Weekend economic news round up


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Weekend economic news round up

Co-op Bank scraps its accounts with perks
The Co-operative Bank is to scrap its line of paid-for current accounts that come with travel insurance, breakdown assistance and other perks.
The Times, p. 55
Also appeared in : The Times, p.54

Why current accounts could be the best home for your savings
Savers are opting to stash their cash in interest-paying current accounts that are now offering rates of as high as 5 per cent, while rates on traditional deposit accounts continue to subside.
The Times, p. 65
Also appeared in : The Independent, p.61

Wait five years, get 2.75pc
Virgin Money has launched a new market-leading Isa that will pay 2.75pc for five years. The bank’s Fixed Rate Cash Isa Issue 35 is available for those with a minimum deposit of £1, and is available in Virgin Money stores, online and by post. It accepts transfers in of previous cash Isa balances, as well as new subscriptions.
The Daily Telegraph Your Money, p. 7

How to spice up your ISA
Although there are strict rules around what investments can be held in an individual savings account, for adventurous and experienced investors there is still a surprising amount of choice.
Independent i, p. 48-49

Pensioners are ‘ripped off’ by profit margins on annuities
Those retiring are being “ripped off” by financial companies making huge profit margins on annuities, campaigners have warned.
The Daily Telegraph, p. 1

Cowie’s blog week
Millions of older people who live within their means and hoped savings would fund retirement are the victims of a slow-motion bank robbery, which began when the Bank of England cut interest rates to 0.5pc four years ago this week.
The Daily Telegraph Your Money, p. 12

Banks lift ban on housing benefits tenants
Buy-to-let mortgage lenders have caved into pressure to allow landlords to rent their properties to people on housing benefit, after fears that the policy could leave these tenants with nowhere to turn.
The Times, p. 80

FSA pressed over B of I rate rise
Andrew Tyrie, chairman of the treasury select committee, has reportedly written to the FSA demanding it investigate interest rate rises on Bank of Ireland’s UK tracker mortgages.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Moving fast is the key to a good deal
Repossessions are at their lowest level since 2007, according to the Council of Mortgage Lenders. But that may change. Mortgage adviser Samantha Cooper from Cooper Associates expects the figure to rise “as lender forbearance is currently allowing borrowers in financial difficulty more time to sell”.
The Daily Telegraph Property, p. 7

UK housing market is stuck on the second step
The housing market is facing a logjam as home owners hoping to move up the property ladder cannot afford the cost, according to a Lloyds TSB report.
The Daily Telegraph, p. 33

RBS rewards top performers but reduces £lm earners
The bank Royal Bank of Scotland has revealed that 95 of its staff earned more than £1m last year. The bank has not provided comparable figures for the previous year, but a spokesman said that the number of people earning more than £1m had fallen “substantially” year-on-year.
The Daily Telegraph, p. 33
Also appeared in : The Guardian, p.2, Daily Mail, p.24, The Independent, p.56, The Sun, p.4, Independent i, p.46, Daily Mail, p.99

Disgraced former Barclays chief to collect £2m
A year after leaving Barclay’s in disgrace amid the Libor scandal, Bob Diamond is set to pick up a £2m lump sum this summer.
The Independent, p. 46
Also appeared in : Financial Times, p.13, Daily Express, p.2, The Guardian, p.43, Evening Standard London, p.50, International Herald Tribune, p.13

Lloyds tops complaints list
Lloyds Banking Group has again been named by the Financial Ombudsman Service as the bank attracting the most complaints.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

HSBC shrugs off $1.9bn fine from US regulators
HSBC has announced that pre-tax profits were down 6 per cent to $20.6bn.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 14

JPMorgan scales down buyback
JPMorgan Chase has requested a share buyback of about half last year’s $15bn programme.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 13

Guilty banks pay £1m to more than 500 of their staff
More than 500 bankers who work at the two British banks found guilty of attempting to rig interest rates at the heart of the financial system were each paid £1 million or more last year. Deborah Hargreaves, director of the High Pay Centre think-tank, said: “Most ordinary people will struggle to see how these pay packages could possibly be proportionate to the efforts or talents of bankers compared to the rest of the population, after the year that Barclays and RBS have had.”
The Times, p. 13

