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[I383]Interest Rates To Increase

by Joseph Hanoa, Jos

The news is filled with stories about people having difficulty making payments on their mortgages in the face of steady increases in interest rates. What was once a fabulous deal for them has quickly turned into an albatross, something that could threaten their financial viability. Lost in all of this are those people who not only benefit, but thrive during times of higher interest rates. How about you? Are higher interest rates working to your benefit or not?

If you live on a fixed income, then you have suffered long enough with dismal returns on your savings. Likely, the bulk of your monies are tied up in a safe financial vehicle such as certificates of deposits. If so, then you suffered long enough with returns of 1.25% or so. Today, interest rates are climbing, so much so that a return of 4.5%, 5% or even higher is possible. This has meant an immense relief for people who live on interest income and want their savings to last them for the rest of their lives.

Of course, not every financial institution is paying the higher rates so it is imperative that consumers shop around for the best returns. Places to look include:

Online institutions such as ING Direct, HSBC Direct, and Netbank. Recent rates on CDs show an average of just over five percent on CDs with terms of one year or longer. This rate is above inflation, currently running at about 3 to 4 percent.

Select Credit Unions. Keeping up with online financial institutions, some credit unions are paying higher than industry average rates to attract and retain funds. Their competition is now any bank across the county, indeed throughout the world. Thus, to remain competitive, higher yielding rates are in order.

Bank Specials. To woo new deposits, some fixed base financial institutions are offering limited time specials paying a bonus rate of CDs. There may be some restrictions with these banks that the others don't have, such as a minimum deposit of $50,000 or a longer term ? such as two years ? for the CD versus six months or one year with other offers. Still, this is an option worthy of your consideration especially if you wish to see your account grow locally.

Certainly, the options today to earn a better return on your money are in place. Shop around for the best deal and you will be one consumer who has thoroughly taking advantage of rising interest rates.

The recent economic downturn has led to nervous times in the construction industry. Construction recruitment has been slashed as building projects are put on hold, whilst potential buyers slam the door shut on their finances and ride out the economic storm in the only way they know how – by not spending money.

Help, though, is at hand. The recent 1.5% interest rate cut by the Bank of England was designed to give the UK economy a shot in the arm and to get the wheels of industry turning again. Priority number one was the construction industry, which has a massive workforce and huge financial commitments to maintain. The interest rate cut, described as a ‘brave move' by construction industry commentators, is seen as a direct result of intense lobbying by the construction industry and house builders, as well as the satellite businesses that depend on the buoyancy of the construction industry to continue trading.

The cut was in response to a marked deterioration in the economic outlook, with inflation no longer seen as a threat, but underlying trends still showing a continuing slide into recession. This is exactly what the construction industry doesn't need right now, so pressure to cut interest rates was seen as the only way out of a downward spiral. Construction recruitment is a major contributor to the UK economy, which depends so heavily upon a well-functioning housing market. Without that housing market in place, jobs in construction drops as workers are no longer required for projects that have either been suspended or, in some significant cases, mothballed altogether. The interest rate cut could turn that situation around and get the construction industry back to work far more quickly than had been predicted just a few months ago.

The Home Builders Federation (HBF) called for an interest rate cut as early as May this year, but specified that this cut must be passed on to homebuyers if any positive effects were to be felt in the construction industry. Stewart Baseley, Executive Chairman of HBF said: “Action from the bank is needed if we are to break the vicious downward spiral of sharply lower mortgage lending, falling house transactions, falling prices, declining home buyer confidence and a worsening outlook.”

The construction industry (and consequently construction recruitment) needs and wants to get back to work. The demand for housing is still strong, but in a bleak start to the winter quarter, potential homebuyers are still reluctant to take the chance of buying when the market is in decline. The interest rate cut will make house buying more attractive as the country battens down the hatches against an economic storm that just won't vanish overnight.

Construction recruitment will continue, prompted by the interest rate cut, as homebuilders and construction companies decide that it's ‘business as usual' and start opening up sites again. This may be small comfort for those whose jobs in construction have been already hit by the downturn, but bodes well for future employment within the industry as confidence in the marketplace returns. Once the interest rate cut filters down to the buyers, the hope is that construction companies will start to see the demand for housing return, and the rush to re-employ or renew contracts will begin again, kick-starting the industry.

On a global scale, the fiscal policies that Gordon Brown has presented to the G20 summit may prove to be a system that can be incorporated universally, not just benefiting the UK construction industry, but worldwide construction as a whole. For once, countries are going to have to talk to each other to build a new post-2008 recession world.

Article Source : Pg. 201

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Both Joseph Hanoa & Duncan Freer are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Joseph Hanoa has sinced written about articles on various topics from Mortgage, Government Grants and Acid Reflux. Joseph is the proud owner of , a website that willexplain everything you need to know about. Joseph Hanoa's top article generates over 135000 views. to your Favourites.

Duncan Freer has sinced written about articles on various topics from Computers and The Internet, Home Improvement How to and Careers and Job Hunting. Duncan freer - Director - Jobs Search is a job site dedicated to the specific needs of candidates who work in the building services. Duncan Freer's top article generates over 201000 views. to your Favourites.