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American Express saw first quarter profits decline 6%, after the number of cardholders failing to pay off their debts increased.

Profits for the three months to 31 March fell to $991m from $1.06bn a year earlier, but beat forecasts.

The firm set aside $1.27bn for credit losses during the period, representing a 48% increase year-on-year.

But while profits fell in the US, the profits overseas rose and the firm expects such growth to continue.

“While we continue to be cautious about the US economy, we are encouraged by our performance internationally,” said chief executive Kenneth Chenault.

US card service profits fell 19% to $523m but international profits climbed 30% to $133m.

Shares in the firm added 3% in after hours trading.

A handful of mortgage lenders are being inundated with applications as competitive deals become increasingly rare.

Mortgage comparison website mform.co.uk said up to six out of 10 applications from both home movers and people remortgaging made through its site had been to just three lenders during the past month.

The group said between March 15 and April 18 up to 60% of all mortgage applications it handled were for home loans with The Principality, West Bromwich Building Society and the Co-operative Bank.

It added that just 17 out of 90 lenders dominated applications through its service during the past month, but before the credit crunch struck more than half of lenders had deals that could be considered to be competitive, attracting a significant amount of business.

The group said HSBC had seen a surge in applications, particularly since it launched an offer under which it will match rates for people coming off fixed-rate mortgages, as had First Direct, which stopped writing mortgages for new customers on April 1 after being inundated with applications.

Other lenders that have featured prominently in applications being lodged include Halifax and Norwich & Peterborough Building Society.

The group said the recent market turmoil, which has seen lenders hike their rates and pull products that are attracting too much business, is leading to consolidation in the market.

It added that the Co-operative Bank, HSBC, Principality and West Bromwich Building Society featured as the cheapest lender on a true cost basis in 67% of searches done by customers on its site.

The Bank of England said yesterday it will exchange about 50 billion pounds ($100 billion) of government bonds for mortgage securities, mimicking a swap of $200 billion worth of securities by the U.S. Federal Reserve last month. Brown, whose popularity fell the most on record in a newspaper poll published April 13, said “we will make sure there is enough liquidity in the economy to make sure people can buy their own houses.”

While Goodhart says the Bank of England’s plan doesn’t back up that guarantee, it may do enough to take the sting out of any economic slowdown.

Possible Recession

“The credit crunch will still hit the economy, but it might have hurt more if it weren’t for these measures,” said Goodhart, 71, who served on the MPC from 1997 to 2000. “The measures prevent the risk of a possible recession becoming a depression.”

Goodhart is the author of “Goodhart’s Law,” which holds that targeting monetary aggregates as a surrogate for inflation is futile.

U.K. Chancellor of the Exchequer Alistar Darling will meet mortgage executives at 3 p.m. today in London and so far there are few signs of a coordinated effort to slash lending rates. While Abbey National, Britain’s second-largest mortgage lender, said yesterday it’s reducing rates on some adjustable loans, it also raised them for borrowers who make deposits of less than 10 percent.

The number of fresh mortgages approved for house purchase by the big UK banks remained close to a decade-low in January, industry figures revealed yesterday, reinforcing economists’ forecasts of significant falls in house prices this year.

Figures from the British Bankers’ Association showed the number of fresh home-loan approvals in January was down 31% on the same month of 2007 at 44,288.

This was up marginally from the December number of 42,343, but this figure had been the weakest since comparable records began with the formation in September 1997 of the “Major British Banking Groups” constituency following conversion of the larger building societies. The BBA numbers are adjusted for seasonal factors.

Data from the Association of Payment Clearing Services (Apacs) reveal that the UK’s 31.5 million credit card holders spent £32.3 billion in the last three months of 2007 - the second-highest sum on record, beaten only by the final quarter of 2004, when cheap credit card deals were more readily available.

Although some of the increased spending on food in December can be attributed to higher prices, recent figures show that the cost of food and drink has risen by only about 6 per cent in the past year, raising fears that more households are relying on credit to fund essential spending.

Chris Tapp, of Credit Action, a debt charity, said: “As household budgets are squeezed, people may start to use their credit cards to pay for shopping. This is a warning sign. While some people will be taking advantage of special credit card deals to earn points or cash back, many others will be simply using their card to put off paying the bill.”

Car insurance is costing drivers 5% more on average than a year ago, figures have shown.

