Weekend Economic News Round Up

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Weekend Economic News Round Up

Stick to strategy and Britain risks a ‘lost decade’, Osborne warned
Jim O’Neill, the influential chairman of Goldman Sachs Asset Management warned the Government last night against clinging dogmatically to its deficit strategy to protect Britain’s credit rating. Official figures showed that Britain is suffering the worst post-crisis performance of any G7 nation, barring Italy, with output dropping 0.3 per cent in the last three months of 2012. The Office for National Statistics said that if oil and gas extraction was excluded from the figures then the economy would have fallen by 0.1 per cent instead of by 0.3 per cent.
The Times, p. 6
Also appeared in : The Independent, p.1-4-5

Miton poised to beat profit forecasts
Miton, the asset manager formerly known as MAM Funds, said its 2012 profits would be ahead of market forecasts of £3.4m before tax.
The Independent, p. 51

Banks must make costs clearer or else, OFT warns
Banks are still giving customers a raw deal in the current account market and must make costs clearer and switching easier, the Office of Fair Trading said yesterday. Anthony Browne, the British Bankers’ Association chief executive, said: “Consumers are now nearly £1 billion better off due to a reduction in charges driven by greater competition. Banks now provide annual statements to all customers detailing what they have paid for their service and banks now provide scenarios so customers know what they will pay if they exceed agreed limits.”
The Times, p. 48
Also appeared in : Daily Mail, p.41, The Times, p.66, Independent i, p.48-49, The Daily Telegraph, p.31, Daily Mail, p.103

Barclays shamed again
Barclays has been shamed as Britain’s worst bank for customer service in a survey by Which? Santander was second worst, with people particularly upset about the running of their current accounts.
Daily Mail, p. 41
Also appeared in : Daily Mirror, p.26

Banks to repay €137bn to ECB
The ECB said yesterday that European banks have pledged to repay over a quarter of the first tranche of cheap funding they received at the height of the debt crisis.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 13
Also appeared in : Daily Mail, p.101, The Times, p.48, Evening Standard London, p.40, The Daily Telegraph, p.33

Blankfein defends Goldman bonus scheme to avoid tax
Goldman Sachs chief executive, Lloyd Blankfein, has defended the investment bank’s controversial plans to defer bonuses to benefit from the looming cut in the top rate of income tax to 45p.
The Independent, p. 51
Also appeared in : Daily Mail, p.15, Independent i, p.47, The Daily Telegraph, p.32, The Times, p.53

Trader lost £34m bonus over claims of rate collusion
A Deutsche Bank trader, Christian Bittar, who was dismissed in December 2011, has been forced to repay his £34m bonus.
The Times, p. 48
Also appeared in : Independent i, p.7, Independent i, p.2, The Independent, p.7, The Guardian, p.25

Monti goes on attack after rescue
Shareholders in Banca Monte dei Paschi di Siena, Italy’s oldest bank, waved through plans yesterday to secure a €3.9 billion (£3.3billion) government bailout, days after a €720 million black hole was discovered on its books.
The Times, p. 48
Also appeared in : The Times, p.48, Financial Times, p.13, Independent i, p.46

RBS switches its branch sale focus from Santander to the City
Some of the City’s top investors have been approached about their potential interest in a listing of more than 300 branches owned by Royal Bank of Scotland. Threadneedle Investments is among a handful of blue-chip shareholders to have been canvassed about a deal in recent days.
The Times, p. 47
Also appeared in : The Daily Telegraph, p.33, Financial Times, p.17

More ex-Barclays staff named in Libor documents
Former Barclays CEO Bob Diamond and former COO Jerry del Missier were among the individuals detailed in an investigation into the bank’s Libor settlement.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 13
Also appeared in : The Times, p.44, The Daily Telegraph, p.33

Banks await FSA’s decision on rate swap compensation
The FSA is preparing to issue its first update on the mis-selling of interest rate swaps to small businesses.
Daily Mail, p. 101

