The good news is that the economy's recovery from recession gathered steam between April and June. Britain grew by a whopping 1.1% - the highest growth rate in four years and almost twice as fast as expected in the second quarter.

The bad news is that this will be seen by the government as justification for its drastic austerity measures. It will also give ammunition to those on the Bank of England's monetary policy committee who want to put up interest rates sooner rather than later - which would be bad for mortgage holders but good for savers.

There are a few things we all know about mortgages. They are very complicated, many of them are cheaper than they have ever been (if you have a big enough deposit) and they are about to get more expensive as the Bank of England looks set to raise interest rates in the next few months.

However, there are a host of things we don' know, according to a new survey. Some 15% of people don't know what kind of mortgage they have, 74% have no idea what effect a 1% rise in the Bank of England interest rate would have on them, and 14% of people don't know what they'd do if their mortgage was £200 a month more expensive. Fortunately we can put an end to the mystery, with a quick and easy crash course in mortgages.

Those sneaky recessions... they get themselves all dolled up in their fancy government schemes, historically low interest rates and state engineered recovery plans, and they fool us into thinking they are actually a recovery.

But lurking beneath positive-sounding stuff like the fact the economy grew this spring, export orders and domestic sales are up, employment expectations are better and investment plans have improved, are apparently the murkier facts and statistics that show we're heading for deep dire trouble (again).

UK banks and building societies wrote off loans worth £9.6 billion during the 12 months to the end of March 2010, according to figures from debt agency Credit Action.

Meanwhile personal debt levels in the UK continue to grow, with total lending during the month of May increasing another £1.5 billion, some £1.2 billion of which was secured lending – or, for the most part, mortgages.

George Osborne has taken control of banking regulation from the Financial Services Authority and given it to the Bank of England, under the power of Governor Mervyn King. It's a sure sign that the nation has lost all faith in the regulator to keep tabs on the banks.

But what does it actually mean for us?

The latest inflation figures bring some respite for cash-strapped families. Inflation has finally fallen back, with food and drink becoming cheaper while petrol prices have come off their recent highs.

The data raised hopes that price pressures have now peaked and that the cost of living will come down further in coming months.

The latest jump in inflation, to 3.7%, continues to punish savers and squeezes family budgets. The cost of living, as measured by the consumer prices index, is now the highest in 17 months.

What's more, a VAT hike would keep inflation high and this could force the Bank of England to raise interest rates sooner than expected. The double whammy will mean higher mortgage payments and living costs.

The financial crisis is far from over, Bank of England governor Mervyn King warned today. In fact, we have moved into a second stage: from the banking crisis that triggered the credit crunch (and a painful recession) to a sovereign debt crisis.

Presenting the central bank's quarterly inflation report, King painted a decidedly gloomy picture.

We're not a nation of complete numpties. ven the dimmest amongst us have twigged that low interest rates have meant a little more cash at the ready for some mortgage holders - particularly those people who hold tracker mortgages.

This means the amount of interest they pay on their outstanding loan tracks the Bank of England base rate, which currently stands at 0.5%. The tracking rate might be 2% above base so you pay 2.5% interest on your loan, for the time being.

We should be taking advantage of this to make a massive difference to our household finances, but we're not.

The cost of living has come down for Brits with the inflation rate dropping to 3% last month from January's 14-month high of 3.5%.

The consumer prices figures brought a pleasant surprise this morning as some in the City had feared that delayed effects from January's VAT hike could push inflation higher. But inflation was driven lower by a combination of cheaper computer games, utility bill cuts and a fall in alcohol and tobacco prices (payback for a bumper increase the month before).

This reinforced expectations that interest rates are set to stay low for months to come.

People are back to borrowing and spending again, Bank of England figures have revealed.

Consumers borrowed another £500 million on their credit cards and through loans in January, following £265 million in December.

This was the largest increase in consumer credit in well over a year and comes after five months of net repayments - when people paid back their credit card and other unsecured debts between July and November.

The surge in borrowing comes as a bit of a surprise. People probably borrowed more in December and January to buy Christmas presents and go on shopping sprees during the January sales – but retail sales were actually badly hit in January by the weather.

It looks like the housing market is running out of steam again, just a few months after things started to pick up. The reason? Would-be-buyers are still struggling to get mortgages.

Housing market expert Kate Barker, who sits on the Bank of England' monetary policy committee, has warned prices could dip again this year because of a lack of mortgage lending.

Even though the government has urged banks and building societies to make more and cheaper mortgages available, the situation hasn't got much better.

Santander offered a glimmer of hope yesterday, slashing the deposits required for first time buyers buying new-build properties. Those buying flats will be able to borrow 80% of the property value, and those buying flats will be able to borrow 90%. It's the first time the firm has offered 90% mortgages for two years.

However, this will suit just a small percentage of house buyers. The rest of us will continue to struggle.

Inflation shot up to 3.5% in January, a 14-month high, after last year's emergency VAT cut was reversed and because of higher petrol prices.

Inflation is now well above the Bank of England's 2% target, which means that governor Mervyn King has had to write an explanatory letter to Alistair Darling today.

King indicated that the Bank is relaxed about the rise in inflation - because it regards it as a short-term blip and expects the weak economy will bring it down sharply again later in the year. However, some members of the monetary policy committee seem more worried about rising prices.

Fewer people are having their homes repossessed by lenders, and the number of people falling behind with their mortgage payments is also down.

New figures indicate that government initiatives to reduce repossessions by calling on lenders and borrowers to examine all alternatives are having an impact - and many lenders are taking a more sympathetic view anyway.

However, there is is a worry that in some cases the Mortgage Pre-Action Protocol is just delaying the inevitable, and it must be even worse for people to lose their homes after getting their hopes up.

In another twist, it emerged that more people are taking in lodgers to help pay their mortgages and avoid getting into arrears.

The Bank of England was quite downbeat in its assessment of the economy today, saying the recovery would be slower than previously thought.

Governor Mervyn King said it's "far too soon" to say whether the quantitative easing programme is over. Last week the Bank halted the bond-buying programme, under which it pumped £200 billion into the economy since last May to kickstart growth - but left the door open for further purchases.

"The strength of the recovery is highly uncertain," the Bank said in its quarterly inflation report. "The nature of the headwinds means that the recovery is likely to be slow."

The tone suggests that interest rates are unlikely to go up any time soon from their record low of 0.5%. Some economists say they could even stay unchanged for the next couple of years.

King also warned of sharp price rises in coming weeks, but they will be temporary.