Delaying the austerity programme by three years would put 200,000 people back into work and raise economic growth by 239bn pounds over a decade, according to one of the UK’s leading think tanks. The National Institute of Economic and Social Research (NIESR) published the analysis as it slashed its growth forecast for this year from 0 per cent to a contraction of 0.5 per cent and warned that the recovery would not begin in earnest until 2014. Had the Government delayed austerity this year, the economy would have grown 1.2 per cent, NIESR estimated. The research will pile more pressure on the Government to respond to the double-dip recession with a new growth strategy. Last month, the International Monetary Fund said the Chancellor would have to react in next March’s Budget if the economy has failed to bounce back by then, according to The Telegraph.
Top shareholders in RBS have complained to the Treasury over “dangerous” and “damaging” suggestions that the taxpayer-backer lender could be fully nationalised. Leading shareholders in Royal Bank of Scotland have complained to the Treasury over what they say are the “dangerous” and “damaging” suggestions that government ministers are looking at fully nationalising the lender. Business Secretary Vince Cable is understood to have pushed proposals for the state to consider buying out minority shareholders in RBS, a position that flies in the face of promises made by the Government to sell down the 82% taxpayer holding in the bank over the next two to five years, The Telegraph explains.
Another bank has been penalised for not doing enough to stop the proceeds of drug trafficking and other crimes flowing through its customers’ accounts. Two weeks after HSBC was denounced in the US Senate for allegedly allowing drug cartels and terrorist groups to move money around the world with insufficient scrutiny, the British division of Turkish Bank was fined £294,000 yesterday for breaching rules against money laundering. The Northern Cyprus-owned bank, which acts mainly for Turkish-speaking clients in London, did not put in place adequate anti-money-laundering procedures or conduct sufficiently detailed checks on its customers, the Financial Services Authority said, The Times reports.
An increasingly bitter competition for control of the West Coast Main Line was branded a “shambles” yesterday as anticipation mounted that Virgin Trains could be shunted off Britain’s railways. Louise Ellman, chairman of the Commons Transport Select Committee, has joined unions and industry experts in urging the Government to think carefully before handing a franchise to operate London-to-Glasgow trains to FirstGroup, a rival to Virgin. FirstGroup has offered to pay nearly £7bn in profits to the Government if it wins a 14-year contract to operate the line from December, when the existing franchise expires. Its bid is about £1bn higher than Virgin’s offer but will involve deep cost-cutting, The Times says.
Jobs at the UK arm of Sharp are under threat as the Japanese electronics maker plans to cut 5,000 roles globally following a 94.1bn yen loss. Sharp will slash thousands of jobs by March in its first cuts since 1950 as it is hit by a prolonged slump in its key television and liquid crystal display sectors. The company, which employs 57,000 people globally, and more than 1,000 in the UK, has seen operations suffer amid worries over high energy prices, a high yen, slow domestic demand and global economic uncertainty. It had originally considered cutting about 3,000 domestic jobs, but decided to expand the scope to include worldwide operations to accelerate a management restructuring, Kyodo News said. Meanwhile, Sharp executives will take pay cuts of 20% to 50%, compared with an originally planned 10% to 30%, Kyodo and broadcaster NHK said, The Telegraph reports.
Apple’s iPad has claimed more than two thirds of the global tablet computer market, according to new industry figures. A report by IDC found that 25m tablets were sold worldwide in the three months to June 30, up 33.6% from the first quarter and 66.1% year-on-year. Apple got a boost from the March of its newest version of the iPad, and sold 17m tablets in the second quarter, giving it a 68% market share. Samsung jumped into second place with sales of nearly 2.4m, up 117% from a year earlier. Tom Mainelli, an IDC analyst, said: “Apple built upon its strong March iPad launch and ended the quarter with its best-ever shipment total for the iPad, outrunning even the impressive shipment record it set in the fourth quarter of last year. The vast majority of consumers continue to favor the iPad over competitors,” writes The Times.
