UK News

Insights from the UK and beyond

Time for salary cap for bankers?


It’s not a great time to be a banker at the moment with financial apocalypse making the pin-striped gents probably more loathed than estate agents or journalists. Thousands of them have lost their jobs and those that are still in paid employment are finding that their renumeration packages are coming under ever greater public scrutiny.

Over the weekend reports that the Royal Bank of Scotland was about to award its staff a billion pounds in bonuses prompted outrage at a time of soaring unemployment and with a deep recession looming. Most people would agree it is a no-brainer that a company that has just posted the biggest-ever financial loss in British corporate history, required a 20-billion-pound government bail-out to stay afloat last year and is now nearly 70-percent state-owned should not be allowing its staff to be trousering huge bonuses.

The banks say they are bound by contract to pay the bonuses and that they need to retain key staff.

But that argument has got the former deputy prime minister John Prescott so riled he has even launched a public campaign against the bonus payments on Facebook. “This is morally and economically outrageous,” wrote Prescott. “If we hadn’t bailed them out to save homeowners and businesses, their contracts would be worth nothing as they’d be out of work.”

Are interest rates at one percent the answer?


The Bank of England has gone into further into uncharted territory with its decision to cut rates by half a point to just one percent. Many economists think they will be down to zero by the Spring.

But like gunfighter running out of bullets, the Bank is, in the view of some observers, just wasting ammunition by using the interest rate weapon.

Did the press make the crisis worse?

- As the British economy continues to nosedive, an intriguing sideshow has been going on about who should we blame for the financial meltdown.

Since building society Northern Rock went belly up, Prime Minister Gordon Brown’s mantra has been to link Britain’s economic problems to credit flows seizing up due to the subprime crisis in the United States.

Not surprisingly the Conservative party blames Brown. Champagne-swilling, overpaid, bonus-fuelled bankers have come in for plenty of criticism from the general public.

from Global Investing:

And the next Iceland is…

If there's one thing you don't want to be, it's the next Iceland.

Since its currency, colossally indebted banking sector and economy collapsed in spectacular fashion in October, the country has become a byword for an economy that has truly hit the rocks.

Within weeks, banking problems and currency falls meant Hungary was being hyped as a "second Iceland", at least until a joint International Monetary Fund and European Union rescue package restored some stability.

What other options does the Bank have?


Interest rates have been cut again – to a record low of 1.5 percent. As they get ever closer to zero, the impact of rate cuts will become more and more limited. So what can central banks do to ease the economic pain?

“Quantitative easing”, or what non-economists call “turning on the printing press” is one of the options.

Unpaid overtime anyone?


It’s widely acknowledged to be bad for your health but millions do it, even without getting paid for it. The Trades Union Congress (TUC) said on Thursday the number of people working hours they are not paid for is at its highest level since 1992.

Five million worked unpaid overtime last year because of a “long-hours” culture and concern that the economic downturn is putting their jobs at risk. The largest increase in workers carrying out unpaid overtime occurred in London, followed by the east Midlands and eastern England.

In Britain – The week in 7 pictures


Saturday: A worker changes a sign in the window of the Woolworths store in Ashby de la Zouch in central England on December 27, 2008. Woolworths collapsed into administration in November and its administrators said earlier in December that all its stores would close by Jan. 5, with the loss of 27,000 jobs, unless a last-minute buyer could be found. REUTERS/Darren Staples

Sunday: A pro-Palestinian demonstrator waves a muddy boot during a protest near the Israeli Embassy in London on December 28, 2008, against the Israeli strikes on Gaza. REUTERS/Luke MacGregor

In Britain – 7 days in 7 pictures


Wednesday: A homeless man sits outside the entrance to Green Park Tube Station in central London on Christmas Eve, while a man and a woman kiss goodbye after a shopping trip. There was yet more evidence this week that the world’s economies are limping into the new year,  with Britain contracting more sharply than first thought and further signs that the U.S. economy is in a sharp decline. REUTERS/Andrew Parson

Tuesday: A homeless man has his hair cut at the charity Crisis UK temporary day centre for the homeless at a school in London. Crisis UK opens its doors to the homeless over the festive period from 23 until 30 December. A survey for Crisis suggests nearly one in 10 people are struggling to keep up with rent or mortgage payments, and the charity fears there will be a surge in homelessness in 2009. REUTERS/Luke McGregor

from The Great Debate UK:

Put your questions to David Cameron


(UPDATED Dec 18 - This post is now closed for questions)

Conservative Party leader David Cameron will be speaking on the economy and the credit crunch at Thomson Reuters' Canary Wharf office on Monday, followed by a question and answer session.

The Tory leader has argued that two main problems face Britain at present – a recession coupled with a record level of government debt, and that the government is trying to tackle one while ignoring the other.

from Global Investing:

To spend, or not to spend?

A day after Britain unveiled a multi-billion-pound fiscal stimulus package to spend its way out of recession, market analysts have been busy figuring out what it all means, in the context of a sharply slowing economy.

Nick Parsons, head of market strategy at nabCapital, has come to this conclusion: