Morning papers: Delay austerity to boost growth says NIESR

Delaying the austerity programme by three years would put 200,000 people back into work and raise economic growth by £239bn over a decade, according to one of the UK’s leading think tanks, reports the Daily Telegraph.

The National Institute of Economic and Social Research (NIESR) published the analysis as it slashed its growth forecast for this year from zero per cent to a contraction of 0.5 per cent and warned that the recovery would not begin in earnest until 2014. Had the government delayed austerity this year, the economy would have grown 1.2 per cent, NIESR estimated.

IT meltdown and misselling scandal to put RBS £1.5bn in the red

Royal Bank of Scotland is expected to lurch £1.5bn into the red for the first half of the year after setting aside £300m to cover compensation for its IT meltdown and misselling to customers and small firms, reports the Daily Mail.

The loss - double the £794m incurred in the same period last year - takes the state-backed bank’s total losses to £32.5bn since it fell to the brink in 2008.

Darling considered full RBS nationalisation

Alistair Darling came within a whisker of fully nationalising the Royal Bank of Scotland and Lloyds in January 2009 as their share prices plunged, reports the Financial Times.

The former Labour chancellor eventually refrained from doing so, deciding instead to keep the money in reserve in case further bank bailouts were needed. Yesterday it emerged that the current government was considering a full nationalisation of the bank.

Court rejects Barclays move to delay Libor test case

Barclays has failed in an attempt to delay a legal claim over allegations it mis-sold an interest rate swap to a care home operator, reports the Daily Telegraph.

Cameron says Osborne is safe in his post until 2015 election

George Osborne will remain chancellor until the general election due to take place in 2015, David Cameron said last night, reports the Daily Mail.

The prime minister brushed aside critics who have suggested Mr Osborne might be moved after his badly received March Budget dented Tory fortunes, insisting he was “not going anywhere”.

Rebels quit Alliance fight

The activist investor Laxey Partners has taken its tanks off Alliance Trust’s lawns after waging a two-year battle to force the country’s second-largest investment trust to take measures to boost its share price, reports the Independent.

Laxey, which built up a 1.7 per cent stake in Alliance, suffered defeats for proposals it put at the trust’s last two annual meetings, the latest in April, where it managed 20 per cent support.

Gold will get a rise if it goes with the grain

Gold is poised to get a boost from surging corn and soybean prices, as investors look to the metal as a hedge against the growing risk of global inflation, reports the Wall Street Journal.