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. 

While the financial world waits for the latest move from the Federal Reserve Bank, it might be a good time to consider the implications for homeowners in the UK.

The fact is that any change in interest rates in the US will have little direct affect on UK homeowners.

It will be the rhetoric surrounding the announcement, which will be closely monitored to find hints as to the health of the US economy.  There is no doubt that the state of the US economy affects every other economy around the globe.

Most of the central banks do a similar dance around monetary policy, but they are all dancing to a different beat.

The US has been lowering interest rates since September last year, the UK started reducing closer to Christmas, while some other central banks such as in Australia have increased their base rate to curb inflation.

When central banks decided to uniting to reduce the impact of the sub-prime crisis it made front-page news around the world.

The banks agreeing to move in the same direction is big news, and not something us investors would expect every day.

Central banks can only create and change policy according to real figures sourced from the domestic economy.

Bankers need evidence and justification for change, if they make changes without the evidence to back it up then hard questions will be asked.

By paying attention to the CPI, employment rates and GDP an investor can have a pretty clear picture of the way interest rates are headed.

It might be weak but the UK has experienced economic growth in the first three months of 2008.

Despite the economic slowdown and low consumer confidence the Office of National Statistics has reported that the UK economy grew by 0.4 per cent in the first three months.

The growth was reported in analysing the gross domestic product for the first quarter.

The growth is lower than what was expected by analysts, but GDP is still growing rather than contracting. Many expected the slowdown to be so steep that it would result in negative GDP in the first quarter.

The strength came from the service sector that grew by 0.6 per cent in the quarter. The biggest percentage decline was in mining and quarrying, which fell by 5.2 per cent.

There is a chance that the UK might just avoid a recession, and the lower growth might give the Bank of England the confidence to lower interest rates again next month to keep the balance sheet in the black.

The bank expects this slowdown to have a negative effect on inflation; it has yet to come to fruition with high food and energy prices maintaining pressure on prices.

Do we need a retraction in the economy before inflation starts to slide?

Maybe, but is it really worth the risk.

The smart money is on the Bank of England maintaining the base rate at its current levels, and wait to see if market weakness can reduce the inflation rate.

As we have seen in the last year or so, the market has more impact on inflation than any action by the Bank of England.

Chancellor Alistair Darling wants banks to help easy the credit crunch by passing on rate cuts, but banks will try to resist any weakness to their bottom line.

Historically banks have always been held up as institutions and safe sharemarket investments.

They were a safe haven and immune from financial trouble as they controlled the money. But if this credit crunch has proved anything it is that banks are like any other business.

They are exposed to slowdowns and credit troubles, not only does it increase the levels of bad debt on their book, but it also increases cost with credit markets tightening.

Need we be reminded of the long lines of customers abandoning Northern Rock late last year?

With these conditions there is growing economic pressure not to reduce interest rates to maintain profit margins, even with the base rate in decline.

Darling’s ‘request’ for relief for customers from the banks, will hold little weight with the banks that are seeing their ledgers drained.

Some banks have reduced their interest rate after the Bank of England reduced the interest rate by 0.25 per cent, from 5.25 per cent down to 5 per cent.

But the cost to homebuyers wanting to establish a mortgage has risen, it is the case of giving with one hand and taking with the other.

Darling comments were definitely a warning to banks, after also mentioning the rescue money that the Bank of England and the HM Treasury supplied to stressed banks and financial institutions was a show of goodwill from the government.

But these words are falling on deaf ears as all the attention turns to the US market that shows all the signs of being in a recession, and the banks asking each other how bad this slowdown will hit.

Britain’s housing prices are down again but still up for the full year, according to one of UK’s leading credit society.

Nationwide has announced that housing price have fallen in March by 0.6 per cent, it is the fifth consecutive loss and extends the loss of 0.5 per cent recorded in February.

Property prices are still up for the full year by 1.1 per cent the lowest growth in 12 years.

“However, prices are still 11 per cent higher than two years ago and 47 per cent higher than five years ago,” said Nationwide’s chief economist Fionnuala Earley.

