There is almost no limit to the advice and speculation when it comes to predicting the market. From talk of the inflation rate peaking to the housing market bottoming, there is any number of estimates that the everyday investor can hang his or her hat on.

Analysts look for trends before making predictions so why can’t we, as the everyday investor, do the same and look for the growing trend in analysts’ predictions to find some sort of consensus.

Most analysts are offering a difference of opinion on how long the UK economy can expect the same pressures of increasing inflation, credit squeezing and high energy prices. Some analysts expect some clear air by the end of 2008, others 2009, a few commit to 2010, which is so far ahead for the UK market you could barely call it a commitment at all.

Bank of England governor Mervyn King is confident that the inflation rate will fall back into the two per cent range the government is comfortable with, but he was not so clear on timeframes. There were hints that it wasn’t interest rates that would pull back inflation but higher energy and food prices. This links well with the commodity analysts.

Most analysts of commodities expect oil to start retreating sooner rather than later, and talk of US$200 a barrel has disappeared.

Commodities, because of supply and demand, will be the first indicators of market weakness, which will then probably flow on to inflation.

Most analysts also agree that getting through the crisis facing the global markets, will give investors a much healthier and rewarding market in the future. 

A UK central banker has warned that inflation could rise to four per cent before the end of the year.

Bank of England governor Mervyn King said higher food and energy costs might cause a rapid increase in the inflation rate.

So what will a world be like with inflation near four per cent?

At four per cent the central bank will be forced to play its hand and raise interest rates, not because of strong demand overheating the economy, but because of the cost increasing as supply is strained.

This is a whole new ball game for the central bank and rising interest rates will achieve minimal results for maximum pain to the consumer.

Interest rate rises will be necessary.

But the pain will give momentum to the cry that these rises are based on a flawed model and other, more radical, action was needed.

Some may even suggest price fixing to curb inflation but this is an extreme reaction and will only be considered if inflation starts pushing double figures.

Rest assured that double-figure inflation is unlike; almost impossible as spending has already slowed which has relieved some of the pressure on the supply side of that most basic economic equation.

The concern remains that the UK, along with the global economy, is facing inflationary pressure from ‘necessities’ and demand can only reduce so much before it levels out.

It is any wonder analysts are closely monitoring the commodities markets as any further price increase could just be the catalyst needed to push us over the economic edge we have been dancing with for so long.

A leading property group released figured yesterday showing a rise in the number of mortgage applications in April.

Council of Mortgage Lenders (CML) claimed that close to 57,000 loans were approved in April a rise of nine per cent from the previous month and the highest figure since December 2007.

This figure might be a sign of a turnaround or it could just be a reprieve for a market that has been in a steep decline for most of the year.

It seems that as soon as talk turns to more positive economic news, more data is release showing the economy is a long way from getting out of trouble.

CML has indicated that there would probably be further hurt before any real growth was established.

“Monthly house purchase lending volumes continue to be lower than levels and there will be a further weakening in coming months as recent approvals data has shown,” CML director general Michael Coogan said.

Borrowers are confident that increasing inflationary pressure will force the Bank of England to raise interest rates so borrowers are trying to lock in a fixed rate.

Higher interest rates mean cheaper houses; better a lower principle than a lower interest rate.

Now might just be the time for first homebuyers to wait because further falls in housing prices will put buyers in a better position even with a higher interest rate. But if you are already in the property market, then refinancing is definitely an option worth considering.

A fall in house prices could see potential first-home buyers finally able to get a foot in the door.

According to housing analysts Hometrack, a quarter of young working households in the UK are unable to afford to enter the property market.

The worst affected areas are London and the South West with both have around 40 per cent of young working households unable to afford to enter the property market.

However, there is light at the end of the tunnel with Hometrack revealing that the expected drop in housing prices is allowing some of these young working families to get off the rent cycle.

Hometrack director of research Richard Donnell said until such time as mortgage rates start to fall then lower house prices will be the only real driver of improved affordability for first-time buyers.

High interest rates are deterring buyers now, but as prices fall some will dip their toes in the market.

There is a lot of talk about higher interest rates hurting homeowners, but it presents a perfect opportunity to enter the market.

It is better to buy with a high interest rate and get a house at a reduced price, rather than when interest rates are low and housing prices are at the premium. That is when borrowers get into trouble.

By having a lower principle you pay substantially less over the life of the loan and month to month repayments are also reduced as interest rates inevitably decline.

Low interest rates are good in the short term but they do go up and this puts strain on budgets.

Bank customers may have seen a change in their favour as a major UK bank reduces fees.

According a release earlier this week Barclays is offering customers an overdraft penalty of only £8.

Barclays’ managing director of current accounts Mark Parsons said the fee cut was simply a response to customer’s requests.

“We have listened to our customers and acted on this feedback by completely revamping our unauthorised overdraft service, replacing it with the new Personal Reserve,” Mr Parsons said.

“Our customers wanted a simple, clear way of managing payments when they go beyond agreed limits,” he said.

While this is a win for customers some regulatory groups have said it should have been done years ago, and it was only pressure from the Office of Fair Trade that has lead to this result.

But there might be yet another reason, with the tight liquidity markets finally forcing banks to become more customer focused.

Deposits are in greater demand as money available in the markets continues to be limited.

Banks are starting to reduce charges and increase interest rates to attract cashed-up customers.

Also banks were squarely in the firing line of public criticism as more people are forced to sell up and hand over assets to the banks. These are the same institutions that many people blamed for the economic slowdown in the first place.

By cutting charges for customers banks are once again focused on customer relations and striving for positive publicity.

No matter what the rational the objective is the same, to attract more customers and draw more deposits.

Barclays is the first to reduce charges, but it will not be long before more banks follow.