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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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AUDIO: Bank bonus cap ‘will not reduce risk’

Category : Business

Negotiations to introduce a bonus cap in the European Union have stalled after EU countries and the bloc’s parliament clashed over how far to go in curbing pay for the industry’s top earners.

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Shocking figures reveal the growth in UK’s wealth gap

Category : Business

Inequality has risen sharply since the 1990s, according to a report by the Resolution Foundation thinktank

The super-rich – the top 1% of earners – now pocket 10p in every pound of income paid in Britain, while the poorest half of the population take home only 18p of every pound between them, according to a report published this week by the Resolution Foundation thinktank, which reveals the widening gap between those at the very top and the rest of society.

Inequality has grown sharply over the past 15 years, according to Resolution’s analysis: the top 1% of earners have seen their slice of the pie increase from 7% in the mid-1990s to 10% today, while the bottom half have seen their share drop from 19% to 18%.

There was a dip in top earnings between 2009-10 and 2010-2011, but Resolution’s analysis suggests that may have been because highest-paid employees brought forward earnings to avoid the 50p top tax rate on earnings above £150,000, which Chancellor George Osborne has cut to 45p from this April.

Matthew Whittaker, senior economist at the thinktank, said: “If we take the longer view, we see the very wealthiest have continued to prosper while many others have not.

“The growing gap in incomes is pronounced when you look at the top 10th of households, and overwhelming when you consider the position of the top 1%. The rest of society hasn’t kept up. It’s the squeezed majority, not just the squeezed middle.”

Resolution’s calculations do not include the impact of benefits and tax credits, which top up the incomes of the lowest earners, yet show the polarisation in the UK’s flexible labour market between top earners’ soaraway salaries and stagnant wages for those at the bottom of the pile.

The Organisation for Economic Co-operation and Development used its annual health check of the UK economy to warn of the dangers of increasing inequality, saying: “Labour market conditions are widening the income gap between full-time employees and an increasing share of the workforce on part-time, insecure and low-wage jobs. This comes in a context where income inequality was already high and rising before the recession.”

Tackling the gap between rich and poor is a growing political issue. The Labour leader, Ed Miliband, has called for a policy of “pre-distribution” to try to narrow the gap between the best and worst paid, while politicians from across the spectrum, including the mayor of London, Boris Johnson, have praised the idea of employers promising to pay the Living Wage, currently £8.55 an hour in London, and £7.45 elsewhere. The deputy prime minister, Nick Clegg, last week revived the idea of a “mansion tax” on homes worth more than £2m, or higher council tax bills for the costliest properties.

In its report, Squeezed Britain 2013, the Resolution Foundation will focus on the fortunes of middle-earners, many of whom have seen their real incomes stagnate over the past decade in the face of high inflation and weak bargaining power in the workplace.

Surge in child benefit opt-outs

Category : Business

Some 270,000 people have opted out of receiving child benefit, owing to changes in rules affecting higher earners which are now in force.

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Citi plans to cut bonuses by up to 10%

Category : Stocks

Citigroup will cut the “average employee’s” bonus between 5% and 10% this year, but top earners won’t get pinched.

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Obama: Wealthy must pay more tax

Category : Business

US President Obama says high earners must pay higher taxes, ruling out tax rises on earnings under $250,000 despite an approaching “fiscal cliff”.

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Childcare ‘hits second earners’

Category : Business

A think tank says the cost of childcare is making work “hardly worthwhile” for a growing number of second earners in middle and low income families.

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Dr. Dre tops hip-hop ‘rich list’

Category : Business

The US rap star tops a list of hip-hop’s biggest earners to due to his audio company Beats Electronics.

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‘Lost decade’ for US middle class

Category : World News

The US middle class is facing a “lost decade” as its share of the country’s income has been surpassed by affluent earners, a new report says.

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Chancellor, this new recession isn’t Labour’s mess – it’s yours

Category : Business

The crisis now threatening the British economy is a chronic and widespread lack of growth. The blame for that lies firmly at the door of the party of austerity

George Osborne and David Cameron made little effort to hide their discomfort at last week’s news that the economy had slipped back into recession. Their carefully conceived political arc – take the pain, restore growth, sail serenely back to power – has been shattered.

Analysts embarrassed by getting their forecasts wrong rubbished the official estimate that GDP declined by 0.2% in the first quarter. But a couple of tenths of a percentage point either way would make no difference to the big picture, which is of an economy flat on its back. Output is lower than it was in the third quarter of 2010.

