The UK has reached an agreement with European Union member states that will potentially limit Brussels’ influence on the way the City of London regulates its financial markets. A deal between the countries reviewing legislation represents a significant step forward after 30 months of fierce negotiations between the UK, France and Germany – as well as the banks and exchanges. Ministers warn that turning our back on Europe would result in fewer jobs and higher prices. (FT p1, DT p1).
Proposals for a radical reshaping of the private pensions industry are being drawn up, under which ‘big household name’ companies would come together to create a pooled fund that could ensure a more generous income in retirement. Pensions minister, Steve Webb, told the Financial Times that potential returns could be 30-40 per cent higher if they can make it work (FT p2).
Meanwhile, the Daily Telegraph reports that more than 800,000 pensioners have seen their savings drop by an average £2,400 in the past year because of the falling rates of investments – according to a survey from fund manager Investec Wealth & Management (DT p12).
Fears about potential for declines in house prices in Britain have returned to the financial services sector’s list of key worries, according to the Bank of England’s biannual Systemic Risk Survey. A quarter of respondents said they were concerned about the risk of declining valuations – up 11 percentage points from the previous survey. The poll of risk managers also cited lurking dangers associated with the ultra-low interest rate environment and distorted asset valuations as a key concern (Times Business p37).