We start this week's round up with positive news from Lloyds Banking Group who returned to the black in the first three months of this year, its first profit since buying HBOS in 2008. The figures prompted speculation that there would be a swift sale of part of the Government’s stake in the bank. The taxpayer was last night sitting on a £1.4 billion profit on a holding of 41 per cent, according to the Government’s calculation that it paid an average of 63.2p for its stake. The results were on the back of more stable bad debt provisions with the bank confident that performance would be similar for the rest of the year. Just when we as tax payers are seemingly getting a return on our stake, Britain's leading organiser of privatisation share issues is making preparations for a public offering of Government shares in the state-backed banks. Solid Solutions has inserted a clause into its joint venture with Barclays to allow it to work as an independent adviser to the Government on any future public share sales. The clause was added after conversations with UK Financial Investments and is the strongest signal yet that the Treasury is planning to offer Lloyds Banking Group and Royal Bank of Scotland shares to the public.

Spain's economy was thrown into chaos on Thursday when its credit rating was cut. The turmoil came just a day after Greece's rating was cut, increasing concerns of a Europe-wide financial crisis. To the benefit of UK holidaymakers, the Euro fell sharply and the interest rates European governments pay to borrow money jumped after Standard and Poor's, a credit ratings agency, downgraded Spain. Last night the government in Madrid appealed for calm, promising an "austerity programme" to cut spending. But economists fear that events in Spain show that financial "contagion" is spreading from Greece, as investors are scared off investing in any European country with significant government deficits. The UK seems currently immune to this as the latest auction of UK gilts was over subscribed showing some level of confidence in the UK recovery.

Whilst there has been plenty of news on the back of the IFS assessment as they work out how much the potential tax we will be paying to bring the deficit down, the National Institute of Economic and Social Research (NIESR) has predicted that the UK economy will expand by 1% this year. As part of a report on prospects of the economy, the think tank has said that the recovery will continue slowly this year, before increases of 2% and 2.2% in GDP are recorded in 2011 and 2012 respectively. The organisation has also predicted that unemployment will peak at 2.7 million in 2011 and that consumer price inflation will average 3.1% this year, falling back to just below the government's 2% target in the following two years. "Additional tax increases and spending cuts worth 1% of GDP each are needed to put the public finances on a better long term footing," it added.

According to the Nationwide, house prices have increased by more than 10% in the last 12 months, the first time the annual rate of inflation has hit double digits for almost three years. House prices registered a 1% month-on-month rise in April, taking the average price of a home in the UK to £167,802. This latest increase meant that over the last 12 months, house prices have gained 10.5%; the first time annual price inflation has hit 10% or more since June 2007. The expansion in house prices has been driven by the low levels of stock available, rather than an influx of cash buyers into the marketplace. Martin Gahbauer, chief economist at the building society, predicted a gradual levelling out of recent upward price momentum.

One in four pensioners still has a mortgage on their home, a shocking report claims. The findings highlight the nightmare facing soaring numbers of old people whose retirement dreams cannot be realised due to debts. The major survey of 3,500 people over the age of 65 found 27 pc had a mortgage, which forces many to keep on working because they cannot afford to retire. The average size of a mortgage was even higher among older pensioners, according to the research by the equity release firm Key Retirement Solutions. Pensioners over the age of 65 had an average mortgage of £35,441, but the average shot up to £52,576 for those over the age of 70.

London & Country are urging homeowners on standard variable rate (SVR) mortgages to move on to fixed-rate loans as they are at their cheapest for 10 months. Borrowers paying the average SVR could save £16,257 on a £200,000 mortgage over five years by remortgaging on to the market-leading five-year fixed-rate deal, according to figures from the broker. Even those with a deposit of only 25% are able to benefit from remortgaging, as they would be eligible for the deal. Those on the cheapest SVRs - 2.5% from Cheltenham & Gloucester and Nationwide building society - would also be better off switching to a fix, saving £550.

And finally we saw the last episode in the trilogy of debates between the 3 political leaders before next Thursday's election. Debate centred around the economy as the battle for middle earth reaches a crescendo, with each trying to explain the gap highlighted by the IFS. With Bigotgate, Clegasms and a thrown egg, it’s been an interesting week as NEETs and tweets all go towards getting seats. Those who are Not in Education, Employment or Training now seem a target via the social networking sites for politicians, but with just 1 week left all of this excitement will soon be over, at least until Dr Stephen Hawkins' alien invaders turn up.

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