InvestmentsMay 17 2013

Morning papers: IMF warns on money printing costs

Search sponsored by
ByNick Reeve

The Bank of England’s recession-busting policy of quantitative easing could end up costing the Treasury up to £80bn – more than outweighing any profits it will make from the scheme, according to new research by the International Monetary Fund, reports the Guardian.

Policymakers have become increasingly concerned about their “exit strategy” from the unprecedented measures they have used to cushion their economies from the impact of the financial crisis over the past five years.

In a study of the impact of “unconventional” policies, including the Bank’s £375bn bond-buying programme, economists at the IMF found the Bank could sustain losses of anything up to 5.5 per cent of GDP, or almost £80bn, when it sells the bonds back into the market.

Eurozone imports reflect weakness

The trade surplus for the eurozone in March hit its highest level since the bloc was formed in 1999, driven by a continued decline in imports that reflects very weak demand at home as well as steadily rising exports, reports the Wall Street Journal.

The figures released yesterday indicate that the region’s trade surplus increased in the first quarter as a whole, suggesting that weak demand was also responsible for the decline in output during the period.

CBI chief John Cridland issues warning over European Union exit

The head of Britain’s most powerful employers’ organisation today issues a blunt warning about the risks of quitting the European Union after the Conservative party signalled the beginning of a drawn-out parliamentary battle over plans for an in-out referendum by 2017, reports the Guardian.

Budget black hole at heart of George Osborne’s finances

George Osborne’s attempt to slash £11.5bn off public spending in election year has run into cabinet trouble, after ministers identified only £2.5bn in cuts to their budgets, reports the Financial Times.

Some ministers failed to provide Mr Osborne with the list of 10 per cent in proposed departmental cuts he ordered before last month’s deadline. One said the chancellor was “asking too much”.

Gold hits 4-week low on ETF selling

Gold fell to a four-week low on Thursday, with an increasing number of investors becoming bearish about the precious metal as it has fallen through technical support levels, reports the Financial Times.

Lloyds’ shares close in on ‘break even’ level

Shares in Lloyds Banking Group rose to within a whisker of the price at which support for the taxpayer-backed bank is booked by the government, increasing the prospect of a share sale as soon as this year.