PRESS DIGEST - Financial Times - Aug 14

FORECAST SENDS POUND LOWER

Sterling fell against the dollar and the euro on Wednesday after the Bank of England gave its bleakest economic assessment for more than a decade and the markets priced in a series of interest rate cuts.

Mervyn King, the Governor of the Bank of England, predicted inflation would peak at five per cent at least and said that the economy required a 'painful' adjustment to higher energy and food prices. Sterling fell more than one per cent against the dollar, the euro and on a trade-weighted basis.

JOBLESS CLAIMANTS RISE AT FASTEST RATE FOR 16 YEARS

Last month, the number of people claiming unemployment benefit rose at the fastest rate for almost 16 years. The number of people claiming jobseekers allowance rose for the sixth month in a row, increasing by 20,100 to 864,700.

Total unemployment rose by 60,000 to 1.67 million during the three months to the end of June. Chartered Institute of Personnel and Development chief economist John Philpott said that the labour figures were 'the weakest' since the economic slowdown began.

DARLING PRESSED TO CLARIFY STAMP DUTY IDEA

Alistair Darling has come under renewed pressure to clarify any plans for a stamp duty holiday after a poll of estate agents by the National Association of Estate Agents showed that uncertainty on the issue was hitting the housing market.

The survey found that 92 per cent of estate agents believed that the situation had increased consumer concerns with people delaying buying a house in the hope of avoiding stamp duty. The poll of 1,350 agents found that 62 per cent had been asked for advice on whether to hold off purchasing a house until the autumn pre-Budget statement.

NERVOUS INVESTORS TURNED TO NATONAL SAVINGS

The near-collapse of Northern Rock and the credit crunch have led to significant new retail deposits at National Savings & Investment as investors seek to find a safe haven for their money.

The government's retail finance arm said on Wednesday that net financing was 5.9 billion pounds in the year ended March 31 2008. This figure is three billion pounds more than its original target of 2.8 billion pounds. Gross sales of all NS&I products rose to 15.54 billion pounds compared to 14.17 billion pounds in the previous 12 months.

The Treasury uses the money in NS&I to manage the national debt cost effectively and when customers invest in NS&I they are effectively lending money to the state.

HBOS TO AXE 425 JOBS AND HALT NEW MORTGAGES AT TMB DIVISION

HBOS HBOS.L is to cut 425 jobs and close its TMB mortgage brand to new business in a move aimed at reducing duplication between brands, it is also to stop offering conventional mortgages through its Intelligent Finance brand.

The move comes weeks after the bank said it would consider disposals or winding down businesses in order to position itself for a shrinking mortgage market. HBOS recently reported a 72 per cent drop in first-half profits to 848 million pounds and also saw its four billion pound rights issue shunned by most investors.