Bank of England Economist Gives Warning on Challenging Financial Era
The chief economist from the Bank of England, Spencer Dale, has issued a warning for everyone in the country that there are “relatively hard times ahead”. He said that there will be less opportunities for growth and there will be a significant increase in inflation which will put a lot of sectors at risk. In his visit to Scotland, he spent his two and a half days looking at a textile factory as well as a timber processing plant. He also had important discussions with the CBI and the Chamber of Commerce. This trip is a part of the regular program of the MPC to assess the state of the economy. It is in this trip where he issued a statement giving the warning of impending challenges to the economy of the United Kingdom.
Barclays Planning to Buy Regional Spanish Bank
The management of Barclays is making plans to buy one of the regional banks in Spain. This report was released after a meeting between Barclays chief executive Bob Diamond and Spanish Prime Minister Jose Luis Rodriguez Zapatero in Madrid a week ago. However, with the acquisition of the regional Spanish bank, Mr. Diamond wants a guarantee that Barclays will not catch any of the debts that the bank has. He wants his acquisition to start with a clean slate. Spain has quite a good number of regional banks that may be speculated to be the one that Barclays is eyeing on at the moment. These cajas, as they are locally called, are struggling at the moment because of the current financial situation of Spain. Most of them have very high levels of debt following the collapse of the property sector in Spain.
Bank of Scotland to Pay £17m in Compensation to Customers
Customers of the Bank of Scotland are going to receive a sum of £17M in compensation due to mishandling of complaints regarding their products on investments. The Financial Services Authority also issued a directive to the Bank of Scotland to pay £3.5M in fines because the bank has failed to attend to the complaints that were filed by their customers. This was started by the Financial Ombudsman Service who received appeals from various customers who have reiterated that their complaints were not attended to at all, or worse have been rejected. This then triggered an investigation of 2,592 complaints that discuss five investment policies that were issued between July 207 to October 2009. The policies were: Collective Investment Plan, the Personal Investment Plan, the Guaranteed Growth Bond, the ISA Investor and the Guaranteed Investment Plan.
China Cuts UK Credit Rating
China’s Dagong rating agency has decreased the UK credit rating. The agency did so as a response to the slow economic growth of the country over the last several months. The United Kingdom has been stuck in 1.3% to 1.5% rate of growth for many months now which in effect is causing big difficulties for the finances of the country. The credit rating of the United Kingdom is now at A+ from AA-. This rating is the same with Chile, Belgium and the United States. However, there are still three other rating agencies in the west that has retained UK’s credit rating of AAA. Dagong rating agency thought that the UK’s credit rating will still continue to go down in the next couple of months considering the problems that the government has yet to solve to make their economy better.
Nationwide Building Society Happy with Strong Financial Year
The largest building society in the United Kingdom, Nationwide, has expressed their delight with their excellent and strong financial year, even if they have had a small mortgage and savings market. Their pretax profits decreased by 7% to a figure of £317M due to various changes in their accounting while their underlying profits increased by 30% to a good figure of £276M. According to Graham Beale, those figures show excellent performance of the company despite the very challenging and extremely difficult economic environment that the country is in at the moment. It can also be noted that the figure that was written off for bad loans to customers decreased by 35% to £359M.
