The Treasury select committee has warned the Help to Buy scheme could raise prices rather than stimulate new supply. This warning of a new housing bubble comes as Virgin Money is announced as having signed up, alongside government owned bands Lloyds and RBS. David Cameron defended the scheme saying it will help buyers who haven’t got rich parents.
Small investors who successfully apply for Royal Mail shares stand to make an instant profit of £250 according to City forecasts. Shares are expected to increase in value from £3 to £4 instantly when trading starts next week, offering a boon to investors who are allocated the minimum of £750 worth. Labour have accused the government of undervaluing the company for a quick sale. Reports suggest it may be worth £4.5bn, far higher than the current upper valuation of £3.3bn.
The FCA is examining whether plans to cancel the bonuses of executives working at bailed-out banks contravene European Human Rights Law. The proposal was made by the Parliamentary Commission on Banking Standards, but could trigger lawsuits over the cancelling of legally earned pay.
Hiring of temporary staff is at its highest level for 15 years according to REC/KPMG, while demand for new staff is at a six year high. This in turn is pushing up wages with the rise in starting salaries hitting a five and half year high. (Times, p. 35, Patrick Hosking)
A sharp increase in sales, orders and hiring intentions is adding weight to claims the economic recovery is rapidly taking hold according to Patrick Hosking in the Times. Domestic sales forecasts, and confidence in services and manufacturing are higher than pre-recession levels. While the figures may moderate, the British Chamber of Commerce said the recovery was gaining traction and it is therefore likely to raise growth forecasts for 2013 and 2014.