The Bank of England slashed its forecasts again yesterday, predicting that the economy will now not recover its pre-recession levels until 2015. Inflation is also said to become higher than expected, eating away at wages and keeping household finances under pressure. Governor Sir Mervyn King says he has not ruled out further money printing in future but he did warn that boosting exports is the only real shot the economy has of returning to strong growth. This is unlikely to happen when the global economy is so weak. Cover of the FT, cover of City A.M., and p.8 of The Times.
Global banks operating in London have been warned by the top UK bank supervisor that this year’s staff bonuses must reflect the mis-selling and market manipulation scandals that have damaged the sector over the past year. Andrew Bailey, head of the FSA’s prudential business unit, wrote to bank chief executives in late October, ahead of this year’s bonus round, warning them that the watchdog would be looking for evidence that they had “clawed back” deferred bonuses from people involved in scandals. P.52 of The Times and cover of the FT.
According to three leading organisations, the coalition has failed to deliver on a host of housing issues in the first half of its parliamentary term. The National Housing Federation, the Chartered Institute of Housing and the charity Shelter said that although there had been many initiatives but little achievement in the past two and a half years. Overcrowding, homelessness, housing costs and private rent affordability were all worsening, the report said. It also claimed that ministers had made “no progress” on housebuilding, planning approvals and home ownership levels. P.4 of the FT.
With last month’s shock rise in inflation adding to the squeeze on Britons’ spending power, Sainsbury’s boss Justin King yesterday predicted shoppers would turn to its own brands when shopping for the holidays. King said that although Britons would “splash out” to enjoy Christmas with their families they would ditch branded goods in favour of cheaper own-label supermarket turkeys and trimmings, which are typically 20% cheap than their branded equivalents. P.32 of The Guardian.
Employment continued to climb in the third quarter, official statistics showed yesterday, and though the rate of growth was down, employment remained more than a half a million up on the year. There were 100,000 more people with work in the three months to September, compared to the previous three months, ONS said yesterday, bringing employment to another all-time high. P.3 of City A.M.
On the other hand, the number of people claiming unemployment benefit rose sharply last month, which has prompted fears that the improvement in the jobs market is coming to an end. ONS said the number of people on jobseeker’s allowances rose by 10,100 as the jobs boost from the Olympics faded. It was the largest increase since September 2011 and even surprised City forecasters, who had not expected to see a rise. P.4 of The Guardian.