BIG BANK GRIP GETS TIGHTER
Watchdogs have called for a “substantial” shake-up of the £9billion current account market to loosen the grip of Britain’s Big Four banks. The Office of Fair Trading investigated the retail banking sector back in 2008, when it recommended a raft of changes.
Daily Mirror, p. 52

Canada seeks ‘new Carney’
Canada is looking for someone “like Mark Carney” to replace him after he becomes Governor of the Bank of England in June.
The Independent, p. 51

Writer of bank rules defends recent easing
The head of a panel that writes the global financial rule book has answered criticism that it has gone soft on banks, arguing that lenders need more time to adjust to new regulations because the financial crisis has lasted longer than anyone expected.
International Herald Tribune, p. 10

National Savings shock: investors get more interest
Savers with tax-free accounts at National Savings & Investments are set to enjoy much better returns – but access to their cash will be limited. About 95,000 customers with a T Cash Isa, formerly known as the Tessa-only Isa, and its Cash Isa – which have been closed since 1999 and 2009 respectively – will be moved into its Direct Isa.
The Sunday Times Money, p. 7

Co-op launches trust to protect customers’ Christmas savings
The Co-operative supermarket chain will this week unveil a new scheme to protect its customers’ Christmas savings.
The Mail on Sunday, p. 92

Pension despair at Nortel deadlock
It is reported that attempts to recover the retirement savings of 40,000 British pensioners hit by the bankruptcy of Nortel, the Canadian telecoms giant, have collapsed following a ruling by a judge in Toronto.
The Sunday Times Business, p. 3

Delay your pension drawdown to reap rewards
Pensioners going into income drawdown plans have been urged to wait for two months to benefit from more relaxed rules on the amount of income they can take – or risk having to wait more than a year to qualify.
The Sunday Times Money, p. 6

Treasury loses £34bn on QE
According to the latest estimates from the Pension Corporation, a company that provides insurance for final-salary pension schemes, the Treasury has lost out on up to £34bn in tax revenues since the Bank of England began its money-printing programme.
The Sunday Times Business, p. 2

Savers £100,000 worse off as a result of state pension switch
Hundreds of thousands of pension investors will be thousands of pounds worse off because their provider automatically contracted them back into the State Second Pension without their permission.
The Sunday Telegraph Money and Jobs, p. 2

This week pension cap refusal
Pensions Minister Steve Webb has rejected calls from MPs to cap pension charges at 1pc per year, saying he prefers to name and shame overcharging providers.
The Independent on Sunday, p. 93

Pensioners are forced to release cash in their homes to pay the mortgage
Pensioners are increasingly cashing in on the wealth tied up in their home to make ends meet. The value of new equity release plans jumped 17 per cent in 2012, with older homeowners drawing £926m from their property, according to the latest figures from the Equity Release Council.
The Mail on Sunday, p. 82-83

Little-known funds set to shine
Ordinary investors are rediscovering the benefits of investment trusts, as the total amount of assets held by investment trusts passed £94bn last year.
The Sunday Times Money, p. 4-5

Hanson backs £125m loan fund for firms
Hanson Asset Management is working with fund manager Prefequity to launch the fund, which will make loans of £5million to £20million to owner-managed companies. The Prefequity fund is intended to target the gap in the market left after banks that had been funding business in the boom years have retrenched.
The Mail on Sunday, p. 77

Your children could lock you out of a better mortgage
Families are being warned that they face a reduction in the amount they can borrow on a mortgage because of rising childcare costs.
The Sunday Telegraph Money and Jobs, p. 5
Also appeared in : The Sunday Times Money, p.5

The great mortgage thaw: snap up cheapest fixes ever
For the first time since the financial crisis began in 2008, banks and building societies are eager to lend to homebuyers. In the past ten days, at least twelve lenders have cut rates on all or some of their home loans. Some, like Nationwide, Coventry and Skipton building societies, have been reducing rates almost weekly.
The Mail on Sunday, p. 86-87

