Four-year negative equity warning

31 August 2010 Last updated at 05:30 ET

Homeowners who bought at the peak of the market face four more years of negative equity, a housing group said.
The National Housing Federation (NHF) said the average buyer in England paid £216,800 for a home in 2007.
They may now have to wait until 2014 before prices recover enough to make their homes worth more than they paid.

Meanwhile, figures from the Bank of England show that the number of mortgages approved for UK home buyers was barely changed in July at 48,722.
The figures reinforce data from lenders and surveys which suggest that prices have reached a plateau after the revival that started in the spring of 2009.
The Bank‘s figures show that in July, the number of mortgage approvals was just 160 higher than in June and only slightly higher than the average recorded in the previous six months.
With lenders continuing to ration severely their loans to house buyers, net mortgage lending rose by only £86m in July, one of the lowest monthly increases on record.
“The Bank’s July mortgage figures offer further evidence of a stabilisation in the level of home loans,” said Brian Murphy of mortgage brokers the Mortgage Advice Bureau.
“The October Spending Review — D-Day for consumer confidence — is approaching fast and many prospective borrowers are understandably being cautious.”
Forecasts
According to the NHF, house prices in England will dip again next year by 3%, before steadily climbing thereafter.
Continue reading the main story
“Start Quote

Proposed caps on housing benefit payments could also put nearly a million people on low incomes at risk of losing their home”

Read more

Pensions ‘require funding boost’

31 August 2010 Last updated at 05:42 ET

Workers may need to pay more for their pensions amid a continuing picture of fund deficits, two surveys suggest.
Employees of large firms could have to invest more because of the costs of a new system to include more people in company pensions, actuaries warned.
Four in 10 companies would reduce future scheme benefits to pay the additional costs, the Association of Consulting Actuaries’ survey found.
Meanwhile, KPMG said business growth could be hit by pension costs.

The accountancy firm said that its analysis showed the UK’s largest firms were facing a growing pensions shortfall.
‘Cut back’
The poll of large firms conducted by the Association of Consulting Actuaries (ACA) found that 41% of employers said they were “likely” or “highly likely” to cut back the benefits of existing deals.
This was because they needed to meet the cost of a new scheme - being brought in from 2012 to 2017 - to automatically enrol some workers into a company pension.
Exactly the same proportion of small businesses said they might cut their existing pension scheme entirely and replace it with a government-sponsored scheme, when the ACA conducted a poll last year.
The government is currently reviewing the auto-enrolment plan. Companies will initially only have to pay in 1% of a worker’s earnings, rising to a minimum of 3% by 2017.
Individuals will have to contribute 4% of their salary to their scheme, with the government topping this up with 1%.
Continue reading the main story
“Start Quote

The pensions outlook for those aged 45 and over no longer looks quite as spectacularly good as it did”

Read more

Yen worries hit Japanese stocks

31 August 2010 Last updated at 03:49 ET

Continue reading the main story

Japanese stocks have seen sharp falls in response to the Bank of Japan’s attempts to curb the rising yen.
In Tokyo, the Nikkei 225 index fell more than 3.5%, hitting a fresh 16-month low.
On Monday, Japan’s central bank announced plans to boost low-interest lending, in an effort to bring down the value of the currency.
But the yen remains at 15-year highs and investors are concerned over the impact that could have on exporters.
A strong yen makes Japanese goods more expensive abroad, hitting exporters’ profits.
Electronics giant Sony was hit by the sell-off, losing 3.66% of its share price.
‘Tokenistic gesture’

Car maker Toyota was down nearly 2.4%, while Toshiba lost 4.7%.
The Bank of Japan said it would boost cheap lending to commercial banks by 10 trillion yen ($117bn; £75bn), in an attempt to ease pressure on the yen.
The Japanese government also said it would initiate a further 920 billion yen of stimulus measures.
But BBC Tokyo correspondent Roland Buerk said the move had been seen as a “tokenistic gesture” by investors.
“Government ministers here have been trying to talk down the yen,” he said.
“They have said they will take decisive action, [but] the problem is that the limited action they have taken so far has looked anything but decisive.”
This entry passed through the Full-Text RSS service — if this is your content and you’re reading it on someone else’s site, please read our FAQ page at fivefilters.org/content-only/faq.phpFive Filters featured article: “Peace Envoy” Blair Gets an Easy Ride in the Independent.

India growth rate rises to 8.8%

31 August 2010 Last updated at 05:17 ET

India’s economy grew at its fastest rate for more than two years in the last quarter, according to official data.
In the three months to June, GDP was up 8.8% compared with the same period last year.
Although only the 11th biggest economy in the world, India is the second fastest-growing, behind China.