The UK’s biggest building society is to charge for one of its current accounts for the first time. Nationwide’s FlexPlus account, which carries a £10-a-month fee, offers perks such as travel and mobile insurance, and breakdown cover.
The Sun, p. 4

HSBC’s £5bn for exports
HSBC, the UK’s most profitable bank, is launching a £5billion fund to help small businesses export around the world.
The Sun, p. 45
Cash Isa rate war offers ‘glimmer of hope’ for savers
Halifax and Santander have started a rate war that experts say could finally kickstart the cash Isa season.
The Sunday Telegraph Money and Jobs, p. 12
Also appeared in : Sunday Express Financial, p.5

Isa rates edge higher but it’s still hard to beat inflation
Savers are being tempted with higher cash Isa rates for the first time in nine months. According to Moneyfacts, rates started falling last June, when they averaged 2.55%, and hit a low of 1.74% last month. Since then, they have increased to 1.79 per cent.
The Sunday Times Money, p. 1

Fees set ambush for Isa investors
According to comparefundplatforms.com, the financial website, ISA investors could see a six-figure sum wiped off the value of their Isa funds by charges over a 30-year investment.
The Sunday Times Money, p. 8

Paid-for account market grows
Nationwide Building society has become the latest provider to launch a packaged current account, as the number of free accounts is diluted further. The building society will also agree a free arranged overdraft for 12 months, after which, a £100 fee-free overdraft buffer is left in place.
The Sunday Times Money, p. 7

Millions fear mortgage rate rises
Millions of home owners who have tracker mortgage deals could see their monthly repayments soar if other lenders follow the Bank of Ireland’s lead. About three quarters of a million home owners now pay interest at just 2.5pc on their Nationwide mortgage, as the building society has guaranteed that this rate will never be more than two percentage points above the Bank Rate – making it effectively Britain’s largest tracker deal.
The Sunday Telegraph Money and Jobs, p. 4

Like? Friends and followers to determine mortgage bid
Moven, an American online bank, will launch in Britain at the end of this year, subject to approval from the Financial Services Authority (FSA). The bank is already using social networking as a factor in determining how much money to lend to customers in the US.
The Sunday Times Money, p. 4

Fix for longer to win mortgage price war
Borrowers with substantial equity in their homes are being seduced by cheap short-term mortgages – from Chelsea Building Society and Yorkshire Building Society – in what has escalated into a price war between lenders.
The Sunday Times Money, p. 5

Barclays takes on apprentices
Barclays have announced that it is doubling the number of places in its apprentice scheme as part of the government’s drive to provide jobs for low-skilled school-leavers. The bank last year pledged to lift 1,000 young people out of unemployment as it attempts to revive the bank’s reputation after a series of scandals.
The Sunday Times Business, p. 3
Also appeared in : Sunday Mirror, p.12

How the banks are letting us all down
Consumers are making record numbers of complaints over current accounts, mortgages, insurance policies, and investments as banks and other financial companies fail to admit to their errors or to provide compensation.
The Sunday Times Money, p. 4-5

Brussels draws up curbs on bosses’ pay
After reining in bank bonuses, the European Commission is preparing legislation that will give shareholders of public companies the authority to block excessive executive pay deals. The legislation being drafted by Michel Barnier is similar to the measures being introduced in Britain by Vince Cable, the business secretary, which force companies to give investors a legally binding vote on remuneration every three years.
The Sunday Times Business, p. 2

FSA slammed over bank’s shock rate rise
The Treasury Committee reports that thousands of homeowners have been let down by the Financial Services Authority. Andrew Tyrie, the chairman of the group, has demanded to know why Martin Wheatley, leader of the FSA, did not veto the bank’s recent decision to raise rates, reneging on its tracker mortgage promise.
The Sunday Times Money, p. 7

Banks will be forced to lend to businesses or face harsh penalties if Labour succeeds in a bid to change the law.
Sunday Mirror, p. 2

What? Barclays singled out for praise?
Barclays, battered by the Libor scandal and the toxic legacy of big bonuses, will take a step towards rehabilitation this week when the Coalition highlights the bank for having an exemplary apprenticeship model.
The Mail on Sunday, p. 74

Politicians want cap on bank leverage
British banks should be subjected to a cap on leverage to reduce future risks to the UK economy, the Banking Standards Commission is expected to say.
The Sunday Telegraph Business, p. 2

The above articles appeared on 03/03/13 & 10/03/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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