1 Stop Financial Services had the pleasure of an outside broadcast by Radio Pembrokeshire from our office on Friday 29 Jan 2010.

Ben Stone entertained the listeners with his usual whit and style. The main reason for the outside broadcast was to promote the Local Hero Awards.

1 STOP Financial Services are very pleased to be sponsoring the Volunteer of the Year and look forward to meeting the winner.

Nomination forms are available in the office at 20 High Street, Haverfordwest and you can put the form straight into the nomination box. Nominations close 7th February 2010.

During the show Ben spoke to members of the staff about their roles at 1 STOP Financial Services and also their involvements in various charity events.

Lee Rees spoke about the forth coming ‘Pembs Climbs Kili’ in June this year. 12 local men will be climbing Kilimanjaro in Africa to raise money for the following 5 local charities – Paul Sartori Foundation, Pembrokeshire Puffins Disability Club, Guide Dogs in Pembrokeshire, Frame and The Carreg Pink Ribbon.

Figures from the Office for National Statistics (ONS) revealed the UK economy has exited its longest recession since records began, with GDP growth of 0.1% in the final quarter of 2009.

The economic growth in the UK had decreased for the previous six straight quarters. The UK GDP is now 6% lower than it was at its peak in early 2008.

However, the figures will be revised by the ONS in the coming months as more data becomes available and could be reduced to 0% or less.

Britain is the last G20 country to leave recession, with many European economies seeing economic growth in mid-2009.

Output for business services and finance industries is thought to have been flat during the final three months of 2009.

According to a Nationwide report House prices rose in all regions except Northern Ireland during the fourth quarter of 2009, southern regions continued to experience stronger growth than northern regions and London saw the strongest growth in the quarter and also over the year. 
 
Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:
“The final quarter of 2009 saw a slowing in the quarterly rate of house price growth across the majority of UK regions, but most regions ended the year with average prices higher than at the end of 2008. For the UK as a whole, prices rose by 1.6% in the fourth quarter, leading to an increase in the annual rate of change from -3.0% in the third quarter to +3.4%.

“Greater London was the best performing region in the quarter; prices rose by a seasonally adjusted 3.4%. This increase pushed the annual rate of change up from -1.9% to 7.0%, making London the best performing region over 2009.

“Outside of London, the East Midlands saw the strongest quarterly performance within the English regions, with a 2.8% rise in prices over the quarter, bringing the annual rate of change up from -5.4% to 2.5%. The Outer Metropolitan and Outer South East regions continued to see above average growth in the quarter and were the second and third best performing regions, with annual growth of 6.4% and 5.5% respectively.

“The northern regions generally saw weaker growth, in particular the North where prices rose just 0.4% in the quarter. The North was also the only English region not to see prices rise across the year as a whole, with an annual price change of -2.0%.

“House prices in Scotland rose 1.9% during the quarter, slightly above the UK average. This was enough to push the annual rate of change into positive territory, with prices up 1.0% compared to the fourth quarter of 2008. Quarterly price growth in Wales remained relatively weak in the fourth quarter, with a 0.9% rise recorded, leaving average prices marginally lower than one year earlier.

“Reversing the large increase seen in the third quarter, prices in Northern Ireland fell by 6.8% in the fourth quarter. On an annual basis, house prices were down 6.7%, a modest improvement from the 8% year-on-year fall in the third quarter. Northern Ireland remains the worst performing UK region.

Wales top performing UK country over last decade

“Despite the sharp house price falls seen in 2008 and the first half of 2009, the 2000s has generally been a very strong decade in terms of house price growth. In nominal terms, house prices in the UK rose 117% between 1999 Q4 and 2009 Q4. Taking into account overall retail price inflation over the period, prices have risen by 68% in real terms, the strongest decade on record. This compares with a 14% fall in real terms during the 1990s.

“Wales has been the top performing country over the 2000s; house prices have risen 82% in real terms.  This sharply contrasts with the 1990s, where Wales saw prices fall by 24% in real terms.

