Shop Direct alters centre structure

By James Hall

Published: 5:30AM GMT 29 Jan 2010

The retailer, which used to be called Littlewoods, said that it has more space
in its contact centres than it needs to handle the declining volumes of
phone calls from customers. Less than four years ago, 33m calls were taken
through its contact centre, compared to only 19m calls today.

“Customers are choosing to transact through the web and manage their
accounts online,” the company said.

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Factory prices rise at fastest rate in a year

British factory gate inflation rose by more than expected in December and at
its fastest rate in nearly a year, official figures showed today.

The price of goods leaving factories rose by 3.5 per cent on last year,
according to the Office for National Statistics (ONS), beating forecasts of
a 3.1 per cent increase.

Output prices rose by 0.5 per cent on a monthly basis, reflecting increases in
other manufactured products, transport equipment, food and electrical
products.

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Better a ban on self-cert loans than more bailouts

Most people’s reaction to news that the Financial Services Authority plans to outlaw self-certification mortgages will probably be to ask what took the regulator so long.
Self-certs, or “liars’ loans”, were one of the most obvious symptoms, in late 2006 and early 2007, that the housing market had become overcooked. In 2007, according to the FSA discussion paper on mortgage regulation published yesterday, getting on for half of all UK mortgages sold were on a self-cert basis.
Under normal market conditions, because self-cert mortgages are higher risk, they will be more expensive. However, because of excess capacity in 2006-07, risk was inappropriately priced. There will always be some people who want to abuse the system. In these circumstances, they were able to — aided and abetted by banks, which, unable to believe their luck in being able to parcel up such loans and sell them on to investors gulled by credulous ratings agencies, lost all incentive to lend carefully.
The question is whether the FSA’s proposals now risk throwing out the baby with the bath water. After all, for many of the self-employed, a self-cert mortgage is the only way they can raise sufficient credit to get on to the housing ladder. Many of these people will find it far more difficult to obtain home loans under the FSA’s proposed new rules.

Opponents of excessive regulation will also argue that the market has already done the FSA’s job for it. Risk has been repriced to the extent that many — if not most — people who previously would have relied on self-certs are now no longer able to borrow in this way. In these circumstances, an outright ban seems unfair and inappropriate.
The ban on self-certs also seems somewhat baffling given that, in declining to introduce a compulsory cap on either loan-to-value or loan-to-income ratios, the FSA appears to have decided the market has saved it a job. Many will wonder why the regulator is not, for example, seeking to outlaw home loans worth more than 100 per cent of a property’s value — the types of mortgage in which Northern Rock so notoriously specialised. The answer seems to be that the FSA has concluded new rules on the amount of capital a bank must hold, introduced last year by the Basle committee, have done the trick in persuading banks and building societies to tighten their lending practices and conserve capital. And, in what Hector Sants, the FSA’s chief executive, calls its “more intrusive and interventionist” mood, it can always implement a ban at a later date if necessary.
In practical terms, though, despite these wrinkles, few will have serious quibbles with the FSA’s proposals. Essentially, the regulator is urging lenders to know its borrowers better, a practice with which those in the retail investment industry are already familiar — in some cases, wearily so. Nonetheless, if these measures make it less likely that the banks have to receive another bailout from taxpayers, they are more than appropriate.
They would certainly have helped to prevent the last blowout — or, at the very least, lessened its extent — and will also, crucially, help to save some borrowers from themselves.
They may also contribute to the UK housing market becoming less volatile in future. No bad thing.
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Better a ban on self-cert loans than more bailouts

Most people’s reaction to news that the Financial Services Authority plans to outlaw self-certification mortgages will probably be to ask what took the regulator so long.
Self-certs, or “liars’ loans”, were one of the most obvious symptoms, in late 2006 and early 2007, that the housing market had become overcooked. In 2007, according to the FSA discussion paper on mortgage regulation published yesterday, getting on for half of all UK mortgages sold were on a self-cert basis.
Under normal market conditions, because self-cert mortgages are higher risk, they will be more expensive. However, because of excess capacity in 2006-07, risk was inappropriately priced. There will always be some people who want to abuse the system. In these circumstances, they were able to — aided and abetted by banks, which, unable to believe their luck in being able to parcel up such loans and sell them on to investors gulled by credulous ratings agencies, lost all incentive to lend carefully.
The question is whether the FSA’s proposals now risk throwing out the baby with the bath water. After all, for many of the self-employed, a self-cert mortgage is the only way they can raise sufficient credit to get on to the housing ladder. Many of these people will find it far more difficult to obtain home loans under the FSA’s proposed new rules.

Opponents of excessive regulation will also argue that the market has already done the FSA’s job for it. Risk has been repriced to the extent that many — if not most — people who previously would have relied on self-certs are now no longer able to borrow in this way. In these circumstances, an outright ban seems unfair and inappropriate.
The ban on self-certs also seems somewhat baffling given that, in declining to introduce a compulsory cap on either loan-to-value or loan-to-income ratios, the FSA appears to have decided the market has saved it a job. Many will wonder why the regulator is not, for example, seeking to outlaw home loans worth more than 100 per cent of a property’s value — the types of mortgage in which Northern Rock so notoriously specialised. The answer seems to be that the FSA has concluded new rules on the amount of capital a bank must hold, introduced last year by the Basle committee, have done the trick in persuading banks and building societies to tighten their lending practices and conserve capital. And, in what Hector Sants, the FSA’s chief executive, calls its “more intrusive and interventionist” mood, it can always implement a ban at a later date if necessary.
In practical terms, though, despite these wrinkles, few will have serious quibbles with the FSA’s proposals. Essentially, the regulator is urging lenders to know its borrowers better, a practice with which those in the retail investment industry are already familiar — in some cases, wearily so. Nonetheless, if these measures make it less likely that the banks have to receive another bailout from taxpayers, they are more than appropriate.
They would certainly have helped to prevent the last blowout — or, at the very least, lessened its extent — and will also, crucially, help to save some borrowers from themselves.
They may also contribute to the UK housing market becoming less volatile in future. No bad thing.
This content has passed through fivefilters.org.

Factory gate prices rise in September

Prices at the factory gate rose for the first time in five months in
September, with almost all sectors taking part in the unexpected rise,
according to official figures today.

The Office for National Statistics said that non seasonally adjusted output
prices rose 0.5 per cent in September.

It took the annual rate of inflation to 0.4 per cent, the first positive
reading since April. Prices registered a 0.3 per cent fall in August.

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British manufacturing suffers surprise contraction in August

Reuters

Published: 9:55AM BST 01 Sep 2009

The headline manufacturing purchasing managers’ index fell to 49.7 last month
from a downwardly-revised 50.2 in July. That was the first fall since
February and well below the consensus forecast for a rise to 51.5.

However, a breakdown of the data suggested some reasons for optimism. Output
rose at its fastest pace since December 2007 and stocks of finished goods
fell at their second-fastest rate on record.

“The data are a mixed bag,” said Rob Dobson, senior economist at Markit, the
compiler of the survey.

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Germany picks Magna to save Opel

Germany has agreed a deal with Magna International, a Canadian car parts maker, to take over Opel, part of the European wing of US carmaker GM.

Talks in Berlin continued into early Saturday before Germany’s finance minister announced a deal.

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