Thursday 9th January

Economic

China has offered to invest in Britain’s railways by funding and building links to a new Birmingham station on the high-speed HS2 network. Bank of England figures showed that lending to SMEs increased significantly in the three months of last year. Brian Murphy Mortgage Advice Bureau says in The Times “increasingly competitive and mortgage access visibly improved”. The recovery is snowballing as mortgage demand, lending and hiring picks up.

PF

Allister Heath writing in CityAM says our pension system is broken. The public doesn’t save enough and is forced to rely on the state to finance it all or a large part of its retirement years. The only progress has been the increase in retirement age. Private pension schemes have been decimated by idiotic government rules, final salary pensions are finished for younger private sector workers and the entire annuity system is complex. The retirement prospects for the majority of under 35 year olds is catastrophic.

Property

Housing bubble fears as demand for mortgages soars boosted by Help to Buy, says The Telegraph and Carney could scrap Help to Buy next year say top bank analysts as booming housing market gathers pace according to CityAM.

Recruitment

Jobs market boom sustained by Midlands and North says KPMG and the Recruitment and Employment Confederation (REC) which shows the number of people taking on permanent positions rose last month at its quickest rate since March 2010, with the steepest rises in the Midlands and North. These regions also showed the fastest recorded rise in temporary posts since 1998, however, a skills squeeze is hitting London.

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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.

Newspaper Headlines – Thursday 14th November

Main Economic/Business
Rate rise signalled for 2014 as UK recovery takes hold – The Bank of England has unexpectedly brought forward its forecast for when it predicts unemployment will fall below 7%, meaning it could raise interest rates as early as next year. Financial Times, p1; Independent, p18; Times, p1

Property

Britain’s housing crisis is the latest subject to be tackled by an annual competition founded by Lord Wolfson, chief executive of Next. Launched this morning, the prize is offering £250,000 to the author of the best plan to create a new garden city. City AM, p6

The developer of the capital’s ‘Cheesegrater’ British Land has reported a 6.6% rise in its underlying pre-tax profits to £146m in the six months to September. Much of the company’s success has been driven by the strength in its London portfolio which includes the Cheesegrater and the large Regent’s Place scheme near Euston station which has already secured lettings to Manchester City Football Club and Facebook. The Times, p51; City AM, p11

Recruitment

Unemployment in the UK has fallen to 7.6% of the workforce, its lowest since May 2009. Most of the jobs taken were full time, although 54,000 were temporary. FT, p2

A sharp rise in the number of jobs that require a degrees as a minimum entry requirement has led to a qualification inflation according to Vince Cable. He said that large number of students were being forced to gain university degrees even though they were superfluous to many careers. Graeme Paton, Telegraph, p6

Personal Finance
Research funded by the Joseph Rowntree foundation shows that a third of the 1.3m families with children in poverty are single breadwinner families. Guardian, p20

Daily Paper Summary: 11th November

Property

Over 2,000 people have put in offers on homes during the first month of the Help to Buy scheme, under which the taxpayer guarantees up to 15% of mortgages. David Cameron will welcome today the early interest in the scheme. On average applicants have requested to borrow £155,000 but only three quarters are first-time buyers. In the Times, it has been reported that almost a quarter of those using the scheme are trading up rather than buying their first home. Though the rules do not enable homeowners to purchase a second home, the mortgage can be used to buy a more expensive home with loans that require a deposit of between 5% and 20%. And the maximum value of a property bought with a help-to-buy mortgage is £600,000. The majority are couples applying with a joint salary of under £50,000 to borrow about £159,000. What is surprising is that 31% of people in Britain spend more than a third of their income on mortgage or rent, according to a poll commissioned from Ipsos Mori for BBC One’s Panorama. If people spend 35% or more of their disposal income on rent or mortgages that means they may not be able to afford other basic needs such as food.

Personal Finance

The coalition is  searching for new ways to find £1.6 billion a year by means of tax rises or spending cuts to fund measures to reduce household energy bills. George Osborne is thinking about shifting the cost of government-backed insulation schemes away from bills in a step that would reduce household energy prices by up to £75 a year. However any decision to instigate the switch with the Energy Companies Obligation (Eco) and the smaller Warm Home Discount off bills will require £1.6billion a year to fund it. The issue is said to be brought into the limelight in the Mr Osborne’s Autumn statement in early December which will discuss his announcements in more detail. It’s clear the coalition is under pressure to identify measures to cut household bills after Ed Milliband’s pledge to freeze energy prices if Labour wins the forthcoming election.

