Royal Mail has been valued by investment banks at up to £5bn in June, 50% more than the price at which it was sold to the public a week ago. This revelation will intensify criticism of the government’s handling of the flotation. MPs are currently preparing to grill its main adviser, Lazard, on the conduct of the £3.3bn offering at a hearing next month, in the face of a public outcry and accusations by Labour that a prime state asset has been sold off on the cheap. (Cover of FT, p.52 of The Independent)
In light of last week’s row over woolly jumpers following British Gas’ announcement of rising energy prices by 9%, senior industry figures have warned that the rising cost of living could seriously impact the government’s infrastructure investment plans. Some are questioning whether it will be possible to achieve the coalition’s £300bn target of investment in new infrastructure without growing public dissent about the cost of new projects. (p.2 of FT)
The energy secretary, Ed Davey, has called on electricity and gas suppliers to act rapidly to reveal their true profitability to customers and the energy regulator, as the government spent another day on the defensive over soaring bills. (Cover of The Guardian)
In light of soaring energy costs, it is nice to note the significant fall in petrol costs, which have fallen by the largest amount since 2008 according to the AA. However, It has been suggested that won’t be seeing another fall as dramatic as this. (p.25 of The Independent)
The latest data from the Council of Mortgage Lenders (CML) shows that gross mortgage lending increased by almost a fifth between the second and third quarters as the housing has ‘revived’. However, despite the noticeable quarter-on-quarter increase, there was actually no rise between August and September. There is continuing debate about the impact of government-sponsored schemes, but ONS’ latest house price index shows that house price growth was not just limited to London – suggesting that recovery is no longer localised (p.4 of FT and p.37 of The Guardian)
However, Jessica Winch and Steve Hawkes write in The Daily Telegraph that most first-time buyers will still be priced out of the property market in London and the South East. (p.8 of The Daily Telegraph)
Recruitment & Employment
The Independent’s letter page include a piece from Jan Hills, partner at Head Heart + Brain reacting to an article by Nick Goodway in last week’s paper on workers in the banking sector suffering under increased pressure (“Stress and job cuts take toll on bankers”, 17 October). Jan says the scale of the problem is perhaps greater than reported and that research carried out by Head Heart + Brain has shown 40 per cent of employees in the UK’s banks, insurance companies and accountancy firms think the leaders in their organisation have put them under a lot of pressure in the past six months. This was the highest level of any industry in the UK and compares unfavourably to the average of 22 per cent. There are wider implications beyond the health of workers. Our findings demonstrated a correlation between sectors where employees say their leaders are under a lot of pressure and sectors with poor “brain-fried” leadership. Hills concludes that it is clear that the credit crunch and the resulting recession, far from bringing out the best in our leaders, has brought out the worst in them.