Issue 1

It looks like we may have seen the end of 100% lending. It remains to be seen how this will affect the housing market but this development could bolster the buy to let sector as homebuyers with no deposit are marginalised and pushed into renting rather than stepping onto the first rung of the ladder.
 
If we look at the months ahead the phrase on the lips of most leading economists is ''stagflation''. This essentially means a period of low economic growth and high inflation. ''Stagflation'' presents policy makers and economists with a real dilemma as they have virtually no tools at their disposal to deal with it.
If growth is low then the initial reaction would be to lower rates and conversely if inflation is high then rates should be increased to counter this. If growth is low and inflation high then the options available to tackle this are limited to say the least. We are likely to see this biting towards the tail end of the year unless conditions in the credit markets improve and inflationary pressures ease. The areas at the moment impacting most significantly on inflation are average food and petrol prices.

The average price of basic food items has increased by 17% over the last 2 years, according to figures from the Office of National Statistics. 

The Government body surveyed prices of 20 everyday ingredients from 150 locations across the UK, from supermarkets to local grocers. Their analysis showed that the cost of these ingredients had risen from a combined cost of £50.03 in 2006, to £58.74 in 2008.  This weekly increase of £8.71, adds an extra £453 over the course of the year to an average grocery bill.

The rising cost of petrol prices and utilities is also well documented, showing that UK consumers more than ever before need to keep a tight grip of their purse strings.