Four weeks ahead of the March 21 budget, the Confederation of British Industry urged the chancellor to adopt £500 million ($789 million) of cuts to business taxes, in particular a tax break to foster investment in infrastructure projects. The lobby group argued that tax cuts were affordable and wouldn’t involve the government abandoning its deficit-reduction strategy.

Liam Fox, the former defence secretary who resigned in October over a conflict of interest after using a friend as an adviser, called for the chancellor to reduce taxes on employment, saying it would make it cheaper to hire workers, therefore boosting the workforce.

Writing in the Financial Times newspaper, Mr. Fox said there was a strong case for deeper spending cuts to fund the tax reduction. Mr. Fox is a leading cheerleader for the right wing of the Conservative Party—the senior partners in the coalition government—and his first foray back into politics is seen as a rallying call to other lawmakers to put pressure on Mr. Osborne to do more to stimulate growth.

The calls for tax cuts were bolstered by the publication Tuesday of January’s public-sector borrowing figures, which showed the U.K. had its biggest surplus in four years. This means Osborne is on track to be around £7 billion under his £127 billion borrowing target for this financial year.

However, a Treasury official Wednesday sounded caution, saying one month of strong figures didn’t mean the government had a sudden windfall to spend. Mr. Osborne has resolutely refused to budge from his austerity plan, which will see the government instigate £107 billion of spending cuts and tax rises by 2015.

In recent weeks Mr. Osborne has faced calls to consider introducing a stimulus measure, such as a tax cut, from leading economic think tanks the Institute for Fiscal Studies and the National Institute of Economic and Social Research. While Nick Clegg, leader of junior coalition partners the Liberal Democrats, and David Laws, a Lib Dem lawmaker and former Treasury secretary, have called for an income tax break to ease the burden on family finances.

Last week, Mr. Osborne used the decision by Moody’s Investors Service Inc. to place the U.K.’s triple-A government debt rating on negative outlook as further justification for the austerity measures, saying they were the only thing preventing the country losing its prized triple-A rating.

FEBRUARY 22, 2012, 8:39 A.M. ET By AINSLEY THOMSON http://online.wsj.com/article/SB10001424052970203960804577238962029178188.ht ml?mod=googlenews_wsj

Payments hit £441m in December 2011, the largest month yet for PPI payouts.

The Financial Ombudsman Service says it is currently receiving 1,000 new PPI complaints every day, the majority of which relate to PPI sold by banks, attached to credit cards and loans.

It is currently upholding around three out of four cases in the consumer’s favour with the average compensation £2,750.

But Which? executive director Richard Lloyd says the amount banks are paying out is not good enough and he is calling for them to speed up their payouts.

He says: “It’s good to see the PPI payout is finally starting to speed up but last year’s compensation of £1.9bn is less than a quarter of what lenders expected to refund.

“Too many people are still finding the claims process too lengthy, the banks must streamline the process to make it easier for people to claim.

“Otherwise this leaves an open goal for claims management companies that charge people a hefty fee for putting in a claim which is easily done yourself for free.”

22 February 2012 12:06 pm | By Natalie Thomas http://www.moneymarketing.co.uk/protection/ppi-redress-hit-£19bn-in-2011/104 6624.article

The Office for National Statistics (ONS) said the surplus followed a fall in local government borrowing and a rise in tax receipts.

It said the public sector made a net repayment – excluding financial interventions – of £7.75bn, up from £5.2bn a year ago.

January’s finances are often in surplus because of a spike in tax receipts.

The government has borrowed £93.5bn in the tax year to date, down from £109.14bn in 2010/11,

Chris Williamson, chief economist at Markit, said the figures meant the government was on track to meet or even beat its borrowing target of no more than £127bn this year.

“With two months to go, that target looks easily attainable,” he said.

“The target would still be met even if the deficit in February and March matched the recent record of £29bn seen for these two months in 2010.”

In the year 2010-11, the government borrowed £136bn.

Shaky ground

The UK’s total public sector net debt, excluding financial sector interventions, fell back to £988.7bn, or 63% of gross domestic product, having breached £1tn in December.

The level of government borrowing is one of the data series looked at by ratings agencies, which judge the likelihood of a borrower defaulting, something that can affect the cost of borrowing.

Last week, the ratings agency Moody’s warned that Britain could lose its top, triple-A credit rating in the next 18 months.

Ross Walker, economist at RBS, said these borrowing figures could weigh positively on Moody’s continuing assessment: “It’s a good set of data. We are still borrowing huge sums, but against a backdrop where we had Moody’s negative outlook and there was growing talk about the UK’s rating… these numbers help.”

