A WARNING CAME from the Bank of England yesterday over levels of consumer debt in the face of possib...
A WARNING CAME from the Bank of England yesterday over levels of consumer debt in the face of possible interest rate increases, writes The Daily Telegraph.
Monetary Policy Committee member Paul Tucker said that rates were now more likely to rise than fall and that they were below their long-term average.
He suggested that "personal finances would be managed on the basis that rates are likely to be somewhat higher in the medium term".
Tucker admitted that it was difficult to know just what was a "safe" level of consumer debt, but noted that debts as a ratio of incomes have risen 25% over five years, to record levels.
The Scotsman adds that Tucker's comments come as "a blunt warning" to those continuing to follow the borrowing binge.
The paper says that gilt and interest rate future yields immediately fell on the open market after the comments as traders bet that a rate increase will now come sooner than expected.
SWISS RE, THE world's second largest reinsurer, has swung a sixfold increase in first-half profit compared to last year, reports the FT.
The SFR691m profit beat last year's paltry SFr118m after big gains in non-life business amid rising premiums and what the the FT calls an increase in the "quality of its business during the renewals season".
COLLINS STEWART, THE embattled broker, has asked the FSA to investigate the sale of shares by James Middleweek, the sacked analyst who is countersuing for £2.4m over allegations of unfair dismissal linked to alleged insider dealing at the firm.
Middleweek sold his 88,000 shares some two weeks before he made public accusations that the broker willingly engaged in illegal activities.
Since then, Collins Stewart shares are down by about 20%, and the firm is apparently already subject to FSA investigations on the basis of Middleweek's allegations, the Telegraph says.
BETTER NEWS COMES from the US, where the latest economic indicators show that the economy grew by a whopping 3.1% on an annualised basis in the second quarter, a sharp revision upwards from previous estimates of 2.4%, The Times reports.
The growth was spurred by both higher consumer spending and increased business investment.
Meanwhile, a leaked copy of an upcoming IMF report shows that the organisation expects growth of 2.4% this year rising to 3.7% in 2004 as the economy picks up steam.
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