The study, which was conducted by the polling organisation Ipsos MORI, found that a third of all adults plan to reduce their spending over the next 12 months, as worries grow that 2012 could be as bad as or worse than 2011.

The number of people saying they planned to reign in their spending is up from 19% when the same survey question was last asked in October. Although people are typically more pessimistic about their financial situation in January, the results indicate a growing lack of confidence, despite the fact that a quarter of all survey respondents said they expected to get a pay rise this year.

Some 23% of adults expect their financial situation to deteriorate over the course of the next year, with those on low to middle incomes the most pessimistic, according to the study. The poorest households and those in full-time work were found to be even more likely to say they will cut back, with both groups polling 38%.

Just under a third of respondents said they spent less on Christmas last year than in 2010, while one in five said they would not be able to afford a holiday this year.

Gavin Kelly, chief executive of the Resolution Foundation, said, ‘Families that are already hard-pressed are preparing for yet another very tough year ahead, with a big rise in the numbers planning to cut back spending as well as trying to save and reduce their debts,’

‘Given this gloomy backdrop it’s a real worry that a new round of cuts to tax credits planned for April will further dampen the spending power of low to middle-income families.

‘The longer households cut back on spending, the longer it will be before we see real economic recovery.’

A report published today by the Resolution Foundation said that millions of ordinary Britons are unlikely to see their incomes return to pre-recession levels until at least 2020.

The ‘Squeezed Britain’ report said that low to middle income (LMI) households, which include couples without children living on a gross annual household income of between £12,000 and £29,000 and couples with two children on between £17,000 and £41,000, will continue to suffer over the next eight years while the wealthy prosper. The study also found that Briton’s 5.8 million households earning £22,000-a-year would have to save for a total of 22 years to scrape together a deposit large enough to buy their first home.

Darra Singh, the chief executive of Jobcentre Plus, has told his staff they are free to dip into the public purse to fund plastic surgery and laser removal treatments to remove tattoos if the procedure improves a claimant’s job prospects.

Although data is not collected on how many claimants have already made use of the allowance, Mr Singh said he is aware of at least one case where a benefit claimant was “allocated financial support to have tattoos removed.”

He commented: “There is no automatic entitlement, but where an adviser deems the removal of tattoos as necessary to facilitate the take-up of a specific job offer and the cost represents good value for taxpayer’s money, an award could be made. I envisage this only being in exceptional circumstances.”

David Ruffley, conservative MP for Bury St Edmunds, told the Telegraph: ‘Tattoos are very expensive to have done in the first place so I think it is completely reasonable from the taxpayers’ point of view to get individuals to help pay for the removal of unsightly tattoos.’

Tattoo removal can cost thousands of pounds and take multiple treatments before larger, multi-coloured designs are no longer visible.

Emma Boon, campaign director of the Taxpayer’s Alliance, told MailOnline: “It’s unfair to ask taxpayers to fork out for tattoo removal because those who’ve had a design now regret it. Removing ink is a cosmetic procedure and at a time when the government needs to cut spending it’s not a priority.

“Those who have been tattooed found a way to pay for it so they should take responsibility for that and pay for removal themselves. Many designs can simply be covered up with clothing and having a tattoo isn’t an excuse for not getting a job.”

Some 48,019 new loans were written, up from 47,315 in October. The increase was driven by a rise in the number of people remortgaging their properties and are a sign that homeowners are conscious of the fact that interest rates could rise over the coming year.

The figures are still well below the 70,000 to 80,000 monthly approvals that experts consider consistent with a stable housing market and shy of the average for the previous six months which stood at 48,145.

Brian Murphy, head of lending at mortgage broker, the Mortgage Advice Bureau, said: “The sharp increase in the number of remortgages shows that consumers are becoming far more wary of potential interest rate rises given the growing inflation threat. Increasingly, the belief is that Bank rate will rise this year and not next.”

Overall, net lending was down on the October figure of £1.17 billion to £788 million as borrowers continued to pay off outstanding debt. Unsecured lending feel by a total of £121 million in November as consumers looked to consolidate their position in the face of an uncertain economic start to 2011.

Howard Archer at IHS Global Insight, said: “While the Bank of England data show that mortgage approvals edged up in November, they remained at a very weak level and the modest increase does little to dilute our belief that house prices will remain under downward pressure in the early months of 2011 at least. What it does suggest is that house prices are more likely to trend modestly downward rather than crash.”