Economy

A handful of official data, positive surveys and reports are due out today, offering further evidence that the business community is increasing its sights and pushing Britain on track to run the US close to achieving the fastest rate of growth in the world’s developed economies next year.  There are fresh new signs of recovery: rising business confidence, a boost in economic growth, a further fall in unemployment and an expected slowdown in the inflation rate. These factors are expected to offer further light and optimism for the Chancellor and the Bank of England to be more upbeat about the outlook for the economy. Lloyds Bank is reporting a record rise in business activity in the English regions among its customers and a new peak in job creation in both England and Wales. Official figures tomorrow are thought to show the consumer price inflation rate down to a six month low of 2.5% followed by an appreciable fall in employment on Wednesday.  Lloyds bank showed that in a recent survey that job creation remained robust in England and Wales last month to reach a 13-year peak and five regions reported record growth in new business.

Recruitment

The UK’s short-term jobs outlook is at its strongest for five years a survey of 1,000 employers has found as the Bank of England gets ready to show a faster fall in unemployment this week. Optimism for employment prospects is highest in manufacturing and retail, among small and medium sized companies and in southeast England according to the Chartered Institute of Personnel and Developments quarterly labour market outlook.

Paper summary: Wednesday 30th October 2013

Economics

The Department for Transport yesterday lowered the forecasted benefits of the High Speed 2 Railway, but insisted that the £50billion project will still be of significant benefit to the economy. The Y-shaped route from London to Birmingham, Manchester and Leeds is now expected to generate £2.30 for every pound invested (lower than the original £2.50), due to the project’s inflating budget. City AM, pg 2. Meanwhile Labour will back the scheme if the project’s incoming chairman, Sir David Higgins, has a free hand in bringing down costs. Pg 1, The Guardian.

Personal Finance

Executives representing the big six energy companies faced MPs in the House of Commons yesterday, blaming increases in green taxes, transport costs and wholesale costs for the increased prices of gas and electricity. Tony Cocker, of eON, was the only CEO to attend. EVERYWHERE.
Excessive pension fund fees will be legally capped in a move that will prevent workers from being “fleeced” out of hundreds of thousands of pounds, ministers will announce today. Steve Webb, pensions minister, said that this is a “full frontal assault” on fees that can eat up as much as half of a worker’s retirement savings. The Daily Telegraph, pg 1; The Times, pg2; The Express, pg 1; The Daily Mail, pg9

Property

Statistics from the Bank of England yesterday stated that 66,735 loans were approved for house purchase in September – the most since February 2008. Analysts say that this is further evidence that the housing market is improving off the back of state backed mortgage lending scheme. However, the figure is still well below the pre-recession peak of around 100,000 approvals per month. Daily Mail, pg71.

Recruitment

Junior staff at Goldman Sachs are to get more regular hours and a wider circle of peers to share the burden of their workload, the investment bank said yesterday. The proposals are among several which have been proposed by a new task force which is monitoring the working conditions of junior bankers. City AM, pg1.

SME

Mortgage approvals hit post-crash high but lending to small and medium sized businesses is down again according to statistics from the Bank of England. The Bank’s monthly report in September showed that lending to SMEs fell by £400million in a month whereas overall net lending was up £700million in September. The Times, pg46

Newspaper Summary – Tuesday 1st October

Property

Mortgage lending has hit 2008 levels even before the Help To Buy extension kicks in, according to figures published by the Bank of England. Many commentators have been critical of the scheme. Sue Foxley from Cluttons added that increasing funding in the absence of new supply in the capital and SE will hike up prices ahead of earnings and do little to alleviate renters’ fears. City AM, p3;

 

Main Economic/Business

At the Conservative Party conference yesterday, Chancellor George Osborne signalled another six years of austerity as he set out his aim for a UK budget surplus by 2020.  He has vowed to carry on squeezing welfare and other spending to meet his new fiscal objective. FT, p1; City AM, p1

 

Personal Finance

The Chancellor has announced that he will freeze fuel duty until 2015 as he wants British households to ‘share in the rewards’ of the economic recovery. According to Conservative aides, the party will fight the next general election claiming that a litre of petrol is 20p cheaper than it would have been under Labour’s proposed fuel duty escalator. However George Osborne conceded that the money to pay for the freeze was not yet in place. City AM, p2; Telegraph, p1;

 

Recruitment

New vacancies are at their highest for four years, adding to recovery hopes though optimism has been tempered by a continued salary squeeze. The report from Reed shows job opportunities have risen by almost a quarter in the last year. The best performing sector was construction with a 78% increase, while vacancies in retail and manufacturing were almost up a third compared to a year ago. Brian Groom, FT, p4