Monday’s headlines 10.02.14

Economics
The eurozone’s new chief banking regulator says that weak banks should be allowed to fail. It has said that some of the region’s lenders have no future and should be allowed to die, heralding a far tougher approach to supervision across the currency bloc. (Cover of the FT)

The Bank of England is going to give guidance on Wednesday on how quickly interest rates will rise in Britain’s rapidly growing economy. After Mark Carney, bank governor, signalled that the BoE would move away from linking rate rises to unemployment, its Monetary Policy Committee has been considering how to provide clarity to markets without jeopardising growth. Many economists think the bank will use its scheduled quarterly Inflation Report to build on recent utterances indicating there is “no immediate need” to raise rates and that monetary policy will be tightened “gradually”. They also believe the bank will broaden its analysis to include other economic data beyond unemployment, probably including wages and underemployment. (p.2 of FT)

New research from the Business Trends survey, produced by accountancy firm BDO suggests that interest rates could rise in the “very near future”. The report states that business optimism reached record levels in January, signalling rapid economic growth over the next two quarters (p.B4 of The Daily Telegraph)

The Chairmen of Britain’s leading retailers have become significantly more optimistic about the prospects for the economy and have performed a dramatic U-turn on the performance of the government. According to the fourth annual survey of chairmen by headhunter Korn Ferry, 73% of chairmen are optimistic about the outlook for the economy, compared with just 15% last year. (p.B1 of The Daily Telegraph)

Personal Finance
Young people are bearing the burden of increasing levels of debt, according to a poll that shows how the older generation are escaping the squeeze in incomes. People in their 20s and 30s face a stark choice between “putting their lives on hold or racking up substantial debt”, according to the Demos thinktank that commissed the poll. The Populus poll of 1,775 adults found that more than half (55%) of those aged 18 to 24 – and 48% of those aged 25 to 34 – say their debts have increased over the past five years. This compares with a 13% rise for those aged over 65. (p.10 of The Guardian)

Property
Four in every 10 London homes sold for more than £1m last year were bou8ght by foreign buyers, according to new research. The number of homes being sold for more than £1m in Greater London rose to 6,145, up 20% on 2012. The research, from aviation firm Beechcraft Corporation, claims non-British buyers spent a combined £5.1bn on London properties (p.14 of The Independent)

Wriglesworth newspaper summary: 10th January 2014

Personal finance

Large families are losing up to £400 a week since the introduction of the Government’s weekly benefit cap, which has affected 31,000 households. Figures from the Department for Work and Pensions show that by November more than 2,600 households had lost more than £150 a week or £7,2000 a year. The Times, page 16. The Daily Mail has taken a different view of this – prior to the cuts 33,000 families had “hit the jackpot” under Britain’s “generous” welfare system. Front page. Also page 5, Daily Express …

Property

Francesca Steele looks ahead to 2014 in the Bricks & Mortar section of The Times. On the government pledge to pump £1 billion into infrastructure to unlock housing projects , Stuart Law CEO at Assetz, comments that this pledge is welcome and a boost to supply, creating homes and jobs, is to be welcomed. Forecasts around property prices are also buoyant with Knight Frank predicting an 8.4% rise in property prices this year. According to Mortgages for Business buy-to-let lending will reach £25 billion by the end of 2014 but investors should watch out for the “hidden” amendment to the CGT final exemption period. The Times, Bricks & Mortar, page 6-7.

Thousands of people have wrongly been identified as liable for bedroom tax, including some who now face eviction or have been forced to move to a smaller property as a result of an error by the Department for Work and Pensions. Housing experts believe that as many as 40,000 people could be affected by the mistake. The Guardian, pg 1.

Economics

Yesterday three of the UK’s biggest retailers (Tesco, Morrisons and M&S) admitted that their profits had been hit by poor Christmas sales. They blamed a squeeze on shoppers’ spending power and unseasonal autumn weather for falling underlying sales and lower than hoped for profit margins. The Guardian, pg 30, and pretty much everywhere else. This also highlights the changing nature of consumer spending habits with more online shopping and shoppers buying from small convenience stores.

Recruitment

Clifford Chance has adopted a radical approach to recruiting graduates in an attempt to break the “Oxbridge recruitment bias”. Staff conducting interviews are no longer given any information about which university the candidate attended, or whether they came from independent or state school. This scheme is currently the only one in the UK. In its first year, the scheme saw candidates come from 41 education institutions.  Independent, page 9.

Newspaper Summary: Thursday 5th December

Economic
The European Commission has imposed a record penalty of £1.4 billion for a fresh rate rigging scandal. The fine is against six firms, including bailed-out Royal Bank of Scotland, for colluding to fix key interest rate benchmarks. Total penalties for rigging libor and other key interest rate benchmarks now totals £3.5 billion. The Guardian, Pg 2; The Times, Business, Pg 54.
George Osborne was given a boost before today’s Autumn Statement with news that the economy is on track to grow at its fastest pace in almost four years in the final quarter of this year. Excellent performance by all three sectors last month indicated that the economy is likely to grow by 1% between October and December. The Times, Business, Pg 51.

Personal Finance
Later today it will be announced in the Chancellor’s Autumn Statement that the state retirement age is being raised to 70 – so people now in their twenties will have to work until they are 70 and those in their 40s until they are 69. In future workers will expect to spend around a third of their adult lives in retirement. The move will save around £500 billion over 50 years. Daily Express, Pg 2; Daily Mail, Pg 2; Guardian, Pg 1; The Times, Pg 1; The Independent, Pg 1; Daily Telegraph, Pg 1; FT, Pg 1 George Osborne is also set to announce £3 billion of public spending cuts.