Separate figures released by the Building Societies’ Association (BSA) showed that savers banked £432 million more than they withdrew in November. This is the first time that building societies and mutuals have seen an increase in deposits since April as low interest rates encouraged savers to run down their accounts.

Adrian Coles, director general of the BSA, said: “Savings flows can be quite variable on a month-to-month basis and though it is pleasing to see balances held at mutuals increase in November, it remains to be seen whether this is the beginning of a sustained trend,

“However, 2011 looks set to be another challenging year for retail deposit takers as household finances remain tight and the Bank rate is likely to be held at its record low for much of the year.”

Yesterday was the last chance for shoppers and motorists to take advantage of the lower rate. Large queues formed at garage forecourts and in shops before the increase from 17.5% to 20% came into force at midnight.

The price rise will see the cost of the average pint of beer breach the £3.00 mark for the first time whilst petrol will hit a minimum of £1.20 per litre. A new men’s suit will cost an extra £10 and the rate increase will see £80 added to the cost of a new sofa set.

The British Beer and Pub Association said that the increase in the cost of a pint of beer would push more drinkers out of pubs and cost the industry over 8,000 jobs. Labour leader Ed Miliband warned that the move was “too far and too fast” and risked up to 250,000 across the private sector at a time when the coalition’s austerity measures have seen unemployment rise.

Increasing the rate of VAT is widely considered to be a regressive way of reducing the public deficit as it takes a higher proportion of the income from the poorest sections of society. The Labour shadow chancellor Alan Johnson wrote to George Osborne last week urging an eleventh hour rethink of the tax reforms. He wrote: “The increase in VAT will hit people hard when they can least afford it. Motorists, who have seen significant increases in petrol prices recently, will suffer particularly badly by having to pay a further 11.6p per gallon.

“The owner of an average size car who drives 20,000 miles a year will pay an extra £58. The Chartered Institute of Personnel and Development estimate that raising VAT to 20% will result in the loss of a further 250,000 private sector jobs … That is why, even at this late stage, I ask you to think again about raising VAT.”

George Osborne told the Today programme: “I think it is a reasonable rate to set, given the very difficult situation we find ourselves in. The VAT rise is a tough but necessary step towards Britain’s economic recovery.

‘If you don’t want to raise VAT, you have got to do something else. I said before Christmas that the VAT rate I regarded as permanent because it is a structural tax change. Income tax and National Insurance (increases) would have a more damaging impact on poorer people in our society.”

Some retailers have said that they intend to delay applying the increase until they have sold old stock and made an assessment of how the tax hike will affect trade. A spokesman for the British Retail Consortium said: “We’re not expecting the prices of retail to shoot up overnight. For quite a period the effect of the VAT rise will be lost amid the discounts and sales.

“The VAT rise is certainly being used as part of the promotion activity that retailers are involved in. Some are saying they will bear the cost of the rise for people. They are effectively holding prices at the pre-VAT rise level as a promotion.

“Over the next few months there is no question it will put up prices and retailers have been pointing that out as part of their efforts to make people buy.”

Shares in retailers and airlines have been hit over the past week as fears grow that the cold snap could have a negative impact on growth. Analysts had been expecting consumers to spend on big ticket items ahead of the VAT rise in the New Year, but have said that this now seems unlikely in light of the sub-zero temperatures.

Howard Archer, UK chief economist at Global Insight, said: “The return of the snow and ice is a particularly serious body blow for retailers who would have been desperately hoping that the latest snow blast would not arrive until after the last Saturday before Christmas, especially as shopping was also disrupted in the first Saturday in December. The hit to retailers is compounded in that many are hoping for their sales to be lifted in the final days of 2010 by consumers looking to make purchases – particularly of big ticket items – ahead of January’s VAT rise from 17.5% to 20.0%”.

Although online spending is up, the big freeze began so close to Christmas that potential internet shoppers have been left unsure of whether their orders would arrive before the weekend. The high street giant John Lewis shut down its delivery service yesterday advising customers: “Owing to adverse weather conditions, we’ve had to bring forward our pre-Christmas home delivery cut-off date, and we’re sorry that we’re now unable to take further orders for home delivery in time for Christmas.
“We’ve taken this decision to enable us to do all we can to deliver existing orders to our customers in time for Christmas.”

The chaos caused by the arctic conditions is thought to be costing the UK economy up to £1.2 billion a day according to insurers Royal Sun Alliance (RSA).

