Weekend Economic news round up


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Weekend Economic news round up

Be a rate tart to dodge the ‘Teaser’ account trap
The Financial Conduct Authority is mounting an investigation into controversial “teaser” rates for savers.
The Times, p. 63
Also appeared in : Financial Times Money, p.2

Middle-waged to get burned in retirement
Pensions minister Steve Webb has warned that up to 12 million people will face a shortfall in their pensions,despite the introduction of automatic enrolment. He highlighted that middle-income workers are just as likely to be hit as low-paid ones. Exclusive research handed to The Independent shows that one in 10 middle-income workers, defined as earning between £30,000-£50,000, has no pension at all while one in five is currently not making any pension savings. The figures, part of the Scottish Widows Workplace Pensions Report, lay bare the full scale of the problems facing the squeezed middle-waged.
The Independent, p. 59

Bank of England is urged to intervene on house price bubble
The Royal Institution of Chartered Surveyors (Rics) argues in a report published today that the Bank of England should consider imposing a 5 per cent limit on annual average house price appreciation. The Council of Mortgage Lenders said yesterday that gross mortgage lending in June rose 29 per cent on a year earlier. The interest rates charged on mortgages have also been falling.
The Independent, p. 1-6
Also appeared in : Financial Times, p.1, International Herald Tribune, p.13, The Independent, p.59, The Times, p.52, The Times, p.51

£5,000 price rise from Help to Buy
Experts have predicted that the policies to kick start the property market will account for a third of an expected £15,000 rise in average house prices in the next two years. The average house prices is expected to rise to £185,000. Meanwhile, the Royal Institution of Chartered Surveyors has called for the Bank of England to restrict mortgage lending if house price growth tops 5 per cent a year. Elsewhere, a report by Sky News last night disclosed that house prices are now six times the level of average earnings.
The Daily Telegraph, p. 14

First-time buyers seek longer repayment terms
Hard-pressed first-time buyers are abandoning traditional 25 year mortgages and opting for much longer repayment terms – some as long as 40 years – so they can afford bigger loans, in the latest indicator of Britain’s emerging property bubble.
The Guardian, p. 43

Hackers’ attempt to steal bank millions foiled
The police has reported it has foiled an attempt to hack into Santander Bank’s computer system and steal millions of pounds after a man disguised as a BT engineer was caught attempting to plant a device that would have allowed hackers to gain access to its network from outside at the bank’s Surrey Quays branch.
The Daily Telegraph, p. 4
Also appeared in : Financial Times, p.3, Independent i, p.12, The Guardian, p.21, The Times, p.9

Happy to take bribe to switch
A new industry guarantee will be launched on Monday and it means that if you want to switch current accounts you can do so in just seven days.
The Times, p. 65
Also appeared in : Financial Times Money, p.2

TSB gears up to challenge biggest lenders
TSB is planning a rapid and vigorous push into the current account market as it seeks to satisfy the Office of Fair Trading that it can challenge Britain’s biggest banks.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 18

Axa fined £1.8m over mis-selling of Isas
The Financial Conduct Authority has fined Axa Wealth Services £1. 8m after uncovering potentially widespread mis-selling of stocks and shares Isas in Clydesdale Bank, Yorkshire Bank and West Bromwich building society branches.
The Guardian, p. 43
Also appeared in : The Daily Telegraph, p.39, Financial Times, p.19, The Times, p.55

Insurers ‘f louting new annuity code’
The Financial Conduct Authority is facing fresh calls to intervene in the £14bn-a-year annuity market, following claims that insurance companies are not playing fair with their customers.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 3

Borrowers to be offered replacement for PPI
Financial services companies are preparing to roll out a replacement for the now discredited payment protection insurance which it is claimed will provide similar benefits to PPI, but will not cost the borrower a penny.
The Guardian, p. 43

Co-op accused of creating false market with silence
The Co-operative Group is facing growing scrutiny about whether it fully disclosed its financial problems this year. Mark Taber, who is leading a campaign group of 1,500 of the bank’s bondholders, has called on the Financial Conduct Authority to investigate whether the group “created a false market” in its bonds by not making public the regulators’ concerns about its capital position.
The Times, p. 49

