Weekend economic news round up


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Weekend economic news round up

RBS given Fairbanking award
The Fairbanking Foundation has bestowed its first ever five-star award on a high street savings product: RBS/Nat-West Instant Saver with Savings Goals account.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Great Scot! How the City high-flyer upped sticks to raise a northern star
Today, Alliance manages assets of £4.7 billion, including £1.6 billion in third-party funds. Another £5 billion is administered via its online savings platform, which has been quick to adapt in areas such as junior ISAs. The hope is that the savings industry’s retail distribution review means financial advisers will no longer be so reluctant to recommend investment trusts.
Evening Standard London, p. 56

Scottish Widows purchase pushes Aberdeen forward
Aberdeen Asset Management’s £550m acquisition of Scottish Widows Investment Partnership made it the biggest investment group in Europe. It can challenge the US asset management groups like Vanguard and BlackRock.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 14

Stars align for UK property markets
The Council of Mortgage Lenders said it expects the number of housing market transactions will top one million this year, for the first time since 2007.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 3

1m more households ‘face being forced into private renting’
An extra million households will be forced into rental accommodation over the next five years as rising house prices shut would-be buyers out of the property market, new research warned today. Savills’ Susan Emmett said: “Although the property market is strengthening and mortgage availability is improving, many households are being left behind. The new excluded are unlikely to qualify for social housing yet their incomes are not high enough to take advantage of the market recovery.”
Evening Standard London, p. 57

Market town houses 6% more than in county towns
House prices in market towns are on average £14,000, or 6 per cent, higher than their county average, claims Lloyds Bank.
The Independent, p. 69

Sealed bids are back in property scramble
In the surest sign that the UK housing market is on the rise again, the National Association of Estate Agents has reported that rising demand from buyers means that sellers, looking to maximise the value of their homes, are asking people to submit sealed bids.
The Times, p. 38

Nationwide to issue securities to raise £500m
Nationwide building society will raise up to £500m by issuing a type of debt that meets new rules on capital but does not compromise its mutual model, becoming the first customer-owned lender to do so.
The Guardian, p. 45
Also appeared in : Daily Express, p.77, Daily Mail, p.99, Financial Times, p.16, The Daily Telegraph, p.37, The Times, p.58

Osborne orders Co-op Bank inquiry
George Osborne yesterday ordered an independent investigation into the near downfall of the Co-op Bank. The Chancellor confirmed the inquiry under the Financial Services Act after the troubles at the bank were discussed at a board meeting of the Prudential Regulatory Authority (PRA). The meeting was chaired by Mark Carney, Governor of the Bank of England, and attended by the regulators Andrew Bailey and Martin Wheatley. The investigation will look back at least five years into the run up to the Co-op Bank’s woes, and will also cover the Co-op’s takeover of the Britannia Building Society at the height of the banking crisis and the failed “Project Verde” bid earlier this year for 632 Lloyds Bank branches.
The Daily Telegraph, p. 37
Also appeared in : Daily Mail, p.98, The Guardian, p.15, The Independent, p.9

Lloyds sets up sell-off
Lloyds Banking Group will gain the right to apply to offload more of its stake in St James’s Place next week.
The Times, p. 57

MPs face questions as police arrest Flowers
Co-op Bank chairman Paul Flowers was arrested by police today over drugs allegations, deepening the scandal engulfing politicians and City regulators. Tory MP David Davis said the Treasury should have picked up on warnings signs about a Co-op bid to buy Lloyds branches.
Evening Standard London, p. 2

Aberdeen buys S Widows fund arm
Aberdeen Asset Management has bought Scottish Widows Investment Partnership from Lloyds in a deal that will make it the biggest listed investment group in Europe. Swip, the investment arm of Scottish Widows, is known for its passive equity funds and so should provide diversity to Aberdeen which is better known for active management and emerging market funds.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Rate rises ‘won’t be happening any time soon’
Interest rate rises are “not going to happen any time soon” as the economy takes time to regather strength, the Bank of England’s chief economist Spencer Dale said today. In a local radio interview Dale underlined that the Monetary Policy Committee will only raise rates from their current record low of 0.5% “when we see a sustainable recovery and the economy is strong enough to withstand it”.
Evening Standard London, p. 57

