Hopes are growing that the crisis in the Ukraine may be abating as Russian president Vladimir Putin pledged to pull troops back from the country’s eastern border and called on pro-Russia separatists to postpone a planned referendum on independence.
According to the Financial Times, Mr Putin also shifted away from recent hardline tone by describing upcoming presidential elections in Ukraine later this month as a “step in the right direction”.
He added, however, that the Kiev government must first hold talks with separatists in the east and suspend “unacceptable” military operations against pro-Russian groups.
His comments followed a meeting with Didier Burkhalter, the Swiss president who chairs the Organisation for Security and Co-operation in Europe, which has been undertaking monitoring work in the country under a previous agreement.
Western officials treated the comments with caution, with Nato and the Pentagon stating there has yet been no sign of any actual pullback of the 35,000-40,000 troops amassed on the eastern Ukrainian border.
Russia’s Micex index closed 3.4 per cent higher yesterday, marking a six-week high.
Pfizer attempts to dispel fears
Pfizer has sought to dispel fears that its proposed £63bn takeover of AstraZeneca would lead to big cuts in British drug research, according to The Guardian.
The news came as the Anglo-Swedish company’s fourth-largest shareholder came out in support of the board’s rejection of the approach.
Sweden’s Investor AB, which owns 4.1 per cent of AstraZeneca, said it was “backing the board” of the company – the biggest investor so far to publicly back the drugmaker’s battle to stay independent.
Yesterday, the Financial Times reported that Sweden’s finance minister Anders Borg has raised fresh questions over Pfizer’s commitment to keeping science jobs in Europe if it buys AstraZeneca, saying “it failed to live up to promises made when it bought a Swedish drugmaker more than a decade ago”.
Ex-chancellors warn of housing bubble
Three former chancellors of the exchequer have urged the chancellor to rethink his Help to Buy programme, following yesterday’s warning from a think-tank to scale back the mortgage support scheme, the Financial Times reports.
Lord Lawson, Lord Lamont and Alistair Darling – all predecessors of George Osborne at the Treasury – said the second phase of the scheme, which guarantees very high loan-to-value mortgages, has the “potential to inflate a future housing bubble”.
Mr Osborne faces a growing cross-party consensus that “Help to Buy 2” should be scaled back, with Vince Cable, the Liberal Democrat business secretary, among those to have called on Mr Osborne to reconsider it because of a “raging housing boom”.
The OECD, the economic think-tank representing wealthy nations, has called on the government to consider “tighter access” to Help to Buy to address the risk of “excessive” house price inflation.
Last week, the Bank of England warned if the Mortgage Market Review fails to cool down the housing market, it will have to step in.
The Bank of England admitted it would be “dangerous” to ignore rapidly rising house prices.
This follows a report by the Royal Institution of Chartered Surveyors that house sales have hit a six-year high.
House sales hit six-year high
House sales hit the highest level in six years last month despite property supply issues getting more acute, the Daily Mail reports.
A new report by the Royal Institution of Chartered Surveyors revealed that 26 per cent of surveyors reported increased agreed sales in the three months to April, with each surveyor having sold an average of 23 properties - the highest figure since February 2008.
However, the number of new properties for sale coming into the market fell for the fourth consecutive month - as the market “continues to be marred by weak supply and high demand”, which is forcing house prices higher.
London, where prices have risen at more than double the average rate in the rest of the country, could see a slowdown in price growth in the second half of the year, Rics said.
London house prices have risen by over 12 per cent in the last year according to Land Registry figures, but Rics said the balance of surveyors expecting prices to rise had fallen to 49 per cent in April from 61 per cent in March.
According to Nationwide, house prices rose by 10.9 per cent in 2013.
Barclays to cut 7,000 investment jobs
Barclays is set to cut more than a quarter of the staff in its investment banking arm as part of a radical overhaul of the lender that will also lead to the closure and disposal of its entire European retail business, the Telegraph reports.
About 7,000 staff employed by the old Barclays Capital division will lose their jobs, out of a current workforce of just over 26,000, that will see the bank shrink its trading operations and focus more on underwriting new issues of bonds and shares.
Overall, Barclays said it had increased its redundancy target for this year to 14,000, with thousands more jobs expected to go in businesses outside of the investment bank in an effort to cut costs.
Ireland’s justice minister quits
Ireland’s justice minister resigned yesterday (7 May), “the second senior figure to fall victim to a bitter political dispute about the competence and integrity of the country’s police force”, the Financial Times reports.
Alan Shatter quit just three weeks before local and European elections in which the Fine Gael and Labour parties that make up the coalition are “struggling to get across a coherent message”.
Mr Shatter’s resignation was the result of a report by a senior barrister into alleged malpractice by the Garda Síochána, the Irish police force.
