Sky News senior business producer Peter Hoskins

Well, a week's gone by and I'm back writing another Blog about the gloomy state of the economy.

I'm starting to think I should wear a black cloak and carry a scythe. Grim Reaper-style.

Anyway, The Department of Justice tells us that 27,530 possession orders were issued by the courts in the first three month's of the year.

That's a rise of 17% on the same time in 2007 and the highest quarterly figure since the early 1990s.

It's important to bear in mind that these aren't people actually getting kicked out of their homes...yet.

But these are homeowners who are facing the very real threat of having to hand their keys back to mortgage lenders.

Of course, as a homeowner myself the last thing I want to do is help talk up trouble for the housing market.

I'm also fortunate enough, so far, not to have had any of my family or friends effected by the credit crunch.

But I do want to get to the bottom of how serious or not this problem really is for people around the country.

What's so frustrating about all this is that we have to rely on so-called experts and statistics to tell us what's going on in the real world.

As we all know 'experts' and stats are not always the most reliable way of finding out what's really going on.

Thanks to Dennis in Northumberland, Michael from Cornwall and Khalid for giving us a view about insolvencies from your different parts of the country.

So, are you now seeing repossessions going up where you live?

Sky News business editor Michael Wilson

There's plenty of blood on the high street and you'd be some sort of crazy optimist to think that there's much to be squeezed out of retail right now - but re-enter Carphone Warehouse and Charles Dunstone.

It's just sealed a deal with the US electronics supermarket group Best Buy to expand its business across the UK and Europe.

Best Buy will take a 50% stake in Carphone Warehouse's retail business - Dunstone will plough the £1.1bn back into his broadband and fixed-line business and probably buy broadband rival Tiscali.

The enduring problem for electrical retailers, like for example DSG, the former Dixons, which owns Currys and PC World, is ever-decreasing prices.

Never mind the attraction of excitingly new technologies, from flat-screen tvs to sat navs - shoppers always knew that if they waited long enough, prices would come down.

Or they'll go online, check the prices and then ask for the same deal in the stores.

It's been a nightmare for DSG, and last month they announced their second profits warning since Christmas. So, how will Charles Dunstone increase his share of the mean streets?

He is after all, the man who said 'I'm no entrepreneur - I haven't started a loads of great businesses.

I'm a one trick pony.' Well apart from the superstore scale of the new shops, the thing Mr Dunstone is very good at is customer service.

So he'll make sure that the store staff are extra savvy, and he'll develop his share of the door-to-door service of the 'Geek Squad' - a mobile hit team who help the technically challenged at home with their IT problems- at a juicy price, of course.

If scale and service can beat the sharp deflation which is surely still to come on the high street, then the one trick pony may well ride to another winner. But it's a risky business.

Sky News business editor Michael Wilson

You won't need to be told, as consumers, that you are more pessimistic than ever, but as the interest rate setters at the Bank of England begin their monthly deliberations, don't expect an interest rate cut.

I'd love to be wrong. I hope I am, because I, like everyone else, prefers low interest rates.

The chorus of woe from the economy would normally mean an interest cut was a no-brainer.

The Nationwide noting that high street confidence is slipping for the seventh month in a row; the growth in the service sector,which includes everything from restaurants to finance companies, is at a standstill and house prices continuing to fall - all would normally signal the need for cheaper money.

Add to that the evidence that employers are being forced to borrow more and run down their deposits in order to stay afloat, and the case for a cut looks copper-bottomed.

However, there's a view, which I share, that the increasing inflationary pressures, particularly from the ever rising oil price will stay the Bank's hand.

The consumer inflation measure was 2.5% in March, and looks set to stay like that until the autumn. (And of course we all now know that the rate of price rises in household budgets are far higher).

Manufacturers are also now passing their costs on to their customers, and the rising cost of feed and food has taken everyone by surprise.

So, unlike its US counterpart which has cut lending costs aggressively, the bank will maintain a cautious stance, and hold for now, but with every expectation that the base rate will be down to 4% by the end of the year. But as I said, I hope I'm wrong.

Updated May 09, 2008

So, as predicted it looks as though the Bank of England's monetary policy committee didn't think that inflationary pressures were yet relaxed enough to allow it to move.

We clearly won't see a rapid return to cheaper money, but June now looks like a good bet for another cut.

Hopes of anything else through the rest of the year will rise or fall on the inflation figures, and how far rising prices are slowing the public's willingness to shop, above all.

If the Bank's glidepath to a 'soft landing' for the economy remains smooth, a rough straw poll of City opinion suggests we could be looking at a base rate of 4% by the end of the year.

How far that is passed onto mortgage costs will be critical for the housing market. Difficult to say, right now

Sky News business editor Michael Wilson

I wonder if insider traders are getting worried. The City watchdog is threatening more criminal prosecutions for traders who cheat by manipulating the market to their advantage.

The Financial Services Authority has more than doubled the size of its investigating team as part of a much tougher crackdown on insider trading.

Well, I wish them luck.

First,'insider knowledge' is no crime. Where the use of it strays into criminality is a very grey and ill-defined area.