Watchdog targets ‘teaser’ accounts
Moneyfacts has found that one in five cash Isa accounts is luring savers with attractive rates based on bonus deals that plummet after the first year. The Financial Conduct Authority has announced plans to clamp down on deposit accounts that such carry bonuses.
The Sunday Times Money, p. 8

£15bn bill for pensions
UK businesses face a bill of more than £15bn to comply with changes to the pension system that mean companies must enrol staff in a retirement scheme. A report prepared by the Centre for Economics and Business Research on behalf of Creative Automatic Enrolment, a pensions consultancy, predicts that businesses employing fewer than 500 workers will spend a total of £15.4bn on set-up costs
The Sunday Times Business, p. 2

Hidden £300m raid on pensions
Teresa Hunter states that workers are being charged hundreds of millions of pounds in hidden fees on pensions held by their former employers. A report by the Office of Fair Trading is to call for a ban on this practice, known as deferred member charging. Steve Webb, the pensions minister, is also known to be concerned.
The Sunday Times Money, p. 1

Axa fined over mis-selling
Axa Wealth Services has been fined £1.8m for mis-selling investment products, and ordered to pay compensation to all affected customers.
The Sunday Times Money, p. 2
Also appeared in : The Observer, p.49, The Sunday Telegraph Money, p.7

Fund investors to be told exact costs from next year
Millions of investors will from next April be told in sterling exactly how much of their nest egg is eaten by fund management charges, The Sunday Telegraph can disclose.
The Sunday Telegraph Money, p. 2

It’s time to burst this myth of a new property bubble
Vince Cable has become the latest vocal critic of Help to Buy, the government’s flagship policy to boost the property market. The business secretary claimed that the scheme was fuelling a dangerous bubble in the market and called for the second part of the initiative to be scrapped.
The Sunday Times Money, p. 7

First-time buyers advised to focus on affordability
First-time buyers are flooding back to the housing market as economic conditions improve, alongside fears that low mortgage rates won’t last and a fresh housing bubble will push house prices beyond reach.
The Observer, p. 49

Lenders threaten Help to Buy plan
Report on how banks and building societies could derail the government’s controversial Help to Buy scheme amid concerns that they may be saddled with too many high-risk loans. The second phase of George Osborne’s flagship scheme to aid housebuyers is due to start in the new year. It is designed to allow homes worth up to £600,000 to be bought with a deposit of as little as 5% of their value.
The Sunday Times Business, p. 3

Cable backs land tax for HOME OWNERS
Liberal Democrats have proposed a policy, under which home owners would be charged an annual tax on the value of the land on which their houses are built. Under the policy farmers and others with larger plots of land in the countryside could face some of the highest bills.
The Sunday Telegraph, p. 4

Police smash £300m bank cyberheist gang
UK police have helped to smash a criminal network that hijacked 5m PCs and stole £300m from banks including HSBC in one of the world’s biggest “cyberheists”.
The Sunday Times, p. 9
Also appeared in : The Sunday Telegraph, p.2

Why the return of TSB to the high street feels like shotgun divorce
Chiara Cavaglieri and Julian Knight’s report on the return of the TSB, and what it means for the banking sector. Laura Willoughby of moveyourmoney.co.uk calls on savers to dump both TSB and Lloyds, because of its mis-selling practices. Mentions that the Money Advice Centre is launching a current account comparison table to encourage people to switch banks and increase competition in the sector, which is dominated by Lloyds, RBS, Barclays, HSBC and Santander.
The Independent on Sunday, p. 62

Reading between the lines of Barclays’ offer
Barclays is due to issue a prospectus for its £5. 8bn rights issue early this week.
The Observer, p. 41

How to reap the extra benefits of a packaged current account
Banks are offering a range of incentives to attract customers as new rules come into force tomorrow making it easier to switch current accounts.
The Observer, p. 48

Fed set to taper QE as US picks up
The US Federal Reserve is expected to announce plans to slow down its quantitative easing programme, which could clash with the current policy loosening by the Bank of England and the European Central Bank.
The Independent on Sunday, p. 57

Co-op rebels challenge bank losses
The Co-operative Bank has been accused of overstating its losses in an attempt to force through a rescue deal, according to a new group of rebel bondholders.
The Sunday Times Business, p. 1

The above articles appeared on 14/09/13 & 15/09/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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