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Problem debt 'will not evaporate with return to growth'

A return to economic growth is not enough to make the household debts built up before 2008 "simply evaporate", a finance expert warned.

Matthew Whittaker, chief economist at the Resolution Foundation said:

It would be a serious mistake to think that the legacy of problem debt built up in the pre-crisis years will simply evaporate with a return to economic growth.

The magnitude of the stock of debt is simply too large, given expectations that income growth will be gradual at best.

And while the mortgage market largely remains competitive, tighter lending criteria means that some highly-stretched borrowers face limited choices. There is a pressing need for regulation to respond to this new context.

– Matthew Whittaker

Interest rate rise could force repayments 'up by £400'

Mortgage repayments could jump by at least £400 every year if interest rates rise by 1%, a think tank warned.

The Resolution Foundation gave indications of how changes in mortgage rates could impact on repayments.

  • A rate of 3.2%, which corresponds with current average mortgage rates, means someone with a 25-year mortgage of £150,000 pays £727 a month.
  • But if this rate increases to 3.7%, the monthly cost is £767, amounting to around £480 a year more.
  • If the rate jumps another percentage point, to 4.7%, the monthly cost is £851 and the mortgage holder pays in the region of £1,488 more a year than they would on a rate of 3.2%.
  • Moving the mortgage rate up to 5.7% means the mortgage holder pays £939 a month, or around £2,544 a year more than on a rate of 3.2%.


Public asked to help find historical remains of WWI

British soldiers negotiate the Winter landscape along the River Somme in late 1916 after the close of the Allied offensive.
British soldiers negotiate the Winter landscape along the River Somme in late 1916. Credit: PA

Members of the public are being asked to "turn detective" to help identify as-yet unfound historical remains of the First World War.

As part of the Britain from Above project people are being asked to "tag" an online archive of aerial photographs of sites, ruins and remains showing the impact of the Great War on English soil.

The four-year project, run by English Heritage, aims to make a collection of photographs taken by the pioneering Aerofilms company over the course of the 20th century available online.

Helen Grant, minister for the First World War Centenary, said: "The First World War left a huge footprint on the UK's towns, villages, cities and countryside.

"No matter where you live now or where your family were living and working in 1914-18, there are likely to be structures, sites or whole buildings that survive.

"Now the public can help create a lasting aerial photographic record of the impact of the war on our landscape."

People can join the Britain from Above Home Front Legacy Group for free here.

2 million mortgage payers 'at risk' from interest rate rise

An estimated two million mortgage payers would struggle to cope with a rise in interest rates, a think-tank has warned.

Read: Business leaders predict interest rates rise early in 2015

Even a small rise in interest rates could threaten the financial security of some homeowners, the think tank warned. Credit: PA

The Resolution Foundation warned the number of households spending more than one third of their income on keeping a roof over their head would balloon to 2.3 million by 2018 - even with a "relatively benign" raise.

The more ominous situation of households forced to put half their monthly income towards their mortgage could triple to 0.6 million to 1.1 million.

Both scenarios are based on assumptions that the Bank of England base rate, which has been at a historic 0.5% low for over five years, will approach 3% by 2018, in line with market expectations.

Read: Poll: 55% think savers are being made to pay for economic crisis

China visits 600 fast food outlets over 'rotten' meat scare

Security guards stand inside the OSI group where the meat is alleged to have been processed.
Security guards stand inside the OSI group where the meat is alleged to have been processed. Credit: Reuters

China's food regulator has visited 600 fast food outlets and food distributors over fears out-of-date or rotten meat is being sold for consumption, the watchdog said in a statement.

Big chains like McDonald's, Starbucks and KFC-parent group Yum Brands Inc have already been dragged into the safety scare.

The investigation comes after five people from OSI Group, the US parent of China-based meat-processing factory at the center of the incident, were arrested. Yum has now severed ties with the group.


Full review ordered into two hour Arizona execution

A full review has been ordered into the execution of double murderer Joseph Wood, who took two hours to die after being given a lethal injection.

Arizona's Governor Jan Brewer said that while justice had been done she was concerned by how long the lethal injection procedure took.

She said: "One thing is certain, however, inmate Wood died in a lawful manner and by eyewitness and medical accounts he did not suffer.

"This is in stark comparison to the gruesome, vicious suffering that he inflicted on his two victims, and the lifetime of suffering he has caused their family."

Scottie dogs 'steal the show' at Commonwealth Games

The Scottie dogs which led each team out in the athletes' parade at the Commonwealth Games opening ceremony have sparked a Twitter frenzy.

Tweets praising the dogs, who wore jackets bearing the name of each country, flooded in from the likes of Scottish MP Jackie Baillie and Scot tennis star Andy Murray's mum Judy.


Scottie dogs in tartan coats at CG opening ceremony. Barkingly brilliant.


Everybody seems to agree that the Scottie dogs have saved it. Let's just give in and rename them the #CommonwoofGames

The dogs also prompted some Twitter banter, with Patrick McPartlin joking: "Impressed at how the man and the Scottie manage to get back round for each new country in time. Fair play to them."

Reports suggested the terriers were being 'recycled' backstage to walk for each one of the 71 countries competing and that there actually only 41 with some of them working a "double shift."

'Gay kiss' at Commonwealth Games opener praised

A gay kiss in the 2014 Commonwealth opening ceremony has been hailed as a snub to homophobia in Commonwealth countries.

Openly gay singer John Barrownman performing during the opening ceremony.
Openly gay singer John Barrownman performing during the opening ceremony. Credit: PA

Openly gay entertainer John Barrowman kissed a male "bride" at a mock Gretna Green during the Opening Ceremony at Celtic Park last night.

Out of the 53 Commonwealth countries represented at the Games 42 criminalise homosexuality in some way.

Many people took to Twitter to praise the kiss, which came hours after Deputy Prime Minster Nick Clegg called for greater protection for the rights of lesbian, gay, bisexual and transgender (LGBT) people around the globe.

Fergal McFerran tweeted: "John Barrowman's kiss was important beyond symbolism, it's still illegal to be gay in 42 of the 53 #Commonwealth Countries"

Nicola 'Nikki' Coles wrote: "Watch Glasgow snub homophobic nations with John Barrowman gay kiss during opening ceremony."

Games' opening ceremony raises £2.5m for Unicef

The opening ceremony of the Commonwealth Games has raised around £2.5million for children's charity Unicef.

The donations were made during the show following an appeal by Scottish actor James McAvoy and cycling champion Sir Chris Hoy.

James McAvoy and Sir Chris Hoy at Celtic Park in Glasgow.
James McAvoy and Sir Chris Hoy at Celtic Park in Glasgow. Credit: PA

McAvoy, from Glasgow, said: ''This has never been done before - this many people in a single moment all coming together to make a life-saving difference to millions of children.''

Sir Chris added: ''Let's make history together.''

Early figures showed that over 500,000 Brits had donated by text within an hour, Unicef said.

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