Morning papers: Royal Mail to float on stock market

Royal Mail this morning announced its intention to float on the stock market, kickstarting the privatisation process which is expected to value the state-owned postal network at between £2.5bn and £3bn, reports The Times.

Today’s announcement makes an initial public offering (IPO) likely within weeks and will put the float on a timetable that could clash with the biggest industrial action at Royal Mail in years.

Record number of estate agents raises fears of unsustainable housing bubble

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Britain now has a record number of estate agents, official figures have revealed, underlining fears that the fledgling economic recovery is based on inflating an unsustainable housing bubble, reports The Guardian.

The number of people employed in “real estate activities” increased by 9.9 per cent between March and June (the latest month for which data are available), according to the Office for National Statistics.

Jobless boost puts markets on alert for early rate rise

The pound surged yesterday to its highest level against the dollar since January as investors bet that the Bank of England will lift rates sooner than expected in response to the rapidly improving jobs market, reports The Times.

The number of jobless benefit claimants dropped to 1.4m in August, the lowest since early 2009, in the latest sign that Britain’s recovery is gathering steam.

Libor control to remain in London

Brussels has ditched its plan to put the scandal-mired Libor lending rate under the direct control of a European supervisor in Paris, in a concession that removes a serious political nuisance for Britain, reports the Financial Times.

Early drafts of the European Commission regulation, which is to be unveiled next week, called for shifting direct supervision of Libor from London to the European Securities and Markets Authority, based in France.

George Osborne rejects Vince Cable’s Help to Buy concerns

The Treasury has opened up a significant rift with the Business Secretary over the Government’s controversial Help to Buy scheme, saying that the mortgage support policy would go ahead in spite of Vince Cable’s concerns, reports The Daily Telegraph.

The move came after the Liberal Democrat Business Secretary suggested that the second stage of the policy should not be launched if fears over a growing bubble in house prices proved correct.

Derivatives move from banks into the shadows

Shadow financial institutions have taken advantage of the wave of new regulation to steal the lion’s share of the derivatives business from the major banks in a blow to those institutions’ profitability, according to traders, reports the Financial Times.

Bankers fear the trend, underpinned by tougher capital rules for the banks, can only increase as regulations come into force encouraging bilateral over-the-counter deals on to exchanges, where pricing is more transparent. The obligatory clearing of trades, theoretically in place since the end of last year, will further erode margins.