David Greaves, director at RSA, said: “The cold snap we had in early December has already cost the economy in the region of £4.8bn, so the bad weather forecast for this week couldn’t come at a worse time for some businesses. The impact will be felt across the whole economy.”

Shops are hoping that conditions thaw in time for a last minute rush in the final few shopping days up until Christmas. Big name stores such as Wallis, Gap and Austin Reed are already offering discounts of up to 50% to lure in reluctant shoppers put off by the snow. Some commentators have suggested that many presents may not be bought this year as consumers resign themselves to the fact that their options are limited.

Tim Denison, at Synovate, who monitor high street footfall, said: “If this weather continues, there will be a growing acceptance from some shoppers that it’s just foolhardy to venture out to the high street. This is a very difficult position for retailers to be in.”

The monthly GfK /NOP Consumer Confidence Index, conducted on behalf of the European Commission, remained static at minus 21 points with every major indicator down on November bar one.

The only measure propping the index up was a slight rise in the number of big ticket items purchased ahead of next month’s VAT increase. The major purchase index jumped by ten points to minus 7 masking a fall in overall consumer confidence.

Nick Moon, managing director of GfK NOP Social Research, said: “At the moment consumer confidence is being propped up by one thing: a belief that the run-up to Christmas and the VAT hike is a good time for big-ticket retail purchases. This element of the index has distorted the overall index to make it appear static when in fact it is teetering on the brink.

“Every other [confidence] measure has fallen and without this one positive, consumer confidence would have fallen to its lowest level in over a year. Of course, the real test will come in January when festive spending ceases and the VAT increase comes in. Then we will finally see the full impact of how consumers are reacting to the first wave of austerity measures.”

Consumers’ confidence in their own financial circumstances over the last 12 months dropped as did their confidence that things were likely to improve over the coming year. Confidence over the past and future performance of the UK economy was down, as was the “now is a good time to save” measure.

The survey questioned 2,007 UK adults and comes in the same week as a study by the Samaritans found that 57% of Britons worry that they will not be able to make ends meet in the coming year.

Figures in the UK are in stark contrast to those in Germany where, although the forward looking GfK index fell slightly for January, levels of consumer confidence remain high at plus 5.5.

Carsten Brzeski, at ING, said: “Despite today’s drop, German consumer confidence remains high and it looks as if German consumers are finally waking up. Prospects for the German economy have hardly ever looked better at an end of the year.”

The Office of Fair Trading (OFT) say that more than a quarter of a million people may be vulnerable to unscrupulous lenders charging punitive rates of interest when they are unable to access credit elsewhere and excluded from mainstream banking.

Loan sharks target the poor in deprived areas and extend small amounts of credit in return for exorbitant fees. They are not licensed by the OFT and often use threats of violence if their customers fail to repay loans in a timely fashion.

The warning comes after research published by the Stop Loan Sharks campaign, which is backed by the OFT and Trading Standards, revealed that up to 165,000 people already use loan sharks to borrow money from in the UK.

OFT director Ray Watson said: “We are always concerned about people using loan sharks, but particularly at this time of year when people are under significant financial pressure. Loan sharks are a bad option. They are violent and operate outside the law. We urge people not to borrow from them under any circumstances.”

Half of all households using loan sharks are in the poorest parts of the country in areas like Scotland, the north of England and the West Midlands.

A woman who used loan sharks to borrow money told the BBC that she faced threats against her life, verbal abuse and break-ins when she experienced problems repaying her loan: “They’ve got their people that can come kidnap you, shoot you, do whatever they want to you. If you’re not paying and you’re not co-operating then they’ll get someone to come and sort that out.”

She borrowed a few hundred pounds which quickly grew to over £4,000 as fees and interest were added

“They would say we didn’t pay them when we did pay them. They could see I feared them, so they took advantage of that, took advantage of the kids crying.”

A spokesperson for the Consumer Credit Counselling Service, which offers advice to consumers in debt, said: “If you have borrowed money from a loan shark you are under no legal obligation to pay the money back and should contact your local trading standards officers”.

Nearly two thirds of people are concerned that they will not have enough money to make ends meet next year after what nearly a third described as their worst year ever in 2010.

Around 56% of those surveyed said that they were worried that they might suffer financially as a consequence of the coalition government’s spending cuts, with 37% expressing concern that they might lose their jobs.

Worries about redundancy cut across social classes with 36% of the ABC1 demographic saying that they were worried about being made unemployed compared with 38% of people in the C2DE group.

