GOVERNMENT FINANCES are expected to miss Budget forecasts even though they improved in August, according to this morning's papers.
BRITAIN HAD a budget deficit of £4.76bn in August, against £6.6bn in the same month last year, the lowest shortfall for the month in three years as tax income rose at twice the pace of spending, reports the Scotsman.
However, analysts warned yesterday the Chancellor, Gordon Brown, was still on course to miss his borrowing forecast for the year, especially as the economy was showing signs of weaker growth in recent months.
"In the last two months, the trend has improved and the public finances are moving back in the right direction,'' said Geoffrey Dicks, chief UK economist at Royal Bank of Scotland.
COST-CONSCIOUS homeowners have quickly seized on last month’s cut in interest rates to refinance their mortgages, says the Times.
The quarter-point cut in base rates by the Bank of England’s Monetary Policy Committee came just in time for many homebuyers who had taken loans with low fixed rates at the height of the housing boom, only to find their cheap deals expiring when house prices weakened.
Several lenders made new, lower fixed-term offers, in anticipation of the rate cut, after it became clear that the trend of rising short-term rates had come to an end. Borrowers took the opportunity to switch to a new mortgage as soon as the Bank of England moved.
During August, members of the Council of Mortgage Lenders (CML) made £27.5 billion of new loans, the most for 13 months. Of this total, however, £11.7 billion went to existing homeowners who were remortgaging with a different bank or building society.
ABOLISHING THE state second pension and ending the rebates that go with it for those who contract out would make it easier for pension schemes to communicate to their members the benefits they offer, the National Association of Pension Funds said yesterday, says the Financial Times.
It wants to scrap the state second pension in favour of a more generous citizen's, or basic, state pension - although it would mean billions of pounds of rebates which currently go into existing company schemes would cease to do so.
The association argues that occupational schemes would cut future benefits when the rebates end, while individuals would in return get a bigger state pension. Almost four out of five schemes in a survey by the NAPF said that would make it much easier to spell out the advantages of pension provision to members.
The rules are so complex "that schemes cannot successfully explain contracting out to members", the NAPF said, "even though they are the very people who are meant to benefit from it".
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From 6 April 2019