Weekend economic news round up


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Weekend economic news round up

Why current accounts are better for savers
Strict limits on the number of withdrawals allowed on savings accounts are making current accounts a more attractive option for savers struggling to beat inflation.
The Times, p. 64

Sipp operators under review
The Financial Conduct Authority has launched another review of the self-invested personal pension market. The review is the third of the Sipp market in the past six years.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Saving money while saving the planet
There is around £12bn invested in Britain’s green and ethical-retail funds, according to EIRIS, the sustainable-investment research specialists. Meanwhile, the number of ethical investors has tripled over the last decade to more than 750,000. Anyone invested in five leading ethical funds would have gained returns at least 50 per cent better than the FTSE All Share index in the last year. That grew by around 20 per cent, but the likes of Premier Ethical, Ecclesiastical Amity European, Old Mutual Ethical, Allianz Global Eco Trends and Alliance Trust UK Ethical all posted growth of around 30 per cent or more.
The Independent, p. 59

first-time buyers in race for property as loans hit six-year high
Figures published by the Council of Mortgage Lenders yesterday shows first-time buyers took out 27,100 loans in August, a 33% increase on a year earlier and up 7% on July. Separate figures from the Office of National Statistics painted a more gloomy picture for the construction sector, however. Output shrank by 0.1% in August compared with a month earlier, after a 2.8% rise in July.
The Daily Telegraph, p. 37
Also appeared in : Evening Standard London, p.2, The Guardian, p.37

Rich baby boomers stash cash as housing costs drain renters
Analysis on how banks have concentrated on using their limited available mortgage funding to lend to equity-¬rich homeowners, pushing aspiring new buyers out of the way.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 2

Renting is cheaper than Help to Buy
Estate agents have warned that buying a home through the Help to Buy scheme is still likely to be expensive than renting in major towns including London.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 6

Dunfermline cuts loan rates
Almost 8,000 borrowers with Dunfermline Building Society will see their monthly repayments fall as their standard variable rate (SVR) drops from 5.19 per cent to 3.99 per cent.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

JP Morgan falls to first loss under Dimon
JP Morgan yesterday reported a $380m loss in the three months to October on revenues of $23.9bn, lower than analyst forecasts of $24.1bn.
The Daily Telegraph, p. 35
Also appeared in : Financial Times, p.15, International Herald Tribune, p.10, The Guardian, p.36

Lloyds banks £977m from Australian sale
Taxpayer-backed Lloyds Banking Group today sold its remaining Australian businesses to local bank Westpac in a deal worth A$1.55 billion (£917 million). From an original target of £8.6 billion identified by the PRA at the end of 2012, Lloyds is now down to about £2.2 billion. Almost half of that could come from an extra large dividend payout this year from Scottish Widows
Evening Standard London, p. 55

Compensation deadline extended
The deadline for the Equitable Life Payments Scheme (ELPS) has been extended by a year until mid-2015.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Treasury Keeps an eye on Isa millions
The government is thought to be considering a cap of £100,000 on Isas amid claims about the growing number of “Isa millionaires”. Officials also considered reducing the tax-free amount that can be withdrawn from pension pots at age 55, from 25 per cent to 20 per cent.
The Sunday Telegraph, p. 1
Also appeared in : The Sunday Telegraph Money, p.1

Richard Evans reports on how a scheme set up to compensate Equitable Life victims is struggling to locate policy holders who are due a payment and will remain open for an extra year as a result. There are two Equitable Life compensation schemes – one for those whose pensions or investments date from 1992 or later and another for people who have with-profits annuities taken out before that date.
The Sunday Telegraph Money, p. 2

State pension ‘to rise by 2.5pc in 2014’
Focus on how pensioners can expect a 2.5pc rise in their state pension next year as the Government’s “triple lock” comes into play to guarantee a minimum increase. Under the triple lock guarantee, the payment increases by the higher of price rises and wage inflation, subject to a minimum rise of 2.5pc.
The Sunday Telegraph Money, p. 2

Crossword p2 puff Help to Buy deals may not be the cheapest
The consumer group Which? has said that first time buyers tempted by the Government’s Help to Buy scheme should look at other more competitive deals on the market before making a decision.
The Independent on Sunday, p. 73

Scheme to help first-time buyers gets off to early start
Jessica Winch looks at how the second phase of the Help to Buy mortgage scheme started last week, with many of the big lenders signing up to the scheme. Figures from the Council of Mortgage Lenders (CML) last week showed that even before the second part of Help to Buy went live on Tuesday, mortgage lending to first-time buyers was growing fast.
The Sunday Telegraph Money, p. 2

First-timers still banking on mum and dad
Anna Mikhailova looks at how househunters with a 5% deposit may need more help. There was widespread disappointment last week that lenders pitched rates under the Help to Buy mortgage guarantee scheme at roughly the same level as the small number of deals already available for homebuyers with 5% deposits.
The Sunday Times Money, p. 4-5

Osborne praised on Help to Buy
The Chancellor’s controversial Help to Buy scheme will receive the backing of one of Britain’s leading economic forecasters tomorrow. The £12bn mortgage guarantee plan, launched on Tuesday, is “well timed and targeted” and will help the housing sector to its fastest rate of growth since the market peak, the EY (Ernst & Young) Item Club will say.
The Sunday Times Business, p. 2

Forces face loan hurdle
Nationwide is making it more difficult for those who have served in the armed forces to purchase a home.
The Sunday Times Money, p. 2

Share Dealing Services
Useful lessons from the Royal Mail ‘staggers’
Those who bought through the Government’s Royal Mail share trading service remain as spectators until full trading starts on Tuesday. Investors who sold their Royal Mail shares first thing on Friday morning will be sitting on a tidy profit of around £250 from the £750-for-all punt.
The Sunday Telegraph Money, p. 2

Banks clean up phone insurance deals
An investigation by the Sunday Telegraph has shown that banks are quietly improving the inferior insurance policies contained in controversial “packaged” current accounts that cost up to £300 a year. Figures show that two in three customers who complain to the Financial Ombudsman Service about the mis-selling of paid-for bank accounts are successfully winning money back or compensation.
The Sunday Telegraph Money, p. 5

Jenkins’ rainmakers
Comment on Barclays completing its surprise £5.8bn share issue. In the prospectus for its cash call, Barclays confessed that its investment bank was struggling. Profits over the summer were “significantly below” last year. Its bond trading business, the group’s principal money-making machine of the past 20 years, appears to be the biggest problem.
The Sunday Times Business, p. 4

Canadians plot £8bn raid on RBS arm
TD Bank, one of Canada’s biggest banks, is considering an opportunistic swoop on Royal Bank of Scotland’s American retail banking business.
The Sunday Times Business, p. 1

Back from the brink – Ireland’s entrepreneurs show signs of life
Five years after the Irish government decided to stand behind its crippled banks – in a bailout that cost €70bn (£60bn) and forced the country to go cap in hand to the EU and International Monetary Fund for its own rescue package – Ireland is officially out of recession.
The Observer, p. 44-45

Investec offshore unit sale nears
Investec is in late-stage talks to sell its £4bn offshore investment trust administration business to boutique merchant bank Salamanca.
The Sunday Telegraph Business, p. 3

The above articles appeared on 12/10/13 & 13/10/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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