| Housing market crash feared after price plunge Halifax tries to allay fears that prices are poised to nosedive amid impending cuts to public sector jobsFears of a housing market crash have been raised after average house prices fell by more than £6,000 in September, driven to the biggest monthly fall on record amid anxiety about the fragile state of the economy.The 3.6% monthly decline in house prices – the biggest reported in 27 years by Halifax – was described as an "absolute shocker" by one economist, and knocked share prices in housebuilders and mortgage lenders.Halifax, part of the state-controlled Lloyds Banking Group, tried to ally fears that prices – now at an average of £162,096 – were poised to nosedive amid impending cuts to public sector jobs.Martin Ellis, Halifax's housing economist, stressed that while September's 3.6% fall was a record on the basis of monthly comparisons, on a quarterly basis the fall in house prices was 0.9% compared with the second quarter – a significant slowdown on previous quarter-on-quarter falls of between 5% and 6%.The release of the closely watched Halifax data, which has been a barometer of house prices since it was first compiled in January 1983, came barely 24 hours after the International Monetary Fund had warned that house prices in the UK were too high and vulnerable to a fall.Halifax admitted the September fall was an "intake of breath" moment, and warned that more volatility was expected because of rising taxes, falling incomes and homeowners testing the appetite for demand by putting their homes on the market.Howard Archer, chief UK economist at IHS Global Insight, described the house price data as an "absolute shocker", but noted that prices had risen surprising strongly in August and July.He added: "The Halifax data will undoubtedly raise fears of a housing market crash. However, it is important to put the data into perspective. The data highlights how volatile housing data can be."Housing marketHouse pricesPropertyReal estateLloyds Banking GroupBankingJill Treanorguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
Oboist loses WNO dismissal claim A 61-year-old oboist who played with Welsh National Opera (WNO) for 34 years loses his claim of wrongful dismissal. bbc.co.uk |
Bank levy to raise £2.5bn a year but bigger banks could still gain Planned cuts in corporation tax will offset imposition of levy on bank balance sheetsThe Treasury today slapped a £2.5bn-a-year levy on the banking industry but still left some of the major banks better off as a result of corporation tax cuts being implemented over the next four years.As the electorate was hit by £81bn of cuts to public spending that will leave the poorest section of society worst off, City minister Mark Hoban issued legislation that made some concessions to the banks after a summer of intense lobbying by the industry. It could even result in some banks ending up paying less tax than before.Unions were swift to attack the tax, dismissing it as "a pathetically small amount" to demand from the banks, and said the City would be "cracking open the champagne.""Ministers have come up with the smallest number they think they can get away with, even though the banks are carrying forward £19bn of tax losses to offset against future bills – losses that have been bailed out by the taxpayer," said Brendan Barber, the general secretary of the TUC. "Those who caused the recession will be cracking open the champagne today, while the full extent of the attacks on the living standards of poor and middle-income Britain are starting to sink in."The levy will come into force in January 2011 after being announced in the June emergency budget. Analysts calculated then that a planned cut in corporation tax to 24% from 28% would negate the impact of the levy and that some banks, such as state-backed Lloyds Banking Group and Royal Bank of Scotland, could actually stand to gain from the tax changes.Hoban said: "The government believes that banks should make a full and fair contribution in respect of the potential risks they pose to the UK financial system and wider economy."He added: "The levy has been designed to encourage less risky funding and complements the wider agenda to improve regulatory standards and enhance financial stability. It will apply to the global balance sheets of UK banks, and the UK operations of banks from other countries."The Treasury spent the summer consulting on a levy that would consist of a charge of 0.04% of a bank's total balance sheet in the first year – generating £1.1bn – rising to 0.07% in 2012-13 to raise £2.3bn and up to £2.5bn in 2013-14. It conceded today that it was yet to agree on the actual rate at which the levy would be imposed. Industry sources believe that to ensure the Treasury does not overshoot of its goal of a £2.5bn tax take, it will have to cut the size of the levy.As George Osborne unveiled his spending review he said he wanted "to extract the maximum sustainable tax revenues from financial services". But he also made clear he had heeded the industry's warnings that banks could move overseas if tax changes were too draconian."We neither want to let banks off making their fair contribution, nor do we want to drive them abroad," the chancellor said during the spending review.He stressed his bank levy would be more effective than Alistair Darling's one-off tax on bonuses, which brought in £3.5bn of tax receipts or a net figure of £2.3bn – still four times more than the former chancellor had expected after the tax was imposed for just four months starting in December 2009.The original proposal for the bank levy has been amended after the government listened to responses from 48 interested parties.The draft legislation published today sets out some of the changes, including changing the £20bn threshold at which the levy had been liable. The Treasury is also cutting the levy rate on uninsured customer deposits, while the definition of a "banking group" has been altered so that if more than 50% of a group's activities are non-financial, it will not be classified as a "bank" – ensuring that insurance companies and similar groups are not caught up in the levy.The banks are still seeking clarity on how to avoid the problem of double taxation, which would arise if other countries impose a similar levy.The levy will be included in the Finance Bill 2011.BankingSpending review 2010Tax and spendingJill Treanorguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
Aerial views of snowbound Scotland Snow and ice have been causing more disruption across parts of the UK with Scotland and the north-east of England worst hit, and forecasters are predicting that temperatures in Scotland will drop to -20C. bbc.co.uk |
British Students Protest Education Cuts It was the second such action this month to protest a drop in education spending and an increase in university costs. nytimes.com |