Catherine Johnstone, chief executive of the Samaritans, said: “As a nation, we continue to worry about our health and our relationships, but, unsurprisingly, our concerns have become increasingly focused over the past year on having enough money to live comfortably.

“It’s also clear that, no matter what work we do or where we live, many of us are anxious about keeping our jobs and our homes. The most important thing to remember in these tough times is that we can all help each other and no one should suffer alone.”

“We are appealing to anyone facing difficulties, no matter what they are, to call Samaritans,” Ms Johnstone said. “Our volunteers will be there to listen to your worries 24 hours a day, every day, over the Christmas period and throughout the coming year.”

Slightly over 50% of people said that the threat of financial difficulty and debt worries was among their top five worries throughout 2010, followed by health at 32% and issues with friends and family members at 30%.

The annual survey carried out by the polling organisation YouGov on behalf of the Samaritans found that despite the widespread feeling that 2010 had been a bad year, one in five people who had experienced difficulties had not sought any advice or support.

Andrew Sim, Samaritans’ Director for Scotland, said: “As a nation, we continue to worry about our health and our relationships, but, unsurprisingly, our concerns have become increasingly focused over the past year on having enough money to live comfortably.

“It’s also clear that many of us are anxious about keeping our jobs and our homes. The most important thing to remember in these tough times is that we can all help each other and no-one should suffer alone.”

The survey of 2,000 adults around the country comes after David Cameron announced the launch of a national well being index. The Office for National Statistics will start to measure how members of the public feel about access to key services and the environment from next April.

Overall poverty will rise amongst children and working age adults over the next three years as average incomes stagnate, unemployment rises, inflation starts to bite and benefits are cut. Housing benefit reforms alone will force 100,000 children below the poverty line.

The IFS says that the government’s plans will see the first rise in child poverty in 15 years, contradicting George Osborne’s claim that the measures announced in his spending review would not unfairly affect the worst off.

Those living in absolute poverty, defined as households with an income of less than 60% of the median, will rise to 900,000 by the end of 2014. The increase would have been higher but for a decline in living standards and frozen average earnings.

The government are tied to legally binding targets on child poverty set in the landmark Child Poverty Act passed earlier this year with cross-party support. Campaigners have labelled the prospect of child poverty rising as absolutely unacceptable.

Robert Joyce, an author of the IFS report, said: “We find that the coalition government’s measures act to increase poverty among these groups slightly in 2012–13, and more clearly in 2013–14. Meeting the legally binding child poverty targets in 2020 would require the biggest fall in relative child poverty after 2013–14 since at least 1961.”

The government has repeatedly queried how poverty is measured and suggested that it should not be purely based on income. A report carried out for the coalition by the Labour MP Frank Field recommended changing the way that child poverty is measured to encompass “life chances” indicators which look beyond finances.

A spokesperson from the Treasury said: “The government has been clear child poverty isn’t just about getting above an arbitrary line, but is about improving people’s life chances, as outlined in Frank Field’s review. The steps taken to reduce welfare spending are to incentivise work and remove people from getting stuck on benefits.

“Any consideration of the impact of the government’s reforms on child poverty should take into account the wider work to encourage work and improve children’s life chances.”

Douglas Alexander, Labour’s work and pensions spokesman, said the IFS report “flatly contradicts David Cameron’s promise that there would be no increase in child poverty”.

The historically low base rate has tempted many families to opt for tracker or variable products as opposed to fixed rate deals leaving them vulnerable to a sudden increase in prices.

The Bank’s financial stability report says that many households could face mortgage misery if interest rates rise next year as some analysts predict. If the base rate goes up from 0.5% to 1%, the cost of repaying a £150,000 mortgage would rise by £43 a month or £516 over the course of a year.

Eight million mortgage holders are now on variable deals which means that if the Bank decides to increase rates to drive inflation down, their mortgages could rise dramatically. The average fixed rate deal currently charges an interest rate of 3.54% compared to the typical tracker at 3.51%. Consumers coming off fixed rate deals have not been looking to renew as a consequence.

The report said: “Currently, around two thirds of outstanding mortgages in the United Kingdom have floating interest rates, somewhat above the average over the past five years. That proportion is rising as mortgagors move on to standard variable rate products as existing fixed-rate deals expire. This exposes more households to the risk of increases in interest rates.”

The Bank warns that mortgage holders could find themselves in difficulty and unable to meet their monthly repayments if rates rise quickly. The combination of an increase in VAT, a weakening housing market and tighter lending criteria from banks could see homeowners stuck in homes they can’t afford and are unable to sell. The Bank’s warning comes just days after the Council of Mortgage Lenders announced that it expects arrears and property repossessions to rise in 2011.