And it is motorists aged 40-50 who have endured the biggest increases, statistics from Sainsbury Car Insurance found.

While the average insurance premium has gone up 5.24% in the last 12 months, the average rise for drivers aged 40-50 is 7%.

Forget worming pills and a flea collar - a trip to the vet in Britain these days could be about heart surgery, joint replacement, chemotherapy or a host of other cutting-edge procedures.

Britain is one of the few countries in Europe to offer many of these complex treatments: devoted British pet-owners have fuelled a fast-growing insurance market that helps fund care which would otherwise take a big bite out of a bank account.

Research firm Datamonitor has forecast the country’s pet insurance market will grow to almost STG600 million ($A1.28 billion) in 2011 from nearly STG380 million ($A812.14 million) in 2006.

“It wasn’t that big a market a few years ago but now it is growing,” said Kelly Ostler-Coyle, a spokeswoman for the Association of British Insurers. “It is a combination of how much people value their pets and (the fact) that there are more providers in the market.”

At Davies Veterinary Specialists, the largest private clinic of its kind in Europe, a lobby full of barking dogs is evidence of the lengths pet-owners are prepared to go for treatments for their pets, which can easily cost thousands of dollars.

U.K. house prices rose in February for the first time in four months after two interest-rate cuts by the Bank of England encouraged sellers to demand more for their homes, Rightmove Plc said.The average asking price climbed 3.2 percent to 237,856 pounds ($466,000) from January, compared with a 0.8 percent decline the previous month, Britain’s most-used property Web site said today. In London, values increased by 0.9 percent.

“With a couple of interest rate drops,” homeowners seeking to sell “are probably thinking the outlook is more positive,” Miles Shipside, commercial director at Rightmove, said in an interview with Bloomberg Television. “They’ve got the whole year to pitch their asking price. It’s not the return of a boom.”

Other reports have shown the property market slumped after the benchmark interest rate reached a six-year high in 2007 and credit costs rose. Bank of England Governor Mervyn King said last week that further price drops are “possible” as economic growth slows and banks curb loans to consumers.

The average time a property spent on the market rose to 93 days from 78 days a year earlier, Rightmove said. Average stocks per real-estate agent increased to 64 from 54 in February 2007.

Morgan Stanley will cut 1,000 jobs from its mortgage business and shut the UK sub-prime home loan division that it bought just over two years ago amid worsening market conditions.

The American investment bank blamed a “dislocation” in mortgage markets for redundancies in the United States and Britain, which will involve the closure of Advantage Home Loans, its UK mortgage division. About 160 jobs are likely to go at the business based in Ellesmere Port, Cheshire.

Anthony Meola, chief operating officer at Morgan Stanley, said: “Given the dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward.”

Morgan Stanley bought Advantage at the end of 2005 as a way into the then-lucrative British sub-prime mortgage market. One of the bank’s headline-grabbing deals was a loan aimed at first-time buyers that offered some borrowers seven times their income.

Britons are twice as likely to have a credit card as people in any other country in Western Europe, a report shows.

The average Briton had 1.4 credit cards in their wallet at the end of 2006, twice as many as second-place Norway, where people had an average of just 0.7 of the cards each, according to market analyst Datamonitor.

At the other end of the scale only one in every 16 cards in Germany is a credit card, rising only slightly to one in 10 in Sweden, Denmark and France.

Britons’ extensive use of credit cards has seen them collectively run up £54.93 billion in plastic debt at the end of 2007, according to Bank of England figures.

Datamonitor said people’s approach to credit cards in the UK was different to their counterparts in Europe, with consumers having a more relaxed attitude towards debt.

At the same time, people in the UK are also increasingly taking advantage of 0% introductory offers to shift outstanding balances from one card to another.

Author of the report Andrew Fabricius, said: “The high penetration of credit cards in the UK is due to consumers being happy to pay for goods and services by using credit and enjoy the flexibility of paying for purchases over a longer period of time.”

He said by contrast, consumers in Germany had a far more disciplined attitude towards expenditure, and as a result credit cards were far less popular in the country.

The UK also has the highest number of payment cards overall, with the average Briton having 2.8 credit or debit cards in their wallet at the end of 2006, and the number looks set to increase to an average of three by 2011.

The UK is well ahead of other European countries in terms of payment cards per adult, with even second place Norway lagging considerably behind, with Norwegians having an average of just 2.3 cards each, while people in France have an average of only one payment card per person.