U.K Government borrowing for this month has increased to its worst level in six years. The treasury borrowed an extra £1.1 billion last month, taking the net public sector borrowing to £8.2 billion. This will put pressure on George Osborne, who is currently attempting to drive down costs across Whitehall. Despite having four departments on side with his spending plans: The Treasury, Education, Local Government and Defra several colleagues such as Iain Duncan Smith have resisted calls for further cuts in departmental spending. Indeed, this weekend, Osborne refused to rule out cuts to the police budget despite fears from the Home Secretary Teresa May. It is likely this internal cabinet conflict is causing the difficulty for the Chancellor and his austerity plans.
The Derby based train manufacturer Bombardier has received a boost to its contract portfolio by announcing the design for London’s Crossrail trains. The company, which is the last train manufacturer in the U.K, was under threat of closure in 2013 after the Government decided to give a crucial contract to Siemens of Germany. Bombardier is now on a firmer financial footing following the awarding of the crossrail contract.
Following the closure of the SSI steel operation in Redcar, the true picture of job losses has began to emerge. The Redcar Plant, which has been in operation since 1917, has felt the pressure of the global steel price drop as China continues to dump its overproduction on the market. Over 2,200 jobs were lost at the steel plant, with a further 834 jobs lost in 24 firms directly linked to the Redcar operation. The picture is likely to remain bleak for some time as further job losses are predicated.
Jim Slater, the founder of Slater Walker bank in the late 1960s, has died. Slater Walker was famous in the 1970s for its spectacular rise and subsequent collapse. The bank was once valued at £200 million in 1972 but by 1976 the dream was over as the bad loans to the UK property and manufacturing sector began to bite. The Bank of England has to step in to save the operation. Indeed, some commentators today have highlighted that Slater Walker was the first time a government considered a bank ‘too big to fail’. Jim Slater did return to the City as an investment guru, becoming successful in the 1980s and 1990s.
The Asean trade area of 10 South East Asian countries has been moving towards an agreement for the formation of a full free trade area. The organisation, which is meeting in Manila this week, hopes to promote free movement of goods, services and labour between member states similar to the European Union. However, significant obstacles remain due to the wealth disparity between states and the exact detailing of the proposals. Although, Asean is never likely to become as cohesive as the EU on trade, the plan is a considerable step towards a more interconnected South East Asian economy.
A small scale Swiss bank, The Alternative Bank Schweiz, has taken the unusual step of announcing negative interest rates of 0.125% on accounts less that 100,000 Swiss Francs and -0.75% on accounts over this amount. The bank specialises in social and environment projects, the bank said this would provide ‘manoeuvring room’ for the bank to fund projects. Customers have expressed surprise at the development.