Posts Tagged Financial crisis

10.08 Iain Dale, the Tory blogger, has set out his (self-confessedly unlikely) hopes for today. Among other things, he wants: Real cuts in public expenditure of at least 5 per cent each year for the next five years; the abolition of Regional Development Agencies and all the other regional quangos and the cancellation of the planned 45p tax band for high earners.

10.07 On those lending figures, Brian Murphy from the Mortgage Advice Bureau, comments: “It certainly reflects what we are seeing, namely small but very definite increases in buyer interest in the first quarter, which is resulting in a modest rise in the level of clients committing to purchase. Today’s figures are also consistent with what other industry groups are saying.”

09.59 A tiny respite from the gloom on this unsuitably beautiful day in London: The Council of Mortgage Lenders has reported that gross mortgage lending rose to £11.5 billion in March, up by 16.2 per cent from £9.9 billion in February. It’s not much given how far down things have fallen, but it’s perhaps a further sign of stabilisation.

09.56 Commenting on the new jobless figures, Global Insight’s Howard Archer writes: “Claimant count unemployment rose less than feared in March, but it is hard to gain much comfort from a still very substantial increase of 73,700 … the reduced rise does not significantly affect our belief that the sharp contraction in economic activity since the third quarter of 2008 will continue to feed through for some time to come to batter the labour market.”

09.52 The FTSE has opened lower ahead of what is predicted to be a landmark Budget from Alistair Darling with all kinds of borrowing and deficit records set to be broken, writes City Diary Editor Jonathan Russell. How he puts a positive gloss on the figures will be keenly watched by the political observers, but foreign exchange traders wil be focused on the size of the government’s debt.

Banks and retailers continue to push ahead. Banks have been buoyed by US Treasury Secretary Tim Geithner’s comments yesterday that their US counterparts have enough capital. Barclays, Lloyds and Royal Bank of Scotland are all making decent gains.

09.42 The Government borrowed £28 billion in March, according to the ONS. It’s the biggest figure on record.

09.39 Prices for UK government bonds are sliding in morning trading as investors anticipate Darling’s borrowing binge, Richard Blackden writes. The bond market expects the Treasury to ask investors to stump up an unprecedented £180bn this year. “No one wants to get caught off guard,” said one trader.

09.30 The unemployment total rose by 177,000 in the three months to February, the ONS announces. The total now stands at 2.1 million. Public sector net borrowing reached £90 billion, in line with the worst forecasts by City experts.

09.22 alexbailey50 tweets that she agreed with BBC Radio 1’s Only Fools And Horses-inspired budget suggestion: “No income tax, no V.A.T, No money back, no guarantee… We’ll cut prices at a stroke”

09.09 The Society of Motor Manufacturers and Traders is bracing itself for an announcement on cash-for-bangers scheme, which it believes is crucial for the future of UK vehicle manufacturing, writes Graham Ruddick, City Reporter. However, the FT reports this morning that Alistair Darling will force car companies to put forward half of the £2,000 subsidy. The industry believes this would be a disaster. Paul Everitt, the SMMT chief executive, said last week: “Bluntly, I don’t want to be standing up and saying: ‘It’s sort of all right’. I want to say: ‘This is fantastic, this is the best possible time for you to buy a car’.”

Read our questions troubling the Chancellor about the scrappage scheme.

09.00 Interviewed outside his west London home this morning, David Cameron, the Tory leader, tells reporters that today will be the day when Labour’s “spend, spend, spend” mentality will finally be shown to have been a disaster. He says the public finances are “drowning in red ink”.

08.44 Those wags at Conservative HQ have had a “black hole” drawn on the street outside HM Treasury . It features “caricatures of Gordon Brown and Alistair Darling disappearing down a cavernous gap in the pavement, followed by Mr Darling’s red Budget box”, the Press Association reports. David Gauke, a shadow treasury spokesman clearly headed for Mount Olympus/Rushmore, comments: “It’s a great drawing”.

08.40 Ruth Kelly, the former Treasury minister and Transport Secretary barely seen since her resignation from the Government at Labour party conference last September, is on Sky News hammering the line that Mr Darling will guide us to recovery. Investment is needed to turn around the unemployment juggernaut, she suggests.

08.27 Another good detail in that Independent poll is on which politicians business leaders trust to run the economy. Ken Clarke, the shadow business secretary and former chancellor, is the favourite, enjoying the support of 69 per cent of them. Vince Cable has 62 per cent, David Cameron 61 per cent and George Osborne 41 per cent.

It’s bad news for the Government’s big three: Lord Mandelson has 35 per cent, Gordon Brown 30 per cent and Alistair Darling just 22 per cent. But spare a thought for poor old Nick Clegg: only 19 per cent of business leaders trust him.

08.15 Nick Robinson tells Today that Mr Darling will be clear: voters can choose Labour’s “invest for recovery” plan or suffer the Tories’ drastic slashes in public spending. Sounds rather like the political dividing line that got us here, from where we’re standing.

08.00 Three in 10 business leaders detect the “green shoots” of economic recovery, according to a poll for The Independent. “The findings will be a fillip to Alistair Darling as he tries to deliver an upbeat message about post-recession Britain in today’s Budget,” it writes.

