A round-up of the main news stories from this week. [No audio this week. Sorry!]
UK Sees Surge in Credit
The UK saw its biggest surge in credit in over four years during September. Figures from the Bank of England show that net lending rose by £1.7 billion between August and September, driven by a rise in personal loans and overdrafts alongside higher credit card spending. The number of new mortgages for house purchase loans rose by over 4% from August to top 50,000. The demand for credit has also provided a boost for retailers, who recorded a better month in September after a chequered summer.
Funding for Lending Participants Soar in October
The number of participants in the Bank of England’s Funding for Lending increased from 13 to 30 lenders over the month of October. The new recruits include the Co-operative Bank, Clydesdale Bank, Metro Bank and supermarket bank Tesco, the latest to sign up this week. There are still concerns, however, that the value of loans advanced to individuals and businesses is not growing fast enough given the extra lenders on board.
Bank Staff Humiliated for Missing Sales Targets
Bank staff are being humiliated at work if they fail to deliver on demanding sales targets, says workers union Unite. Staff who struggle to meet these targets are made to stay late, named and shamed in front of colleagues, and threatened with the sack, it said this week. So far, only the Co-operative Bank and Barclays have changed their pay system to reward staff for customer service rather than for sales performance. Both the union and the Financial Services Authority will demand that others must follow.
Barclays Faces Further Huge Fine
And finally: it’s involved in yet another scandal. Barclays is facing a $470 million fine for attempting to manipulate the price of electricity in America. Four traders at the bank are suspected to have made a number of attempts to drive down the price of electricity at trading hubs between 2006 and 2008. This would, in turn, allow the bank to profit from other bets that were reliant on that outcome. Though the bank denies the charges, the US regulator has released transcripts of messages sent between traders which implicate them in this activity. Critics have condemned this as another example of the culture that was encouraged during Bob Diamond’s reign as chief executive.
Also, on the Finance Blog this week:
Have a safe firework filled weekend. Keep in touch with us at Which4U and our Finance Blog.