BoE Governor reluctant to raise base rate
by Gill Montia
Story link: BoE Governor reluctant to raise base rate
The Governor of the Bank of England, Mervyn King, has indicated that he is reluctant to raise the base rate in an effort to maintain the Government’s inflation target of 2%.
Addressing the House of Commons Treasury Committee, Mr King spoke about the balancing act of addressing inflationary pressures while remaining mindful of the dangers of […]
HBOS rights issue in jeopardy
by Gill Montia
Story link: HBOS rights issue in jeopardy
HBOS’s £4 billion rights issue looked in jeopardy today as the bank’s share price fell below the proposed offer price of 275p.
Shares in the UK’s largest mortgage lender fell almost 12%, to 258p, as the markets took up the strain of mounting concerns over the UK housing market.
This week’s news on the property sector has […]
UBA acquires Liberty Bank
by Richard Kilner
Story link: UBA acquires Liberty Bank
On Friday United Bank for Africa (UBA) announced it had acquired Liberty Bank (in liquidation).
Liberty Bank is the sixth failed firm taken over by the UBA, West Africa’s largest bank, in the course of the last year.
The other five banks are: City Express Bank, Gulf Bank, Trade Bank, Afex bank and Metropolitan bank.
Central Bank of […]
RBS ends free business banking
by Gill Montia
Story link: RBS ends free business banking
A Royal Bank of Scotland spokesperson has confirmed a report that has appeared in the Guardian newspaper, stating that the bank is to end free banking for its business customers.
Speaking on behalf of RBS, Carolyn McAdam said that the move would affect only a few thousand of the group’s one million business customers.
It […]
Spring base rate cut threatened by 6.2% factory gate inflation
by Gill Montia
Story link: Spring base rate cut threatened by 6.2% factory gate inflation
Hopes of a further cut in the base rate in the Spring are under threat with the news that the price of goods manufactured in the UK is rising.
According to the Office of National Statistics, annual output inflation (also known as factory gate inflation) rose to 6.2% during March, up from 5.9% in February.
The monthly […]
PFI deals decline to £7.3bn
by Gill Montia
Story link: PFI deals decline to £7.3bn
Last year, the value of UK Private Finance Initiative (PFI) deals declined to £7.3 billion, from a record level of £9.6 billion in 2006.
In a recent report, IFSL (International Financial Services, London), which promotes the UK-based financial services industry throughout the world, states as follows:
The number of PFI deals stood at 60 in 2007, which […]
BoE deputy on “largest-ever peacetime liquidity crisis”
by Gill Montia
Story link: BoE deputy on “largest-ever peacetime liquidity crisis”
The deputy governor of the Bank of England has warned of the consequences of slowing growth and rising inflation.
Speaking at the Institute of Economic Affairs in London, Rachel Lomax painted a bleak picture of the global economy, saying outlook has “changed dramatically” in recent months as a result of the credit squeeze and the increased […]
Bankruptcy loses social stigma
by Gill Montia
Story link: Bankruptcy loses social stigma
Figures from the Ministry of Justice released at the end of last week show that bankruptcy is losing its social stigma.
In 2007, 75% of individuals who petitioned for bankruptcy did so voluntarily. While overall bankruptcy petitions fell slightly last year, 53,114 people brought their own petitions, up from 52,717 in 2006.
Meanwhile, figures from the Insolvency […]
Darling U-Turn On CGT
by Stewart Douglas
Story link: Darling U-Turn On CGT
Chancellor Alistair Darling has today shocked analysts by announcing an embarrassing U-turn on the proposed capital gains tax changes scheduled to come into force in April, in a move that has been met with approval from private equity and entrepreneurial sectors.
The Chancellor today made the unprecedented announcement that he would turn back on initial proposals […]
Moody’s predicts rise in commercial loan defaults
by Gill Montia
Story link: Moody’s predicts rise in commercial loan defaults
Moody’s Investors Service is forecasting a sharp rise in the number of businesses world-wide that will be defaulting on their repayment obligations in 12 months’ time.
