Paper Summary: Friday 26th July

Economics

  • All the national newspapers covered yesterday’s GDP figures (which revealed 0.6 per cent growth for the quarter to June) in their editorials.  The Evening Standard, City AM, The Independent and The Sun were cautious “growth – but not yet the sunny uplands”; “we are expanding again – but the journey has barely begun”; and “growth, yes, but still a long, long way to go”.  The Telegraph counterattacked Labour’s offensive on the decline in the standard of living, asking if the party wants “those in work to push for higher pay, just at the point when the economy is least able to withstand the shock?  While The Times is also circumspect about the figures – calling for great regulation and low corporate taxes to ensure a sustained recovery – The Daily Mail and the Daily Express were more upbeat saying respectively that the results were “lifting the gloom on the British economy” and that “it’s getting better at last… Rejoice.”  The Daily Mirror vents a surprising amount of spleen on the “Chancer of the Exchequer” over what it calls a “glimmer of good news” but The Guardian takes a very different tack offering, perhaps, the most positive spin on the news for the Tories: “David Cameron will be able to claim at this September’s party conference that the plan is working…  This may well be his 1981 moment: the point at which all the naysayers can be dismissed as weirdy-beardy academics and media malcontents.  It allows Nick Clegg to breathe easier. And it confirms that, of all the party leaders, Ed Miliband will face the toughest autumn conference of the lot. Labour’s wobbly response to the GDP figures was surely a product of its uncertainty over whether to welcome the news or grouse that it should have been better.”

 

Personal Finance

  • By far the biggest PF story of the day is Archbishop of Canterbury’s declaration of war on Wonga.  The Sun says this is “bold”,” imaginative”, and “forward-looking”.  “By throwing the church’s financial muscle behind credit unions he says he hopes to force payday loan firms who charge eye-watering interest levels out of business.  He could let the credit unions use church buildings to lend money at affordable rates — potentially giving them 16,000 “branch offices” and easy access to millions of needy people.  His idea is a very modern take on the church’s centuries-old mission to help the poor and the exploited…  For too long the church’s endless rows over women bishops made it look hopelessly out of touch.  Its new Archbishop vowed to make it more relevant to ordinary people. In taking on Wonga he has successfully proved it does have a role in the 21st century.  Answering the prayers of our most downtrodden citizens.”  The Times is also fulsome saying Justin Welby has a true understanding of “love your neighbour.”  The FT says the archbishop’s proposal is ambitious.  “Success would give savers a new way to help the least fortunate.  Even if it fails, he has shown how the Church aspires to be a potent force for good.”

 

Recruitment & Employment

  • Financial firms are taking on more short term workers, in an encouraging sign for jobs activity in the sector, according to the boss of the world’s second-biggest recruiter.  “Activity in the City is not for permanent placements, but there are a lot of projects going on. We usually see that over time resulting in permanent jobs also,” Randstad chief exec Ben Noteboom told City A.M. The group’s global revenues fell five per cent to €4.1bn in the quarter.

 

Property

  • Help to Buy is in the firing line this morning.  The Daily Mail’s Tom Utley asks how can it possibly make sense to pledge £130 billion of taxpayers’ money to underwrite home loans, with deposits of as little as five per cent?  In the short term, the scheme can only drive house prices up still further (Utley quotes Zoopla’s valuation data to demonstrate how much prices have risen).  As for those reckless enough to take advantage of the scheme, what is to become of them when interest rates go up, as surely they must one day, and they can no longer afford the repayments?  In last night’s Evening Standard, Russell Lynch also turned his guns on Help To Buy as the Chancellor’s meets with housebuilders and lenders over the second stage of the scheme. The Government is preparing to underwrite the mortgages of tens of thousands of would-be homeowners from next January for a three-year period, which conveniently coincides with the next election.  Lynch argues the Chancellor would rather people were feeling warm over higher house prices than talking about his biggest embarrassment, the fact the deficit will barely move this year and is likely to take two parliaments to get rid of: “Help to Buy is all about May 2015: don’t expect much long-term help for the economy”.
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