011, 2012 and beyond,” he says.

“We have to make sure that we don’t go back into a recession, because if we go back into recession, the cost to taxpayers will be even greater.”

“The deficits will be measurably larger, so I think it’s important to spend more money now.”

According to Mr Zandi, government spending needs to be aimed at assisting local government offices, as with tax funding falling, many employees are at risk of losing their jobs.

President Obama is on the look out for new ways to combat unemployment.

Unemployment benefits usually run out after six months in the US, but have been extended because of the highest unemployment rates.

Mr Zandi believes continuing with providing benefits to the unemployed as essential to maintaining demand, as those with no money make no purchases.

That situation could develop into a ‘catch-22’, downward spiral, as consumers that don’t consume, results in businesses cutting their workforce, causing more unemployed with no money to spend.

Another area where Mr Zandi feels the government can make a unique contribution is providing credit to small and medium-sized businesses.

Banks are still cautious over lending after the credit crisis, but have always given capital to start-up companies to help them expand, and these new businesses usually provide America with the majority of new employment.

Mr Zandi believes that “it’s clear that even when the economy gets back on its feet, we’re going to have very high unemployment in many parts of the country for a long time to come.

“One reason is that the people out of work don’t have the skills and education necessary to be employed in the jobs of the future.”

The UK’s Yorkshire and Chelsea building societies are said to be in “advanced talks” over a potential merger.

The Chelsea is the fifth and the Yorkshire is the second largest building society in the UK.

If a deal is reached, it would rival the Nationwide as big mutually owned mortgage and savings institution.

In August, Chelsea revealed a half-year loss of £26m after it had assigned £41m to cover to mortgage frauds.

The Chelsea has 35 branches and 700,000 members, while the Yorkshire has almost t three times as many members at 2 million and over four times as many branches, with 143.

The Chelsea building society announced, “the board of Chelsea has been undertaking a detailed review of the society’s activities, operations, financial position and corporate structure”.

“As part of this, Chelsea has considered the potential benefits to members and other stakeholders of a merger and this has culminated in discussions with the Yorkshire.”

The talks of a deal are being seen as a rescue package for Chelsea. New chairman Stuart Bernau has been analysing the business and viability over its independence.

In 2008, it reported a loss of £39m which was the highest recorded loss by a building society. £44m was written off due to huge investments in two failed Icelandic banks.

Another £15m was written off by the Chelsea after buying a mortgage broker in 2007 whose business collapsed during the credit crunch.

Building societies differ from banks and stock-market companies, as they are owned by their members, and struggle to regain reserves if they suffer heavy losses.

The Chelsea went on to reveal that “for a merger to proceed, the boards of both societies would need to be satisfied that it will be in the benefit of each society’s members”.

“The merger would also be subject to approval by each society’s members and the FSA.”

It has yet to be revealed if a merger would provide a windfall to the members of both societies. A spokeswoman for the Chelsea said that such details were yet to be discussed.

Several takeovers of building societies have been made since autumn 2008 in an attempt to save them from problems brought on by the global financial crisis.

In September last year, the Nationwide began its takeover process of both the Cheshire and the Derbyshire, then the Yorkshire made a move for the Barnsley building society, with the Skipton taking control of the Scarborough.

The most important factor when choosing to manage your personal finances effectively is time. A greater time investment will almost always result in a greater financial return.

Therefore the sooner you start to manage your finances, the greater return and financial ease you will feel in the future. Many people fail to plan ahead, which results in struggling to juggle finances at a later point in life.

Money management should focus on four primary questions:

1.       What financial goals would you like to achieve?

2.       When can you expect to achieve them?

3.       What finances do you currently have?

4.       What level of risk would you make to achieve these targets?

Choosing somewhere to live is an essential in everybody’s lives, and therefore, buying a house will be the biggest financial purchase that people will make. The financial investment into a home will affect all your other finances.

Making big decisions on your lifestyle will affect your financial goals. If you consider a luxury holiday to be one of life’s essentials, you will have less money left over for savings and investments.

When do you want to retire? What expenses do you currently have? Deciding what your priorities are will help to determine what money you will have left.

It is worth assessing your current liabilities, as these expenditures and assets could be reduced or sold and free up money for the future.

Calculate how much spare money you have so that you can form an investment plan. Investments can vary dramatically. Some are high risk for higher reward or loss, and some are low risk for a steady growth on investment. It’s up to the individual to decide what level of risk you are prepared to make.

Once these considerations have been made and your plan is in places, it’s important to assess the decisions you’ve made and how they affect you on a day to day basis. You plan may be too restrictive, leaving you with not enough money to live on, or perhaps you could make greater short term sacrifices to benefit you in the long term.

A small amount of time spent on your current finances can be highly rewarding for your future.

The US economy saw its first growth in over a year, rising to an annual rate of 3.5% between July and September.

Experts believe that a major spending plan by the US government which featured a scrappage scheme to encourage the car sales market has been the main cause of the upturn.

Some economists believe that there could be more setbacks lurking ahead, despite the official statistics showing that the recession is over.

A spokesman at the White House announced that recent economic progression was “a welcome milestone” but it would take more time for a full recovery to be recognised.

The US economy had risen 0.9% in relation to the previous three months, whereas the UK economy remained in recession, unexpectedly dropping 0.4%.

Hugh Pym, the chief economics correspondent for the BBC, revealed that the growth rate of 3.5% was greater than the 3.3% predicted by most experts.

He continued:”The sheer scale of the stimulus in the US has made a big difference, it was much bigger in percentage terms than that in the UK.”