The major concern about these figures is that housing prices are continuing to deteriorate at a stronger pace.

While it is not as dramatic as the double digit falls seen in the US, the US example shows that a reduction in house prices can have a dramatic effect on the wider economy.

Housing price is one economic indicator that many analysts look at when gauging Britain’s long-term economy health.

It is an important indicator because for many people their homes are their biggest investment and deterioration in price is a reduction in household wealth.

If housing prices do not recover then Britain, like the US, may face a more severe slowdown in economic growth that affects more homeowners in the UK.

A peak business group has looked into its crystal ball about economic growth and it has found some numbers.

While some analysts are laying low until more substantial data about the direction of the economy is revealed , CBI has claimed that the Treasury’s forecast of Britain’s economic growth in 2008 of between 2.25 and 2.75 per cent was optimistic and growth was more likely to be around 1.8 per cent.

CBI went further in its analysis stating that inflation was likely to top 3.2 per cent before being reeled in, sparking a reduction in interest rates in the second and fourth quarters of this year reaching a base rate of 4.5 per cent.

The group also stated that low economic growth is likely to remain throughout 2009.

Do you think this forecast is specific enough? It is amazing what can be stated when the forecasters are not held accountable.

The Treasury would be held accountable on its forecasts.

The CBI forecast is just one of the many forecasts available on economic conditions in Britain, there are many business and financial groups gazing into the crystal ball at the moment and there is very little consensus.

Some are claiming the worst is over, while others are still talking doom and gloom.

No wonder the average investor is becoming confused.

It isn’t helped by the mixed signals coming from market data.

Employment is strong, but business investment and confidence is down, also the economy is contracting but inflation pressure is up.

When will it end?

“Time is running out!” screams the flyer from an endowment claims handler that landed on my doormat the other day.

It encourages recipients to get in touch “before it’s too late” if they think they might have been mis-sold a mortgage endowment.

It points out that if your endowment is not going to reach its original target value, you might have a case for claiming compensation.

These things are true.

More than 600,000 people have been compensated because they were mis-sold these mortgage linked investment policies.

And you need to hurry if you want to follow in their footsteps, as many leading policy providers are now enforcing a time limit on claims.

What the firm (which deserves to remain nameless) fails to mention is that a shortfall alone is not grounds for a claim.

And it goes on to urge readers: “Don’t throw your money away.”

Strangely, it doesn’t mention how much it charges for its services, so I visited its website to check.

Turns out it’s a whopping 25 per cent of any cash received – money that’s meant to make up the mortgage shortfall.

If it really means what it says about not throwing money away, it should be giving would-be claimants the advice they really need: make the claim yourself.

It’s not difficult, you’ll be just as likely to succeed – and it won’t cost you a penny.

I received a question today regarding capital gains on a property sale.

My correspondent said, ‘A married couple can both claim the full capital gains allowance each against profit from sale, as indeed can so-called civil partners. Does the same apply to couples in joint ownership of a property?’

In a nutshell, yes.

Capital gains tax is due on the sale of properties other than your main home, and each individual has an annual tax-free allowance. This is currently £9,200.

Say you made a £100,000 profit (after deducting allowable purchase, renovation and sale costs) on an investment property which you owned equally, you would each have made £50,000.

Assuming you haven’t used your annual allowance for anything else, you can set this against your share of the gain, leaving you each with a taxable profit of £40,800.

The rate you pay on this will depend on your individual tax bands.

For example, if once your gain has been added to your income for the year, the total is within your personal allowance, you will be taxed at 10 per cent on the gain, costing you £4,080.

If the total is within the lower or basic rate bands, the tax rate will be 20 per cent – making it £8,160.

If the gain takes you into the higher rate band, you’ll pay at 40 per cent on this part of it.

And if you are already a 40 per cent taxpayer, you will pay this rate on the whole gain, giving a bill of £16,320.

However, depending on how long you’ve owned the property, you may be eligible for taper relief, which will reduce your capital gain and, therefore, your liability.

Revenue & Customs has a helpful leaflet on taper relief, which also explains what is and isn’t an allowable cost.