Morning papers: Consumer borrowing ‘fastest since 2008’

The Bank of England has admitted to an error in its data and said consumer borrowing has been growing at its fastest rate since before the financial crisis five years ago, reports the Guardian.

The Bank said on Thursday that net unsecured lending to consumers – overdrafts, personal loans and credit cards – rose by £864m last month, the biggest increase since December and more than double the £411m figure it first reported and the strongest growth in the figure since April 2008.

The surge in borrowing will raise concerns that Britain is relying on a debt-fuelled recovery at a time when policymakers have repeatedly stressed the need to rebalance the UK economy away from spending and towards manufacturing and exports.

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Barclays and RBS sued by Fannie Mae over Libor scandal

Barclays and the Royal Bank of Scotland are among nine banks being sued by the US mortgage market giant Fannie Mae over the alleged manipulation of the benchmark Libor interest rate, reports the Independent.

In a case filed in the US yesterday, Fannie Mae sought damages for what it said were losses connected to the alleged misconduct in relation to the benchmark rate.

Europe moves nearer Japan-syle deflation trap with shock price falls

All key measures of eurozone inflation fell dramatically in October, stunning the markets and leaving the region dangerously close to a Japan-style deflation trap, reports the Daily Telegraph.

Consumer price inflation plunged from 1.1 per cent to 0.7 per cent, the lowest since the financial crash in 2008-2009. The underlying rate is even lower once austerity-linked tax rises are stripped out.

RBS small business lending a failure and needs ‘overhaul’

Royal Bank of Scotland has been told its whole system for lending to smaller companies requires a complete overhaul after a report into the bank’s business found major failings in the way it deals with SMEs, reports the Daily Telegraph.

Germany rebuffs US Treasury criticism

Germany has struck back at the US Treasury after it became the target of an unusual swipe in a report blaming the eurozone’s biggest economy for giving a deflationary bias to the euro area and the world economy, reports the Financial Times.

Treasury considers tax raid on foreign property owners

London’s booming high-end property market – fuelled by cash-rich foreign investors – has been targeted by ministers for a new tax raid, as George Osborne tries to fill a £1.2bn hole in the public finances, reports the Financial Times.

AIG completes buyback as profits improve

AIG announced it had completed its first share buyback since its $182bn (£113.8bn) government bailout during the financial crisis, as the insurance group posted improved third-quarter profits on Thursday, reports the Financial Times.