The credit rating agency is predicting that the global default rate will increase fourfold over the coming year (from 1.2% to 4.2%) as a result of the credit squeeze and […]
NatWest Three Prepare To Face Trial
by Stewart Douglas
Story link: NatWest Three Prepare To Face Trial
The three former UK bankers charged with committing fraud in connection with the Enron case will today appear before a court in the US having been extradited, to be tried under the law of Texas in a Houston courtroom after much debate as to their case.
The trio, branded the NatWest Three, will appear in Houston […]
Banks to guarantee six day cheque clearance
by Gill Montia
Story link: Banks to guarantee six day cheque clearance
From November 30th bank customers will be able to rely on cheques which have been paid into their accounts clearing within six days.
Currently, banks can reclaim money from a customer’s account if a cheque bounces or is a forgery.
The money can be reclaimed weeks or months after the event, leading to a situation whereby cheques […]
KKR Edges Towards IPO
by Stewart Douglas
Story link: KKR Edges Towards IPO
American private equity group KKR suggested today that it was to proceed with its previous goal of launching its initial public offering, despite the fact that securities markets worldwide have been shaken in recent months as a result of the summer sub-prime collapse.
The privately held firm, run by investment managers George Roberts and Henry Kravis, […]
HSBC to writedown a further $1bn in sub-prime losses
by Gill Montia
Story link: HSBC to writedown a further $1bn in sub-prime losses
It is rumoured that HSBC will be writing-down a further $1 billion in connection with its portfolio of US sub-prime mortgages.
The bank is expected to announce the loss on Wednesday of this week, when it reports third-quarter results for its US division.
HSBC made its first such writedown in February of this year and has since […]
Base rate held at 5.75%
by Gill Montia
Story link: Base rate held at 5.75%
The Bank of England’s Monetary Policy Committee has voted to keep the base rate at 5.75% for October.
The base rate was also kept on hold in September and this month’s decision was widely expected by economists.
Analysts are expecting the Bank to wait until the effects of the recent global credit squeeze are more evident, […]
Commercial and homebuyer loan costs rise
by Gill Montia
Story link: Commercial and homebuyer loan costs rise
The latest figures from the Bank of England show a marked increase in the cost of borrowing for both UK businesses and households.
Average interest rates for the most common form of commercial loan taken out by UK companies are two full percentage points ahead of rates for this time last year.
According to Citigroup, the international […]
Moody’s predicts business bankruptcies
by Gill Montia
Story link: Moody’s predicts business bankruptcies
Moody’s, the credit ratings agency, expects the rate of bankruptcies of highly leveraged companies (that is to say companies with significantly more debt than equity) to increase substantially over the coming 12 months.
In recent times, bankruptcy and default rates for businesses have been at record lows because companies have had little difficulty making repayments on […]
Money markets crisis looms
by Gill Montia
Story link: Money markets crisis looms
Some City analysts are warning that this week, the money markets could experience the worst crisis for 20 years.
According to Lehman Brother, the investment bank, $113 billion of commercial paper (effectively money market IOUs) are due for refinancing in the coming days.
This refinancing will mainly come through London and exceeds the $100 billion that […]
Medium-term funding in short supply
by Gill Montia
Story link: Medium-term funding in short supply
UK banks seeking medium-term funding are facing interest rates that are at a ten-year high.
The London interbank offered rate (Libor) for three-month sterling has reached 6.74%, its highest level since December 1998.
The Libor is fixed on a daily basis by the British Bankers’ Association and reflects the interest rates at which banks offer to […]
SMEs lose banking price controls
by Gill Montia
Story link: SMEs lose banking price controls
The Competition Commission (CC) has lifted the temporary price controls that it applied to the UK’s four largest banks, in 2003.
The controls determined the way in which Barclays, HSBC, Lloyds TSB and the Royal Bank of Scotland group run business accounts for small and medium-sized enterprises (SMEs).
The price controls were put in place following an […]