Despite the improved borrowing figures, the UK economy remains on shaky ground.

Official data on Friday is expected to confirm the economy shrank by 0.2% in the final three months of 2011, and the Bank of England last week said it expected the economy to “zigzag” in and out of growth this year.

The Chancellor, George Osborne, will deliver his annual Budget next month.

The chief economist at the British Chambers of Commerce, David Kern, said the January borrowing figures gave him scope to help the economy grow.

“This gives the chancellor some room for flexibility in his upcoming Budget to implement measures to support growth and help companies create jobs, invest and export,” he said.

“This should include an effective credit easing programme and an aggressive reduction in red tape.”

21 February 2012 Last updated at 10:56 http://www.bbc.co.uk/news/business-17109999

The move came after the Greek government announced a further €325m in reduced spending and private lenders took a 53.5 per cent haircut.

Eurozone leaders say they had been assured of the implementation of the programme by coalition leaders beyond forthcoming general elections.

The news will see a provision ensuring the priority of debt servicing included in the Greek constitution.

In a statement the leaders say: “The Eurogroup is fully aware of the significant efforts already made by the Greek citizens but also underlines that further major efforts by the Greek society are needed to return the economy to a sustainable growth path.”

The statement also argued for the European Commission’s Greece task force to be bolstered.

Christine Lagarde, managing director of the International Monetary Fund (IMF), welcomed news of the agreement.

She adds: “As soon as the prior actions agreed with the Greek authorities are implemented and adequate financial contribution from the private sector is secured, I intend to make a recommendation to our executive board regarding IMF financing to support a program.

“I also welcome today’s discussion on ensuring the adequacy of the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM), which will help bolster the firewall against financial contagion, catalyze efforts to enhance IMF resources, and help secure global stability for the benefit of all.”

21 February 2012 8:48 am | By Rob Langston, Henry Brennan http://www.moneymarketing.co.uk/investments/eurozone-agrees-€130bn-greece-bailout/1046535.article

Banks and building societies privately admit the costs of offering Isas is broadly similar to taxable accounts, despite additional paperwork.

But the average of the top five cash Isas in This is Money’s savings tables lags 0.22 percentage points behind ordinary savings rates.

When challenged, one major provider insisted there is an inherent extra cost to creating and managing an Isa, but admitted it did not account for the total gap from its taxable accounts.

Critics say the difference, worth millions of pounds, is stolen to line banks’ vast pockets.

Individual Savings Accounts (Isas) are the major method used by the state to encouraging saving. The Government allows savers over the age of 16 to pay up to £5,340 this year into a cash account and earn interest free of tax.

It’s a popular way to evade the taxman’s clutches, with 12million Britons stashing an average £3,166 into cash Isas in the last tax year, according to HMRC.

But the statistics shows greedy banks and building societies – the Isa providers – are pilfering some of the benefits meant for their customers.

At current rates, banks are nabbing roughly £7 in interest from each person on the average Isa fund stashed away every twelve months. Spread across the country, that’s a mind-boggling £80million a year.

The figures are only a rough estimate but serve to illustrate the rotten deal Britons get from many banks. The number does not account for the billions held in previous years’ Isas that remained untouched in 2011 and from which the average payout was just 0.53 per cent.

Last year, This is Money’s sister title, Money Mail, warned that savers were losing up to £920 a year tax-free interest on their cash Isas because of the ruse.

It found that nearly every bank and building society paid less on its cash Isas and in the worst case the difference was 1.35 percentage points.

Britain’s ‘big five’ banks – HSBC, Lloyds, RBS, Barclays, and Santander – are set to rake in £35billion in total profits this year, according to City estimates collated by Reuters.

This giant haul stands in stark contrast to the income squeeze faced by their legions of loyal savers.

Price rises across the economy hit 5 per cent on the consumer prices index at one stage in 2011. The number dropped back to 3.6 per cent in January 2011 but savers are still struggling because the average instant access account pays just 0.92 per cent.

Money stored in savings accounts at interest rates below inflation declines in value over time.

The best Isa rate today is Halifax’s 4.4 per cent five-year fix. But Halifax’s parent company Lloyds offers 4.65 per cent through its BM Savings offshoot on a five-year bond.

The story is repeated at banks and building societies across the UK (see box above right).

Campaign group Save Our Savers is urging the Government to step in. Director Simon Rose says: ‘It is clearly wrong when banks and building societies cream off the tax advantage of Isas.

