IMF at war with George Osborne

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IMF at war with George Osborne

IMF at war with George Osborne
The International Monetary Fund (IMF) has turned on Britain’s chancellor, as its top economist accused George Osborne of “playing with fire”. However, the Treasury fought back, and free market economists argued Osborne should ignore the IMF, step up his spending cuts and chop red tape to boost growth. “The danger of having no growth, or very little growth, for a long time is very high,” the IMF’s Olivier Blanchard told Sky News. “You’re playing with fire when you get to very low growth rates. If you can decrease the speed of fiscal consolidation maintaining credibility I think it’s worth considering.”
City AM London, p. 1
Also appeared in : Financial Times, p.9, The Independent, p.52, Daily Mail, p.68, Evening Standard London, p.2, International Herald Tribune, p.1, International Herald Tribune, p.15, The Daily Telegraph Business, p.1

EU approves plans to cap City bonuses
Tens of thousands of City workers were a step closer to having their bonuses capped by new EU rules yesterday, after the European Parliament approved the plan to ban variable pay rising above the level of salaries.
City AM London, p. 2
Also appeared in : International Herald Tribune, p.15, Evening Standard London, p.38, International Herald Tribune, p.1, The Independent, p.54-55

Credit unions get £38m to take on loan sharks
It has been revealed that the Government is splashing out £38m to help credit unions take on payday lenders. The Department of Work and Pensions handed the cash to the Association of British Credit Unions (Abcul) yesterday to help unions ex¬pand and modernise. It is hoped the move could save hard-¬up borrowers up to £1bn in loan interest repayments by March 2019. That is the extra amount they would have been charged if forced to turn to short-¬term, high-¬cost lenders such as Wonga, which quotes an APR of 4,214 per cent.
The Independent, p. 53
Also appeared in : Financial Times, p.4, Daily Mail, p.48

Italy seizes €1.8bn in Nomura inquiry
Italian prosecutors are seizing about €1.8bn (£1.5bn) of assets from the Japanese group Nomura Holdings as part of an inquiry into Banca Monte dei Paschi di Siena’s use of derivatives to hide losses.
The Independent, p. 54-55
Also appeared in : Independent i, p.43, International Herald Tribune, p.1-19

De Vere to sell venues arm for up to £300m
De Vere Group, Britain’s largest conference centre chain, was yesterday put up for sale by its owners and is expected to fetch up to £300m. The company has been trading well and is expected to generate around £28m earnings this year, helped by long-term contracts with blue-chip clients such as BMW.
City AM London, p. 12
Also appeared in : Daily Express, p.54

Monetary hits can’t do it all
Monetary policy cannot do all the work of stimulating the economy, Bank of England head Sir Mervyn King said last night in the US.
City AM London, p. 5

ING US worth $6bn on float
ING Group’s insurance unit ING US plans to price shares in its float at between $21 and $24 each, valuing the company at up to $6.16bn (£4.29bn) in what could be one of the biggest offerings this year.
City AM London, p. 7

Swiss bank pay leads the way despite move to cut rewards
Swiss bankers’ pay is the highest in the world according to an SNL Financial study of 17 major global institutions.
City AM London, p. 7

Ex-Aldermore chief to join Co-Op bank
The Co-Op Bank yesterday named former Aldermore chief financial officer (CFO) John Baines as interim CFO, little over a month after his predecessor at the Co-Op moved in the other direction.
City AM London, p. 7

Share price dips despite jump in Goldman profit
Goldman Sachs’ profits increased in the first quarter of the year, the bank reported yesterday, as investment banking and management incomes improved.
City AM London, p. 3

Better than they expected but not good enough for investors
Lloyd Blankfein’s words cast something of a pall over yesterday’s Goldman Sachs first quarter results announcement, in contrast to the numbers themselves.
City AM London, p. 3

Paulson loses $1bn in gold price slump
It is believed that the collapse in the price of gold this week has cost hedge fund titan John Paulson as much as $1bn (£650m) of his own money. The 13 per cent slump in gold since Friday has dragged the metal to a two-year low and hammered Paulson’s personal wealth. He started the year with 85 per cent of his own hedge fund investments in gold class shares, believing the position to be a good hedge against inflation, according to Bloomberg.
City AM London, p. 3

Association of British Insurers raises flag over Barclays coco bonds ahead of AGM
The Association of British Insurers has raised flags over Barclays’ controversial coco bonds, saying the money-raising method dilutes shareholder value. The ABI has issued an “amber-top” warning over the convertible bonds, which transfer into Barclays equity if the bank gets into trouble.
City AM London, p. 8

