Insolvency experts are warning that the numbers of consumers declaring bankruptcy is set to soar next year, despite the release of figures revealing a fall.
Data from the Insolvency Service showed the number of people becoming insolvent fell by 5 per cent between July and September. Bankruptcies were up 2.2 per cent to 15,833, but there was a drop in Individual Voluntary Arrangements (IVAs), which fell to 10,239 – down 14.3 per cent compared with last year.
UK manufacturing output fell sharply in September, according to official figures, while the global credit squeeze hit the services sector.
Output slid 0.6% on a monthly basis in September and was flat in the third quarter, held back by the strong pound, high interest rates and oil prices.
Services activity slowed to a 53-month low as the global lending crisis affected leading finance institutions.
One analyst said the data strengthened the case for an immediate cut in rates.
Barclays’ shares hit a three-year low yesterday in another day of pain for the banking stocks, as further analysts’ downgrades and continued rumours of emergency central bank funding plagued the sector.
Analysts predicted that “things could get worse” if investors continued to run scared from UK bank stocks because of fears that the companies are hiding hits from investments in US sub-prime mortgages.
The prospect of a full-blown financial crisis edged nearer yesterday as fears of black holes in the accounts of British, European and US banks sent confidence in the sector spiralling downwards.
A third successive day of falls in the values of Britain’s banks, led by Barclays, mimicked declines on the continent and the US following concerns that banks had failed to own up to all their debts and trading problems resulting from the global credit crunch.
A new phase in the credit crunch, one of “$1 trillion losses” seems to be dawning. The crisis at Citigroup and renewed doubts about some of the world’s leading banks disquieted stock markets on both sides of the Atlantic yesterday, with the fractious mood set to continue.
The FTSE 100 fell 69.2 to 6,461.4, with Alliance & Leicester (down 4 per cent) and Barclays (off 3 per cent, to a two-year low) singled out for punishment. In New York, Citigroup, down |4.9 per cent to multi-year lows, weighed on the Dow Jones index, which fell 51.7, or 0.4 per cent, to 13,543.4. Merrill Lynch, Goldman Sachs and Lehman Brothers also dropped on speculation they face more writedowns on top of the $40bn (£19bn) announced in the past four months.
Bill Gross, the chief investment officer of Pacific Investment Management, said US mortgage delinquencies and defaults would rise in 2008. “There are $1 trillion worth of sub-primes, Alt-As [self-certified] and basically garbage loans,” he said, adding that he expects some $250bn in defaults. “We’ve only begun to see the pain from rising mortgage payments,” he added. Brian Gendreau, an investment strategist at ING, commented: “Financials are 20 per cent of the S&P 500 and if that sector doesn’t do well all bets are off. People just don’t know what’s on the balance sheets.”
British households are in effect throwing away every third shopping bag of food they buy, most of it ending up in landfill at huge environmental and financial cost, according to research.
Some 90% of consumers admit they are unaware of the amount of food they regularly bin. They are being urged to change their ways through a national campaign – believed to be the first of its kind in the world – funded and backed by the government. The main reasons given for waste are buying too much through unplanned and excessive shopping, poor storage and not eating short-shelf-life items quickly enough.
Criminals could escape jail if their local prison is full under Government plans to tackle overcrowding, it is claimed.
A review of the Prison Service by Labour peer Lord Carter of Coles is expected to recommend not jailing people who have been sentenced to six months or less if there is no space in the system.
The measure, for a limited period, comes at a time when Britain’s prisons are already over maximum capacity of about 81,000 – with the population estimated to reach 102,000 by 2011.