‘Savers are suffering horrendously from the effects of rampant inflation and negative real interest rates. They are effectively being made to pay for the incompetence of the Government, the MPC and Britain’s banks.

‘Taxing them on top of everything else is adding insult to injury. The very least the Government can do is give savers some relief by removing income tax on all savings accounts.

The biggest Isa to normal savings gap

The biggest gap between the Isa and non-Isa top fives is in the fixed-rate bonds. Over two years, the average of the best five Isas is 3.51 per cent compared to 3.91 per cent for the best taxable bonds – a gap of 0.4 percentage points. On five-year deals the gap is 0.33 percentage points.

Some savings providers, such as Nationwide, Virgin Money and M&S Money, play fair by paying the same rate on on fixed-rate bonds and Isas.

Andrew Hagger, of price comparison site Moneynet.co.uk, says there is ‘no reason’ for the gap and wants the fair-play model to be adopted across the industry.

David Black, banking analyst at data firm Defaqto, says savers are indebted to the newspaper reports piling the putting pressure on banks to act honestly.

Black says varying competition is the major force behind the Isa/bond gap, not additional costs. He says: ‘An awful lot of banks are trying to attract cash to fund their mortgage lending. The way to bring in more money is to get into the best buy tables. That just means beating the next-best rate, whichever product that is.’

Brian Capon, of the British Bankers Association, defended banks. He said: ‘These are different products with different features and tie-in periods. The decision on the level of interest offered on any particular product will be a commercial one based on many elements including the cost of providing the product and market conditions.’

By Dan Hyde Last updated at 5:53 PM on 17th February 2012 http://www.thisismoney.co.uk/money/saving/article-2100574/Banks-pocketing-80 m-year-short-changing-savers-tax-free-Isas.html

Speaking to Citywire Global, Hauptmann, who co-manages the Reyl GF Emerging Markets Equity fund, said he is seeking to indirectly access Asian growth through a 12% allocation in off-benchmark country Australia, as well as a 16% allocation in South Africa.

‘[It] is a good way to play the Asian growth story and we see a lot of opportunities in mature markets like Australia, as well as South Africa, where we can pick up stocks which are a lot less volatile,’ he said.

The moves to Australia and South Africa, which were increased at the end of 2011, were taken at the expense of Taiwan as Hauptmann believes the small nation has become over-saturated.

‘We did have a very large allocation to Taiwan in the fund over the last year – it was our top allocation in the fund,’ he said. ‘It was a great contributor to our performance but with that slowing of growth, and an export market dependent on electronics and TVs, we saw a lot of over-capacity.’

Rebound

Discussing the recent rebound in the emerging markets, which has seen $17 billion enter the market in January according to a report from EDRAM, Hauptmann said it may be too much too soon.

‘The main issue for us, though, is the fundamentals and we would say they do not seem to fully justify this rebound. This is because we still see a flattening of growth in the emerging markets that started a slowdown at the end of last year,’ he said.

He said investors could potentially overlook the knock-on effect of quantitative easing on the emerging world and also lingering difficulties with containing inflation – a major concern for the markets in 2011.

‘A lot of the emerging markets are now in a difficult position, where inflation is still there but also weaker growth,’ he said. ‘A lot of dollars flowed into the emerging markets under the last round of QE, causing inflationary pressures, and that is one of their main concerns.’

Hauptmann co-manages the $51 million Reyl GF Emerging Markets Equity fund alongside Maxime Botti and Thomas de Saint-Seine. Over the past three years the fund has returned 52.4% in dollar terms while the MSCI EM (Emerging Markets) TR benchmark has risen 28.2%.

by Chris Sloley on Feb 17, 2012 at 12:13 http://www.citywire.co.uk/global/australia-top-bet-to-play-asian-growth-stor y-says-em-manager/a567444

Athens needs the 130bn Euros (£110bn; $170bn) in order to avoid bankruptcy in mid-March, when a huge repayment on its governmental debt must be made.

French Finance Minister Francois Baroin said Greece could not wait any longer.

On Sunday Greek PM Lucas Papademos went to Brussels to try to clinch the deal.

The rescue plan would also write off 100bn Euros of debt, with private lenders accepting a 70% reduction in what Greece owes them.

In return, they would receive cash and new bonds, expected to mature in 30 years’ time.

Elections ahead

Mr Baroin said he would plead for the deal at Monday’s meeting of eurozone finance ministers.

“All the elements are in place… both with the bankers, private sector creditors, and public sector creditors, the states and central banks,” he told Europe 1 radio.

