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Equilibrium's Finance and Investment News Roundup

As part of our roundup this week, we look at data suggesting George Osborne's target for reducing the budget deficit for the current financial year could be missed, the UK inflation rate remaining unchanged in February, a widening of the national house price gap and new research showing the majority of current account users are regularly facing fees.

 

2015/16 budget target 'may be missed'

A target set by Chancellor of the Exchequer George Osborne for cutting the budget deficit in the 2015/16 financial year could be missed, new data has suggested. According to the findings from the Office for National Statistics, the budget deficit stands at £70.7 billion with one month remaining of the current financial year.

Mr Osborne has set a target of bringing the budget deficit down to £72.2 billion for the period, but with borrowing falling less than expected in February to £7.1 billion, it would mean that it would have to fall to levels not seen since March 2004 in order for the figure to be achieved.

The news comes after a challenging week for the Chancellor, in which he dropped plans to cut disability welfare payments as part of his Budget after receiving criticism for the proposal.   

UK inflation was unchanged in February

The Office for National Statistics has revealed that UK inflation, as measured by the Consumer Prices Index, remained unchanged at 0.3% in February. It was shown that while big rises were recorded for food prices - and vegetables in particular - there was a fall in transport costs, caused mainly by price changes for items including second-hand cars, road passenger transport and bicycles.

The lack of movement means that annual inflation has remained beneath the 2% target set by the Bank of England (BoE) for two years. The BoE has previously stated that it anticipates the level to stay below 1% in 2016. 

National house price gap 'continues to widen'

A national house price gap between England and the rest of the UK is continuing to widen, new research has indicated. Figures released by the Office for National Statistics revealed that prices climbed by 8.6% in England in the year to the end of January, while over the same period prices in Scotland and Northern Ireland only edged up by 0.1% and 0.8% respectively, and dropped by 0.3% in Wales.

It was revealed that the average UK home is now valued at £292,000 following an average UK house price increase of 0.9% from December to January.

The research showed that the house value upsurge in England is primarily being fuelled by annual increases in the South East of 11.7%, in London of 10.8% and the East of 9.8%. Indeed, UK house prices climbed by only 5.1% in the year to the end of January when figures for London and the South East are not included. 

Most current account users face fees, research shows

The majority of current account users in the UK regularly face fees of one form or another. This is according to new research from financial information service Moneyfacts, which found that nine in ten current accounts for day-to-day customers include fees for overdraft usage or include a subscription charge.

It was shown that many accounts that charge fees are offering incentives to get people to sign up, including cashback when they open an account and discounts when shopping with certain retailers.

Rachel Springall of Moneyfacts commented: "The complex nature of current accounts makes it hard to choose the right option upfront, which means that when someone does borrow, the fees are likely to give them a nasty surprise."