Vince Cable, business secretary, has lifted the lid on tensions between the government and the Bank of England criticising its “capital Taliban” whom he accuses of holding back the recovery by imposing excessive financial burdens on the banks, reports the Financial Times.
Mr Cable believes the BoE has held back small business lending by demanding banks hold onerous levels of capital as a cushion against further shocks, a view shared by chancellor George Osborne.
Firms ‘could quit UK’ if Heathrow was shut
In a submission to the Government’s Airports Commission, chaired by Sir Howard Davies, the property giant, Segro, said that a poll of businesses around Heathrow showed huge support for expanding the airport as the best solution to the UK’s aviation needs. Any other option would cause significant economic damage, reports The Daily Telegraph.
The evidence comes at the same time as Gatwick said that a second runway south of London could be built for as little as £5bn, just a fraction of the £14bn-£18bn cost of building a third runway at Heathrow.
Companies dip a toe back in lending water
Signs of an economic recovery have been reinforced by a rare monthly rise in business lending and stronger mortgage approvals and credit card lending, reports The Times.
“The British Bankers’ Association reported that net lending by its members to businesses rose by £172m in June, the first such rise since January. However, the increase only partially reversed the £2.7bn net reduction in business lending the previous month and left the longer-term trend still firmly downwards.
RBS chief appointment could come next week
The taxpayer-backed lender is currently weighing up a shortlist of about four internal and external candidates for the job, though one source said the appointment could be delayed until September due to the need to get approval from the Treasury, reports The Daily Telegraph.
Ross McEwan, the head of RBS’s retail banking business, and Bruce van Saun, the bank’s finance director, are seen as the leading internal successors to Mr Hester.
UK economic recovery expected to gather pace in official GDP figures
George Osborne will to stick to his well-honed script about the risks to Britain’s recovery on Thursday, even if, as City analysts expect, official figures show that economic growth picked up sharply in the second quarter of the year, reports The Guardian.
After a modest 0.3 per cent increase at the start of 2013, which scotched fears of a renewed slide into recession, experts have pencilled in GDP growth of 0.6 per cent, or perhaps even better.
Egypt’s Gaza Crackdown Hammers Economy
An aggressive crackdown by Egypt’s interim government on smuggling tunnels between Egypt and the Gaza Strip is crushing the Palestinian enclave’s economy, sparking concerns it could fuel a militant backlash, reports The Wall Street Journal.
In the days after Egypt’s military pushed President Mohammed Morsi from power, the army led what local residents described as an unprecedented assault on the tunnel trade, strangling a lifeline for construction materials and fuel into the blockaded strip.