The FT
Corporate pension shortfalls have increased by an additional £90bn since the Bank of England resumed gilt purchases last October in an effort to drive down interest rates, according to an employers’ body. The National Association of Pension Funds said the impact of the Bank’s quantitative easing policy, aimed at kick-starting the economy, had been worse than expected since it was launched in March 2009. “Businesses running final salary pensions are being clouted by [QE],” Joanne Segars, NAPF chief executive, said in a statement marking the policy’s third anniversary. “Deficits that were already big now look even bigger because of [QE’s] artificial distortions
The Times
Headlines…… “Mortgages set to jump as lenders claw back discounts” “Investors give Greece the nod on bond swap” “Do not give in to temptation” Chancellor told: Price cuts take a toll at John Lewis
The Chancellor George Osborne will be urged today to bank any one-off improvement in the public finances this year rather than attempt to use the spare cash to prop up growth. A report from PwC predicts that government borrowing will be £7 bn lower than previously forecast in the 2011-12 fiscal year, but it said the Chancellor must ignore calls for the money to be spent supporting the economy. Any deviation from the fiscal plan would shake market confidence, while delivering a negligible benefit to GDP, said PwC’s chief economist, John Hawksworth.
Millions of home owners are likely to see the cost of their mortgages rise, even though today marks the third anniversary of interest rates being cut to an historic low. Families with loans from the Bank of Ireland will see their payments rise by as much as £160 a month over the next six months as it lifts its standard variable rate to 4.49%. The move yesterday, which will affect 100,000 borrowers, comes after the Halifax and the Royal Bank of Scotland announced increases in their variable rates for more than a million borrowers at the weekend.
Credit rating agencies remain riddled with conflicts of interest and have still not tackled their failures in the run-up to the financial crisis, a powerful group of MPs said yesterday. Representatives from influential agencies including Standard & Poor’s and Moody’s were given a 105-minute grilling by the Treasury Select Committee, which accused them of showing little remorse about their role in the 2008 meltdown. The MPs, some of whom have already accused the rating agencies of “sleepwalking into the financial crisis”, berated them for failing to identify problems with highly structured investment vehicles and the American sub-prime mortgage market. As well as pushing them to publicly apologise for their actions, several MPs expressed concern that capital markets were overreliant on credit ratings.
Corporate pension shortfalls have increased by an additional £90bn since the Bank of England resumed gilt purchases last October in an effort to drive down interest rates, according to an employers’ body. The National Association of Pension Funds said the impact of the Bank’s quantitative easing policy, aimed at kick-starting the economy, had been worse than expected since it was launched in March 2009. “Businesses running final salary pensions are being clouted by [QE],” Joanne Segars, NAPF chief executive, said in a statement marking the policy’s third anniversary. “Deficits that were already big now look even bigger because of [QE’s] artificial distortions,” she added
The Telegraph
Headlines…..John Lewis chairman sees “UK growth in 2012” “Antofagasta chief makes shock exit” “Ladbrokes boss handed £491,000 bonus despite profits fall” Indonesia demands 51pc of foreign-owned mines Questor: Questor: “Fresnillo can shine if precious metals fall – Hold” “Bank of Ireland mortgage customers face 50% rate rise “
A projected £7bn undershoot in Government borrowing this year should allow Chancellor George Osborne room to deliver targeted growth measures in his forthcoming Budget, according to PricewaterhouseCoopers. Borrowing is likely to come in at £120bn in 2011/12, according to economists at the accountancy firm, lower than the independent Office for Budget Responsibility’s £127bn projection, which is used by the Treasury as the backdrop for policy decisions. PwC argued that Mr Osborne should use the shortfall to provide support for British businesses, in turn boosting growth. So-called “supply-side” reforms could include lighter regulation, a more competitive tax regime, jobs market intervention and a focus for Government spending on areas such as infrastructure, education and research. Meanwhile; five million middle-class retired people could be freed from paying income tax on their state pensions, the Treasury’s tax advisers have suggested. In a move that would be worth up to £1,000 a year each, the Office for Tax Simplification said that scrapping the levy should be considered because many pensioners considered it “unjust”. The advisers, an independent body set up by the Chancellor, George Osborne, made the suggestion in a report that condemned “confusing”, over-complex tax rules facing people in retirement
The Italian government has pledged to investigate how a BG Group project in the south of the country was held up for 11 years by a nightmare of bureaucratic red tape. The British firm announced this week that it was shelving plans to build a liquefied natural gas import terminal near Brindisi, in Puglia, after more than a decade of trying in vain to acquire the necessary permits from the Italian authorities. The company said it had spent €250m on developing the project, which would have created hundreds of jobs in an area which suffers from high unemployment. The withdrawal prompted much hand-wringing in Italy about the obstacles the country often puts in the way of foreign investment
