Citigroup announced plans yesterday to extricate itself completely from new sub-prime lending in Britain, with the loss of up to 700 jobs, The Times reports.
The American bank is closing down Future Mortgages, its mortgage operation, and CitiFinancial, its unsecured loans business.
Its 92,000 mostly sub-prime customers – people with blemished credit histories – will continue to be serviced by other parts of Citigroup on the same terms.
The bank said that it planned to close its Doxford call centre operation near Sunderland, where 400 people are employed, and 49 CitiFinancial branches, employing 300 people. The bank has entered into consultation with the staff affected. Some may be offered jobs elsewhere in the group.
THE CBI PRESIDENT, Martin Broughton, will warn the Government today not to make business the "fall guy" as it tries to calm anger among the electorate over the country's worsening economic conditions, according to The Telegraph.
He will say that ministers must resist the temptation to rush through more taxes and regulation because, despite the credit crisis, the UK economy "remains robust".
Speaking at the CBI's annual dinner tonight, Mr Broughton will say: "These are times in which voters are angry. And politicians seeking re-election will want to assuage that anger. As they cast around for ways to do that, they face a strong temptation: the temptation to treat business as the fall guy for the credit crunch and the fall guy for job losses. Regulation can create a crisis as well as fix one."
THE GOVERNMENT’S 2% inflation target will require a 1.5 percentage-point premium on interest rates because of spiralling food and energy prices. This will lead to sharply lower growth and rising unemployment, according to a study released today , The Guardian reports.
A report by the Ernst & Young Item club, which uses the Treasury model to forecast the economy, urged the chancellor, Alistair Darling, to exclude food and energy from the inflation target or risk excessive pain for voters in the run-up to the election.
Peter Spencer, chief economic adviser to the Item club, said food and energy prices alone were contributing more than 1.7 percentage points to inflation as measured by the consumer prices index.IFAonline
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