On Monday this week you could hear the strains of "Lets Dance" by David Bowie coming out of the Liberal Democrat's HQ as they tried to work out who would give them the greatest level of influence over the future of the UK. Just as the words "Put on your red shoes and dance the blues" died away, confusion turned into "bring me sunshine" as the new Morecombe and Wise double act was borne. David Cameron as Prime Minister and Nick Clegg as his able deputy presented themselves on the lawn of Downing Street as the public school version of the Chuckle Brothers and began to deliver some idea of the economic challenges facing the UK going forward - to me, to you. It seems the Tory party have agreed to the Liberal's £17bn tax cut in return for support in starting public spending programs this year. The word of this week has been "difficult" which replaced last week’s most common used entry in the political dictionary "hung".

Interest rates remained on hold as mixed messages appeared on the economy. Despite a small increase upwards in terms of economic recovery, underlying UK retail sales dropped 2.3% in April and the country's balance of payments increased on the back of lower than expected exports to the Euro zone. Data released by the Department for communities and local Government reported that house prices increased by 0.7% in March, the 5th consecutive month of growth. More interestingly according to the statistics, the prices of homes bought by first time buyers have risen by 12.6% in the past 12 months compared with 8.6% for properties bought by homemovers.

The higher prices suffered by first time buyers might be curtailed slightly by the decision by Lloyds Banking Group to clamp down on interest-only mortgages. Of the 11.4m mortgages in the UK, 43% by value have the owner paying just the interest and none of the capital creating concerns for the regulator and the Government. Many first time buyers see interest-only as a way of getting on the housing ladder and this move may force many other banks to reconsider their lending policies in this area. Research conducted by Moneyfacts Group suggests that the buy-to-let sector is beginning to stage a fight back. The credit crisis dealt a severe blow to the BTL market, which at its lowest point in September last year had seen its size diminish by 95% when compared with its peak in August 2007. However, since that trough, the market has expanded by 70%, with product numbers rising from 179 to 304. Perhaps more importantly, a number of these products are in high loan-to-value (LTV) tiers. Figures also show that lenders are beginning to return to the market, while average rates have fallen. In September, products with a maximum LTV of 80% comprised just 1.40% of the entire market; this has increased to 4.24%. In addition 75% and 70% LTV products now make up 29.07% and 25.82% of the sector, comfortably more than in September last year. The average two year fixed BTL mortgage rate has fallen in the same time, from 5.96% to 5.66%, as have two-year trackers, from 4.59% to 4.49%.

With eight banks in the US facing another investigation this time into their relationship with credit rating agencies, the new coalition Government has announced they are setting up a committee on banking. The agreement between George Osborne and Vince Cable included a pledge to introduce more taxes on the industry and robust action to tackle banker's bonuses. The committee has been given a year to report on proposals on whether to separate the retail and investment elements of the UK's big banks, a proposal many in the industry are looking to oppose arguing that there have been measures already taken that reduce systemic risk.

And finally, when it comes to giveaways in cereal boxes, you can't beat the one that Eftychia Symeonidoy had for her breakfast. Unfortunately for her it was not full of 100% goodness, but contained plenty of artificial additives namely 300,000 in 500 Euro notes. She was able to take between £1m and £4m in cash each month and convert it into Euros. With the current exchange rate it meant the number of notes decreased by 8 times - a weight loss programme of 48kg over night. This has left the UK authorities with no choice but to ban the note in the UK, with around 20,000 Euros in this denomination fitting inside a cigarette packet, many criminals using the note in money laundering scams will see their illegal activities going up in smoke.

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