The insurance bond market will plummet by around £20bn following the controversial changes to capital gains tax, according to estimates, The Telegraph reports.
The predictions of a 10% tumble in the value of the market from management consultancy Navigant Consulting comes as insurers are showing signs that sales of their bonds are falling.
Ken Taylor, head of life and pensions, said the forecast - based on interviews with chief operating officers and their boards representing 60pc of the UK life and pension market - could be "conservative".
"If advisers start to consider that these products are really not suitable for a majority of people, the fall could be even more," he said. "This is one of the biggest product lines for insurers - it is bad news."
Insurers have feared for months that sales of insurance bonds would fall following changes in the Budget to scrap 10% taper relief and introduce an 18% flat rate of CGT. This move made insurance bonds less tax-efficient than unit trusts.
RACHEL LOMAX IS quitting as the Bank of England's deputy governor, sparking a disagreement between the Bank and the Treasury over the planning of her departure, The Telegraph reveals.
Sources at the Bank claimed yesterday that they knew as long as a year ago that Ms Lomax would leave at the end of her five-year term. Treasury sources said it only became aware of this last week.
Ms Lomax, 62, will leave the Bank and relinquish her position as a member of the Monetary Policy Committee at the end of next month.
The Treasury said it would seek her replacement "as soon as possible" but the search had only just started.
HOUSE PRICES COULD tumble by 7% over the next year as the credit crunch continues to bite, according to a bleak forecast from the Royal Institution of Chartered Surveyors (RICS), according to The Times.
The surveyors’ organisation has given warning that sales will drop 40% this year, unless the shortage of mortgages eases.
It says that the housing market slowdown could cause an 8 per cent fall in consumer spending.
RICS now predicts that prices will fall five per cent in 2008 and a further two per cent next year before recovering later in 2009.
MICROSOFT HAS RETURNED to the negotiating table with the embattled internet company Yahoo to discuss a scaled down deal tipped to be a combination of the two firms' on-line advertising businesses, The Guardian reports.
Just two weeks after insisting that it had "moved on" after the collapse of talks to acquire the Silicon Valley firm in a $47.5bn takeover, Microsoft announced this evening that it had raised the idea of a tie-up with Yahoo which would be short of a complete buyout.
"Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo," said a statement from the Seattle-based software giant.IFAonline
Smoking biggest culprit; obesity second
Average earner will gain £840 in 2018
Will also move heritage items
Responding to letter from Treasury Committee chair Nicky Morgan