CITY ECONOMISTS AND MPs are calling on the government to delay introducing its new measure of inflat...
CITY ECONOMISTS AND MPs are calling on the government to delay introducing its new measure of inflation because of the timing of the event and the impact it could have on the UK economy, The Times writes.
The switch to using harmonised index of consumer prices instead of a retail price index as the benchmark for measuring inflation threatens to develop into a serious row between the Bank of England and the Treasury.
Bank governor Mervyn King last week warned that the institution did not agree with a way of measuring inflation that does not take into account housing costs.
City economists say there is no real reason to change the way inflation is measured, while the opposition Tory party says not including housing costs in the UK has no "economic justification".
PROPERTY PRICES ARE meanwhile stabilising across the country, which should allay fears of a property bubble bursting, reports The Daily Telegraph.
The view is based on the latest Rightmove monthly survey shows house prices have remained stable so far this month compared to July, showing an annualised rate of inflation of 12.5%.
London saw further price falls, but Rightmove's survey still suggests stability in the market as for the third month in a row demand oustripped supply and the average length of time taken to sell a property remained unaltered at 69 days.
Rightmove also says there is a swing back towards more activity in the South after most of the focus this year having been on the North and the sharp – up to 30% - price rises experienced there.
THE SCOTSMAN SAYS that while it is still too early to tell whether the housing market has landed softly, there is no shortage of good deals in the property sector of the stock market, where soaring profits mean that there are still good bargains to be had.
"In addition, the big investment houses still believe the sector is underrated," the paper writes.
"Smith Barney lifted its price target on seven housing stocks at the end of last month, including Berkeley Group, Bovis Homes and Redrow, its top pick. It may be idle speculation doing the rounds in the depths of summer, but a new round of consolidation could also extend investors' gains in a sector that has already outperformed the recovering FTSE All Share index by 27 per cent this year."
SMALL IS BEAUTIFUL according to the new NAPF focus on encouraging pension funds to put more money into the smaller companies sector, something that the government is also keen to encourage as part of its promotion of "entrepreneurial Britain".
The long-term fear is that lack of support for smaller quoted companies now will mean no more giants of tomorrow, and less opportunity for funds to benefit from companies that are growing earnings and profits faster than bigger firms.
MARLBOROUGH STIRLING, the services supplier to the insurance industry, is warning insurers that they must halve their administration costs if they are to be able to supply simplified products being developed by the Treasury, the FT reports.
Policies currently cost on average £30 per year to administer, which is up by about 20% since 2000 because of lower sales volumes and costs associated with issues such as endowments, the paper says.
Big cost-cutting in the industry would also make it more possible to live with the 1% price cap that providers say makes it uneconomical to enter the market.
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