Where does one go for financial advice nowadays? More and more, it seems that decent impartial financial advice isn’t easy to come by – after all, as impartial as people claim to be, quite often you can’t confirm this yourself.

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Just by tapping in a few details and hitting that button, you can view details on a huge number of deals on the product you’re looking for, ranked to be as close as possible to the parameters you set in the first place, and many of which you can apply for directly.

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There is a lot to be said for carefully considering your financial position, learning about the different options available and then choosing the one most appropriate to you. True enough, this may not be the quickest way, but do you really want to rush into what could be a very important financial decision? moneysupermarket.com can make this decision easier, offering not only detailed price comparison, but a wealth of other information that can help you decide on what product and what type of account is right for you.

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.”

Whilst the general financial atmosphere is improving and optimism growing, it is too soon to announce that we are in the process of recovery, according to experts at Ernst and Young Item Club.

The influential professional services firm expects some growth towards the end of 2009, but this growth should begin to struggle, with 1% expected growth for 2010.

They also predicted that customers repaying debt will grow slower than first anticipated and impending tax rises will follow the election.

BT Business research predicted a more optimistic outlook, declaring that small businesses are positive about the forthcoming year.

In September, BT Business conducted a survey of over 7000 small businesses and found that 75% believed their business would see an upturn in 2010, with 61% confident about their business’ prospects.

Professor Peter Spencer, Chief Economist from the Item Club, issued a wake-up-call to all those getting carried away with the optimism of recovery.

He warned, “there could still be substantial pain to come for corporates and consumers.”

“For a sustainable recovery the UK economy needs world trade to pick up and there is still not much sign of that happening.”

One of the factors holding back growth is that the VAT rate will return to 17.5% from its current level of 15% on 1 January, a change which may see consumers making purchases before the New Year.

Several other factors which will hold back growth lie on the horizon. An increase in national insurance contributions, the new 50p tax rate, the termination of the car scrappage scheme, tighter government spending and the return of stamp duty on housing are all due to hit the country.

Judging whether the recovery is happening, on the way or unlikely is difficult to forcast.

Professor Spencer went on to tell the BBC that the recent economic data has been “very mixed,” adding, “the stock market is absolutely rampant, industrial surveys all back in positive territory, but it’s yet to show through in hard data for output and things like that.”

“And when it comes to lagging indicators like unemployment, I’m afraid it’s going to be ‘feel bad’ for quite some time to come.”

On Friday, the official statistics for the Gross Domestic Product (GDP) are released, with many expecting no economic growth at all.

GDP is a measurement of the services and goods produced in a country, and since the first quarter of 2008, the UK GDP has been in negative figures.

The Bank of England has focused on quantitative easing, an act of pushing money into the economy. Professor Spencer feels that this has been of little success, with the little improvement on bank lending, going on to complain that “instead, the banks appear to have used much of the money to rebuild reserves and improve liquidity.”

The Council of Mortgage Lenders (CML) says that UK house repossessions fell 10% in the second quarter of the year compared to the first.

However, there was still a rise of 14% of homes being repossessed compared with the same three months last year.

The group believes low interest rates, early advice for struggling homeowners and tolerant lenders are helping, but with unemployment still rising, more and more households will get into difficulty.

Low interest rates means those that are falling behind on their mortgage repayments is levelling off.

The number of home loans with arrears of over 2.5% of the mortgage balance in the second quarter of this year was 205,600, compared to 203,900 at the end of last quarter, and 139,700 this time last year.

Negotiations

But separate figures show that there may be a future rise in repossessions yet. The number of court repossession actions started bounced back in the second quarter of the year, rising 10% compared to the first quarter. Repossession orders given by judges also rose at the same time by 16%.

Homeowners can still negotiate with their lenders to stay in their homes at this stage, but nearly half of the repossession orders were suspended as judges allow borrowers to negotiate a deal with mortgage lenders.

The CML say the figures show lenders aren’t being aggressive about lack of payments, but do issue a warning: “with unemployment rising and the economy still weak, the outlook will remain challenging for the rest of this year and into 2010.

“Clearly, low interest rates are also helping borrowers who are committed to working to resolve their arrears, paying what they can – and when they can – towards their mortgage, and maintaining good communication with their lenders.”

Second Wave Still To Come?

