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Thursday newspaper round-up: Portugal, Facebook, Taxes
Tue, 22 May, 2012
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Thursday newspaper round-up: Portugal, Facebook, Taxes
Thu, 26 Jan 2012, 06:59:00
The threat posed to the British economy from the Eurozone crisis was underlined on Wednesday when
Portugal
saw its borrowing costs soar to a record high amid market fears that the bailed-out country will not be able to break free of its financial crisis in the near future. The yield, or interest rate, on three-year bonds reached 19.4%, while the rate on 10-year bonds was 14.6%, figures that compare with British rates of less than 2%. Portugal needed a €78bn (£65bn) rescue package last year as its high debt load and feeble growth pushed it towards bankruptcy. A three-year programme of austerity measures and economic reforms is aimed at restoring investor confidence in the country, but a deepening recession, with a 3.1% contraction forecast for this year, is undermining the faith of the markets in Portugal, according to The Guardian. Coalition plans to raise the
income tax allowance
to £10,000 should be accelerated to tackle the growing economic crisis, Nick Clegg will say today. Ministers must go "further and faster" as the pressure on household finances reaches "boiling point", the Deputy Prime Minister will urge. "Ordinary, hardworking people" need a "rapid response," he will say. The proposed tax cuts - which would give back more than £700 to anyone earning under £100,000 a year - would be funded by new levies on the wealthy. The Liberal Democrat leader's pledge follows official figures released yesterday that show the British economy is shrinking and risks a double-dip recession. Mr Clegg will say in a speech: "In just three years, real household incomes have fallen by some 5% - one of the biggest squeezes since the 1950s, since the records began. Household budgets are approaching a state of emergency and the Government needs a rapid response."
Facebook
has suspended trading of its shares on the private secondary market until the end of the week, raising expectations that it will shortly file for its long-awaited initial public offering (IPO). Shareholders can still place buy and sell orders, but the transactions will not be approved by the social network's lawyers until January 27, according to US reports. The pause in trading is not the first from Facebook - the company has previously put a stop on transactions in order to assess its shareholder profile. However, the company is expected to make its IPO in the third week of May, so the suspension adds to a growing body of evidence, according to The Telegraph. Pressure is building on John Hourican -
Royal Bank of Scotland's
best paid banker - to waive £5.6m of long-term bonuses despite contractual obligations. In the last three years Mr Hourican, head of RBS's investment bank, has received compensation worth up to £20m. That excludes this year's bonus and comes as the group is planning the closure of large parts of the investment bank. Sources close to UKFI - the body charged with managing the taxpayer's 83% stake in RBS - said it was right to question Mr Hourican's bonus awards, even though the bank was contractually obliged to make them. "Maybe the focus on Stephen Hester is wrong," said the source, defending RBS's chief executive. "It is a valid concern and part of the current issue of pay for top individuals - the question of whether people should be paid in line with contractual agreements at a time when the environment no longer merits it." The Royal Navy may have to buy French fighter jets for Britain's new aircraft carrier amid growing doubts over the American-designed
Joint Strike Fighter (JSF)
, a senior officer has warned. Admiral Sir Trevor Soar, who retires as Commander-in-Chief Fleet in March, told industrialists that there was mounting concern within the Ministry of Defence about the escalating costs and delays to the JSF programme. In a detailed note of his speech to the ADS Maritime Interest Group, seen by The Times, Admiral Soar warned that US defence spending cuts could jeopardise the deal. He was quoted as saying that Britain might do better to invest in what he called an "interim aircraft capability." The carrier is due to be ready in 2019 but Britain might not acquire the JSF until a decade later, Admiral Soar suggested. Britain's struggling
retailers
still managed to create more jobs in the run-up to Christmas than the previous year despite the consumer squeeze. Stores hired more than 4,000 staff in the final three months of last year, figures today show, but retail experts warn the positive news "won't last". The British Retail Consortium (BRC) said employment in the sector was up 0.5% during the fourth quarter of 2011 compared to the same period a year earlier - the equivalent of 4,074 full-time jobs. This growth, however, was driven by supermarkets and other food retailers and the BRC warned against false optimism. The figures were collated before the recent flurry of administrations on the high street, the trade body said, and numbers were boosted by the fact retailers were taking on seasonal staff to cope with the Christmas rush, The Scotsman writes. Sanctions on Iran could push
oil prices
up 30%, taking the price of Brent crude to above $140 a barrel, the IMF has warned. "A halt of Iran's exports to OECD economies without offset from other sources would likely trigger an initial oil price increase of around 20%-30%, with other producers or emergency stock releases likely providing some offset over time," it said. Brent crude was trading at $110.64 a barrel yesterday. Saudi Arabia has said it could "immediately" increase its production to compensate for any shortfall, The Telegraph says. AB
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