MPC member Danny Blanchflower has warned that the British economy may not recover this year, and repeated his view that unemployment is likely to climb above the three million mark.
Blanchflower believes unemployment and the 'timidity of policymakers' in the face of the crisis were the main obstacles to reversing the problems. "Job creation needs investment in infrastructure, with particular emphasis on shovel-ready projects that can be started quickly," he said.
Responding to the Confederation of British Industry's (CBI) warning that the "alarming" state of the public finances left the Government no room for an additional discretionary fiscal stimulus in the Budget, Blanchflower said: "Fine, but what are we going to do about unemployment?"
LLOYDS OF LONDON HAS WARNED that insurers will be hit by multiple class action lawsuits as investors in the financial markets seek to recover their losses, reports The Times.
The credit crunch has brought Lloyds' pre-tax profit down from £3.85bn in 2007 to £1.89bn last year and the Lloyds market is anticipating more trouble as the economic downturn cuts into demand for insurance cover and premium income while claims are expected to increase.
In its annual report, published today, Lloyds highlighted the risk of lawsuits from aggrieved investors as they pursue company directors for compensation in the financial market turmoil.
A spokesman for the firm said: "We anticipate that plaintiffs will bring suits against any targets that they consider have the resources to recompense them and the professional indemnity (PI) coverage available will be a key consideration. This will include directors & officers' insurance (D&O) and errors & omissions insurance (E&O) for financial institutions and financial advisers."
BARCLAYS IS CLOSING IN ON THE SALE of its iShares business for an estimated $5bn to a consortium of US private equity buyers, according to The Express.
The leading contender is thought to be Hellman & Friedman, which has formed a consortium with Carlyle and two other firms, believed to be TPG and Apax.
A deal could be completed within the next two weeks, although Barclays is thought to be in talks with more than one group about the possible sale.
The sale of iShares is likely to prove controversial with Barclays shareholders, with some believing the bank is selling one of the jewels in its crown and fear it may be looking to sell another, the asset management business BGI, to reinforce its capital position.IFAonline
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