Five straight years of recession have left Greece with a debt that is more than 160% of its Gross Domestic Product (GDP).

Eurozone leaders and the IMF said in October that Greece’s debt should be reduced to the more sustainable level of 120% of GDP by 2020.

Successive rounds of austerity measures, demanded by the EU, the IMF and the European Central Bank – Greece’s international creditors – have failed to restore growth and have provoked clashes between protesters and police.

The Greek government fell last year after ex-Prime Minister George Papandreou called for a referendum on the eurozone rescue package.

He was replaced by Lucas Papademos, an unelected technocrat who is expected to lead Greece until parliamentary elections in April.

Measures passed by parliament last week set out 3.3bn Euros’ worth of cuts to salaries and pensions, and health and defence spending.

Several thousand people protested in Athens on Sunday against further cuts agreed to by Mr Papademos’ cabinet on Saturday – but the numbers were far reduced from the tens of thousands who protested last week.

US Treasury Secretary Timothy Geithner said the US was encouraging the International Monetary Fund (IMF) to support the bailout, but it is not clear how much the IMF will contribute.

Some eurozone finance ministers doubt Greece’s commitment to its spending pledges and want strong mechanisms to ensure its debts are paid.

It is not yet clear how the eurozone intends to keep the pressure on Greece to ensure it fulfils its commitments, says the BBC’s Europe editor, Gavin Hewitt.

And, he adds, there are doubts that even with the bailout Greece will be able to reduce its debt to a sustainable level.

Funds from elsewhere may need to be found.

On Wednesday, the eurozone finance ministers said Greece had made “substantial progress”, but demanded more detail, including a full timeline for implementing the measures.

Jean-Claude Juncker, head of the so-called Eurogroup, said more work was needed to strengthen oversight of how Greece would implement its austerity plans.

This would be the second bailout for Greece. A first rescue fund of 110bn Euros in 2010 was not enough to avert the crisis.

20 February 2012 Last updated at 08:53 http://www.bbc.co.uk/news/world-europe-17092964

Yesterday, the Office For National Statistics (ONS) released a report showing average retirement ages for men and women rose by one year between 2004 and 2010.

Mike Morrison, head of pensions development at AXA Wealth, said the findings “confirm the wide spread belief that people are indeed retiring later, and we expect this to rise as state pension age moves upwards.”

The ONS Pension Trends Survey revealed on average men now retire at 64.6 years, while women are retiring at 62.3.

As time spent in retirement will also increase due to people living longer, AXA has said the need to save and invest is paramount.

Morrison said: “We know from both our own research, AXA Wealth Self, and the FSA’s Consumer Awareness Survey, that people are currently risk averse and unsure as to their own risk appetite. The only way to properly prepare for retirement is through a professional financial adviser who can help plan the appropriate solution across savings, pensions and investments as well as other asset classes.

“Despite the grim macro picture surrounding unemployment and the economy, preparing for retirement has never been more critical.”

Author: Fiona Murphy Retirement Planner | 17 Feb 2012 | 15:16 http://www.ifaonline.co.uk/retirement-planner/news/2153377/preparing-retirem ent-critical-axa?WT.rss_f=Home&WT.rss_a=Preparing+for+retirement+has+never+b een+more+critical+says+AXA

UK petrol and diesel prices soared over the past month and are now not far off the record highs seen last year, new figures reveal.

Diesel prices rose 0.8p to 142.80p a litre – a fifth of a penny shy of the record set in May last year, according to the AA’s February fuel price report.

The price of petrol, meanwhile, is up 1.46p a litre to 135p a litre – some 2.43p off its record.

This means that since the start of the year the monthly fuel bill for the average family with two petrol cars has increased £5.84.

What’s more, petrol prices would have been another 1.5p higher had the pound not strengthened against the dollar in the last month, said the AA. However, it added that surging wholesale prices are now ‘overwhelming’ the stronger pound.

Petrol and diesel is currently most expensive in Northern Ireland, with drivers paying an average of 135.9p a litre for petrol and 143.5p a litre for diesel.

Drivers in the North, meanwhile, are faring best, with both the lowest petrol price, at 134.2p a litre, and diesel price at 142.3p a litre.

Price differences between towns have increased to as much as 5p a litre.

Edmund King, president of the AA, said: ‘The fact of the matter is that, in a period of stagnant wages, petrol costs 23p a litre more and diesel 29p a litre more than in February 2010, when fuel price rises picked up pace.’