Howard Archer, an economist at Global Insight, said: “The Bank of England could raise interest rates earlier in 2011 than currently expected. However, we suspect that most Monetary Policy Committee (MPC) members will be willing to hold off from raising interest rates in the near term at least while they wait to see how well the economy holds up as major fiscal tightening increasingly bites in 2011 starting with January’s VAT hike.

“The MPC are also likely to be soothed by current ongoing evidence of wage moderation. We continue to lean towards the view that the Bank of England will not raise interest rates before the fourth quarter of 2011.”

David Hollingworth, a mortgage broker from London & County, said: “People got complacent and started to feel that it was normal for rates to be so low. All that can happen is that interest rates will increase.”

Women have borne the brunt of the cuts with female unemployment now at a 20 year high. Figures published by the Office for National Statistics (ONS) reveal that more than one million women are now without a job, the highest level since 1988.

Some 24,000 women were made unemployed over the three months to October. Women make up around two thirds of the public sector work force and are expected to be hit hard when further job losses are announced over the coming months.

Analysts expect the headline unemployment figure to bloom to three million over next two years as further cuts take effect. At least 100,000 public sector workers will receive letters announcing further job losses before the 1 January as public services rush to meet the New Year deadline to announce cuts.

The government continued to argue that private sector growth will soak up public sector job losses as ONS data showed the unemployment rate up 0.1% at 7.9%. The number of young people out of work increased by 28,000 to 943,000, approaching the highest number since records began in 1992. Some 19.8% of 16 to 24 year olds are now out of work.

Speaking at prime minister’s questions, David Cameron said: “Of course anyone should be concerned, and I am concerned by a rise in unemployment. We have got to get the private sector going, increase the number of jobs that are available. Over the last six months, we have seen 300,000 new private sector jobs. We need more of them, and keeping the economy out of the danger zone is the way to get them.”

John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, said: “The latest jobs market figures are much worse than expected and the opposite of what was wanted in the run-up to Christmas, with no joy and very little comfort on offer. It is especially disappointing to see the positive momentum that had built up earlier in 2010 appear to run out of steam even before the full impact of the coalition government’s spending cuts and tax hikes take effect. This does not bode well for 2011.”

Research carried out by the Building Societies Association (BSA) found that 59% of people would buy property immediately or within the next year given sufficient resources despite falling house prices. A further 11% of those asked said that they would buy over the next two years if the means were available to them.

The December edition of the BSA’s property tracker of 2,047 consumers shows that market confidence over the short term is faring less well with only 43% saying that now was a good time to buy down from 58% this time last year.

Whilst the survey suggests that Britons are maintaining their confidence in bricks and mortar, it says little about how many potential buyers will be able to secure the resources to enter the property market as banks continue to restrict lending, especially to first time buyers with small deposits. Whether or not the 59% of those who said that they would like to buy over the next year will be able to secure funding makes the survey a poor barometer of market direction.

Paul Broadhead, Head of Mortgage Policy at the BSA said: “Although the housing market remains uncertain, the public does not expect house prices to fall as dramatically as they did two years ago. As such, many expect that the best time to enter the market will be in the next year or so.

“However, barriers remain that might prevent potential buyers from acting on these perceived opportunities. Worries persist about job security, the ability to raise a deposit, and obtaining a mortgage from lenders. These factors might inhibit demand for house purchase from growing as strongly as it might.”

The figures suggest that while consumers appear to be of the opinion that prices will continue to fall in the short term, they expect the market to bottom out over the next two years. Some 36% of respondents said that they expected prices to drop further over the next 12 months compared to 33% who said the prices would increase.
David Hollingworth, of London & Country mortgage brokers, told the Daily Telegraph that now is a good time for buyers looking to take their first step on the property ladder or for those thinking of upsizing to make their move: “This is definitely a buyers’ market and is likely to remain so for the time being. Those who are in the position to buy a property should certainly make the most of this opportunity, and if you plan to live there for a while – or even hold a buy-to-let property as a long term investment – then modest price falls over the next year shouldn’t make much of a difference.”

The SLC claimed that the overpayments where a result of the fact that they could not work out the amounts that had been repaid until employers filed their annual tax returns at the end of the financial year.

