UK BUSINESS leaders, economists and politicians demanded a new
economic strategy from the government yesterday, claiming its approach
had been shown up as a failure after GDP nose-dived in the second
quarter by 0.7%, meaning the UK is now in the longest double-dip
recession for more than 50 years.
MOODY’s last night changed its outlook on 17 German banking groups to
negative because their ratings incorporate support from the German state.
The change follows Moody’s decision earlier in the week to change the
outlook on German sovereign ratings to negative from stable.
EU LEADER Jose Manuel Barroso demanded more cash from member
states yesterday, arguing the budget increases they offered are not
enough. Barroso called for 6.8% increase on the year for the 2013 budget,
but state leaders voted for a 2.79% rise.
AMERICAN authorities did all they could to warn British regulators over
flaws in the Libor system, as far back as 2008, the defiant US Treasury
secretary Timothy Geithner told politicians in Washington DC yesterday.
He insisted that US regulators warned the Bank of England about Libor
manipulation, saying that the failure of governance occurred in Britain.
LIBOR manipulation will become a crime across the EU under new plans
unveiled yesterday. The announcement comes after Barclays was fined
£290m by the FSA for entering false interest rates to the British Bankers’
Association who set the key interbank lending rate.
DEMAND for many types of credit fell again in the second quarter, ECB figures showed yesterday, hitting lending and
spending in the Eurozone. 25% of banks reported falling demand for loans to businesses, with 27% saying that
consumer credit demand had dropped.
OVERNIGHT, Asian stocks headed for the first advance in five days after a drop in US new home sales fueled
speculation the Federal Reserve may take new steps to spur growth, boosting demand for growth-sensitive shares.
TODAY, European stocks are seen mixed after touching four-week lows yesterday, as rising expectations of further US
stimulus to revive growth as well as hopes of new measures to resolve the EU debt crisis halt the week-long slide.
STERLING sunk to a two-week low against the dollar after disappointing UK GDP data was released, down at $1.55
compared to recent highs well above $1.57. The pound was also down 0.8% on the euro. Meanwhile, the yen gained
against most of its counterparts on signs of weakening global growth, boosting demand for the currency as a refuge.
UK GAS producers are set to receive a £500m tax break, while there will be a 10% cut in the subsidies provided for
onshore wind turbines, the government announced yesterday. It is understood that the Treasury was keen to cut wind
turbine subsidies by 25% but Lib Dem energy secretary Ed Davey successfully argued that this would severely affect
private sector investment in renewable energy.
HONG KONG’s largest gold-storage facility, which can hold about 22% of the bullion now in Fort Knox, will open in
September to meet rising demand from banks and the wealthy, according to its owners. The move in Hong Kong reflects
increased demand for gold in Asia even as the commodity struggles to sustain its rally into a 12th year.