Mortgage market gets kiss of life
Signs that the £80billion Funding for Lending Scheme is giving the moribund property market the kiss of life are expected on Wednesday.
The Mail on Sunday, p. 77

Fear factor profits banks
Consumers lack the confidence to switch banks for a better deal, according to the Office of Fair Trading.
The Sunday Times Money, p. 2
Also appeared in : The Independent on Sunday, p.95, The Sunday Telegraph Money and Jobs, p.2

FSA chairman calls for review of Bank inflation target
Adair Turner, the chairman of the Financial Services Authority, is suggesting plans to open the door to a major overhaul of the way the Bank of England backs the economy. In a major speech at Cass Business School next month, Lord Turner will also say that “overt money finance”, the direct printing of more money by the Bank, should be on the table.
The Sunday Telegraph Business, p. 1
Also appeared in : The Sunday Telegraph Business, p.2

Barclays plots deal to raise billions
Sources close to Barclays say that it is planning a swoop on the financial markets to raise billions of pounds of new capital ahead of a showdown with the Bank of England. Iain Dey reports that all Britain’s banks are on edge as they await the findings of the inquiry into their capital positions ordered by Sir Mervyn King’s new financial policy committee.
The Sunday Times Business, p. 3

Lenders ease up on loan criteria
Scottish Widows, part of Lloyds Banking Group, last week increased the maximum loan size available on interest-only deals from £500,000 to £1m.
The Sunday Times Money, p. 5

Barclays brings in headhunter to help find three new directors
Barclays has appointed City headhunters to find three new non-executive directors, as Sir David Walker looks to refresh the bank’s board following last summer’s Libor-fixing scandal. Sir Walker is believed to want to add directors to help his and chief executive Antony Jenkins’ focus of shaping a new bank, from the one that received £290m of fines in relation to the Libor row.
The Sunday Telegraph Business, p. 1

Rowland’s London bank approved
The Financial Services Authority has given the prominent Tory donor David “Spotty” Rowland permission to open a branch of his private bank Banque Havilland in Britain.
The Sunday Times Business, p. 2

New Bank of England boss warns there is no quick fix
Speaking at Davos, Mark Carney has warned that he cannot single-handedly get rid of risks to the economy.
The Independent on Sunday, p. 29

The PPI that home owners may still need
The worsening scandal surrounding the mis-selling of payment protection insurance (PPI) is creating a worrying side effect, experts are warning. It is leaving many new home owners without protection for their mortgage if they are unable to work.
The Sunday Telegraph Money and Jobs, p. 4

Don’t leave it too late to claim any mis-sold PPI
The banks are seeking a cut-off date for mis-sold payment protection insurance compensation but there’s no need to use a third party, writes Liz Barclay.
The Independent on Sunday, p. 96-97

PPI seller put on the block
Towergate, the insurance broker founded by the financial services tycoon Peter Cullum, is reportedly paving the way for a possible stock market float by selling one of its divisions for up to £400m. It has asked Morgan Stanley to find a buyer for Paymentshield, which sells insurance to cover homeowners who fail to keep up with mortgage repayments.
The Sunday Times Business, p. 3

Heavyweight committee to give RBS chiefs grilling
The all party Treasury Select Committee reportedly wants to call senior executives from RBS over the Libor rate manipulation scandal once the bank has settled fines with the FSA and US prosecutors.
Sunday Express Financial, p. 3

Banking scandal hits 4,000 SMEs
According to an estimate by campaign group Bully Banks, as many as 4,000 small to medium-sized businesses have gone into administration because they were missold costly insurance products by banks.
Sunday Express Financial, p. 1

Libor link could open floodgates for claims
The two scandals of interest rate swap mis-selling and Libor-rigging have been brought together in what may prove a landmark legal case brought by Graiseley Properties, owner of Guardian Care Homes, against Barclays.
The Mail on Sunday, p. 75

The above articles appeared on 26/01/13 & 27/01/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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