Financial News that was reported in the weekend papers

Please find below a summary of stories that our Financial Services Director Simon Willcox has found over the weekend.

UKFI to warn of long haul to sell bank stakes

The body which manages the taxpayer's stakes in British banks will warn this week against any expectations of a quick-fire disposal of the shareholdings, The Sunday Telegraph has learnt. UK Financial Investments (UKFI) will say in a strategy document that it will only begin selling its shares in Lloyds Banking Group and Royal Bank of Scotland (RBS) once market confidence in the banking sector has been restored. Sources close to UKFI said this weekend that some senior officials involved in managing the shareholdings believed it could take up to seven years before they can be sold in their entirety.

Source : Sunday Telegraph Business page 1 - 5.7.09


Bank of England injects £25bn more into economy

The Bank of England's monetary policy committee (MPC) is expected to extend its programme of quantitative easing (QE) by £25 billion, though there are doubts whether it will take action beyond that. The Bank has so far committed £125 billion of QE in an attempt to boost the money supply, mainly through purchases in the markets of gilts and other assets. It has permission from the Treasury for a further £25 billion of such purchases, which analysts expect to be announced this week. Beyond this, it would have to seek new approval from the Treasury, which indemnifies the Bank against losses on the scheme. The shadow MPC, a group of independent economists that meets under the auspices of the Institute of Economic Affairs (IEA), today calls on the Bank to maintain the base rate at 0.5% and extend QE beyond the £150 billion it currently has permission to undertake.

Source : Sunday Times page 2.2 - 5.7.09

Bankruptcies among pensioners soar

The number of pensioners being declared bankrupt has soared by 164% during the past five years. A total of 2,595 people aged over 65 went bankrupt during 2008, up from only 983 in 2004, according to accountancy firm Wilkins Kennedy. The firm, which analysed figures from the Insolvency Service, said bankruptcies among pensioners had risen at more than twice the rate as they had across all age groups, with the total number of people declared bankrupt increasing by 89% per cent.

Source : The Independent page 48 - 4.7.09


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Ward Goodman please contact 01202 875900