Morning papers: China rates spike raises cash-crunch fears

China’s money rates shot up on Thursday after the central bank withdrew cash from the financial system, fuelling worries that the world’s second-biggest economy might see a replay of a liquidity squeeze that rattled global markets earlier this year, reports the Financial Times.

The seven-day bond repurchase rate, a key gauge of short-term liquidity in China, opened at 5 per cent, a four-month high and up 150 basis points from the end of last week. But analysts said concerns of a cash-crunch redux were premature, with tightening moves by the central bank only mild so far and in large part directed at counteracting big inflows of cash from abroad.

Europe braces for another round of banking rescues

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Eurozone countries were given a double warning yesterday to set aside extra public funds in preparation for a new wave of bank bailouts, reports The Times.

In a stark reminder that the Continent’s economic crisis is far from over, the European Central Bank called for the 17 governments in the single currency to line up cash for bank rescues next year after it carries out a health check on the 128 largest lenders in the eurozone.

Plans for political union unravel in Europe

Europe’s quest to ensure the euro’s long-term survival by forging a deeper political union out of crisis is fizzling out, reports The Wall Street Journal.

A European Union summit, starting Thursday, was originally intended to pave the way for tighter coordination of economic policies, but now is expected to make little progress. Many European officials say they are losing hope of reaching a deal in the next year to build elements of a common government for the 17 countries that use the euro, including shared spending, borrowing and support for banks and depositors.

‘Quarantine’ call for City listings from overseas

The controversial mining group ENRC has claimed that foreign companies listing in UK should be given a “quarantine” period to adapt to life on the City’s main market, the London Stock Exchange, reports the Independent.

The company, which is being taken private by its founders and the Kazakhstan government for $4.6bn (£2.8bn), said it was not given enough time to evolve from a “private, Kazakh-based company” into a fully fledged public group.

London’s economic boom leaves rest of Britain behind

London’s economy is doing even better after the banking crash than during the bubble – while nearly every other part of the UK has seen its economy shrink by comparison, reports The Guardian.

Exclusive findings published by the Guardian show that London and the south-east are racing away from the rest of the UK at a pace that would have seemed almost incredible at the height of the financial panic.

Energy chief fights back over calls for windfall tax

ScottishPower has taunted ministers over the threat to levy a windfall tax on energy company profits after making a loss this year, which it blamed on having to fund the government’s expanding social and environmental programmes, reports The Times.