The summer of 2007 has not exactly been one to remember with fondness. If we have not been up to our necks in floodwater, we have been watching billions of pounds being wiped from the value of our pensions and investments. Oh, and interest rates have gone up as well. Twice.

Yet amid the doom, gloom and incessant rainfall, one small piece of good news has emerged, if you are a homeowner, at least. Mortgage rates are beginning to edge lower as the recent stock market turmoil and better news on inflation reduces the likelihood that the Bank of England will increase the cost of borrowing again in this interest rate cycle.

As we report on page 4-5, a number of lenders, including Abbey and Nationwide, reduced their fixed rates this week and are offering more competitive variable-rate deals. Sadly, however, not everyone is benefiting from developments in the credit and stock markets.

The mortgage rates available to borrowers with poor credit histories are moving rapidly higher as the fallout from the American “sub-prime” lending crisis drives up the wholesale cost of money for banks specialising in these types of loans in the UK. This week GMAC-RFC, one of Britain’s biggest specialist lenders, increased rates across its entire sub-prime mortgage range by three quarters of a percentage point. The bank also added half a point to the rates on its buy-to-let and self-certified mortgages. Other sub-prime lenders have also raised rates and given warning that they may have to do so again if conditions in wholesale lending markets do not improve.

There could also be further pain for borrowers on mainstream variable-rate or tracker mortgages because it is by no means certain that the cost of borrowing has peaked. If the current stock market turmoil settles and has little impact on economic activity, the Bank of England may yet decide to increase the base rate at least once more, particularly if the inflation outlook deteriorates.

There is certainly a precedent. In February, as in August, the Bank of England indicated that another rate rise was required to keep inflation on target. It then emerged, as it did a couple of weeks ago, that the consumer prices index had fallen back sharply. Between March and April the FTSE 100 index lost about 7 per cent – over the past month the market has fallen by not much more, about 9 per cent.

In April the Bank’s Monetary Policy Committee left rates on hold. But in May, when the stock market had settled and inflation had rebounded, it voted unanimously to increase the cost of borrowing.

It is also worth remembering that share prices fell by about 10 per cent in May to June last year without contaminating the wider economy or changing the interest rate outlook. Of course, the circumstances are different this time around. But it is still far too early to rule out borrowing costs above 6 per cent.

Parking fines are little more than another tax

PITY the poor motorist. In the past month drivers have had to suffer harsher rules on parking tickets and news that they will be fined for straying into cycle lanes. For motorists in London it has been a triple whammy, with the cost of parking fines increasing to £120 for most offences. The only good news is that the Government has finally called time on the legalised extortion that is clamping.

But without wishing to sound ungrateful for this rare outbreak of common sense, it is too little and too late. Ever since parking laws were decriminalised, enforcement has lost all sense of proportion. Wardens patrol the streets with an efficiency unusual in the public sector, leniency is unheard of and discretion a dirty word. You can be fined more for a parking indescretion than mugging a granny.

The system is not run in the interests of drivers, traffic flow, safety, business or the environment. It is a tax in all but name, and a fundamentally dishonest one at that. Hundreds of thousands of cars are wrongfully towed, clamped or ticketed every year. Most people do not appeal because the process is tortuously slow and fines can escalate rapidly.

The system needs a radical overhaul. The operating hours of restrictions need to be scaled back. Fines should be cut so that they are more proportionate to the offence. Wardens should be encouraged to show discretion. Councils must be fined for every appeal they lose so that there is an incentive to stop issuing unfair or invalid tickets. Only then will parking enforcement regain any credibility.