JPMorgan settles with US watchdog for record $13bn
JPMorgan Chase has reached a $13bn settlement with US authorities over claims it misled investors in mortgage-backed securities. It’s the largest penalty by the DoJ against a single financial institution.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 14

Banks where staff may be a thing of the past
Major banks are understood to be in talks to introduce “express” branches, smaller outlets that would be almost completely devoid of staff.
The Daily Telegraph, p. 14

Savers lured by decade-long fix
Leeds building society has launched a savings deal with 4% interest, but it will require the customer to lock away their deposits for 10 years.
The Sunday Times Money, p. 6

A Sunday Telegraph investigation has indicated that insurers have been making profit by directing savers into pensions designed for “superhealthy” people who live to an average age of 93, depriving pensioners with health conditions ranging from raised cholesterol or terminal cancer o an average of £450 in annual old age income. mention of current figures from the Association of British Insurers showing that standard annuity rates now vary by 10pc between providers.
The Sunday Telegraph Money, p. 1

British investment in European property has been predicted to rise as mortgage costs are expected to fall after the European Central Bank cut its key interest rates from 0.5pc to 0.25pc.
The Sunday Telegraph Money, p. 2

New best buys on 5pc deposit mortgages
HSBC is launching two best buy deals tomorrow for Help to Buy mortgage borrowers. Currently there are only two other lenders with Help to Buy mortgage products – NatWest and Lloyds Banking Group.
The Sunday Telegraph Money, p. 2

Home loans jump to post-crash record
Official figures out this week are expected to show mortgage approvals to their highest level since the financial crisis thanks to the Help to Buy scheme.
The Sunday Times Business, p. 2

With competition increasing, mortgage rates […]
Andrew Montlake, director of the independent mortgage broker at Coreco predicts mortgage rates will remain low for the foreseeable future.
The Sunday Times Money, p. 2

Which lenders offer the best hope for first-time buyers?
Mortgage feature on new 95% deals launched by various providers including Yorkshire building society, Chelsea building society, HSBC and Nationwide. Also Skipton building society, which continued to support borrowers with only a 5% deposit throughout the financial crisis but then pulled out last year, plans to return to the market.
The Sunday Times Money, p. 4-5

TSB revival ahead for the ‘luckies man in banking’
Profile of Paul Pester, head of TSB Bank, who would have become the chief executive of the Co-operative Bank if the planned merger of the two would have materialised.
The Sunday Telegraph Business, p. 7

Co-op pursued Lloyds deal despite repeated warnings
It has emerged that the Co-op Bank pushed ahead with a deal that would have trebled its size despite senior managers at the bank admitted to regulators five months before the bid to buy 631 Lloyds Bank branches that the size of the bank’s capital black hole made the deal impossible.
The Sunday Telegraph Business, p. 1

TSB £2bn flotation planned for next year
TSB is to float on the London Stock Exchange next year as Lloyds Banking Group begins to offload the 631-branch bank after a European Commission (EC) competition ruling following the Government’s £20bn bail-out of the bank. .
The Sunday Telegraph Business, p. 1

You don’t expect a proper bank to pinch your house
An inquiry into the Royal Bank of Scotland has been sparked by a damning dossier alleging that the state-owned bank profited by killing off healthy businesses.
The Sunday Times, p. 24-25

D-day for bondholders
The Co-operative Group is considering selling the majority of its stake in the Co-op Bank to deal with a shortfall in its finances.
The Sunday Times Money, p. 1

Ethical customers abandon the Co-op
Growing numbers of Co-op Bank customers are seeking new homes for their money. Last week The Sunday Times found that many ethical investment specialists would not consider suggesting the mutual’s products to clients, while research by TNS, out tomorrow, will show fewer new customers have been switching to the bank in recent months.
The Sunday Times Money, p. 1

New credit union is ‘payday loan alternative’
The newest credit union in the UK, Mycommunitybank, has promised to offer its savers a viable alternative to high-cost credit providers such as Wonga.
The Independent on Sunday, p. 67

Unthinkable? Five ways to stop the slump
The European Central Bank and the Federal Reserve are both contemplating the drastic step of imposing a negative deposit rate on banks’ reserves.
The Observer, p. 49

The above articles appeared on 23/11/13 & 24/11/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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