Long before the Financial Services Authority was born, the City's Serious Fraud Office tried to grapple with the detail of various insider trading scandals and came up with very few bodies.

The detail of the cases was so complicated, apart from anything else, that there was a proposal to dispense with juries because it was impossible to find 12 good persons and true to whom a comprehensible case could be made, for either the prosecution or the defence.

Second, it's difficult to get the staff. Or at least it's difficult to get the staff to stay in the regulators' ranks.

After they've become wise in the ways of the watchdogs, they become natural prey for much better paying positions from City companies on the poacher's side of job opportunities. Public sector salaries simply aren't up to that temptation.

Or it becomes a career move. Witness the head of the Serious Fraud Office who 'retired' after the controversy over the dropping of the investigation into the BAE System's arms deals with Saudi Arabia.

Robert Wardle is now working for a leading corporate crime and investgations law firm - and joins a team that includes former employees of the Financial Services Authority, the Office of Fair Trading the police.

Nothing wrong with that - but it's just a further example of the kind of expertise which is up for sale and gives
the City a considerable adavantage over those who would police it.

The FSA is saying that it's reduced its headcount, employing fewer, but more highly paid staff,and says 'we feel the need to be bold.'

In order to establish its authority, the watchdog needs a big, successful prosecution soon.

Sky News business editor Michael Wilson

Ethics and business are a difficult mix, especially when cultural differences demand a different way of doing things. And when local customs dictate a bit of this and a bit of that, exporters often feel they have to adjust their moral compass to get the all important contract.

The Woolf review into business practices at BAE has called for much tougher anti-bribery measures after allegations that a £60m slush fund was used to bribe members of the Saudi royal family involved in the Al Yamamah arms-for-oil deal.

All the allegations were hotly denied by all involved. Eventually the Serious Fraud Office ended an investigation into the deal, claiming national security concerns.

That, of course did nothing to dampen suspicions of bribery and corruption, especially as the High Court ruled that decision was unlawful.

Today Britain’s largest arms manufacturer acknowledged that it ‘did not in the past pay sufficient attention to ethical standards,’ and has agreed to implement Lord Woolf’s recommendations.

A nice bit of entertaining, middlemen, agents, preferential terms, a sweetener here and there – all part of the business of business.

Not nice, but our major exporters have a responsibility not only to their shareholders but to their workforce. No contract, no jobs.

Take the Eurofighter programme for example. 50,000 jobs are directly dependent on it, BAE’s workforce which relies on it numbers 9,000.

So how officiously should we strive to avoid the payment of bribes, backhanders and other slippery measures to make sure that jobs are secured and contracts are won?

When the Serious Fraud Office ended the BAE investigation, many took the implication of that as something like 'a bit more rigorously than other countries, but not enough to lose the business'.

I’d be interested to see how a whiter-than-white approach to doing business works in the real, dirty world.

Sky News senior business producer Peter Hoskins

Are more people around you struggling to keep their heads above the financial waterline or do you think we're coping pretty well with the credit crunch?

I ask because looking at today's official insolvency figures you might feel reassured that some of the gloomier predictions about the effects of the credit crunch are proving to be unfounded.

The number of personal insolvencies rose by just 1.7 per cent over the last three months.

That's up by just 410. Yes, that's right, only 410 more people went bust in the first 3 months of 2008 compared to the last quarter of last year.

Of course, behind those figures there are many sad personal tales, the total figure is 25,264.

But given that we've been cowering under the shadow of the lending squeeze since last summer that looks pretty good to me.

So is this a case of 'Credit crunch. What credit crunch?'

Not according to Liz Bingham, Partner at accountancy giant Ernst & Young. "The full impact of the credit crunch hasn't hit consumers yet but I would expect it to by the end of the year."

She thinks personal insolvencies will rise to the kind of levels seen at the end of last year, but others are even more pessimistic.

There are plenty of voices - including the highly-respected City commentators Capital Economics - warning that there'll be record numbers of people going bust this year as homeowners struggle with higher borrowing costs and rising food prices.

They say this is "likely to be just the tip of the iceberg... with personal insolvencies set to reach new record highs."

So, are today's figures the calm before the bankruptcy storm or evidence that all the gloom and doom in recent months has been seriously exaggerated?

Sky News business editor Michael Wilson

Calm down, dears. Not as bad as you thought. There was a problem, and we all got a bit carried away and went a bit too far the other way.

It'll be all right in the end. A rough translation of the Bank of England's Financial Stability Report. It was unusually, some would say suprisingly, positive.

Here's the Bankspeak: 'The pricing of risk in credit markets seems to have swung from being unsustainably low last summer to being temporarily too high relative to fundamentals. So, while there remain downside risks, the most likely path is that confidence and risk appetite will return gradually.'

While the Bank of England is clearly anxious to foster calm and stability, and while the big banks may start to restructure their business to something like normal, there was a warning of the rest of us.

Households will still find things very tough, particularly as some see their mortgage rates jump by as much as 2.5% as they have to take on more expensive deals. My further worry comes from Jim O'Neill, the Chief economist of the giant Goldman Sachs.

