Morning papers: Osborne faces £20bn ‘black hole’

Britain faces another year of austerity owing to a £20bn “black hole” in public finances, the Financial Times reports.

According to the paper, official government economic models wrought by the Office for Budget Responsibility and replicated by the FT suggest the government should stop relying on an economic recovery to eliminate part of the budget deficit.

The paper adds that although the country has enjoyed a significant recovery, indicators of the economy’s capacity for future growth have deteriorated.

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These estimates come two weeks before Budget day.

US and EU impose sanctions in Russia warning

US president Barack Obama and allies in the European Union revealed a set of sanctions designed to punish Russia for occupying the Crimean pensinsula, the Guardian reports.

The move follows a unanimous and sudden vote by the Crimean parliament to secede from Ukraine and become part of Russia, with a referendum on 16 March.

However, German chancellor Angela Merkel said: “The decision to hold a referendum in Crimea is illegal and not compatible with the Ukrainian constitution.”

House prices show biggest monthly jump in five years

Analysts have warned that the acceleration of UK house price growth is “approaching madness” after new data showed prices jumping 2.4 per cent in February, the Telegraph reports.

The paper reports that the latest Halifax House Price Index far outstrips analysts’ predictions of a 0.7 per cent rise, renewing fears of a potential bubble.

Draghi: Euro is ‘island of stability’

European Central Bank head Mario Draghi has claimed the euro is “an island of stability” despite sluggish economic growth and high unemployment figures, the Daily Mail reports.

According to the paper, Mr Draghi said a “modest recovery” was underway as the central bank held interest rates at 0.25 per cent.

Mr Draghi said: “The euro is an island of stability. It has to go back to being also an island of prosperity and job creation but certainly it is an island of stability.”

Rogue trader in 1,400km protest walk

French rogue trader Jérôme Kerviel is walking 1,400km from Rome to Paris to atone for exposing his bank Société Générale to €50bn (£41.4bn) in risk, the Independent reports.

Mr Kerviel claims he was inspired by Pope Francis to take the march to Paris, where he will learn if the French Supreme Court will confirm his five year jail sentence and order him to pay £4.13bn in compensation.

His activity is said to have cost the bank €4.9bn (£4bn) in 2008. He was convicted two years later of breach of trust, forgery and illegal use of computers. However he insists he does not owe the £4bn in compensation.