Property
Building contractors in London are warning of rising prices over the next 18 months as fresh demand for construction collides with a shortage of building materials and labour. Construction companies are forecasting a rise of up to 5% in tender prices in London over the period, after they secured twice as much work in 2014 than in 2012. Since 2008 350,000 people have left the construction industry as developments were stalled or cancelled. The FT, pg 4.

Also stamp duty changes: the 1 per cent rate could be extended to properties up to £300,000 (see City AM, Pg 2).

Paper Summary: Tuesday 3rd December

Personal Finance

Millions of RBS and Natwest customers were left stranded without means of payment yesterday – one of the busiest shopping days of the year. Technical  glitches meant debit card and online payments would not work, leaving shoppers at tills with trolley loads of goods and diners finishing meals with no way of paying for them. The outage lasted most of the evening and RBS have offered to pay customers back who have been left out of pocket.  Following past problems with their online banking systems, RBS and Natwest are likely to face an exodus of customers to other banks.

Economics

David Cameron’s trade visit to China has shown early results as the superpower has indicated plans to invest billions of pounds in British infrastructure. Projects including nuclear plants and HS2 are likely to benefit from Chinese money, while Cameron is backing a free trade agreement between the EU and Beijing which would make it easier to sell British goods. The Daily Telegraph backs the move arguing that as China develops its growth cycle, creative industries, advisory services and technology will become far more important – showing a clear role for the UK. However, the trip has been criticised for insufficient focus on human rights issues and the banning of a Bloomberg reporter from a press conference.

Recruitment

A third of big businesses that signed up to cutting gender inequality have done nothing  towards their targets, including not publishing their gender make up. Twenty per cent of the work force is covered under the Think, Act, Report scheme but many are being failed according to The Times.

Property

Lord Deben, the former Conservative cabinet minister has urged the government not to build a new generation of garden cities, arguing the land is needed for growing food. He argues that the original garden cities were a response to appalling living standards in towns which is no longer the case. However, conservative inaction on building was attacked by Labour peer Lord Adonis in the Lords yesterday.

Daily Paper Summary: Tuesday 19th November 2013

Economics

Britain is now growing faster than any of the other leading economies for the first time since the recession. Growth of 0.8% in the three months to September put the UK at the top of the G7 group, beating Japan, German and the USA. This follows the 7.2% shrinkage of the economy that occurred during the recession. The Times, pg 48.

Personal Finance

Graduates are now earning 12 per cent less than those who left university before the financial crisis, new figures show. Analysis by the FT of student loan data found that new graduates earning £15,000 or more in 2011-2012 were paid on average 12 per cent less in real terms than their 2007-2008 counterparts at the same stage of their careers. The Daily Telegraph, pg 2.

Recruitment

Private school pupils should start considering alternatives to university and be more open-minded about other routes into employment. Hilary French, President of the Girls Schools Association, called on parents to embrace “alternative avenues” such as apprenticeships rather than the Russell Group universities which “aren’t for everyone”. The Daily Telegraph, pg 16.

Property

According to The Times the “tide has turned” for homeowners outside of the South East with demand for property in the North increasing fast and starting to sell again after the 2008 crash – the ripple effect is in full force. Liverpool has become the fastest place to sell a home with homes going under offer within 18 days. The Times, pg 15. But a crash in house prices is one of the fastest growing risks for Britain’s lenders. The Times, pg 43; The Guardian, pg 30.

Tuesday’s headlines 12.11.13

Economics

A new study published yesterday revealed that The City of London is increasing its lead as the most competitive economic region in the UK – despite the financial crisis and government efforts to rebalance the economy. The report looked at factors ranging from business start-up rates, education levels, gross value added, employment rates, pay and productivity across 370 regions. (p.2 of City A.M.)

Personal Finance

Four million more households will be faced with higher energy bills this winter as yet another of the Big Six prepares to raise its prices. (Cover of The Daily Telegraph)

However, energy firms will be told not to treat customers as mere “cash cows” or to make profits “at the expense of the elderly and vulnerable”, by Minister Ed Davey at the Energy UK Annual Conference today. He said there has been a decline in the levels of trust between those who supply the energy and those who use it. Energy UK have said they are doing everything they can to ensure that everyone can keep their lights and heating on this winter (p.10 of City A.M. and p.4 of The Independent)

Property

The latest survey from RICS shows how demand is rocketing in every part of the country but new analysis has been unveiled, which highlights the extent of the UK’s housing shortage. Colin Wilkes of Inside Housing and the housing charity Shelter have estimated that roughly 1.1% of the country is occupied by full-size gold courses – the same area that the government says is taken up by domestic buildings. The inclusion of smaller golf courses means that the full golf footprint is more than double the size. (Cover of City A.M.; RICS also mentioned on p.21 of The Times and cover of The Independent)

Critics of the government’s Help to Buy scheme warned last night that it could fail to make housing more affordable, stating that the latest RICS figures are further evidence of the market overheating. Chris Leslie, the shadow Chief Secretary to the Treasury, has called for the Bank to launch an immediate review of the scheme rather than waiting until next year. (Cover and p.3-4 of The Independent)

Recruitment

According to research from business advisory company Deloitte, London has more people employed in high-skilled sectors than any other city in the world. They studied 22 sectors including: banking, legal services, digital media, culture, software development and education. It found that London had 1.5million people employed in these sectors, compared with 1.2million in New York, 784,000 in Los Angeles, 630,000 in Hong Kong, and 425,000 in Boston. The company has predicted growth of 300,000 jobs in the city by 2020, of which at least a third would be in highly skilled sectors. (p.4 of The Times).

Today’s headlines 21.10.13

Economics

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)

Personal Finance

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)

Property

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.