News Summary for 12th September 2013

The government will today formally begin the sale of Royal Mail by announcing its intention to float the 497 year-old postal service on the London Stock Exchange. The most ambitious privatisation since the sale of the railways in the 1990s is forcefully opposed by the unions, who are meeting Royal Mail’s chief executive today to discuss threatened strike action. 96% of Royal Mail staff are against the selloff despite the government promising 150,000 postmen and women a 10% stake in the company, worth up to £2,000 each. Royal Mail’s biggest rival, TNT Post, last night criticised the government’s plans to privatise the postal operator as “preposterous” warning privatising a monopoly is “bad for consumers, bad for business and bad for UK Plc.”

Personal Finance:
Britain’s pensions gap is wider than feared new government information reveals. 13 million people are heading for a drop in living standards when they retire, with two million more people than previously thought not saving enough to maintain their way of life once they retire. UK pensions minister Steve Webb has deemed the results “startling” and warns that “tackling a problem on this scale will take many years and a range of measures” to resolve. While auto-enrolment is expected to close the gap for 1 million pension savers, 12 million still face a significant drop, as many of the multiple causes of the difference are left without a remedy.

Mark Carney will face scrutiny in Parliament today after strong jobs data increased doubts over whether the Bank of England would be able to hold rates at record lows for as long as the new governor has indicated. Sterling rose to an eight-month high yesterday in response to a drop in unemployment from 7.8 per cent to 7.7 per cent in the three months to July. The unemployment rate has become a crucial economic indicator since the Bank of England announced in August it would not raise interest rates until unemployment fell to 7 per cent.

Estate Agents have reported record job levels, with the number of people employed in “real estate activities” rising by 9.9 per cent in the three months to June, faster than in any other sector. However, the rise has sparked some concern that economic recovery is being underpinned by a debt-fuelled housing boom.

Concerns about the state of the housing market were also voiced by business secretary Vince Cable, who called for an urgent rethink of George Osborne’s flagship Help to Buy scheme, which aims to provide government guarantees for low deposit mortgages from next January. Cable opened a significant rift with the Treasury, warning listeners signs of serious housing inflationary pressures were already showing in parts of the country, and in light of changing market conditions, questioned how Help to Buy should come into effect if at all.


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