On the front page of the Financial Times this morning, Chris Giles analyses the latest MPC minutes as a “retreat” from the Bank of England’s “flagship” quantitative easing programme. The incoming governor Mark Carney could be going for a “more mixed strategy” according to the minutes. Kevin Daly of Goldman Sachs thinks that this could be “an increased probability of a change in policy next month”. Philip Aldrick of the Telegraph writes more on the united front in the UK and US to scale back QE. (Telegraph B.1)
Meanwhile, in fiscal news the Mail (p.6) describes the “decades of austerity” that will be necessary in order to reduce public debt in the UK, according to a report out yesterday from the Office for Budget Responsibility. This comes after George Osborne’s recent promise not to raise taxes if he remains Chancellor in 2015 – which would require extra spending cuts to get closer to balancing the books.
City A.M. use the same OBR report as the basis for their front page today, but with a different focus. The OBR has announced that an ageing UK population will make public spending on social care, health and pensions unsustainable within a generation. Page 1 of the Guardian also discusses elderly care and finances – describing the coalition’s plan for new loans and insurance as a way to end the (ever-present media catchphrase) “post code lottery”. The Guardian’s Randeep Ramesh describes how some elderly people could save up to a fifth of their care costs in retirement under the plan. Back in City A.M. Allister Heath argues for urgent reform of the welfare system, saying, “I’m sorry to write about this on such a beautiful summer’s day but it’s a disturbing and crucially important story.” (City A.M. p.2)
Unemployment dropped by 57,000 between March and May, in figures released by the ONS yesterday. However, the Mirror (p.15) focus on the rise in long-term unemployed over the same period, with Labour’s Liam Byrne calling progress “sluggish”. Meanwhile, the OBR, in the same announcement as its analysis of the ageing population, has pressed for more skilled immigration to meet the UK’s demographic and economic needs. (City A.M. p.1, Mirror p.15)
In the Independent and Scottish Daily Express, there’s cautious optimism for the property market north of the border. House prices in Scotland have risen £2,283 since December 2012 with sales 4.4% higher than May last year, according to LSL Property Services. Alan Penman of Walker Fraser Steele, part of LSL Property Services, says: “Sales are improving and mortgages are more readily available. But there is still a long way to go.”