Morning papers: Bank of America issues `bond crash’ alert

The return of confidence and healthy growth in the US risks setting off a “bond crash” comparable to 1994 and triggering a string of upsets across the world, Bank of America has warned, reports the Daily Telegraph.

The US lender said investors face a treacherous moment as central banks start fretting about inflation and shift gears, threatening a surge in bond yields.

George Osborne defies IMF over pace of cuts plan

Article continues after advert

George Osborne insists he will press ahead with the government’s austerity plans in spite of a warning from the International Monetary Fund (IMF) that the chancellor should slow the pace of cuts, reports the Guardian.

On the eve of the latest GDP growth figures for the UK economy, the chancellor said the credibility Britain had built up by setting out a tough package of tax rises and spending plans had been “hard won, and easily lost”, adding that it would be “a huge mistake to put that at risk”.

‘Junk rhetoric of austerity’, says Boris Johnson

Boris Johnson is to demand that the government “junks the rhetoric of austerity” and backs multi-billion pound investments in housing and transport, reports the Daily Telegraph.

The mayor of London will outline a seven point economic plan to business leaders at the World Economic Forum in Davos at lunchtime on Friday. Last year George Osborne gave the equivalent speech and David Cameron is a regular attendee.

Fears over ECB longer-term funding scheme

Concern is mounting among senior bankers that the European Central Bank’s (ECB) special longer-term funding scheme risks backfiring, stigmatising the region’s weaker banks a year after it was launched, reports the Financial Times.

From the end of January banks have the opportunity to start paying back the cheap three-year money they borrowed under the ECB’s longer-term refinancing operation.

Secret Libor list names top Barclays executives

Senior Barclays executives, including investment banking chief Rich Ricci and finance director Chris Lucas, have been identified on a “shortlist” of 25 names by regulators investigating the bank’s manipulation of Libor, reports the Daily Telegraph.

The names were disclosed on Thursday alongside emails which appeared to suggest that some of Barclays’ most senior managers were aware of the rigging.

Microsoft knocked off its stride by falling profits

Disappointing sales of Microsoft’s new Windows operating system were compounded last night as the technology company reported a drop in profits, reports The Times.

The computer industry had hoped that Windows 8, which was launched in October, would be the saviour of a PC market that has suffered as consumers switched to using smartphones and tablet computers.