Strong industrial and mining output helped boost the growth rate, India’s statistics agency said.
Industrial output rose more than 12%, while mining and quarrying jumped nearly 9%.
Services including hotels and banking also did well, with output up nearly 10%.
Services account for 55% of India’s economy, while industry makes up around 25% of output.
In July, the Reserve Bank of India said it expected annual growth for the current financial year to come in at about 8.5%.
But the bank has also said bringing down inflation remains a priority.
The inflation rate topped 11% last month and the strong performance in the economy is expected to encourage policymakers to continue raising interest rates.
Growth to slow
So far this year, the central bank has raised interest rates four times in a bid to curb inflation.
Continue reading the main story
“Start Quote

The Indian economy needs to depend on domestic drivers for growth”

Read more

Central banks ‘face more tasks’

29 August 2010 Last updated at 06:36 ET

Central banks may have to provide more economic support amid a fragile global recovery, the deputy governor of the Bank of England has warned.
Charles Bean said policymakers had prevented a financial market collapse but further action might be required.
He was speaking at the Economic Policy Symposium in Jackson Hole, Wyoming.
At the same event, US Federal Reserve chief Ben Bernanke set out “unconventional” policy options to boost the US economy.
The event, which attracts leading central bank figures, is this year focused on monetary policy lessons from the recent crisis.
‘Emergency Use Only’
Presenting a report to the conference, Mr Bean said that the Bank of England had been unable to prevent the crisis because its powers - primarily the setting of interest rates - were not powerful enough.
He also hinted that there may be a need to increase so-called quantitative easing - the pumping of new money into the economy.
“The deleveraging process is incomplete, the recovery remains fragile and a considerable margin of spare capacity is yet to be worked off, while further policy action may yet be necessary to keep the recovery on track,” he said.
But he added that “normal times will surely return in due course”.
Mr Bean also said that government purchase of securities - such as bonds and shares - was an effective way for central banks to ease financial conditions in a crisis.
However, he insisted that adjustments to interest rates should be used in normal times, with asset purchases “best kept in the locker marked For Emergency Use Only,”
Bank reserves
Later this year, the coalition government will unveil details of new powers for the Bank to try and head off any future crisis.
And Mr Bean used his speech to set out examples how these could underpin “macro-prudential policy” under the Financial Regulations Bill.
These included forcing banks to build up reserves in good times to help them weather downturns, and imposing restrictions on how much money mortgage lenders would provide.
“With an additional objective of managing credit growth and asset prices in order to avoid financial instability, one really wants another instrument that acts more directly on the source of the problem,” he said.
“That is what macro-prudential policy is all about.”
Mr Bean’s speech came after data showed that the UK economy grew by more than initially thought in the second quarter of 2010, boosted by a strong performance by the construction sector.
The economy grew by 1.2% in the quarter, the Office for National Statistics (ONS) said, revising up its initial estimate of 1.1% growth.
That was the fastest rate of quarterly expansion recorded since the first three months of 2001.
But most economists do not expect this level of growth to continue.
Meanwhile, the US Commerce Department revised down its growth estimate for the second quarter.
It now says the US economy grew at an annual rate of 1.6%, down from its first estimate of 2.4%.
Of the policy options set out by Mr Bernanke, top of the list is more quantitative easing.
This entry passed through the Full-Text RSS service — if this is your content and you’re reading it on someone else’s site, please read our FAQ page at fivefilters.org/content-only/faq.phpFive Filters featured article: “Peace Envoy” Blair Gets an Easy Ride in the Independent.

Sanofi makes $18.5bn Genzyme bid

29 August 2010 Last updated at 13:33 ET

French pharmaceutical group Sanofi-Aventis has made a $18.5bn (£11.9bn; 14.5bn euros) cash bid for biotechnology firm Genzyme.
Sanofi’s interest in the US-based firm emerged earlier this month, but this is its first formal offer.
But Sanofi did not go straight to Genzyme’s investors, making a formal approach to the company’s board.
Genzyme, which employs about 11,000 people worldwide, researches treatments for a range of serious illnesses.
The offer has been made at $69 per share but observers expect Genzyme to hold out for a higher bid.
Sanofi is France’s fourth-largest company by market value.
If the deal went ahead, it may become the biggest corporate swoop on a US firm by a French group since media conglomerate Vivendi’s purchase of Seagram in 2000.
This entry passed through the Full-Text RSS service — if this is your content and you’re reading it on someone else’s site, please read our FAQ page at fivefilters.org/content-only/faq.phpFive Filters featured article: “Peace Envoy” Blair Gets an Easy Ride in the Independent.

Economy grew ‘more than thought’

27 August 2010 Last updated at 13:24 ET

The UK economy grew by more than initially thought in the second quarter of 2010, boosted by a strong performance by the construction sector.
The economy grew by 1.2% in the quarter, the Office for National Statistics (ONS) said, revising up its initial estimate of 1.1% growth.
That was the fastest rate of quarterly expansion recorded since the first three months of 2001.
But most economists do not expect this level of growth to continue.