“That the US, the powerhouse of the world economy is growing once again, is good news for the global economy has a whole.”

The last time the US economy grew was in the second quarter of 2008, by an annual rate of 2,4%.

The National Bureau of Economic Research will reveal the full extent of the US economic climb from recession when it analyses all the factors.

Some factors were significantly responsible for helping US economy during the third quarter, according to the Commerce Department.

The spending on durable manufactured products rocketed up at an annual rate of 22.3% which was the highest quarterly figure since 2001 and was spearheaded by the ‘Cash for Clunkers’ scheme helping new car sales.

Consumer spending increased on housing products by 23.4%, the greatest quarterly surge in 23 years, and came as a result of an improving housing market.

The big increase is considered by many to be due to the government’s $8,000 tax credit provided to first-time house buyers.

Government spending increased by 7.9% as stimulus spending spread and exports saw their biggest rise since 1996, rising by 21.4%.

Brian Bethune, an economist for HIS Global Insight stated that “it’s good to have the economy growing again.”

“But we don’t think that rate of growth is sustainable because it is distorted by all the government stimulus.”

“The challenge here is to get organic growth – growth that isn’t helped by fiscal steroids.”

However, unemployment is at a rate of 9.8% and a sharp fall came in September in the car sales industry as a result of the popular car scrappage scheme coming to an end in August.

Dean Baker, co-director of the Centre of Economic Policy Research believes that “you can say that the recession is over, but it sure won’t feel like that.”

“There is a lot of downward momentum that isn’t going to go.”

Plans to split British bank Northen Rock in two which would allow for its partial sale has been granted by the European Union.

The divide would result in two separate banks forming and are already being described as the “good” and “bad” banks.

The “good” bank would offer new lending, retain some of the existing mortgages and hold its savers’ money.

The “bad” bank would be used to repay the existing government loans and hold the remaining loans.

 Decisions made by the EU to accept the move are seen by Northern Rock as “an important and positive step.”

Changes to the existing setup will be made towards the end of the year.

The EU revealed that the good portion of the bank would be expected to grow and then be sold to third party, with the bad bank allowing its assets to dissolve then becoming liquidated.

The good bank may be sold prior to the general election next year with potential buyers being speculated already, with Virgin and National Australia Bank, owner of Clydesdale and Yorkshire Bank, among the interested parties.

EU Competition Commissioner, Neelie Kroes, believes that the move would make the bank a good long-term option, revealing that “this decision demonstrates once again that the EU’s state aid rules provide an appropriate framework to allow state support for a sustainable restructuring of banks without giving individual banks an unfair competitive advantage.”

Whilst Jonathan Todd, European Commission spokesman, said caps would need to be applied for the duration that the good bank remains owned by the public.

Some of the caps include a balance sheet reduced to a quarter of its size prior to the crisis, not being the market leader for loan interest rates, a cap set to limit its lending to one-third of Northern Rock’s 2008 levels and also a cap on retail deposits to be slightly lower than the pre-crisis level.

An investigation was engaged by the EU into Northern Rock in April 2008, two months after its nationalisation.

The results from the investigation showed that the UK government was kept at a “necessary minimum”.

By 30 June, the bank had paid back approximately half the taxpayers’ £26.9bn loan and will gain a further £8bn from the government during the end of year restructuring.

The EU stated that the restructuring would reduce its market share to below half of its pre-crisis level and “correct the excessive expansion of Northern Rock pre-crisis.”

Northern Rock released a statement, saying “this approval is an essential requirement of the planned legal and capital restructure, which is central to the business plan for Northern Rock.”

“The restructure will strengthen the capital and liquidity position of Northern Rock significantly, and offers value for money to taxpayers” and it would be “business as usual” for its customers.

According to official figures, the UK experienced an unexpected contraction of 0.4% for the third quarter, showing that the UK is still stuck in the recession.

This quarterly contraction is the sixth consecutive contraction, the worst run of figures that UK gross domestic product (GDP) has experienced since records began 54 years ago.

The GDP of a country represents the value of goods and services produced by a country. The figures released may be altered at a later date, as this is just a first estimate.

The Office for National Statistics (ONS), had been expected to show quarterly growth of 0.2%. However, no growth in retail sales for September and a 2.5% fall in industrial output for August had dented people’s positive expectations.

Experts have revealed that one of the main causes of the contraction was an unexpected drop in the services sector, with distribution, catering and hotels generating some of the worst figures.

Nearby countries France and Germany exited the recession earlier this year, and it is generally considered that the UK’s reliance upon the services sector, and more specifically, the finances sector being the main reason.

The UK economy has now experienced a 5.9% contraction since its high point prior to the recession.

The Bank of England is set to re-think its quantitative easing plan after seeing such a poor result in GDP figures. Quantitative easing involves the Bank of England printing money to buy bonds from companies and banks in an effort to encourage positive activity in the economy.

HSBC’s Bronwyn Curtis spoke with the BBC, revealing that “back in August we had a worse-than-expected second-quarter GDP number and that is the reason that the Bank of England extended the quantitative easing programme,”

ING’s James Knightly felt that the data was “awful with no positive news” and “clearly suggests that the likelihood of an expansion in quantitative easing by £50bn or so over the next quarter is rising, although [it] is not a foregone conclusion.”

It is considered by many experts to be disturbing that measures taken by the government and the Bank of England have failed to make a positive impact. However, David Kern, the chief economist with the British Chamers of Commerce believes that “continued intervention – including help for businesses to access finance, and incentives to promote investment – is still needed.”

“Above all else, business confidence must be nurtured, to ensure that recovery is not further delayed.”