The CML recently reduced its estimated number of repossessions in the UK to 65,000. However, homeless charity, Shelter, believe there may be a second wave of repossessions when interest rates rise again.

Kay Boycott from the charity said: “Despite many lenders using more tolerant measures to help their customers, further action is needed if we are to prevent a second and more devastating wave of repossessions.”

CML and the government believe free advice to those falling behind on their repayments and ‘last-gasp’ advice in repossession courts has allowed many to keep their homes. But similar schemes  - such as those to allow people to sell their home to housing associations and live as tenants – have had a slow start.

 Fifteen households completed the ‘mortgage rescue’ process in England by the end of June under a new scheme, and the government will send a fast-track team to oversee it from autumn. Seventy families have been through the scheme in Wales and a hundred and five in Scotland since March. Other people have started the process to eliminate the imminent threat of repossession.

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UK unemployment has risen to its highest level since 1995.

In the three months leading to June, unemployment rose to 2,435,000, making the rate of unemployment 7.8%.

Average earnings excluding bonuses also grew at their slowest rate since records began in 2001, at an annual rate of 2.5% in the three months to June, compared to 2.6% in the three months to May.

Those in manufacturing suffered worst with pay increasing only by 1.1%. Public sector work saw an average rise of 3.7%.

The full impact of the current lack of jobs has yet to be shown by the figures which don’t yet include those that left education this year.

Bank governor Mervin King warns the UK is looking at a ‘slow and protracted’ recovery in 2010.

He also hinted further measures may be needed to stimulate the economy on top of the Bank of England’s current quantitative easing.

Lost Generation

The BCC believe unemployment is likely to keep rising rapidly even if the economy begins to grow again, and may reach 3 million.

However, the Institute of Directors also estimated a million people are working part-time because of the recession, that are also not represented in figures.

Calculations based on ONS data believe unemployment among 16-24 year-olds has risen to 19.1% as 928,000 of them are classed as unemployed.

There is rising concern about the number of young unemployed people in the UK. Lord Mandelson, the UK Business Secretary said: “This is something the whole country has got to rally to. We need public and private employers, as well as those in the [charity] sector, to help us mount this national campaign to back young Britain.”

Shadow Chancellor, George Osborne adds: “Unemployment continues to rise, month after month, we are facing a lost generation of young people who can’t get work.

“The government talk about all their unemployment schemes that are supposed to help, but at the moment we’ve just got people losing their jobs and getting very little help in trying to find a new one.”

What Are You Going To Do About It?

Youth Fight for Jobs Campaign says there’s a lack of affordable housing as well as jobs for young people: “It’s about highlighting that there’s a problem, and also saying to the government, and local MPs, and councillors, what are you going to do about it?

“Young people don’t get proper training, a lot of working class young people get put off from going to university and being saddled with debt.”

The number of new claimants for job seekers allowance had been falling, but rose from 21,500 in June to 24,900 in July. The government says it will launch an investigation into the difference between those out of work and those claiming unemployment benefits.

Latest data shows, under International Labour Organisation rules, the jobless rate rose by 7.8% in the second quarter of 2009, but the rate of people claiming unemployment benefit in July was only 4.9%.

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No Such Plans…

The Conservatives say that they have no plans to increase VAT to 20% if they win the next general election says shadow Health Secretary Andrew Lansley.

Mr Lanslet insisted on BBC’s Andrew Marr Show, that the move was note being actively considered. He added that “no such plan” has ever existed and denies reports that “senior level discussions” were being held in order to discuss this possible move.

Stephen Timms, Treasury financial secretary, says David Cameron, leader of the Tories, “needs to explain” his plans

A British newspaper says that a VAT rise would be introduced by a Conservative government within weeks of the party winning the election. They believe the decision to make the increase is part of an “emergency” budget that will reduce the UK’s debt, was made by Mr Cameron and his shadow Chancellor George Osborne.

But Mr Lansley says that no such action has been taken: “As far as I am aware we have absolutely no such plan and I know there have been no such senior level discussions.

…Can’t Be Ruled Out In The Future Though!

“We have been very clear about the need for public spending to be controlled and the priorities that we will have within public spending, including for the NHS.

“We have been very clear about that because we don’t want to be in a position where we have big tax increases, the effect of which is to stifle the economy.”

