As the financial markets in the UK continue to be hit by the Credit Crunch - Brokers Online has dcide to restart its finance Blog.

Here you will be able to read information on whats hapening and what is likely to happen to the UK economy in the next few months and years.

During such a difficult time I guess the best advice anyone can give you is to try not to worry unduely. Panic cause people to make silly snap decisions, try not to fall in to that trap!

Some financial products such as life insurance may feel life they are a luxury but in reality if you are finding hard to pay your bills now imagine how hard it could be without the correct forms of protection insurance.

You must also consider products such as Mortgage Payment Protection Insurance and Income Protection these products can be particularly helpful in times such as these.

Investigate your options clearly and carefully - please remember getting quotations for products is not the same as actually buying them - find out how much additional protection could cost you before you dismiss it out of hand.

Regards,

Editor Brokers Online

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Companies face severe funding woes By Chris Giles, Economics Editor Financial Times

Published: December 1 2008 20:44 | Last updated: December 1 2008 20:44

Company finances are facing the most severe squeeze in almost 30 years, Bank of England figures showed on Monday, as deposits in banks are falling fast and businesses struggle to raise new funds.

In October, deposits at banks and building societies by non-financial companies fell 5.2 per cent, the fastest rate since 1980. In the same month, the annual growth in lending to non-financial companies fell to 6.5 per cent, down from 17.9 per cent a year earlier.

Michael Saunders of Citi said: “With such a rapid deterioration in corporate liquidity, many companies cannot be patient and hope to sit out the downturn – they will have to cut back quickly on jobs and investment.”

Households are finding credit conditions almost as tough. The annual growth in the total amount of mortgage debt rose 4.5 per cent in October, the lowest growth rate since the mid 1990s.

But this figure is also deceptive because net mortgage lending since Lehman Brothers failed in September has ground almost to a halt.

Over the most recent quarter, the growth of secured lending by banks and building societies to households is lower than at any time since the Bank started collecting such data in 1963.

Household deposit growth into banks and building societies – a crucial measure of the health of the nation’s domestic finances – had been growing at a steady rate of about 8 per cent a year since 2002. Since September that rate dropped to 6 per cent, the lowest for eight years.

Such dramatic falls in the underlying strength of lending to companies and households will weigh heavily on the Bank’s monetary policy committee this week as it meets to decide interest rates. It expressed concern over the weakness in the growth of monetary aggregates last month when it cut rates 1.5 percentage points, and this concern has intensified over the past month.

Simon Ward of New Star said: “The monetary data confirm a grim near-term economic outlook and warrant a further cut in interest rates at this week’s MPC meeting.”

The weak credit figures come from the components of the Bank’s aggregate money supply, or M4, figures, which show both deposits in UK banks and building societies and lending by them. The aggregate growth of both M4 and M4 lending is rising at double digit rates, but most of this growth represents loans between subsidiaries of financial institutions or loans to the financial sector.

Original Page https://www.ft.com/cms/s/0/283b9772-bfda-11dd-9222-0000779fd18c.html?nclick_check=1