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Property prices continue to fall

According to the most recent figures from the Land Registry’s House Price Index, the average price of a house in the UK fell by 1% in June, leaving current prices just 0.1% higher than they were 12 months ago. At this rate of decline it seems certain that next month will see house prices showing year on year falls. The current price of an average house in the UK now stands at £180,781 – still far out of reach of somebody earning an average salary, which stands at £23,764 before tax according to the Offiec of National Statistics. Even a couple who were both earning the national average would still need to stretch themselves far beyond the traditional...

posted on: Jul 28, 2008 | author: Lance

Who’s wrong, the Bank or the Treasury?...

This article from the Scotsman highlights the difference of opinion between the Bank of England and the Treasury on what we can expect from the economy over the next year. The Bank, which is (at least in theory) independent from the goverment, claims economic growth will slow to 1.5% for 2009, while the Treasury says we can expect anywhere between 2.25% and 2.75% for the same period. More proof, as if it were ever needed, that the people who are supposed be in control of the economy have no more insight than the rest of us when it comes to figuring out what the future holds. You’d imagine the Bank and the Treasury would have access to all...

posted on: May 24, 2008 | author: Lance

Compound interest – what it is, and why you want it on your side...

It’s been said that there are two types of people in the world: those who understand compound interest and those who are doomed to pay it. In this article we’ll investigate what that means and whether or not it’s actually true. First, we need a definition of compounding and compound interest. When your interest is compounded it means that it is added back to your original capital, from which point it then starts to earn interest itself. To clarify this, let’s take as example the unlikely scenario that you find a savings account paying 10% interest annually, in which you decide to invest £1,000. You might initially think that this means you will make £100 in interest per...

posted on: Sep 28, 2007 | author: Alex