US growth falls off a cliff again January 30, 2013 THE US economy shrank unexpectedly in the final three months of 2012, official figures showed yesterday, taking markets and analysts by surprise. Ben Bernanke at the Federal Reserve responded by holding interest rates at record lows and continuing to print $85bn (£53.8bn) a month to buy government bonds and mortgage backed securities. Stocks dipped on [...]
New lending scheme fails to boost small businesses January 30, 2013 EFFECTIVE interest rates on new deposits have dived from 3.01 per cent in August, when the Funding for Lending Scheme (FLS) started to provide banks with cheap funds, to just 2.11 per cent in December, the Bank of England revealed. But the cheaper funds have started to divert cash back into the mortgage market, the [...]
Flawed government policy is wiping out struggling savers January 30, 2013 ONE of the government’s daftest policies is its underpinning of bank lending, a nationalisation of credit in all but name. The biggest losers from the funding for lending scheme have been savers. The effective average savings rate for new deposits has collapsed from 2.75 per cent in September to a miserable 2.11 per cent in [...]
Fed is ahead in the battle of the central banks January 29, 2013 ALTHOUGH the US has shown signs of rebounding, a scratch beneath the surface reveals that there are still issues dragging on the world’s largest economy. By historical standards, the pace of its current recovery is feeble. Research from Bank of America Merrill Lynch points out that the average annual growth rate of this recovery is [...]
MPs say coalition budgets have been omnishambles January 28, 2013 THE TREASURY Select Committee (TSC) this morning slammed coalition budget policy as unclear, confused and generating uncertainty. The MPs on the committee, led by Andrew Tyrie, used the report to criticise the government for turning the Autumn Statement into a second budget; for giving out unclear signals on plans for fuel duty; and for leaving [...]
Austerity can’t have hurt UK growth because austerity hasn’t yet begun January 28, 2013 IN ORDINARY parlance, “austerity” means a period of cutbacks, spending reductions, and debt being paid down. So when voters hear talk of government austerity, most of them assume that’s what the government is doing. When they hear (a few) economists saying that weak growth has resulted from “austerity”, voters think cuts to public sector pay [...]
US indexes are close to highs after stock lifts January 27, 2013 STOCKS have been on a tear in January, moving major indices within striking distance of all-time highs. The bearish case is a difficult one to make right now. Earnings have exceeded expectations, the housing and labour markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of [...]
House prices in US climb 5.6pc in the 12 months to November January 23, 2013 HOUSE prices in the US shot up by 5.6 per cent in the year to November, according to a widely-observed survey released yesterday. Prices of American homes climbed 0.6 per cent in November, compared to the previous month, according to the Federal Housing Finance Agency (FHFA). The FHFA compiles data from new mortgages owned or guaranteed [...]
Wall Street’s big banks roar again while cutting costs January 16, 2013 EVEN the most committed banker-basher should find something to like in the latest results from Wall Street. Huge rises in profits at JP Morgan and Goldman Sachs from a year ago came alongside reductions in staff and salaries and a boost in lending to small businesses and homebuyers. JP Morgan announced it was cutting chief [...]
November saw accelerating house prices January 15, 2013 THE HOUSING market heated up in November, according to the most comprehensive official data, released yesterday. The Office for National Statistics’ house price index climbed 2.1 per cent in the 12 months to November 2012, up from the 1.5 per cent growth recorded in the year to October. This overall acceleration was driven by soaring London prices, [...]