George Osborne has announced that the recovery of the British economy is most certainly underway and that recent “early signs” of growth were vindication of his economic policies. Cover of the FT, p.13 of The Independent, p.8 of Daily Mirror
However, a new report from the Institute of Economic Affairs (IEA) warns that unless major reforms are undertaken, Britain may not ever be able to return to previously typical levels of business expansion. Before the financial crisis hit the UK had an average annual growth rate of around 2.5%, but this has been trimmed down to around 1% now. If action is not taken then weak economic growth may well be the norm for the British economy for the foreseeable future. P.2 of City A.M
The cost of gas, electricity, banking and transport will all be reduced under government moves to ensure households feel the benefit of an economic recovery, George Osborne said yesterday. The Chancellor has hinted that he will use his Autumn Statement to outline “important improvements” in the costs facing people in their everyday lives. Cover of the Daily Telegraph and p.2 of Daily Express
Controversial “teaser rates” that cost savers billions of pounds in lost interest payments are to be investigated by the City watchdog. Banks and building societies increasingly offer relatively high savings rates that expire after a year, leaving customers languishing in accounts paying very low returns. While attentive consumers switch from one new account to the next, the less nimble majority rarely get round to it and end up receiving interest of as little as 0.1% on their savings. The investigation by the FCA will focus on how clearly the offers are explained and how customers are treated when the interest rate falls to a lower level. Cover of The Times.
Following George Osborne’s speech yesterday, economists have expressed their concern that plans to boost the housing market could undo the UK’s progress towards sustained economic growth. Although analysts praised the corporate tax cuts and moves to restrain public spending and borrowing, they fear that that this good work could be undone if policies like the Help to Buy mortgage guarantee scheme combined with incredibly low interest rates cause a dangerous boom and bust in the housing market. P.2 of City A.M.
According to a report launched yesterday by the Cambridge Centre for Housing and Planning Research and the Town and Country Planning Association, says the rising population is going to fuel a shortage of homes. They have reported that between 240,000 and 245,000 homes will need to be built each year to accommodate the growing population. The number of households in England is set to rise by a fifth in the next 20 years, creating huge demand for new homes which is unlikely to be met. P.4 of FT.
The latest research from RICS reflects this, showing that demand is continuing to outweigh the number of homes coming onto the market. P.10 of City A.M and p.2 of The Guardian
According to the latest research from Manpower, 2013 is likely to have the strongest fourth quarter for hiring since 2007, as the budding economic recovery begins to translate into new jobs. Although 83% of employers told the group they did not intend to change their staffing situation in Q4, 12% said they expect to hire more – the highest for any quarter this year. P.13 of City A.M and p.3 of FT.