PRESS DIGEST - Financial Times - April 4

SQUEEZE ON CREDIT POISED TO INTENSIFY

The Bank of England's quarterly credit conditions survey has shown a reduction in lending by financial institutions, with expectations of further credit tightening in the months ahead. The balance of lenders expecting to cut secured credit availability to households and small businesses in the next three months was 42.5 percent. The figure from the previous survey, published in January, was 25.3 percent. Philip Hammond, shadow chief secretary to the Treasury, said that "Reading between the lines, the Bank of England is telling us that 'we ain't seen nothing yet' ".

TREASURY'S PROMISES HELP TO CALM FEARS OF WEALTH MANAGERS

Financial secretary Jane Kennedy calmed fears over the effects of the new "non-dom" tax legislation in a letter to the British Bankers' Association on Thursday. Banks had previously issued the Treasury with a warning that they would transfer operations abroad in response to the new regime as it would penalise wealthy foreign residents for using British fund managers or executing transactions in the UK. Kennedy acknowledged that these "unforeseen consequences" in the clauses were unintentional and made assurances that the government would address them "through necessary amendments to the finance bill".

CREDIT CRISIS COULD DELAY PLANS FOR RENEWAL

UK developers are bracing themselves for a delay in regeneration schemes as the credit crunch causes the banking sector to exercise caution over the funding of certain projects. Kevan Carrick, of the Royal Institution of Chartered Surveyors in the north-east of England, explained that banks are "looking very closely at their risk profile and at the schemes' exposure, prices and returns on capital." However, with large-scale projects in the Thames Gateway and the north-east set to go ahead, Joe Docherty, chief executive of Tees Valley Regeneration, pointed out that long-term schemes would ordinarily be expected to "go through a couple of cycles".

MTI IN 32 MILLION POUND UNIVERSITY SPIN-OUT FUND

British venture capital firm MTI has teamed up with Manchester University to raise 32 million pounds for a new fund to address the shortage of early-stage finance for spin-outs from academic research. The UMIP Premier Fund plans to reach its target of 50 million pounds within the next year and aims to invest 250,000 pounds to 750,000 pounds in around 20 ideas. Investors committed to the new fund include the Greater Manchester Pension Fund, the European Investment Fund and Co-operative Insurance Society.

SMG IN NO HURRY TO SELL VIRGIN