‘Insider trader’ deal
Richard Bruce Moore, A Canadian investment banker who was charged with insider trading during the £3.1 billion takeover of Tomkins has agreed to settle with the US Securities and Exchange Commission for $340,000.
The Times, p. 43

Migration rules pose threat to City
Editorial comment on the way London depends on its ability to attract the very best talent to work in the financial centre.
City AM London, p. 21

Thatcher’s death has reminded us of the value of freedom and liberty
A comment on the death of Margaret Thatcher.
City AM London, p. 18

Ignore the siren voices that want us to give up on austerity
Comment on the IMF’s latest lament about the British economy last night.
City AM London, p. 2

Good times for mortgage hunters
Low rates and higher lending volumes are great, but also keep an eye on costly arrangement fees, writes Yogesh Chandarana.
City AM London, p. 22

Government schemes hoping to unlock the property market
This year has seen renewed optimism in the UK housing market, according to the Ernst & Young Item Club’s Spring Forecast.
City AM London, p. 23

CITY MOVES
BAE Systems Detica, The business and technology consulting firm has appointed Morag Lucey as chief marketing officer to head its marketing and strategy functions.
City AM London, p. 16

Healthy future for check-up system
A new system of check-ups and care that allows more patients to be looked after closer to home and speeds up NHS response times is set to change GP practices for the better. Using advanced technology installed in surgeries, the iQudos service is being rolled out nationally, beginning with men’s health and prostate conditions. Maisha Frost reports.
Daily Express, p. 35

Is gold still a safe haven?
Recent sharp falls in the price of gold highlight the difficulty investors face in keeping their cash safe, experts suggest. Fears over slowing growth in China and speculation that the banking crisis in Cyprus may lead its government to sell off its gold reserves pushed the metal’s value to a two-year low earlier this week.
Daily Express, p. 31

Spring bounce for the housing market
Government schemes have prompted a jump in first-time buyers, writes Harvey Jones. Jones notes that top loans up to 85pc LTV include a two-year fix from Skipton, charging 3.49pc with a £995 fee, and a five-year fix from Nottingham Building Society at 3.98pc with a £999 fee.
Daily Express, p. 32-33

New chief at Rio aims for £3bn cost cut
The new head of miner Rio Tinto is aiming to cut costs by £3. 27bn to combat falling global commodity demand. Sam Walsh pledged “tough targets” for reducing overheads and other costs by the end of next year but gave no details.
Daily Express, p. 50

Miners come sparkling back
EasyJet flew 11p higher to 1149p amid talk that the chairman of clothing retailer Next John Barton may replace Sir Mike Rake as chairman of the budget airline. Shares in Next fell 24p to 4348p.
Daily Express, p. 54

IMF warns UK on austerity policies
The chancellor was last night told he was ‘playing with fire’ by persevering with strict austerity policies as the economic outlook in Britain was downgraded. The International Monetary Fund slashed its UK growth forecasts to a mere 0.7 per cent in 2013 and 1.5 per cent in 2014 – a 0.3 percentage point cut for each year.
Daily Mail, p. 4

Euroland and a boom in broken promises
Downing Street was ‘tight-lipped’ following David Cameron’s talks at the weekend with Germany’s Angela Merkel.
Daily Mail, p. 18

Savers suffer 60pc rate cut since summer
Research has revealed that savers have seen rates crumble by as much as 60pc since last summer. A series of successive cuts has followed the launch of a government scheme last July that offers banks and building societies a cheap source of money. The knock-on effect is that banks and building societies no longer need to rely so heavily on their savers. Particularly hard hit are savers in those accounts that were among the top deals on offer this time last year.
Daily Mail, p. 46

Only cash Isa deals can beat 2.8pc inflation
The cost of living has risen by 2.8 pc over the last 12 months, government figures revealed yesterday. The best you can do in an easy-access account is 1.6 pc (2 pc) from Skipton BS. At this rate, basic-rate taxpayers are missing out to the tune of 1.2 pc a year (that’s inflation at 2.8 pc less interest of 1.6 pc) turning the spending power of each £100 into £98.80.
Daily Mail, p. 46

Halifax ditch customers who want to pay by cheque
Halifax customers are being turfed out of one of the High Street’s most popular current accounts just because they want to pay by cheque.
Daily Mail, p. 51

