A round-up of the main news stories this week. (Transcript Below).
Overhaul of the Libor System
An in-progress review by the Financial Services Authority has called for a complete overhaul of the Libor system. The interbank lending rate, which was allegedly manipulated by a number of British banks, remains compromised, the report says, as long as it is based upon data fed from banks. Martin Wheatley, the FSA’s managing director, said that stronger regulation was needed to repair the system’s “loss of credibility”.
Retail Sales Defy Plummeting Economy
UK retail sales performed more strongly than expected in June and July, adding to mounting speculation that the estimated fall in economic growth may have been overly pessimistic. The initial figures from the Office of National Statistics said the economy had retracted in the second quarter by 0.7%. But with better performance in the construction sector and falling unemployment, it may yet be that the economy is not as bad as first feared.
Rent Costs Reach Record High
The average cost of rent in England and Wales has reached a record high of £725 per calendar month, according to letting agents LSL. In London, where rent is rising at its fastest rate, private-sector rent now averages over £1,000 a month. This is being blamed on the higher deposits needed for a mortgage, which many cannot afford. And experts believe the market will remain tightened until something is done about the short supply of new housing.
The Great Train Robbery
A modest rise in inflation this week might have seemed innocuous. But the rise in the retail price index measure to 3.2% now means that the price of many regulated train fares will be rising by at least 6.2% from the New Year. Train companies will be able to increase fares by another 5%, providing they make cuts elsewhere. Which4U found that for fares on the day of travel, journeys from London to Newcastle and Glasgow were cheaper by air than by train. And for journeys to Birmingham and Manchester, the train also proved by far the most expensive option. Check out the feature article, Inflation and the Great Train Robbery for the full story.
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