Raising UK interest rates through a succession of 0.25% steps since November last year was the right policy to adopt, according to arguments put forward by deputy Bank of England governor Rachel Lomax yesterday.
The Daily Telegrah says the comments came as new data showed the UK manufacturing sector stuttered last month, threatening a slowdown the UK economic growth.
However, Lomax points out that the UK had the lowest amount of “slack” in its economy compared to all other major economies, which is why the Bank had no choice but to reverse the credit cycle earlier than elsewhere.
While the BoE’s first increase was applied in November last year, the first increase in US interest rates occurred just this week, when the Federal Reserve upped the key rate by 0.25% to 1.25%. The European Central Bank yesterday maintained its key rate at 2%, stating growth in the eurozone was not strong enough to warrant any increases.
HBOS IS DENYING panic lay behind its decision to shut down its high-risk mortgage lending subsidiary The Mortgage Business, writes The Scotsman.
TMB announced a couple of days ago it would no longer be active in the marketplace while dealing with a backlog of business, and might start accepting new business by the early autumn.
TMB gave customers, including those relying on intermediaries, just 48 hours, until 5PM today, to get their applications in.
HBOS, the UK’s biggest lender, admitted in a statement to the market in the past week it could miss a target of growing its business 20% this business half as it tightens up lending criteria.
STANDARD LIFE IS pleased with its results, despite figures showing a drop in UK sales and market share in the six months to mid-May, the FT writes.
Commenting on the figures, group chief executive Sandy Crombie said: “I would have bitten my arm off - or someone else's - for these results six months ago,” the paper reports.
His pleasure is there because of the wranglings that have gone on since the company had to deal with an FSA statement in January about its ability to provide realistic reporting figures, the departure of its former chief executive, and plans to demutualise in order to raise the funds necessary to keep writing new business, the FT notes.
The Scotsman takes a harder line, saying business dropped at the insurer “because of consumer concerns about the group’s financial strength following talks about its capital adequacy with the FSA .”
THE UK FACES a huge rise in energy costs driven by new commitments to reducing harmful greenhouse gases, which is already resulting in steep rises in utilities bills for consumers and business customer alike, reports The Times.
Industrial customers have already seen electricity and gas bills jump 30% this year, while additional EU-wide rules will force prices up another 40% by 2010, analysts predict.
Utility Powergen admits commercial customers are seeking longer-term contracts to lock in prices at even today’s higher levels because of expectations of further rises to come.IFAonline
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