Aug/090
Extra £50bn pumped into UK economy
The quantitative easing programme launched by the Bank of England last year was aimed at stabilising the economy and, while the country seems to be over the worst of it, the sheer size of the problems means the Bank of England have deemed it neccessary to pump an extra £50bn into the economy.
The original £175bn was has still not been phased into the economy fully and estimates suggest that £25bn is still left out of it. However, a statement read “the recession appears to be much deeper than previously thought”.
On top of this the interest rate setters also kept rates at their all time low of 0.5% for the fifth month in a row.
Aug/090
Lloyds blames huge 6 month loss on HBOS
After announcing that they had made a £4 billion loss in the first 6 months of 2009, Lloyds were quick to shift the focus of blame from themselves to HBOS whom they took over back in January. The loss was always inevitable given the scale of the takeover and Lloyds are hiding behind the fact that they are currently dealing with not only their own financial problems but HBOS’ cripling debts as well.
The bank is currently publicly owned to the tune of 43% after they went cap in hand to the Government to cover cripling debts with a £13.4bn loan. This was to cover ‘toxic loans’, 80% of which belonged to HBOS. Despite this depressing news, Lloyds are optimistic about the future suggesting that financial results will begin to improve in the near future.
The one thing to be taken from this is that HBOS were wildly irresponsible in their risk taking and were probably the most guilty of all UK’s major banks. It also serves as a reminder that we should think twice before going back to a culture of short-selling, bonuses, and self-gain risk taking.
Jul/090
House of Commons transport committee: Higher ticket fares on the way
The House of Commons transport committee has criticised privately owned rail franchises for increasing ticket prices, up to 11% in the recession. The consensus amongst the committee was that the current relationship between rail companies and commuters is unfair, with passengers being treated unfairly. The franchising system means companies bid to run trains on a particular route and those that bid the highest premium payments win the contracts. The rise in ticket costs on regulated rail fares including all season tickets rose on average 6% which is contrary to negative inflation and disproportionate to the real economy.
Lord Ardonis, Transport Secretary reiterated that the report backed a policy by the government to limit fares to no more than 1% above inflation. The consequence being lower fare rates by January 2010. In reply to the criticism the Association of Train Operating Companies stated that the existing system offers a punctual service and that passengers are satisfied.
Jul/090
New Bill to stop Shares Short Selling
The Short Selling and Bank Accounts Bill is being brought to the commons for debate in June, and is hoped will stop short selling and under hand tactics by lenders. Those who sell shares in a bid to later buy them back at a cut price will hopefully be banned if the bill is brought in. Ministers who are backing the bill say that short selling is an immoral practice, and if the bill is brought in it will require banks to offer retail customers current and savings accounts free of charge for holding the accounts when they are in credit.
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