Which? obtained the figures using freedom of information requests after receiving a number of complaints from people who had noticed that funds continued to be deducted from their wages when their debt should have been cleared.

Instalments are taken directly out of graduate’s pay packets by HM Revenue and Customs (HMRC) and passed onto the SLC until the SLC informs HMRC that the total debt has been repaid.

Which? chief executive Peter Vicary-Smith says: “How is it possible that for at least the second year running the Student Loans Company has overcharged ex-students by millions of pounds?

“We know paying off a debt is a stressful experience, so the last thing people need is to find that they’ve been paying out more than they need to. The SLC must ensure it doesn’t keep ex-students in debt for longer than they need to be.”

The SLC is not required to provide borrowers with a regular detailed statement which leaves some former students in the dark about how much they have left to pay and when their payments are due to stop.

It has recently introduced a new policy whereby former students can switch to making their payment by direct debit for the final two years of their payment schedule and it has asked 68,000 account holders if they would like to pay in this fashion.
An SLC spokesperson said: “Switching to direct debit means you can choose your monthly repayment date and we can make sure your repayments stop at exactly the right time.”
Graduates who are unsure of when their payments are due to stop or think they may have been over-charged have been advised to contact the SLC to request a detailed breakdown of their account.

Increases in the cost of food and clothing items helped push the Consumer Price Index (CPI) up from 3.2% in October, keeping it well above the Bank of England’s target of 2%. City commentators had expected the rate to remain unchanged.

The continued upward pressure on prices made November the 11th consecutive month that inflation has remained over one whole percentage point above target and adds to worries that rocketing prices could put pressure on wages. Private sector wage inflation is currently running at 1.8% whilst savers continue to receive a poor return on investments with the base interest rate remaining at 0.5%.

Everyday goods that consumers cannot avoid purchasing are stretching stagnant earnings with data from the Office for national Statistics showing that food and non-alcoholic drink prices are 5.5% higher than a year ago and clothing and footwear are up 2.1%. November’s year-on-year price hikes are the highest since the CPI was introduced in 1997.

Research carried out by MySupermarket.co.uk measuring the average price of product categories in UK supermarkets found that deodorants and fragrances were up 39% on December 2009 whilst canned fish rose by 20% and butter, margarine and other spreads added 16%.

Dave Prentis, general secretary of Unison, said: “This huge hike in inflation will hit the poorest and most vulnerable in society, who are already struggling to buy basic goods. Public sector workers facing savage job cuts and pay freezes will be among those crumbling under the pressure.”

Economists are beginning to question the Bank of England’s assurances that inflation will bring itself under control and gradually return to target as price rises show no sign of slowing. The Bank has now conceded that inflation is likely to stay above its 2% target for most of 2011.

Michael Saunders, at Citi, who has warned of the threat posed by higher inflation, told the financial Times: “A lack of accurate inflation forecasts, plus the [the Bank’s Monetary Policy Committee’s] habit of downplaying repeated inflation overshoots, could lead to a further rise in long-term inflation expectations and erosion of the inflation target’s credibility in coming months.”

Howard Archer, chief European & UK economist at IHS Global Insight, said: “Consumer price inflation looks ever more likely to reach 3.5% in the early months of 2011 and it may very well rise further still due to elevated food, commodity and energy prices as well as January’s VAT hike.”

High street retailers, restaurants and bars face further misery after bad weather interrupted pre-Christmas sales as thousands of rail and tube workers plan to walk out in a row over pay and conditions.

London Underground drivers voted in favour of taking action on Boxing Day in a row over pay whilst drivers on London Midland will walk out on December 23. Arriva Trains Wales Union members have also backed industrial action.

Bob Crow, the general secretary of the Rail Maritime and Transport union (RMT), stated in an interview to the Guardian that he “couldn’t care less” if his members staged “a million strikes” and that the sole goal of his organisation was to secure the best possible settlement for its members.

Speaking after the RMT backed industrial action that is likely to cause significant economic damage by 85%, Mr Crow said: “RMT has rejected a paltry offer from the company that would have left our members out of pocket and which was loaded with strings. Our members would have ended up with inferior working conditions for a de facto pay cut.”

Staff from the Aslef union backed industrial action on Boxing Day by nine to one, threatening to bring huge disruption to London’s tube network as Christmas shoppers and football fans descend on the capital.

Transport for London said: “It is disgraceful that Aslef should try to hold Londoners and London Underground to ransom in this way. London Underground has a long-standing agreement with all of its trade unions which cover staff working arrangements on bank holidays, and Boxing Day is included in that agreement. London Underground has made every effort to resolve this issue with the Aslef leadership, which has refused to attend talks at Acas to discuss its claim.”

