A total of £10.6bn was invested ethically in the UK last year, up 18 per cent on the previous year and breaking the £10bn barrier for the first time.
Research from the Co-operative Financial Services (CFS) reveals that £5.5bn was put into ethically screened funds, which avoid companies whose activities harm the environment or breach human rights, or that manufacture products such as tobacco, alcohol or arms. The remaining £5.1bn was deposited in ethical banks and non-profit-making credit unions.
"This is a major milestone for the UK's socially responsible investments sector," said CFS's chief executive, David Anderson. "It underlines how UK consumers are increasingly thinking about how they can have influence as ethical investors."
According to the Ethical Purchasing Index, published by the CFS, ethical consumerism across a range of sectors - including investments and banking - was worth a total of almost £25bn to the UK economy in 2003. This is an increase of 16 per cent on the previous year.
But in a separate study, fund manager Insight Investment found, that while ethical issues are high on the social and political agenda in the UK, there is still a lack of understanding of ethical funds.
Its findings show nearly a third of us buy fair trade items at least once a week, and half opt for energy-efficient products, and yet 42 per cent do not know what an ethical fund is.
"Many [people] are eager to adopt socially responsible lifestyles," said an Insight director Dr Steve Waygood. "Yet many still seem unaware that investing in ethical funds is one way of doing your bit - and potentially profiting from your principles."
Cost of borrowing cut
The Bank of England fulfilled expectations last week when it announced that it was cutting interest rates - for the first time in two years - to 4.5 per cent.
Prior to last Thursday's decision, rates had been frozen at 4.75 per cent since August 2004, when the Monetary Policy Committee (MPC) last raised the cost of borrowing.
The Bank cited a slowdown in output, household spending and business investment as reasons for its decision. It added that while there had been signs of a pick-up in consumer spending, the risk of a downturn remained.
But the Bank also gave a strong indication that another cut was not likely to follow shortly, saying that rising share prices and the recent fall in the pound should boost future economic growth.
Last week's cut was welcomed by the housing industry. "The rate cut will provide a welcome boost to consumer confidence and help underpin the recent soft landing of the housing market," said Peter Williams, director general of the Council of Mortgage Lenders.
"After four rate rises last year, this is excellent news for homeowners and first-time buyers," added Melanie Bien, associate director at the broker Savills Private Finance.
But the cut may not be such good news for those with money in savings accounts. They are likely to see their rates drop.
New hope for debtors
Consumer groups have welcomed a new report looking at ways of tackling over-indebtedness in the UK, published by the Government last week.
While the majority of the population continued to benefit from the availability of credit, the report found that a significant minority still had excessive debts. The worst affected were often those on low income and benefits - and in particular, lone parents.
The report's authors called for more action by the Government, the credit industry, academia and consumer groups to help those struggling with debt.
Gerry Sutcliffe, the consumer minister, said the Consumer Credit Bill, currently going through Parliament, would ensure that lenders acted responsibly and give borrowers effective recourse when treated unfairly.
"We will boost the debt advice sector with an extra £45m," he said. "And we will continue to crack down on illegal money-lending, bringing loan sharks to justice."
As an example of the progress made in reducing the personal debt levels, Mr Sutcliffe pointed to the announcement of a £120m Financial Inclusion Fund to improve access to affordable credit. He also cited new consumer credit regulations aimed at improving transparency in credit advertisements.
The Consumer Credit Counselling Service, a charity working with the heavily indebted, said it supported such moves.
"We have worked closely with the Government and the industry on ways of tackling the issue, and on increasing levels of financial awareness," said spokeswoman Helen Saxon. "With everyone working together, this is the right way forward."Reuse content