Lending to the UK’s businesses will finally pick up in 2014 as the economic recovery gains momentum, according to EY’s quarterly Item Club forecast. Business lending is expected to fall for the fifth year in a row this year to £422bn, but the Item Club expects conditions to improve after that, with lending eventually surpassing its pre-crisis peak in 2017.The Item Club now expects the Bank of England base rate to stay at 0.5% for a year longer than it forecast in the spring and doesn’t expect the MPC to raise rates until the opening months of 2016. Financial Times, p.2; Daily Express, p.46;
MPs are suggesting the energy watchdog, Ofgem, is not doing enough to ensure that energy company profits are transparent. The committee of MPs said consumers need reassurance that the profits made by the ‘big six’ energy companies are not excessive. Ofgem said it had made energy companies produce yearly financial statements and they had been reviewed by accountants. BBC Online
Vince Cable has warned the Chancellor’s pet project of Help to Buy could produce another house price bubble. The second £12bn tranche of the scheme, which will begin in January 2014, will give buyers of all properties the ability to borrow with only a 5% deposit. The UK housing market has already been given a boost by the first part of the scheme, which has subsidised an estimated £1.3bn of house purchases since its launch in April. Financial Times, p.2 (Elizabeth Rigby). Daily Telegraph, p.2; Times, p.14; Daily Mail, p.2
Sarah O’Grady covers the Hometrack house price index showing prices have risen 1.3% over the last year. Daily Express, p.2
Brian Groom writes about job growth fueling fears of a regional fault-line with almost half of all UK job vacancies appearing in southest England last month. He includes Adzuna.co.uk research which shows that competition for jobs has fallen for five consecutive months as employers create more vacancies. The number of jobseekers per advertised vacancy has fallen from 3.3 in February to 2.9 in June. The biggest growth in vacancies was in manufacturing, according to Adzuna.co.uk. Financial Times, p.3.