Morning papers: Osborne’s £100bn plan for economy
The morning headlines brought to you by Investment Adviser: Friday, June 15 2012.
George Osborne on Thursday night (14 June) announced plans for a £100bn support programme for the British economy, as he battened down the hatches for a worsening “eurozone debt storm”, reports the Financial Times.
The chancellor told a City audience that he was working with Sir Mervyn King, the Bank of England (BoE) governor, to “deploy new firepower” amid fears that turmoil in the eurozone could lead to a severe credit crunch and higher interest rates in Britain. [...]
At the heart of the package is a BoE “funding for lending” scheme to cut bank lending costs in exchange for lending commitments. The Treasury claims the programme, designed to address the rising costs of loans and mortgages, could support an estimated £80bn in new loans. [...]
The BoE will also today activate an emergency scheme, running for a minimum of four months, that offers six-month liquidity to banks in tranches of no less than £5bn a month.
Debt crisis: ECB last hope as dam breaks in Spain
Spain’s borrowing costs have surged to record highs and are perilously close to the point of no return, threatening a full-blown sovereign crisis unless the European Central Bank comes to the rescue, reports The Daily Telegraph.
“We’re facing maximum tension. The situation is unsustainable over time,” said the country’s finance minister Luis de Guindos. Yields on 10-year Spanish bonds yields punched to almost 7 per cent, above levels that triggered ECB intervention to back-stop Spain last November.
Interest rises in drafting a woman on to Bank of England’s Monetary Policy Committee
George Osborne is under mounting pressure to appoint a woman to the influential committee that sets interest rates at the Bank of England, reports the Daily Mail.
Senior figures in Westminster and the City urged the Chancellor to replace the departing Adam Posen with a woman on the all-male monetary policy committee.
800 Unilever jobs face axe amid site closures
Unilever has announced plans to close sites in England and Wales with the loss of up to 800 jobs, including some outsourcing to Bangalore, as the consumer goods group cited “very tough” economic conditions in the eurozone, reports the Guardian.
Months after settling a rancorous dispute with its UK workforce over pension changes, the Anglo-Dutch business behind the Pot Noodle and PG Tips brands is preparing to close factories in Swansea and Slough, a distribution site in Bridgend, south Wales, and an office in Ewloe, north Wales.
HMRC to target civil servants paid as ‘companies’ to dodge tax
More than 2,000 civil servants who pay dramatically lower tax by setting themselves up as ‘companies’ are to face scrutiny by the taxman, reports the Daily Mail
HM Revenue & Customs confirmed today it would target individuals who posed the ‘greatest risk of tax loss’.