PRESS DIGEST - Financial Times - Feb 13

Financial Times

DARLING FORCED TO RETREAT ON NON-DOMS

Alistair Darling has been forced into a second retreat on his budget after the government confirmed it is to dilute plans to clampdown on wealthy foreigners living in Britain. The crackdown on non-domiciled residents had been intended to raise money from wealthy individuals who avoid paying tax. However, the proposal was not supported by business, banks and pressure groups in the City, which argued the proposal would cause damage to London's status as a financial services centre, by bringing about an exodus to more favourable tax regimes.

INFLATION RISE SMALLER THAN EXPECTED

The Office for National Statistics reported CPI inflation increased from 2.1 percent in December to 2.2 percent in January, meaning consumer price inflation undershot forecasts at the start of 2008, mitigating fears rising prices could limit scope for reductions in interest rates. It is thought the report will bring relief for policymakers who will update economic forecasts in the Bank of England's quarterly inflation report.

FALL IN HOUSE SALES ADDS TO PESSIMISM

The Royal Institute of Chartered Surveyors reported the gloom in the housing market thickened in January, as many properties lingered on surveyors' books because of the gloomy outlook for house prices. Stocks of unsold property in the UK went up by more than ten percent in January, the fourth consecutive monthly rise. Surveyors suggest this slowdown could be more severe than in 2005, as the trend of falling prices gathers pace.

INTERNET BODY OPPOSES POLICING ROLE

The organisation that represents internet service providers has stated it is concerned about the viability of government proposals to make it responsible for identifying and punishing people who download illegal music and videos. A green paper to be published next week will contain plans to waive privacy rights for internet users who transfer vast amounts of data, following campaigns by the music and film industries to protect copyrights. But the Internet Service Providers' Association opposes the idea, saying it is unable to inspect and filter every single packet crossing their network.