Middle-income families and small businesses will receive billions of pounds of tax cuts and benefits in the Chancellor's Pre-Budget Report within the next two weeks, according to The Telegraph .
Alistair Darling will announce measures worth several hundred pounds to every family struggling to cope in the downturn. The measures will include an increase in tax credits and more help with fuel bills for the elderly.
Downing Street sources said that Gordon Brown had been convinced of the case for substantial borrowing to fund a programme of tax cuts and to maintain high public spending to revive Britain’s ailing economy.
The package is likely to focus on cuts targeted at individuals and firms that the recession has already hit or is about to, It will be unveiled in an emergency recession budget in Mr Darling’s Pre-Budget Report [PBR], which is expected next week.
HSBC today revealed that charges on consumer loans that have gone sour soared by $700 million to $4.3 billion during the third quarter as Europe's biggest bank by assets felt the pain of America's nosedive into recession, reports The Times.
Michael Geoghegan, HSBC's chief executive, also said the bank had not yet made up its mind whether to pass on the Bank of England's 1.5 per cent cut in interest rates in the UK last week as part of its efforts to revive the nation's economy.
Mr Geoghegan said HSBC had immediately passed on the cut to holders of the bank's tracker mortgages, but was still making its mind up about what to do for variable rate policies.
He pointed out that HSBC was still facing high wholesale funding costs and denied coming under pressure from Government to reduce borrowing charges to help relieve the pressure on millions of homeowners.
Private equity firms can expect to suffer in a recession, with the biggest suffering more than most, says The Guardian.
That was the message yesterday from Europe's largest quoted buyout firm, 3i Group, as it revealed first-half revenue from disposals had tumbled more than 40%.
The group said the credit crunch had made it difficult to sell companies in which it had invested and that the situation was likely to persist in 2009. A plunge in world stock markets knocked the value of private equity assets and would push down returns at its investment funds, 3i said.
Chief executive Philip Yea warned it was not clear how the next 12 months would develop, but "we would expect a more challenging second half as the squeeze in credit markets persists, the economic slowdown affects portfolio earnings and merger and acquisitions markets remain subdued".
He added: "The mist covering the outlook for 2009 is still very thick. It is not obvious how it will play out."
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