Shadow Foreign Secretary William Hague also says that there are currently no plans to raise VAT to 20%, but he also said that such a move could not be ruled out completely in the future. He said: “You can’t ask George Osborne to write the 2010 budget now.”

Mr Timms says: “If David Cameron is seriously considering this, he needs to explain why he thinks it’s right that ordinary families should pay more tax while he’s pledging £200,000 tax cuts for the 3,000 richest estates.”

The current VAT rate is 15% after Chancellor Alistair Darling reduced it earlier this year from 17.5% in a bid to tackle the economic downturn.

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Discourages Risk-Taking

The FSA will publish a code later this week detailing how it expects banks to change their policies on pay and bonuses.

The consultation was launched in February, which looks into measures to discourage excessive risk-taking.

Last week there were suggestions that bonuses have been returning in the middle of a boom in profits from investment banking, but FSA’s Hector Sants says that the regulator will not look at individual bonuses from banks.

He also added that the FSA would be responsible for making sure the calculation of bonuses was not encouraging too much risk that would put banks at risk of failing, and also for deciding if the banks are distributing too much money for their own health.

“Our code next week will address those questions and make absolutely clear that you cannot calculate bonuses in a way which encourages unreasonable risk-taking and puts the institution at risk, which was the case in the past.”

Reward Long-Term Success, Not Short-Term Risk-Taking

The Turner Report back in March, suggested that bonuses should be deferred in order to reward long-term success rather than short-term risk-taking. But it did concede that regulators’ failure in the past to consider the effect of banks’ remuneration on their risk-taking had been a mistake that contributed to the current economic crisis.

The FSA now says it will start looking closely into the way bankers are paid in general.

Mr Sants said: “One of the measures we’ll be announcing next week is a requirement for all UK banks to produce for us a clearly articulated pay policy and we will sign off on that.”

He also added that as long as overall remuneration policy is acceptable, the FSA wouldn’t be worried about the question of staffs individual payments. As long as the overall amounts going on bonuses were not too much, the amount going to any individuals would be a matter for shareholders or the government.

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Deliberate Undervaluing

Estate agents are warning that property sales and remortgage deals are collapsing due to some mortgage lenders and surveyors deliberately undervaluing homes.

Homes are currently thought to be undervalued by an average of 10% according to the National Association of Estate Agents (NAEA), due to surveyors being overcautious.

The Royal Institution of Chartered Surveyors denies this, saying that the housing market is constantly changing and had lots of ‘imperfections’.

If the valuation a lender places on a property is lower than the agreed price, the lender may choose to offer a smaller mortgage, leaving the buyer without enough money to cover the asking price and causing the deal to collapse.

Lenders can also check property value when it is being re-mortgaged in order to make sure they aren’t lending more than it’s worth.

Same Valuer, Two Different Values

Peter Bolton King of the NAEA said: “They are perhaps worrying about the market and almost deliberately knocking off 10% almost regardless of what the property sold for.

“The other reason which I found more worrying, is that we are hearing anecdotally that lenders are giving specific instructions to their valuers as to how they should approach these valuations.”

Sellers are also feeling the effect of undervaluing as they may have to drop their prices. People seeking mortgages are also left with little or no flexibility.

One homeowner says that she had problems remortgaging her home: “The bank sent their own valuer who valued it at £80,000, but I knew it was worth far more so I paid £300 to get it revalued.

“The valuer came and said it was worth £100,000 but it was the same person that made the first evaluation.”

Unpredictable And Unreliable Time

Managing Director of independent broker Mortgage Talk, Andrew Frankish, said: “With the mortgages that are not completing, we believe up to half of them are affected by the valuation.

“What we mean by that is the valuation is coming back at lower than they predicted, which pushed them into a higher loan to value, which means the products are too expensive or the banks are reluctant to lend in that money at all.

“This is even worse than remortgages where around three-quarters of remortgages are affected.”

The Council of Mortgage Lenders says it works with professionals who are duty bound to give accurate valuations, but those who value homes also deny they are deliberately undervaluing them.

Royal Institute of Chartered Surveyors, Barry Halls said: “We are dealing with a market where there are lots of imperfections and there will be a range of valuations that the valuer will look at before they arrive at their opinion of value.

“That opinion of value could well be different from another opinion of value and could fluctuate over a period of time as well.”

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