Aslef general secretary Keith Norman said: “It is painfully obvious to any reasonable person that Boxing Day is not an ordinary working day and therefore it is no surprise that Aslef members have reacted in the way they have.”

Theresa Villiers, Conservative Rail Minister, said: ‘Passengers would be the innocent victims of these strikes. I would urge the unions to find another way to resolve this issue.’

Some 3% of households surveyed by the polling origination YouGov admitted to currently being in arrears with their rent or mortgage up from 2% last October.

Households with children are most at risk with around 5% in arrears. Shelter estimates that nearly 500,000 children are currently living in families that are falling behind with basic housing costs and are at risk of being made homeless.

Campbell Robb, Chief Executive of Shelter, said: “This research paints a disturbing picture of sharply rising numbers of people who face a daily struggle just to keep a roof over their head.

“We know from the cases we see every day that just one single thing, like a bout of illness, rent increase or drop in income, is all that’s needed to push people into spiral of debt and arrears that can lead to the loss of their home.

“With tough times ahead and homelessness already on the rise, we’re extremely concerned that this could be the beginning of a surge in the numbers of people losing their homes next year.”

The findings come days after the government released figures that showed the first sustained rise in the number of homeless and people in temporary accommodation since 2003. Shelter said that this is a trend that is likely to continue as cuts to jobs, benefits and rises in inflation and VAT push more tenants and homeowners further into arrears.

Homeowners attempting to sell their property to escape financial difficulty are falling further behind as economic confidence and the lack of first-time buyers at the bottom of the market make it difficult to sell their homes. Estate agents are selling and average of just one property a week meaning that those in trouble trying to sell their homes are being faced with the very real threat of repossession. A repossession hearing comes before UK courts every two minutes.

The government has recently proposed legislation to reduce the rights of homeless people by placing them into insecure tenancies in the private rented sector at a time when its cuts are likely to increase the number of people forced into temporary accommodation.

Campbell Robb commented: “It is unbelievable that at a time when every two minutes someone faces the nightmare of losing their home, the government is proposing to reduce the rights of homeless people who approach their local authorities for help.

“We urge the government to think again about the cumulative effects of its policies on people who are at real risk of losing their home.”

From April, employers will no longer be able to force workers into retirement at the age of 65. The CBI argues that businesses face huge uncertainty and a greater exposure to unfair dismissal claims unless there is more legal clarity over how the plans will work.

Business leaders say that the government has not responded to requests for information from employers concerned about how the law will work with some fearing being taken to an employment tribunal merely for asking an employee when they plan to retire.

The CBI says that the laws on unfair dismissal need to be made clearer in advance of the scrapping of the default retirement age (DRA).

John Cridland, director-general designate of the CBI, said that the country’s pensions shortfall and ageing population made it inevitable that people will need to work longer and that the retirement age will need to be pushed back, but argued that blanket legislation could leave some employers exposed to flaws in the system: “Employers understand this, and businesses value the skills, experience and loyalty that older workers bring.

“However, in certain jobs, especially physically demanding ones, working beyond 65 is not going to be possible for everyone. The DRA has helped staff think about when it is right to retire, and has also enabled employers to plan more confidently for the future.”

“In the majority of cases this will not be an issue, but in a minority it will be a serious problem for all concerned. The government needs to act fast, and there should be no changes to the retirement framework until these issues are resolved.”

The number of employment tribunal claims increased by 56% last year partly due to an increase in age discrimination cases. Employers are worried that without changes to the law, they will be exposed to further action.

The Department for Business have stated that they will provide adequate guidance to any businesses that have concerns. A spokesman said: “We are committed to helping and supporting employers adapt to the change in regulations and will be providing them with guidance, but we should not stop people from working just because they have reached a particular age.

“Our consultation asked what kinds of support are required and we will be publishing our response shortly, but many of the 500 respondents strongly support the plan that we have set out.

The findings directly contradict claims by senior bankers that the reason for weaker lending is a result of less demand to borrow since the beginning of the credit crunch.
The Bank’s report could prompt the coalition government to introduce tougher lending targets on the institutions that were bailed out with public money. The Royal Bank of Scotland and the Lloyds Banking Group must meet government targets on the gross amount lent to consumers and businesses including loans repaid. Ministers are considering basing future targets on net lending, regarded as a tougher option when more loans are being repaid than taken out.

