News Summary: 25 January

Jan 25, 2013   //   by Keith McDonald   //   Breaking News  //  2 Comments

Economy Half Way to Triple-Dip Recession

The economy is half way towards a triple-dip recession. Initial estimates from the Office of National Statistics show that the economy shrank by 0.3% in the final quarter of 2012. Part of this fall was due to a major fall in quarrying and mining, after problems involving the UK’s largest North Sea oil field. And fears are growing for the fate of the economy in 2013, with retailers including Jessops, HMV and Blockbuster all entering administration in the opening weeks of the year.

A round-up of the main news stories from this week.

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Lloyds Axes Over 1,000 Jobs

Lloyds has drawn the wrath of unions after confirming that over 1,000 jobs would be cut across the group, with more to be outsourced overseas. The bank is seeking to cut costs by £1.5 billion, as it prepares to sell off over 600 branches. Unite has called the bank a “complete disgrace”, saying that it has axed a quarter of the workforce – 31,000 jobs in total – since it took over HBOS in 2009.

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Barclays Executive Destroys Damning Document

A senior executive at Barclays Wealth has resigned following an internal inquiry. Andrew Tinney destroyed a damning report highlighting numerous failures at the investment bank. But a tip-off to new chief executive Antony Jenkins sparked an investigation into the missing document. The document highlighted the investment arm’s relentless pursuit of profit, its disregard for regulation, and its culture of intimidation. Jenkins has staked his reputation on cleaning up the beleaguered bank.

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FSA to Consider Banks’ Plea to End PPI Complaints

The Financial Services Authority says that it will consider a proposal from banks to set a final deadline over PPI mis-selling complaints. The British Bankers Association has asked for a solution to prevent the stream of complaints going on indefinitely. The regulator is said to be considering the appeal on condition that banks pay for advertising to alert the public to the developments.

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OFT Demands More Changes to Current Accounts

Brits are notoriously loyal to their banks – often because they’re worried about things going wrong if they attempt to change. Now, the Office of Fair Trading has decided that further changes are needed to the current account market. The OFT found some improvements since its last review in 2008 – particularly the charges imposed for unauthorised overdrafts. However, it says that charges are still too complex and that consumers are still reluctant to switch accounts. A new deadline of 7 days for banks to switch accounts comes into place in September.

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  • Daniel Morris

    Looks like 2013 isn’t off to a great start, but things can only get better. Surely? Well, looking back at the last few years, maybe not so. Only time will tell.

  • Keith McDonald

    Well, there are two major developments this year that could determine what is to come. The first is the new head of the Bank of England, Mark Carney, who could favour a change in monetary priority (that is, favouring a growth or employment target rather than inflation). The second is the change in the city regulator. The Financial Services Authority will be succeeded by the Financial Conduct Authority this year, which should have more power and a more proactive attitude. These changes could inspire confidence or they could shatter it, but at least it’s a change in the old guard, bringing new ideas to the table.