News Headlines 26th July 2012

Economics

GDP dropped to 0.7% in the 2nd quarter of 2012 – well below the forecast 0.2% fall predicted by economists. The bad weather and Jubilee weekend have been blamed but this doesn’t wash with many investors. Indeed bond investors have grown increasingly wary of the threat of the UK losing its triple A rating. Any downgrades are likely to have significant impact on the UK’s borrowing costs due to the BofE bond buying programme and its status as a safe haven in the European debt storm. George Osborne has come under increasing pressure to do more to kick start the economy. FT, p.1,3,12,13 (Robin Wigglesworth, Sarah O’Connor, George Parker); Telegraph, p.1 (Robert Winnett, James Kirkup)

Personal Finance

Only a quarter of private sector workers are active members of their employer’s pension scheme, down from a third in 2007, according to Dept. of Work and Pensions. Meanwhile only 3 in 10 private sector companies offer any pension provision at all for their staff, a fall from 4 in 10 five years ago. 47% of private sector workers are eligible to join a workplace based pension but have not done so. Telegraph, p.2 (James Hall)

More than a million people have a secret credit card they use to hide extravagant purchases from their partner according to Debenhams Personal Finance. Women are most likely to use their card to buy clothes and shoes while men often load their with expensive gadgets and gifts. Telegraph, p.6

Property

Mike Farley of Persimmon gives his view that the key to economic recovery is to enable young buyers to gain deposits for house purchase. The problem, he says, is not the fact that house builders haven’t the capacity to build at the moment but that lack of demand is preventing building. And this is not due to the cost of mortgages, but the fact that buyers need at least 20pc. He calls for more assistance for FTBs in the form of loans for deposits. Daily Mail, p.82 (Hugo Duncan)

Recruitment/Employment

Workers who have been on sick leave for more than a year are entitled to reclaim their holiday allowance in the next leave year, regardless of whether they have formally requested it, a court has ruled. The move is “bad news” for employers according to legal experts, who warn businesses face workers returning from long term sick leave only to go straight on paid holiday for up to four weeks. Telegraph, p.B8 (Louisa Peacock)

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