The first estimate of gross domestic product (GDP) is usually revised twice at monthly intervals.
Meanwhile, the US Commerce Department revised down its growth estimate for the second quarter.
It now says the US economy grew at an annual rate of 1.6%, down from its first estimate of 2.4%.
Federal Reserve chairman Ben Bernanke has responded, laying out four “unconventional” policy options to boost the US economy.
Top of the list is more “quantitative easing” - mass purchases of debt.
‘Positive’ effect
The ONS said construction output grew by 8.5% in the second quarter, up from a previous estimate of 6.6%.
Aileen Simkins from the ONS said the overall effect in the quarter had been “very positive”.
But one area that suffered a big fall was air transport, which fell 11%.
Ms Simkins said the fall in air transport reflected the effect in April of the ash cloud as well as the British Airways strike.
A spokesman for the Treasury said: “While the government is cautiously optimistic about the path for the economy, the job is not yet done.
“The priority remains to implement the Budget policies which support economic rebalancing and help ensure the sustained growth that the Office for Budget Responsibility forecast this year and next.”

‘Eyes on the road’
Growth in the key services sector, which accounts for about three-quarters of the UK economy, was revised down to 0.7%.
Continue reading the main story
“Start Quote

Read more

Bernanke ready to act on economy

27 August 2010 Last updated at 18:34 ET

Federal Reserve chairman Ben Bernanke has laid out four “unconventional” policy options to boost the US economy.
Top of the list is more “quantitative easing” - mass purchases of debt.
Speaking to fellow central bankers at the annual Jackson Hole symposium in Wyoming he said the recovery had slowed to “a pace somewhat weaker” than forecast.
Hours earlier economic growth for April to June was revised to an annualised rate of 1.6%, down from 2.4%.
Continue reading the main story

America’s top banker says the country’s biggest economic problem is confidence. But is he doing enough to inspire it? ”

End Quote Mark Mardell BBC North America editor

Read more

Electric cars ‘can be costlier’

27 August 2010 Last updated at 19:01 ET

By Brian Milligan Business reporter, BBC News

Motorists considering buying an electric car are being warned that they can be more expensive to run than conventional petrol vehicles.
Nissan is due to start taking UK orders for what it says will be the world’s first mass-produced electric car.
It says running costs for the Nissan Leaf will be as low as 1p a mile.
But figures given to the BBC by a rival car firm suggest that over three years, electric cars could be more expensive to run than their petrol equivalents.
The figures come from the Japanese car-maker Mitsubishi, which also produces an electric car.
The high purchase price, and the rapid depreciation, are what may make electric cars uncompetitive financially.

Comparative costs of petrol v electric cars.

Fiat 500 Lounge 1.2 petrol
Mitsubishi i-miev electric car

Read more

Boeing delays Dreamliner delivery

27 August 2010 Last updated at 07:48 ET

Boeing is delaying delivery of its first new-generation 787 Dreamliner aircraft until early 2011.
Japan’s All Nippon Airways was due to take delivery of the aircraft at the end of this year.
The 787 project has already been delayed for more than two years, following a series of hitches.

Boeing said on Friday the setback was due to the availability of a Rolls-Royce engine needed for the final phases of flight testing.
The US company said that it now expected All Nippon to take delivery of the aircraft in the middle of the first quarter of 2011.
The 787, being built in Seattle, is Boeing’s most sophisticated plane yet. The company claims the carbon-composite aircraft will be lighter, faster and emit less CO2 than similar-sized planes currently flying.
However, delays on such huge industrial programmes are not uncommon. Development of Airbus’ A380 super-jumbo was dogged by problems, plunging the manufacturer into heavy losses and forcing a clear-out of management.
ANA has ordered 55 Dreamliners, eight of which Boeing had promised to deliver by the end of March.
“Given the success of the flight test programme so far, it is regrettable to hear of the delay,” said an All Nippon spokeswoman.
Engine failure
A spokesman for Rolls-Royce said: “We have been informed by Boeing that the currently planned dates for Trent 1000 engine deliveries will now not support their latest flight test programme requirements.
“We are working closely with Boeing to expedite delivery in support of their programme schedule.
“Rolls-Royce confirms that the engine availability issue is unrelated to the test bed event which occurred earlier this month.”
Continue reading the main story
Difficult births

Boeing 787
July 2007: First 787 unveiled, with test flight planned for August and first deliveries May 2008
Oct: Test flight delayed and deliveries pushed back
Jan 2008: Test flight delayed again and deliveries now set for early 2009
April: Lack of components means deliveries now set for late 2009
Dec: Strikes force another revision of test flight and delivery schedule
June 2009: Long-awaited maiden flight delayed

Read more

Next Page »