Osborne’s central economic gambit – that, by cutting business tax and regulation and convincing the markets he was serious about tackling the deficit, he would clear the way for growth – has failed miserably.

And perhaps it’s no coincidence that just as his economic strategy is so publicly collapsing, the chancellor’s deft touch for political strategy appears to have deserted him. The backlash against March’s budget has been the most painful and drawn out since Gordon Brown used his last outing with the red box to abolish the 10p tax rate for low earners, leaving a ticking time bomb for Alistair Darling.

Osborne isn’t being helped either by the fact that the intellectual and political tide across much of Europe seems to be running against him. François Hollande’s strong showing in the first round of the French presidential election underlines the fact that voters are no longer willing to submit unquestioningly to the markets’ demand for austerity. Meanwhile, the surprise collapse of the Dutch government – one of the most hardline in calling for budgetary discipline elsewhere – reveals how concerned politicians of many hues are becoming about the social costs of Europe’s draconian “fiscal compact”.

But for the chancellor to protest that he has made the UK a “safe haven” from the euro storm – effectively, that it’s only thanks to him we’re not Greece – is a cheap get-out. Unlike the single currency’s hapless members, the UK has its own central bank and its own currency. That has allowed the pound to fall sharply against the euro and the dollar since the onset of the crisis (though it has appreciated in recent months), and the Bank of England to slash interest rates to 0.5% and pump £325bn into the economy.

A more instructive comparison is the one Ed Balls has gleefully been making for the past 12 months – with the performance of the US.

Admittedly, America’s failure to make inroads into its debt has been as much a product of political paralysis in Washington as a thought-through strategy. But over the past three years, President Obama has been unabashed about keeping the spending taps open, and it seems to have paid off. Despite being downgraded by Standard & Poor’s, and suffering a far worse housing crash than the UK, the US has returned to growth. While GDP in the UK remains more than 4% below its pre-crisis peak, in the US it’s more than 1% higher.

Of course, there are other secrets to US success: it has a more diversified economy than the UK, where “business and financial services” – the City, plus our armies of accountants, lawyers and consultants – make up 29% of GDP, against less than 20% in the US.

But America is wrestling with many of the same structural difficulties as the UK, such as over-leveraged consumers and banks. So fiscal stimulus may not be the whole answer, but there does seem to be a prima facie case that it helps. As Trevor Greetham of Fidelity says, when comparing the two countries’ fortunes, “growing your way out of debt looks like the better strategy”.

Ben Bernanke, the chairman of the Federal Reserve, certainly thinks so. Warning at his press conference last week about the risk to the economy from what has become known as the “fiscal cliff” in 2013 – when a series of tax allowances runs out at the same time as savage automatic spending cuts kick in – he said that the Fed, which has been aggressive in propping up growth, would be powerless to help.

“There is absolutely no chance that the Federal Reserve would be able to have the ability whatsoever to offset that effect on the economy,” he said. As Sir Mervyn King and his colleagues have discovered, central banks can only do so much when the government is sucking demand out of the economy.

However, the fact that Osborne’s slash and burn approach delivered a knockout blow to an economy that was struggling to get to its feet doesn’t mean that a shot of public money will bring Britain back to fighting strength.

Most of the sources of growth that powered the expansion of the past 20 years – consumer credit, property, finance, public services – are in retreat and likely to remain so, perhaps for years; while exporters, Osborne’s great hope, are facing recession and austerity in major markets across the Channel.

As Tim Morgan of City broker Tullett Prebon put it in an apocalyptic note last week, “a substantial majority of the economy has become ex-growth”. It’s becoming an increasingly widely held view, in the City and beyond, that without radical action the UK now faces a prolonged period of stagnation.

Even within his spending plan, Osborne could have thought urgently about easing the squeeze on hard-pressed families, funding infrastructure projects that would create jobs and boost productive capacity, and channelling investment to firms still starved of the funds to expand. Instead, his priority was to deliver a tax cut to some of the highest earners in the country.

For the past two years, the coalition has whined about being left to clear up “Labour’s mess”. But as the economy bumps along the bottom, it’s time for Osborne to man up and shoulder his share of the blame.

Couples face child benefit quiz

Category : Business

HM Revenue and Customs will expect high earners to quiz their partners to find out if they claim child benefit.

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