Top stories

  1. Japan invites UK to Pacific trade pact
  2. ‘Generation Rent’ set to get boost in Budget
  3. United Nations calls for drastic climate change action

Stat of the day

173 per cent – The rise in average house prices in England since 1997, according to today’s figures from the Institute for Fiscal Studies, while young adults’ real incomes have increased just 19 per cent in that time.

Japan invites UK to Pacific trade pact

The Financial Times (p1, £) reports, Japan’s Prime Minster Shinzo Abe would welcome Britain to the Trans-Pacific Partnership trade deal “with open arms” as he urged EU leaders to compromise to avoid a no Brexit deal. Mr Abe said Britain will lose its role as a gateway to Europe after Brexit but would still be a country equipped with ‘global strength’.

Meanwhile, the Scottish National Party (SNP) leader Nicola Sturgeon, has said she would back a second vote on Brexit if it came to Parliament. Speaking on the BBC1 Andrew Marr show on Sunday, Ms Sturgeon said that if no Brexit deal was agreed the party “wouldn’t stand in the way of a second referendum” (Daily Mail, p2), and that if Scotland voted remain it should not be forced to leave with rest of the UK (Guardian, p9).

This comes as leading Brexit supporters in the Conservative Party have set a limit of 2022 for the Prime Minister to make a trade deal with the EU, amid talks to negotiate the “so-called Irish backstop”. (The Times, £, p1).  The Guardian (p8) suggests that backbenchers opposed to the Chequers deal may try to force a vote to undermine it or vote against parts of the upcoming Budget.

‘Generation Rent’ set to get boost in Budget

The Chancellor, Philip Hammond, is expected to reveal a new Help to Buy proposal for tenants in private properties in his Autumn Budget later this month, reports The Times (p2, £). The proposal would see capital gains tax waived for landlords who sell to tenants that have been living in a property for at least three years (The Guardian, online only).

Meanwhile a report by the Institute of Fiscal Studies (IFS) has found that even with a 10 per cent deposit, only 60 per cent of prospective buyers aged between 25 and 34 could afford the cheapest home in their area (The Sun, p2).

United Nations calls for drastic climate change action

A report by the United Nations warns of the “huge risk” of catastrophic droughts, floods and extreme heat if global warming is not kept lower than a maximum of 1.5 degrees centigrade and urges governments to act now (The Guardian p1). The Intergovernmental Panel on Climate Change, which commissioned the report at the Paris climate talks in 2016, says urgent and unprecedented changes are needed to keep temperatures between 1.5C and 2C. This follows a recent survey by the Prudential Regulation Authority (PRA) which found that 70 per cent of banks now recognise the financial risks posed by climate change. In comments reported at the time, in the Telegraph (£, online only), Chief Executive of UK Finance Stephen Jones responded: “Tackling climate change is a global priority and today’s report highlights the critical importance of the transition to a low carbon economy.  The majority of banks already recognise the need to anticipate and manage this transition. This commitment is evidenced by the support given by banks to the FSB-backed Taskforce.”

Latest from UK Finance

Nicholas Edge blogs on our response to the joint Bank of England, PRA and FCA discussion paper on Building the UK financial sector’s approach to operational resilience.

The Guide to Development Finance for Small and Medium Size Housebuilders is the result of a collaboration between UK Finance and the Federation of Master Builders to help SME housebuilders access the finance they need.

News in Brief

The European Central Bank has given banks a three-year limit after Brexit to stop using the “back-to-back” booking model that enables them to keep staff and capital in the UK (Financial Times, £, p15).

Home Office statistics have revealed that 450,000 bank frauds reported to the authorities over the past three years were automatically dismissed by computer algorithms, according to the Sunday Times (£, online only).

Chancellor Philip Hammond is expected to announce pension tax relief cuts in his next Budget to help fund the NHS, according to the Daily Telegraph (p2, £).

Recruitment levels in the UK’s private services sector have fallen to a 25-year low, according to figures released today by the British Chamber of Commerce (Financial Times, online only).

London remains the world’s most popular city for global real estate investment, the ninth year in the past decade it has held that position, according to a capital markets report published today from Cushman & Wakefield (City AM, p1).

What the commentators say

Writing in the Times (£, p25), Clare Foges argues that many of the people who voted Leave will be the hardest hit by Brexit, while the ‘elites’ they thought they were punishing will remain unbruised and unscathed. She suggests that ‘men with few qualifications are most at risk of losing their jobs’ if trade barriers go up after Brexit, using the Nissan plant in Brexit-favouring Sunderland as an example. She says that while leading Leavers told voters that “they” – meaning the unspecified elite – ‘look down on your provincial life’ and ‘sneer at your patriotism’ and would be ‘rocked to its core’ when they lost , in reality the establishment has been unaffected. In contrast, those in Westminster would be ‘as unaccountable to the average Briton as ever’.

Writing in the Guardian (online only) Shane Hickey claims that optimism is at a low ebb at the annual meeting of the IMF in Bali with rising debt and trade wars dampening expectations. Hickey points primarily to the ‘America First’ agenda of the United States and the increasing tariffs against China. He also notes the concern of the head of the IMF, Christine Lagarde, about the rise of unregulated “shadow banks” that global debt has risen by 60 per cent in the last 10 years to reach an all-time high of £139tn.

Calendar

  • SNP party conference: address from Westminster leader Ian Blackford
  • BOE Chief Economist Andy Haldane talks at the Economic Literacy for Everyone summit
  • British Chamber of Commerce Economic Survey released
  • LSB publishes Financial Services Vulnerability Taskforce – Principles and recommendations
  • United Nations launches World Economic and Social Survey

For a full list of upcoming UK Finance statistics releases, please click here.

News in brief – 8 October 2018