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News Summary: 08 March

Mar 8, 2013   //   by Keith McDonald   //   Breaking News  //  Comments Off on News Summary: 08 March

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

Taxpayer-Backed Banks Make Most Severe Lending Cutbacks

Big banks supported by the taxpayer were among those to make the most severe cutbacks in lending in the second half of 2012. Figures from the Bank of England showed that Lloyds and RBS joined Santander in reducing net lending by several billion pounds. This is despite a government scheme offering cheap funds to banks to persuade them to lend to households and businesses.

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Payday Lenders to Face Stricter Rules from OFT

Payday lenders are to face stricter rules following a year-long review by the Office of Fair Trading. The OFT has warned firms to raise their game if they want to keep their licenses. The regulator wants more transparent marketing and a crackdown on the practice of “rolling-over” loans, which can carry annual interest rates of several thousand percent.

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RBS SignRBS Glitch Leaves Customers Stranded

RBS has apologised after a glitch left customers without access to cash and their online accounts on Wednesday night and Thursday morning. It is the third time in under a year that the group has been struck by a technical hitch. Problems last June left customers stranded for days after a routine software upgrade went wrong. The bank said it would consider compensation for the latest outage on a ‘case-by-case’ basis.

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Barclays Pays 428 Staff over £1 Million in 2012

Barclays paid 428 of its staff over £1 million last year, and 5 of its staff over £5 million, despite being caught up in a wave of scandals. The bank’s annual report also showed that over half its workforce took home less than £25,000. The details are part of a new wave of transparency ordered by Barclays chairman Sir David Walker. The bank said that it had reduced the number of million-plus earners since 2011, and had adjusted its bonus pool to account for the £290 million fine it received for its role in the Libor scandal.

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Chancellor Fails to Prevent EU Cap on Bonuses

(And finally. Picture the scene.) The UK was defeated by all 26 EU member states this week when chancellor George Osborne failed to prevent the EU imposing a cap on bankers’ bonuses. The new rules will limit bonuses to the equivalent of a banker’s annual salary, or up to double the salary if shareholders approve. Critics believe that the measure will dampen banks’ competitiveness and prevent banks from clawing back cash if employees are found guilty of misconduct in the future.

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Don’t miss our latest feature articles this week:

The Bank of England Needs to Stop its Crusade Against Savers

Yep. Normally, we get everything we deserve in Europe. Any Eurovision fans appreciating the audio in-jokes? 😉

For the latest news and product updates, remember to visit us at Which4U.co.uk.

News Summary: 01 March

Mar 1, 2013   //   by Keith McDonald   //   Breaking News  //  Comments Off on News Summary: 01 March

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

Bank of England Governors Debate Negative Interest Rates

The two deputy governors of the Bank of England have been debating the merits of setting interest rates below zero to promote economic growth. Paul Tucker told the Treasury Select Committee on Tuesday that the UK could set rates below zero, which would encourage banks to lend rather than storing deposits at the central Bank. Fellow deputy Charlie Bean said that potential legal issues made it a challenging proposal to implement. There are also concerns that rates below zero will further negatively impact savers, who have already seen returns on savings accounts flounder this year.

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HSBC Becomes Latest Bank to Ditch Sales Targets

HSBC has become the latest big bank to ditch sales bonuses in favour of customer service. From January, staff were no longer offered commission on the product sales. Instead, the bank now follows Barclays and the Co-operative Bank in rewarding staff based on customer service. City regulator the Financial Services Authority said last year that commission-based pay structures had encouraged employees to mis-sell products, such as packaged accounts and PPI insurance.

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RBS SignRBS Announces £5.2 billion Loss in ‘Chastening’ Year

Royal Bank of Scotland has announced a £5.2 billion pre-tax loss for 2012. The bank described the performance as ‘chastening’. Despite a rise in annual operating profits, the bank has suffered from a string of penalties from scandals including Libor and the mis-selling of PPI insurance and interest-rate swaps to small businesses. Despite the losses, chief executive Stephen Hester said that re-privatisation of the bank was almost within reach.

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Barclays to Reveal New Pay Details

Barclays is to announce in its annual report next week how much its highest and lowest paid staff take home. In what is thought to be the most detailed disclosure of banks’ staffing expenses to date, Barclays is expected to reveal 600 of its staff take home over £1 million a year. The bank is also expected to reveal how much in past bonuses it has successfully recouped from staff implicated in major scandals.

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Don’t miss our latest feature articles this week:

Make and Save Money Through Parking. A Look at ParkatmyHouse

For the latest news and product updates, remember to visit us at Which4U.co.uk.

News Summary: 22 February

Feb 25, 2013   //   by Keith McDonald   //   Breaking News  //  Comments Off on News Summary: 22 February

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

Fixed-Rate Mortgages Hit Record Low

Homebuyers are benefiting from record low mortgage rates as a government lending scheme continues to drive competition between lenders. Average two-year, three-year and five-year fixed-rate mortgage deals are now the lowest in their 24 year history, says financial analysts Moneyfacts. The improvement has been driven by the Funding for Lending Scheme, which has offered cheap finance to banks who must now increase their mortgage books to avoid facing fines.

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Andrew Bailey Named New Bank of England Deputy Governor

Andrew Bailey has been named as the new deputy governor of the Bank of England. Former chief treasurer Bailey, who first joined the Bank in 1985, will join existing governors Paul Tucker and Charles Bean at the beginning of April. Mr Bailey will also head the new Prudential Regulation Authority, as the central bank undergoes a major expansion of its powers this year.

