News Headlines – Thursday 30th January

Economy

An independent Scotland would have to give up some sovereignty in a monetary union with the UK to stop the mistakes of the beleaguered Eurozone, according to Mark Carney. Citing the eurozone, he said a “durable, successful currency union requires some ceding of national sovereignty”. Scotland would have to decide between full independence and successfully keeping the pound, the governor of the Bank of England announced on Wednesday. Mark Carney warned that a currency union could only work when a state surrenders some of its “national sovereignty”. He also suggested that to make a currency union work, Scotland would have to hand over more fiscal powers than eurozone countries currently do. The SNP has insisted that an independent Scotland would retain “full autonomy” to use its fiscal powers – which generally is understood to mean tax and spending.

Recruitment

Accountants seem more optimistic regarding bonuses according to recruiter Mark Satin. They have found that 40% of accountants are expecting a bonus to be paid of around 18% of their salary, that equates to the highest level in three years. In monetary terms that would be equivalent to an average bonus of £11,587. Mark Satin also found that the pay gap between male and female accountants is also widening and after a decade of their career women can be earning £26,000 less than men. Interestingly Robert Walters, the recruitment company, found that 64% of accountants are looking to change jobs in the next 12 months and more than a third in the next three months, suggesting the industry has a high turnover of staff. Career progression is said to be a stronger driver for movement than salary.

Property

House prices have been climbing at their fastest rate since 2010 this month, representing an increase of £14,246 on to the value of an average home in a year according to Nationwide’s latest figures. On top of this, the 0.7% rise for this month tool the yearly increase to 8.8%, which marked the 13 month in a row to show a rise. The jump is the biggest experienced since May 2010, and caused the value of a typical home to climb up significantly. The housing market is gaining strength having benefited from strong gains in employment, record low mortgage rates and growing confidence. The boost in activity seems to be wide reaching and first-time buyers are said to have a central role in powering the market forward. Land Registry figures also support the Nationwide data showing that prices were up by 4.4% in the 12 months to December, while there was also a big leap in sales growth. As Peter Rollings, CEO of Marsh & Parsons, points out, demand is rising, competition is warming up and first-time buyers are returning to the market as improved lending conditions stimulate movement at all levels. The London market is moving at a different pace from the rest of the country due to the imbalance of supply and demand which is propping up prices.

Personal Finance

Over 600,000 parents affected by the Government’s new child benefit changes could be faced with an unexpected fall in their salary next month. The allowance will be deducted from their wages by HM Revenue and Customs. In fact parents expecting to repay the money in next year’s self-assessment tax return due on January 31st, 2015 could see money taken off in the next two months. HMRC yesterday apologised for the confusion and said the charge can be prevented by getting in touch with the tax collection department to reverse the code change. Currently, one can receive £9,440 in income before paying a penny in tax. However HMRC will change this tax code to reclaim money owed in child benefit. Apparently over 460.000 parents  chose to give up their payments immediately. But the problem affects around 640,000 others who continued to receive child benefit. Hidden on the tax form was a box that asked if they wanted benefit received between April 3 2013 and April 5th this year – and anyone who did not tick this box will see money taken from their salary.

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