The report said: “Overall, the evidence suggests that the cost of credit rose sharply during the financial crisis, and that there was a reduction in the availability of credit, both for households and companies. It is likely that tight credit supply played a role in driving up the cost of credit.”

The fact that banks have been able to increase interest rate spreads extended to new borrowers since the credit crunch is evidence that lower demand is not driving net borrowing down. The Bank argues that if this were the case, interest rate spreads would be more likely to fall as a consequence of lender’s reduced pricing power.

Stephen Hester, chief executive of RBS, told the Financial Times that he was “quite happy to lend more” but “the fact is that businesses will not start borrowing more until they are more confident about the outlook”.

The Bank’s finding are likely to increase political pressure on the sector after George Osborne, the chancellor, told the House of Lords’ economic affairs committee earlier this month that “credit conditions are right at the top of my watch-list”.

Vince cable, the business secretary, has repeatedly told the banks that they must help aid the recovery by making sure funds are available to help small businesses bolster the economy, noting that “conditions, rates of interest and demands for security” on loans had been so “onerous” that companies “don’t ask any more”.

Some 22% of households have put off planned spending this year due to concerns about access to credit. This figure is up from 17% last year and 10% in 2007 according to a survey carried out by NMG for the Bank.

Consumer groups are urging the energy supplier’s customers to shop around to see if they can get a better deal on their gas and electricity elsewhere as British gas bills rise by an average of £82 a year for the average dual fuel customer. Prices could rise more for those on less competitive tariffs.

Customers looking to jump ship in light of the price rises could find that their options have been limited by price rises across the sector but can still make savings as some suppliers have yet to increase their prices. Scottish and Southern increased prices by 9% last month while Scottish Power raised its electricity prices by an average of 8.9% and gas by 2% on November 25. Earlier in the week the relatively small supplier Ovo energy increased its New Energy fixed rate tariff by 8%.

EDF has frozen its prices whilst E.ON and npower are yet to show their hand. Customers looking to switch suppliers can sign up to fixed rate tariffs excluding them from further price rises in the medium term.

Scott Byrom, manager of energy at moneysupermarket.com, said: “We use around 40 per cent of our total annual consumption during the winter months so the increases from major providers couldn’t have come at more awful time for bill payers. Everyone needs to ensure they are on the best tariff for their region and usage, and shouldn’t be lulled into thinking they will automatically get the cheapest deal if living in a providers ‘core’ area.”

Suppliers are blaming wholesale gas price increases of 25% and argue that they have to pass some of the costs onto their customers. British Gas has said that it has been selling energy at a loss for some months now. Consumer groups argue that poor buying has left many suppliers paying more for their wholesale energy that they had to and that falls in the wholesale price earlier in the year were not passed onto the consumer.

Audrey Gallacher, head of energy at Consumer Focus, said: “Customers will be baffled as to why they are being told to pay more when British Gas is on track for huge profits.

“British Gas admits that high margins due to low wholesale costs have given a major boost to its balance sheet. So why, yet again, have customers seen only tiny price cuts when wholesale costs have been so low for so long, yet suppliers hike prices as soon as wholesale costs start to edge up.”

Britain’s financial regulator, which is the coalition government plans to break up, was forced to reveal details of its lavish festive celebrations under the Freedom of Information Act provoking fury from consumer groups and politicians. The FSA has spent some £1.2 million on Christmas parties since 2004.

The extravagant spending reached a peak in the early days of the crisis in 2007 when the regulator spent over £270,000 on staff entertainment at a time when questions where starting to be asked as to how it could have allowed the crisis to develop.

The partying continued in 2008 as the credit crunch began to take hold in earnest with £228,461 spent on staff junkets. The true cost could be much higher as the figures released do not include expenditure on travel and accommodation for the regulator’s hard-partying employees.

When recession gripped the country in 2009 the FSA showed relative restraint and kept its staff entertainment budget down to a comparatively modest £107,814.
Charlotte Linacre, campaign manager at the Taxpayers’ Alliance, said: “It is appalling that the FSA was living the high life in the middle of the financial crisis, when their failure was one reason the crisis was so severe.

“Blowing almost a quarter of a million pounds on their own Christmas party is shocking and their levy on companies and entrepreneurs should not be spent so extravagantly.

‘They are supported by what they treat as a bottomless pit of money but the heavier the burden they put on businesses becomes, the more companies will consider relocating their activities outside the UK.”