News headlines for 13th September 2012


David Cameron dodged three challenges yesterday to promise he would meet his own government’s target to ensure debt is falling as a proportion of GDP by the end of the current parliament. The target is likely to be abandoned in the autumn statement unless government borrowing figures suddenly improve. The government debt is currently forecast to be £1.159 trillion this year, or 72 percent of GDP; and economists have deemed improvements unlikely due to weak tax revenues and higher borrowing. Guardian p.18, Telegraph p.14, The Times p.22

Good news for Merkel as German judges backed 500 billion euro safety net. Yesterday Germany’s highest court sent a powerful message to the rest of Europe and beyond after it paved the way for the creation of 500 billion euro rescue fund to tackle the eurozone’s debt crisis. Markets rallied following the decision with the euro reaching a four-month high and European stock markets rising. Guardian p.26, Telegraph B5, The Times p.37, Independent p.33

Personal finance

Mortgage lending booms in July as market strengthens. A jump in loans to home movers outweighed a slip in lending to first-time buyers, the Council of Mortgage Lenders revealed yesterday, leading to an overall increase in mortgage market lending. In total, lenders – who found themselves involved in a price war – advanced 49,500 mortgages totalling £7.6 billion, with the number of home loans granted during July 5% higher than in June. City Am p.16, The Times p.53

Pension reforms ‘will halve costs’ saving taxpayers 430 billion pounds according to official figures. The Public Service Pensions Bill, which is being published today, is forecast to save £65 billion of that figure, ministers have said. The Bill ends final salary schemes for hundreds of thousands of civil servants, and will force them to work longer to receive full pensions. Telegraph p.16, Independent p.56


Policy Exchange reveals that leading house builders are exploiting the planning system to boost their profits. The think-tank claims residential development is delayed by an outdated planning system, rather than an inability to access credit. 2012 is on course to be the year with the second lowest annual level of new homes since World War II, mainly because councils only allow small plots of land to be developed. As a result it is often more profitable for developers to simply sit on land with planning permission, and watch its value rise, rather than begin building. City Am p.2


Employment in Britain is at the highest level in four years suggesting a boost from the Olympics and raising hopes for economic recovery. The number of people in work rose by 236,000 in the three months to the end of July, to 29.6million according to the Office for National Statistics. The jobless total fell by 7000 over the same time to 2.59 million with the unemployment rate at 8.1%. Guardian p.29, Telegraph B3, The Times p.51, Financial Times p.3, Daily Mail p.72


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