CHANGING THE UK mortgage system to adapt to the system used in the eurozone is not "absolutely neces...
CHANGING THE UK mortgage system to adapt to the system used in the eurozone is not "absolutely necessary" for joining the single currency, according to the Governor of the Bank of England Edward George, writes the FT.
In an interview on BBC radio on Monday, George said that if the majority of people were to take out long-term fixed-rate mortgages "it would make it easier to live with the single interest rate" within the zone, but added that it was not a must.
George's statement follows chancellor Gordon Brown's plans to reform housing finances before the euro decision is to be re-assessed next year.
Brown argues that long-term fixed-rate mortgages would be good regardless if Britain were to join the euro or not as it would make the housing market more stable.
However, some economists and mortgage lenders believe that even countries with this system can suffer from volatile housing markets, and that the government should not be forcing people towards mortgages they would not have opted for in a free competitive market.
ALSO AFFECTING the mortgage industry is Standard Life's confession that as many as a third of its mortgage endowment policies maturing this year might be facing a shortfall, reports the Scotsman.
Hit by the collapse of equity markets, SL estimates that almost 7,000 of the 21,000 policies due to pay out in 2003 will not have made enough money to pay off the policyholder's mortgage.
This follows a warning issued by the City watchdog's yesterday, advising all the UK's top insurance not to overstate the potential earnings on long-term investment products.
Almost four fifths of Standard Life's 1.4m mortgage endowment policies are at the moment suffering a shortfall, but SL expect the majority of these policies to even up by the time they reach maturity.
MEANWHILE IN the UK, Boots has rewarded its former chief executive, Steve Russell - who was forced to resign last month - a £1m boost to his pension pot as part of his severance deal, writes the Telegraph.
This was revealed yesterday as figures in Boots' 2003 annual report show that the total value of Russell's pension pot is now more than £7m, giving him an annual pension of £377,000 a year.
He also received a £757,000 pay-off - on top of his £786,000 salary last year including a £162,000 short-term bonus - and he is allowed to stay in the company's long-term incentive plan until March 2004.
Meanwhile, Boots announced that pre-tax profits had dropped earlier this month as the company was hit by the closure of its disastrous 12 Wellbeing health and beauty centres, its six Pure Beauty shops and its decision to put out of international retail.
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