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Lloyds TSB Fined Millions for PPI Compensation Delays

Lloyds TSB has been fined £4.3 million by the Financial Services Authority for delays in paying out compensation to victims of PPI insurance mis-selling practices. The regulator found that between May 2011 and March 2012, a quarter of claimants were left waiting over a month for their compensation payment, while almost 9,000 were still waiting after six months. The bank blamed the delays on the volume of complaints, and the fine arrives just days after former chief Eric Daniels criticised regulators for instigating large numbers of complaints.

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MPs Want Tougher Fines for Banks

And banks should face much bigger fines for their misdemeanours, according to the Treasury Select Committee. MPs said this week that regulators should have the flexibility to impose greater punishments. Currently, the Financial Services Authority allows institutions a discount of up to 30% on fines if they co-operate with investigations. But the committee believes this could undermine the impact of the punishment.

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HMRC Publicly Names and Shames Tax Dodgers

And banks should face much bigger fines for their misdemeanours, according to the Treasury Select Committee. MPs said this week that regulators should have the flexibility to impose greater punishments. Currently, the Financial Services Authority allows institutions a discount of up to 30% on fines if they co-operate with investigations. But the committee believes this could undermine the impact of the punishment.

[Read more]

Don’t miss our latest feature articles this week:

Are AgriBank’s Market-Leading Fixed-Rate Bonds Worth the Risk?

For the latest news and product updates, remember to visit us at Which4U.co.uk.

News Summary: 15 February

Feb 15, 2013   //   by Keith McDonald   //   Breaking News  //  Comments Off on News Summary: 15 February

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

Barclays & ING Cut Thousands of Jobs

Both Barclays and ING have announced thousands of job cuts as part of a cost-cutting strategy. Barclays is to shed 3,700 jobs, half of which will come from the Asian arm of the investment bank. Chief executive Antony Jenkins said that the bank was closing a segment of the investment bank that helped clients to avoid tax. Dutch bank ING, whose UK division has been acquired by Barclays, is to axe 2,400 jobs across Belgium and the Netherlands in an effort to save €270 million per year.

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Change to Whiplash Claims Could Lower Premiums – Aviva

The UK’s biggest insurer has said that motorists could save an average of £60 a year on their car insurance if the system for whiplash claims was changed to cut out the middle-men. Aviva says that the majority of the 550,000 cases made each year are filed by lawyers and claims management firms, who are charging big fees. These even include referral fees paid to breakdown companies for information about accident victims. The insurer wants to see the injured party submitting a claim directly to the guilty party’s insurer in the first instance to help lower the cost of policies.

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Mortgages Reach 5-Year High

The total number of mortgages approved in 2012 was the highest in five years, the Council of Mortgage Lenders has said. Banks and building societies advanced 540,000 last year, worth a total of around £81 billion. The number of first-time buyers, at 216,000 also reached a five-year high. The data showed that lending increased towards the end of the year as the Bank of England’s Funding for Lending Scheme began to filter slowly towards first-time buyers.

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Government Scoring “Own Goals” Over Inflation

The outbound governor of the Bank of England, Sir Mervyn King, has blamed a series of government “own goals” for keeping inflation high. Sir Mervyn, who leaves his post later this year, said that green taxes and higher tuition fees had maintained upwards pressure on inflation and made the Bank’s job more difficult. He said that inflation would exceed 3% in the summer, but that there was signs of recovery on the distant horizon.

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For the latest news and product updates, remember to visit us at Which4U.co.uk.

News Summary: 01 February

Feb 1, 2013   //   by Keith McDonald   //   Breaking News  //  Comments Off on News Summary: 01 February

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

UK Government Loses to Iceland Over Compensation Bid

The UK government has failed in its attempt to recoup £100 million in interest from Iceland after a bitter dispute over the failed Icesave account. The European Free Trade Association court ruled that EU regulations as they existed at the time did not oblige the Icelandic government to compensate other governments for bailing out their own savers. But administrators for failed bank Landsbanki said that the funds were there to pay the rest of its maximum compensation bill.

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Government Launches ‘Green Deal’

The government launched the Green Deal this week, in an attempt to create more energy-efficient homes and lower gas and electricity bills. The deal sees homeowners offered loans at competitive rates for energy-saving home improvements which would then be retrieved by electricity firms. Critics of the scheme argue the cost of financing a loan somewhat defeats the point of reducing utility bills.

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NS&I to Increase ISA Rates

Close to 100,000 savers with the Treasury-backed NS&I are to benefit when returns on their old ISAs increase to over four times their current rates. In May, more than £450 million in ISA funds will be automatically transferred into the new Direct ISA, which offers 2.25% compared to the current offering of just 0.5%. NS&I has become a popular destination for high-volume savers following the collapse of Northern Rock as it is an agent of the Treasury and all deposits are secure.

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Antony Jenkins - Chief Executive, BarclaysBarclays Boss Turns Down £1 Million Bonus

Barclays’ chief executive Antony Jenkins has turned down bonuses thought to be worth £1 million for 2012. Mr Jenkins argued that he thought it would be wrong to accept any bonus in light of the bank’s performance, and that he accepted a degree of accountability for the scandals, most of which were instigated under the tenure of Bob Diamond. Mr Jenkins has staked his reputation on cleaning up the bank’s profit-ridden culture and damaged public reputation.

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HMRC Receives First Tax Avoidance Payment from Switzerland

HMRC has received the first instalment of £342 million as part of a new agreement with Switzerland to reclaim lost tax. UK nationals who have avoided tax through Swiss bank accounts are to pay back arrears totalling £5 billion through a levy on their accounts. Those who fail to disclose their arrangements to HMRC will be struck with a withholding charge of 48%. Prime Minister David Cameron has told world leaders that countries need to co-operate in a concerted effort to combat tax avoidance.

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For the latest news and product updates, remember to visit us at Which4U.co.uk.

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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For the latest news and product updates, remember to visit us at Which4U.co.uk.