Economists are two a penny, but Mr O'Neill is a star performer, who most recently correctly forecast the collapse of the US property market.

He says that the UK, with its heavy reliance on financial services, was 'in the eye of the storm of a deleveraging world economy', and that homeowners would suffer. 'House prices are going to go through negative changes' he said.

'It's going to be a challenge for UK policymakers.' And that challenge is precisely what we've been pointing out for the past six months.

While the Fed in the US feels a freedom to cut interest rates agressively, the inflation pressures here make it much more difficult.

We're currently running the story that petrol could cost one pound fifty a litre in 2009, for example, and we've already had the OPEC predictions of a $200 barrel of oil.

In these times no-one can predict anything with much accuracy, but it's clear that the Bank has limited room to help out with interest rates, or indeed help the banks out of their current problems.

We don't mind a cuddle from the Old Lady of Threadneedle Street, but that's as far as she's going to go.

Sky News business editor Michael Wilson

The latest Competition Commission report into the supermarket business has cost the big grocers – thus presumably its customers - £50m and the taxpayer £4m.

The Commission had already said, six months ago, that the ‘UK grocery market delivers a good deal for consumers’ and that there was ‘no direct evidence of tacit coordination between grocery retailers’.

After that, today’s report was something of a damp squib.

There will be some new planning restrictions to promote competition between grocery retailers, a tightening of supermarkets’ code of practice in dealing with suppliers and an ombudsman to police it.

But there’s precious little for small businesses which compete with their giant rivals – the report said that although independent retailers felt under pressure “this does not mean that competition is not working well”.

What’s curious about this latest exercise is the bizarre sense of timing of another of our competition authorities, the Office of Fair Trading.

Last Thursday, the OFT raided the offices of the big four supermarkets, as part of a new probe into alleged price-fixing of food and toiletries. It’s said to be the biggest investigation it’s ever launched.

Unsurprisingly, retail bosses were exasperated at yet another onslaught. But the taxpayer may also share some of this exasperation.

Doesn’t this at least upstage today’s Competition Commission Report, and might it not render the findings of today’s report redundant, if, as they must suspect from the scale of what they’re doing, that there’s something very serious going on?

And doesn’t this all point to yet another enquiry?

While any price-fixing and collusion obviously needs to be rooted out, I can’t help feeling that the real people to ask about supermarkets and their competitive pricing are the customers themselves.

So are you being served?

And, if you’re a small business either competing with or supplying our supermarket giants, how do you rate our watchdogs’ teeth?

Sky News business editor Michael Wilson

Stellar profits from big oil, and the first £5 gallon at the pumps. A leading politician rushes to the trouble at the Grangemouth refinery, and OPEC’s president warns oil could reach $200 a barrel. Troubling times.

However much the huge profits from Shell and BP rankle and rub salt in the wounds of everyone smarting from their hugely increased fuel bills, both the oil giants are only doing what they are supposed to do, maximise profits for their shareholders. It’s getting harder to get oil out of the ground, and more of the territory where they drill is getting increasingly hostile, physically and politically.

The oil markets are febrile, not just because of supply problems but because foreign investors are getting out of the weak dollar and into oil related assets. A leading investment bank thinks that hot money accounts for $30 of the present barrel price.

But even if this present price is just a bubble, it shows no signs of bursting. Stock of crude are low and OPEC shows no inclination to step in to help.

However, oil is as much subject to supply and demand as any other commodity. Americans are now using less petrol, as they’re hurt by the squeeze of the credit crunch. Neither the dollar or the markets will remain weak forever, and if the hot money retreats from oil, the price could fall as demand falls and oil crude looks less attractive as an investment.

I wouldn’t hold your breath, though. After the credit crunch heals, as it surely will, we now face an even bigger problem – the inflationary shock from the soaring energy prices. And we haven’t even talked about food prices yet, have we?

Sky News business presenter Emma Crosby

Millions of Americans will be $600 (about £300) richer this week as the first cheques in a 120 billion dollar tax rebate scheme start arriving through their letterboxes. Its hoped the cash will encourage around 130 million American households to spend their way out of economic trouble.

Speaking on the economic slowdown, President Bush said  “This money is going to help Americans offset the high prices we’re seeing at the gas pump and at the grocery store and it will also give our economy a boost to help pull out of this economic slowdown.”

Backers of the plan say this’ll act as a bridge until the next US interest rate cut. Julia Coronado, senior economist at Barclays Capital says "It's such a huge number that even a third of it will have an impact on retail expenditure," with others expecting a “multiplier effect” with every 1 dollar spent creating a 2 to 4 dollar benefit to the US economy, especially if it’s spent on domestic goods and services.

There are concerns though that people could just put the cheques into their bank accounts instead and save for a rainy day. Others fear that it does little to address the fundamental problems in the housing and job market. And wasn’t it over zealous consumer spending that got the US into this difficulty in the first place?

Something similar is unlikely to happen in this country as the UK government quite simply doesn’t have enough cash. But if you were on the receiving end of say a £300 cheque from HM Inland Revenue, what would you do with it? Spend, save or clear debts? Let us know…