‘A typical 50-litre petrol refill now costs £11.50 more and filling an 80-litre commercial van tank with diesel has risen £23.20,’ he said.

The AA urges the government to scrap the 3p fuel duty increase earmarked for 1 August and continues to call for a fuel price regulator – like those seen on the continent in countries such as Austria and Denmark – to help make prices more transparent for customers.

by Victoria Bischoff on Feb 17, 2012 at 09:52 http://www.citywire.co.uk/money/fuel-prices-approach-record-high/a567559

Despite a series of public promises from senior ministers and bank officials, lending to business has tumbled in every single quarter of the past three years.

Bank of England Governor Sir Mervyn King yesterday spoke out against the ‘harsh treatment’ of small companies which are still ‘suffering’ at the hands of the banks.

He said ‘market failure’ meant firms are being starved of the funds they need to grow, create jobs and drive the economic recovery.

The startling statistics emerged in Bank of England figures showing that net lending fell by £10.7billion in 2011 – in other words, the banks received £10.7billion more in loan repayments than they gave out in new loans. That took the total fall since the end of 2008 to £82.7billion.

Sir Mervyn’s explosive comments, as the Bank unveiled its quarterly inflation report yesterday, made a mockery of the Government’s attempts to get banks to lend.

Critics called on ministers to force part-nationalised Lloyds Banking Group and Royal Bank of Scotland to supply small companies with the crucial loans they need to kick-start the recovery.

It came as Sir Mervyn warned that the economy faces ‘substantial headwinds’ and hinted that interest rates would stay at historic lows of 0.5 per cent until 2014.

The Governor said Britain would ‘zig-zag’ between growth and decline this year as one-off events such as the additional bank holiday for the Queen’s Diamond Jubilee disrupt business.

‘We are going through an adjustment that will take a long time,’ said Sir Mervyn. ‘I think patience is a quality I would urge on all of us. We can’t expect to get through this quickly.’

Official figures published on Monday showed that five of Britain’s banking giants missed crucial 2011 lending targets set under the much-maligned Project Merlin deal with the Government.

The banks – HSBC, Barclays, Santander, Lloyds and RBS – lent £74.9billion to small businesses in 2011 compared with the £76billion promised under the Merlin deal. RBS, which is 82 per cent owned by the taxpayer, was the main culprit.

But separate Bank of England figures showed the picture was even worse because net lending – the amount handed out to firms, less the amount paid back – in fact fell.

Net lending by the five Merlin banks slumped by £9.6billion last year, while net lending by all banks was down £10.7billion.

‘It’s obvious that net lending by banks to businesses as a whole has fallen quarter-on-quarter through 2011,’ said Sir Mervyn.

The last time net lending increased was in the final three months of 2008 when the collapse of U.S. investment bank Lehman Brothers plunged the world into recession.

It fell by £875million in the first three months of 2009 – meaning businesses paid back more than they borrowed – as the global economy crumbled.

It has fallen every quarter since then, with banks getting back £82.7billion more in repayments than they issued in loans to business.

The lending drought has left companies short of the funds they need to invest, expand and hire new staff – a crisis highlighted by the Daily Mail’s Make The Banks Lend campaign.

Small businesses are crucial to Britain’s economy because they offer the best chance of creating jobs for redundant State workers and the unemployed.

Lord Oakeshott, the former Lib Dem Treasury spokesman who quit over the Merlin deal, said: ‘The Governor got it right and the Government got it wrong on making the banks lend to small business.

‘After the abject failure of Project Merlin, it is time to set new lending targets for the nationalised banks with the boot, not a bonus, as the reward for failure.’

Sir Mervyn urged the Government to lean on Lloyds and RBS, which are part-owned by the taxpayer, to make them lend. ‘For a long period I have pointed out that the Government owns two of the biggest four lenders,’ he said. ‘If they own them, they can do something about it directly.’

He added: ‘There will, however, continue to be a problem for small businesses until the banking system is really back in a healthy condition. That is something the banks are working very hard to do.’

The Government’s latest attempt to help small firms is through a ‘credit easing’ plan called the National Loan Guarantee Scheme, designed to lower interest rates paid by small and medium-sized firms by as much as 1 per cent.

Chancellor George Osborne is expected to outline the details in the Budget next month. But with only five weeks to go, none of the major High Street banks has formally signed up.

By Hugo Duncan Last updated at 7:55 AM on 16th February 2012 http://www.thisismoney.co.uk/money/news/article-2101927/Bank-England-chief-K ing-slams-market-failure-banking-seen-loans-firms-fall-83bn-2008.html