The Chancellor must consider radical action including spending on infrastructure and abolishing stamp duty to put Britain back on the path to growth, according to some of Britain’s leading economists. A series of opinion pieces to feature in The Daily Telegraph this week from economists including Paul Johnson, director of the Institute for Fiscal Studies, and Andrew Sentance, former member of the Bank of England’s Monetary Policy Committee, add to the growing swell of opinion formers arguing for a policy rethink. Mr Johnson said planning regimes needed to be reformed while he described stamp duty as “among the most inefficient taxes we have”. Kicking off the series, Mr Sentance, senior economic adviser to PricewaterhouseCoopers, writes that a “bolder” course is needed without requiring the Chancellor to change the pace of deficit reduction.
Greece must remain in the euro to survive according to its finance minister, Yannis Stournaras, as the country’s leader prepares for a week of crucial meetings with Eurozone authorities which could ultimately determine its fate. Stournaras said the country must press ahead with the spending cuts demanded by its fellow Eurozone members because its membership of the single currency was essential. “We have to stay alive and remain under the umbrella of the euro, because that is the only choice that can protect us from a poverty that we have not experienced,” Mr Stournaras said yesterday. “If we don’t take the measures … then our stay in the euro is threatened. We have the most expensive welfare state in the Eurozone. We can no longer maintain it with borrowed money.”
A government job creation fund will badly miss its target to get money to businesses in employment blackspots. Nearly two thirds of the cash promised — some of it offered 16 months ago — is still sitting in the Treasury. The £2.4bn Regional Growth Fund, which has been fronted by Nick Clegg, the Deputy Prime Minister, was due to have fully allocated £1.4bn of funding to 176 bid-winning companies and organisations by the end of next month. However, it has emerged that by last month’s parliamentary recess — when officials had privately expected to get most of the initial money signed off — only £502m had been disbursed to 46 winning bids, The Times reports.
Standard Chartered is thought to be just months away from recruiting at least two new independent directors as it shores up its boardroom in the wake of damaging sanctions-busting allegations involving Iran. The bank’s 11-strong group of non-executive directors features seven long-standing board members. Rudy Markham, the senior independent director, has been on the board since 2001, while Ruth Markland and Paul Skinner both joined in 2003. Under the Combined Code rules governing best boardroom practice, a director who has been in place for more than nine years is no longer deemed to be independent. Mr Markham suffered a mini-protest at Standard Chartered’s annual meeting in May, when shareholders speaking for almost a fifth of the shares that voted opposed his re-election. Standard Chartered signalled at the annual meeting that it was preparing to bring in fresh blood. Although the bank would not be drawn on the likely departures yesterday, or a timetable for them, Mr Markham is thought the most likely to go.
The world’s largest sovereign wealth fund is planning to take on more risk as it seeks to exploit its role as a strategic investor, in a move that could mark a new trend for conservative publicly-owned investment funds. The Norwegian oil fund, which has more than $600bn of assets under management, also believes it could be more opportunistic when markets dry up, as was the case during the financial crisis. “The fund can exploit [its nature as a long-term investor] by being a provider of liquidity in periods when there is a lack of liquidity,” Pål Haugerud, head of asset management in Norway’s finance ministry, said in an interview. The new approach will be closely watched outside Norway as the size of sovereign wealth funds in the Middle East and Asia, forcing managers to rethink their investments strategies, The Financial Times says.
A disappointing second-quarter earnings season in Europe has prompted analysts to scale back markedly their expectations for earnings growth for the rest of the year. More companies missed than beat expectations in the second quarter of this year, with 48% of those listed on the Stoxx 600 reporting lower than expected consensus quarterly earnings, according to data from Thomson Reuters. A remaining 47% beat estimates while 5% reported estimates in line with consensus. “The message is still quite bearish,” Karen Olney, Europe equity strategist at UBS said. This is in stark contrast to the US where nearly three-quarters of companies beat expectations in the second quarter, The Financial Times writes.