07.51 The Mail also reports on the row between the Treasury and the IMF over those figures mentioned below. The IMF originally put the cost of Britain’s banking rescue at £200 billion, you see, before withdrawing this in the face of furious lobbying from the Government. It later “downgraded the total to just over £130billion”.

07.49 No doubt Alistair Darling’s famous eyebrows will be working overtime today as he tries to convince the electorate he has the answers to Britain’s economic downturn, writes City Reporter Jamie Dunkley. To explore the wonderful world of celebrity brows, see our slideshow.

07.45 Grandparents who give up work to care for their grandchildren will get a significant pensions boost in today’s Budget, the Daily Mail reports. They will receive National Insurance credits to ensure they build up a full state pension, it adds.

07.44 Sterling is treading water against the euro and the dollar ahead of the Budget, writes Telegraph Online City Editor Richard Blackden. But make no mistake, financial markets will be watching this Budget more closely than usual. It’s investors, after all, who will be having to dig deep to fund the Government’s borrowing splurge.

07.31 As the clock ticks down, the last-minute pleas get louder, writes City Reporter Graham Ruddick. The British Property Federation has urged the Chancellor to abolish the tax on growing number of empty buildings created by the recession.

07.23 Robert Peston, the BBC Business Editor, tells Today that the public sector borrowing figures are the story of the day. A year ago Mr Darling said borrowing this year would be £38 billion, by the autumn it was £118 billion, and today it’s likely to be announced that £180 billion is needed, Peston says. He describes this as an “astonishing, unprecedented deterioration in the public finances” and says there’s a danger more government bond auctions could fail.

07.19 British taxpayers face a bill for the financial crisis of £5,000 each, our own Edmund Conway and Robert Winnett report this morning. The IMF predicts that Britain faces “one of the worst losses of any leading industrialised nation in the world from the financial rescue – amounting to about £140 billion”.

07.12 Britain faces a “structural problem” in its public finances, not just a passing phase of deficits, Mr Cable adds. He blames the reliance on the City for the past decade. It all means more pain in people’s personal finances for longer, he says.

07.09 St Vince has popped up on BBC Radio 4’s Today Programme. He says the Lib Dems would take four million people on the lowest incomes out of the income tax system by raising the threshold to £10,000, and scrap the VAT cut in favour of effective investment in projects to get the economy back on its feet.

07.05 Vince Cable, the Liberal Democrat treasury spokesman, has told GMTV: “We are now getting this thing called deflation - falling prices, falling wages - while at the same time the Government has an enormous deficit on the Budget, caused largely by the collapse of revenue from the City of London and that’s a problem that is going to continue for some years to come and balancing those is extremely difficult.”

07.02 Nick Robinson, the BBC Political Editor, tells Today that Mr Darling will be remembered not for the plans he was able to unveil, but the dreadful statistics he is forced to produce. Stephanie Flanders, the BBC Economics Editor, says Mr Darling is charged with performing a difficult balancing act - admitting the scale of the problem/setting out his plan to tackle it, and not spooking the markets.

06.59 In case we didn’t get the message, the Conservatives believe today is a “day of reckoning”, Theresa May, the shadow work and pensions secretary has told GMTV. “We are now facing the longest recession since the Second World War, we have the worst public finances of all the countries in the G20, government borrowing is set to reach record levels today and, of course, unemployment may now rise above the level which the Government inherited,” she said.

06.57 Let’s not forget that before Mr Darling steps up to the despatch box, the latest unemployment figures will be announced by the Office for National Statistics. BBC Radio 4’s Today Programme are predicting the jobless total will reach 2.1 million. That would be the highest number since January 1997.

06.53 Homing in on those Whitehall efficiency savings we’ve heard much about already, The Times reports that the cuts will need to total £45 billion by 2013-14, comprising “cutting office space, selling property, privatising assets and sharing purchasing contracts across the Government”. Ultimately, “thousands more Civil Service jobs will be lost”.

The “Budget for jobs” package will be more like £2.5 billion, it reckons.

06.46 Reporting on the splits within the Government over the Budget’s contents, The Guardian’s Patrick Wintour says: “One wing of the cabinet has been suggesting the chancellor should “soak the rich”, while others have urged that true political courage lies in starting to be honest about the need to cut public spending more than outlined last November.”

He adds: “There were indications over the weekend that the advocates of a ’soak the rich’ budget were winning in the argument”.

06.41 The Guardian predicts a “Budget for jobs“, specifying that it will “provide a guarantee of a job or training for all 16- to-24-year-olds unemployed for more than a year” and devote about £2bn in all to job-creation measures. Attempting to work out how we got here by looking back at Gordon Brown’s final Budget in 2007, its Economics Editor Larry Elliot says: “The Greeks had a word for it: hubris”.

06.30 Good morning on an era-defining Budget day. Alistair Darling, the Chancellor, will be on his feet in six hours. The Financial Times reports that he will “be forced to issue more than £200bn worth of government bonds this financial year … well over £50bn higher than the Debt Management Office estimated last month.”

“This record peacetime borrowing will overshadow Mr Darling’s aim of presenting a Budget for jobs and investing in future growth”, the FT says.

It also predicts the Budget will contain a “£1bn 1980s-style community work programme” to get under-25s off the dole and the much-trailed “£2,000 bounty … to encourage motorists to trade-in old cars for new models.”