“England overall has seen the weakest growth over the 2000s of 65%, although this has varied widely across the regions. Within England, Yorkshire and Humberside has seen the strongest growth, with prices rising 84% in real terms, whilst the Outer Metropolitan region has experienced the weakest growth, with a 51% increase.

The strong growth seen in Yorkshire and Humberside might reflect that it started the decade as one of the most affordable regions, with a house price to earnings ratio of 3.0 (compared with the UK average of 3.6 in 2000 Q1).

“Whilst the strong housing market performance of the 2000s is good news for homeowners, it is less positive for those looking to get on the housing ladder. Affordability has improved since the peak in house prices in 2007, but we will enter 2010 with house price to earnings ratios across the regions at a much higher level than the start of any other decade.”

According to the Confederation of British Industry (CBI), the UK economy is expected to exit the recession in the 4^th quarter of 2009, growth will remain “fragile” and subdued for some time to come, with GDP unlikely to reach pre-recession levels by the end of 2011.

 In its latest economic forecast published on 21^st December 2009, the CBI predicted the recession would end when UK growth resumes in the 4^th quarter of 2009, helped by consumers bringing their spending forward to beat the VAT rise.

However the business group added subsequent growth in the first two quarters of 2010 will be weak at 0.3 per cent, but this should strengthen as the global economic recovery gathers pace, businesses rebuild stocks and household spending recovers.

As a result, the CBI has predicted annual UK GDP growth of 2.5 per cent in 2011, following 1.2 per cent in 2010.

However, despite two years of economic expansion, UK GDP will still not have returned to its pre-recession level by the end of 2011, which illustrates the depth of the recession and the weakness of the economic recovery.

John Cridland, deputy director-general of the CBI, said: “The outlook is brightening as the global economy finds its feet, although we will need to keep our nerve during early 2010, and there is no sign of a clear driver of strong economic growth.

“In the spring many staff will face another cycle of wage freezes, and job losses will continue rising until the autumn. Although the first few months of 2010 will be difficult, growth will gradually pick up and increasing confidence and demand will lead the UK into a more positive 2011. Consumer spending looks to be slightly more resilient than we first thought, and a weaker pound will help to support export growth.”

“However, the economy will be on a fragile path of very slow growth, as we continue to feel the lasting effects of the financial crisis. And it remains vital that government sets out clearer plans to address the fiscal deficit at its next opportunity in order to help shore up future UK economic prospects.”

Meanwhile, the CBI expects unemployment to continue rising over the coming quarters, but peaking slightly lower than previously forecast, at just over 2.8m in the third quarter of 2010.

Elsewhere in the report, the CBI forecast that the planned VAT rise in January will push CPI inflation up sharply before it eases back during 2010 and falls below the Bank of England’s 2 % target throughout 2011.

The UK Bank rate is forecast to start rising in spring 2010, as the Bank of England withdraws some of the monetary stimulus in order to minimise the risk of undesirable inflationary pressure in the medium term.

The CBI said the Bank rate is expected to reach 2 per cent by the end of next year, with no further rises during 2011, to assist the sustainability of the recovery as fiscal policy begins to tighten.

Ian McCafferty, chief economic adviser at the CBI, said: “The UK economy faces a number of structural hurdles over the coming two years, and this recovery – like that of the 1980s – will be relatively drawn out.

“Credit conditions will remain difficult as the banks slowly nurse themselves back to health, consumer spending will be shaped by the need to rebuild savings, and the public sector will soon have to tighten its belt. All three factors will act as headwinds to growth.”

According to Bank of England governor Mervyn King, inflation in the UK may rise ‘sharply’ over the next few months but is likely to fall back again in the medium term.

The increase would be triggered by VAT returning to 17.5% on 1 January 2010 and higher petrol prices. However, he believes inflation, which is currently at 1.1%, will then fall back in the medium term.

Presenting the Bank’s latest quarterly inflation report Mr King said the UK economy has ‘only just started’ down the road to recovery and lending by commercial banks would ‘probably remain weak over the next three years’.

His comments come a week after the Bank decided to pump an extra £25bn into the economy under its QE programme, bringing the total to £200bn.