Millions held to a £72 ransom by NatWest
Millions of current account customers with NatWest and RBS face new charges of £72 a year plus interest for dipping more than £10 into their arranged overdrafts. The state-backed bank will force its current account customers to pay the extra charges on top of the interest of 19.89 per cent from July. The only way to avoid the charges is to pay up to £24 a month for a packaged account with the bank.
Daily Mail, p. 51

The mortgages that come with a £1,500 bung!
Home loans that tout freebies such as cashback and free legal bills can work out hundreds of pounds cheaper than deals with rock-bottom interest rates. Competition in the mortgage market is heating up because of the Government’s £80billion Funding For Lending scheme encouraging lenders, and many are turning to cash handouts and other incentives – or both – to win customers. The cashback typically ranges from £150 to as much as £1,500 – and is usually paid straight into your bank account by the lender on completion – while the savings on legal work and valuations can benefit borrowers by as much as £850.
Daily Mail, p. 48

The heating cover that leaves you freezing cold and boiling with rage
A spokesman for the Financial Ombudsman Service says it has been inundated with thousands of complaints about insurance cover for boilers from British Gas. In its annual report for 2012, British Gas announced a 16pc rise in profits to £312 million at its residential services unit, which includes services such as boiler repairs. With as many as two in five households paying for some form of boiler cover, according to estimates by price comparison website uSwitch, that’s more than £15 billion in potential revenue.
Daily Mail, p. 47

Tide turning?
Pension payout rates edged 3pc higher between January and April. A £100,000 pot will buy a man aged 65 an income of £5,838.
Daily Mail, p. 47

Wealth warning
Banks may be forced to warn savers with more than £85,000 in their account that their cash is not protected by the financial safety net. 8 in 10 MPs in a survey called on banks and building societies to alert savers whose money is at risk from a default.
Daily Mail, p. 47

Pension seekers
One in four people have lost track of at least one pension pot, a survey suggests. Five million people are estimated to have around £3 billion sitting in missing nest eggs.
Daily Mail, p. 47

Tullett boosted by buyout buzz
Don’t be short of Tullett Prebon, writes Geoff Foster. That was the late shout in dealing rooms as speculative buying helped shares of the loss-making inter-dealer broker retrieve an early fall to touch 262.6p before closing 4.7p better at 259.4p.
Daily Mail, p. 70

British beauty ‘murdered and burned by her Polish lover for £120k payout’
A factory worker murdered his British girlfriend and burned her body in a plot with his lover and her uncle to claim a six-figure insurance payout, a court heard yesterday.
Daily Mail, p. 27

MEPs vote to put cap on bankers’ rewards
Yesterday european lawmakers agreed to enforce a strict cap on the amount banks can dish out in bonuses. MEPs voted by 595 votes to 40 on plans to cap payouts at 100pc of a banker’s annual salary, or 200pc if shareholders approve. It is a blow to the Government, which has been fighting the restrictions. Chancellor George Osborne has pleaded that the UK already has the toughest regime in Europe for bankers’ pay and that capping bonuses could ‘have a perverse effect’.
Daily Mail, p. 69

1 in 5 mutuals is ‘locals only’
One fifth of the UK’s 47 building societies are now open only to local residents. Dudley, Ipswich, Loughborough, Tipton & Coseley and Vernon building societies have all shut their doors to customers outside of their local area since the end of 2012, according to data from Moneyfacts.
Daily Mail, p. 50

13,000 gripes for Big Five
A report has revealed that Britain’s five biggest banks received an astonishing 13,000 complaints a day last year. In just six months, a huge 1.7million gripes were lodged against Barclays, Lloyds Banking Group, Santander, RBS/Natwest and HSBC. More than six in ten concerned mis-sold payment protection insurance (PPI). The remainder were for shoddy service, unfair charges or sales tricks on products such as current accounts, general insurance, credit cards, savings and investments.
Daily Mail, p. 50

Barclays’ investors cry foul over bank’s use of CoCos
Barclays has failed to win the all-clear from the Association of British Insurers about the way it is using complex financial instruments to raise capital and pay its bankers. The powerful investors’ group has issued an “amber top” alert, urging investors to think twice before backing the bank, before its crucial shareholder meeting next Thursday.
The Guardian, p. 25

Stubborn inflation raises pressure on Carney’s first move
According to the Office for National Statistics, inflation stayed stubbornly above target last month as the rising cost of books, digital cameras and car insurance offset lower prices for fuel, sofas and armchairs.
The Times, p. 41

The above articles appeared on 17/04/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

Charterbridge Private Financial Planning, Independent Financial Advice, Thornbury, Bristol.