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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com 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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Chancellor to stay on economic path

Category : Business

Chancellor George Osborne tells business leaders at the CBI that he will not deviate from the government’s economic road to reducing the deficit.

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George Shoppers Go Gaga for Latest Designer Collection

Category : Stocks

George G21 Talent graduate designs sell out on George.com and in-store in minutes

220% uplift week on week

Lady Gaga snaps up graduate range for world tour

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Help to Buy risks helping to create another housing bubble

Category : Business

In his ‘emergency’ budget in 2010, George Osborne pledged to create a less debt-fuelled economy. Where is that promise now?

The late Eddie George, in 2002, brought the phrase “two-speed economy” into common parlance, telling an audience in Scotland: “We have taken the view that unbalanced growth in our present situation is better than no growth – or, as some commentators have put it, a two-speed economy is better than a no-speed economy.”

But his words could just as well have been applied to last week’s GDP figures. While it was undoubtedly great news that the UK has skirted around a “triple dip”, the breakdown of the numbers suggested that, far from achieving the rebalancing George Osborne hoped for, away from consumers and towards industry, the mix of growth looks much as it did a decade ago. Manufacturing output declined; services expanded; government spending made a positive contribution. Industrial output is still 10% below its pre-crisis peak.

Yet far from acting to redress the balance, the coalition’s latest policies read like a desperate attempt to return to the unstable, unsustainable norms of the early noughties.

Help to Buy, announced in the budget, will offer taxpayer backing for up to £130bn worth of mortgage lending, while last week’s extension of the Funding for Lending scheme will allow banks to receive £10 of cheap funding for every pound they lend to small businesses in 2013 – and lend it back out again in any way they like, including to buy-to-let investors.

Back in 2002, George wanted to reassure consumers they would not face a runup in interest rates – because with other sources of growth, such as industry and exports, struggling, the Bank was willing to allow Britain’s shoppers to continue propping up demand with their buy now, pay later spending habits rather than risk economic stagnation.

When he spoke, the cost of the average home was less than £96,000, though prices were already rising at double-digit rates; by the peak of the boom, little more than five years later, it had all but doubled, to £183,959.

Alongside that extraordinary growth in house prices came an unprecedented explosion in household debt. But constantly rising prices bred a warm feeling of confidence among homeowners and fuelled a sense of entitlement to the unearned benefits of rampant housing-market inflation, creating a ready-made lobby group opposing changes to inheritance tax, council tax or any other method of sharing the windfall more widely.

In Osborne’s first, “emergency”, budget in 2010, he carefully laid out his intention of building a safer, more stable economy, less reliant on debt-fuelled spending. Yet three years on, scarred by the failure of the pound’s 20% depreciation to spark an industrial renaissance, he appears to be banking on the two-speed doctrine to lift him clear of trouble.

Osborne has insisted that Help to Buy is not aimed at pushing up prices. But encouraging first-time buyers to take out mortgages with high loan-to-value ratios – on properties whose value may be unsustainable even at current levels, let alone after another market bounce – is hardly a recipe for a fairer or more stable economy.

The Treasury claims to hope the policy will stimulate housebuilding, helping to ease the chronic shortage of homes that has driven up prices; but as the Treasury select committee rightly pointed out in its report on the budget, if the government really wanted to kickstart building, it should act to do so directly. That might mean taking advantage of record low gilt yields to invest in council housing, for example. But as Pete Jefferys of Shelter put it in a blog last week, Help to Buy is a “Thatcher-style home ownership revolution, not a Macmillan-style housebuilding boom”.

Neither does pumping out a new generation of cut-price loans – which, remember, will be available to anyone buying a house worth up to £600,000 – tackle the problem of banks still saddled with shaky-looking mortgages from the boom years. It just postpones the reckoning – and risks making it worse when it comes.

There is agreement across the political spectrum that Britain faces a housing crisis: a generation of young people have little or no prospect of affording a place to live, and find themselves trapped in insecure, poor-quality rental housing owned by landlords out to make a quick buck.

But first-time buyers need cheaper homes, not bigger loans, and the chancellor’s argument is reminiscent of those who used to claim vehemently in the mid-noughties that allowing low-paid workers to borrow six times their income was socially necessary, because otherwise young people wouldn’t be able to afford a home.

A mass programme of publicly funded housebuilding, along the lines stirringly recreated in Ken Loach’s documentary The Spirit of ’45, could boost supply dramatically and help to rebuild the shattered construction sector, while tougher regulation of the rental market could ease the pain for those unable to afford their own home.

And taxing housing more heavily – whether through a more progressive council tax system, heftier inheritance levies or a land value tax, under which homeowners would pay a small percentage of the value of their property each year – could help to prevent the next bubble inflating. Instead, the government appears intent on subsidising it.

Martin Rowson on escaping a triple-dip recession – cartoon

Category : Business

George Osborne says Thursday’s growth figures are ‘an encouraging sign the economy is healing’

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Soros reveals stake in J.C. Penney; stock surges

Category : Business

George Soros has given ailing J.C. Penney a big vote of confidence.

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May Issue of the International Resource Journal Now Online

Category : World News

LONDON, UNITED KINGDOM–(Marketwired – April 24, 2013) - George Media Inc. is pleased to announce that the May issue of The International Resource Journal is now available online at www.irjonline.com. Click on the magazine cover to enter the publication.

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Austerity: an idea on trial | Editorial

Category : Business

The past week has been a particularly bad one for George Osborne and advocates of the Reinhart-Rogoff approach

Over the past week, a series of blows have been dealt to George Osborne’s reputation. First, the IMF’s chief economist warned that the chancellor’s austerity programme was “playing with fire”. Then the latest unemployment figures indicated that the jobs market may be about to turn significantly for the worse. The week ended with another credit rating agency stripping Britain of its AAA rating. While all this was going on, a row raged about academic research that had been cited by the chancellor in support of his austerity.

In 2010, the Harvard economists Carmen Reinhart and Ken Rogoff produced a paper arguing that countries with public debt above 90% of their annual income hit a tipping point, experiencing much lower growth. The study had been used by the Treasury as a key excuse for its spending cuts. Except that on closer examination by economists at the University of Massachusetts Amherst, the Reinhart-Rogoff research was found to be riddled with errors, from inappropriate weighting of the statistics to a howler over the use of an Excel spreadsheet. As if to rub in the schoolboy nature of some of these errors, the key researcher in the Massachusetts trio was a 28-year-old graduate student yet to complete his PhD.

It would be tempting to describe this as a terrible week for Mr Osborne, were it not for the fact that that phrase now seems to fit most weeks with a decent amount of economic news. Still, the past week has been particularly bad. The IMF is normally too respectful of diplomacy to take a stick to powerful member-states. And it is usually far too mindful of its own reputation to publicly repudiate a strategy that very recently commanded its emphatic support. Visiting London last summer, IMF boss Christine Lagarde gave even stronger support to the chancellor: “When I look back to 2010 and what could have happened without fiscal consolidation I shiver.” Not immaterial in all of this is that Ms Lagarde counts Mr Osborne as a friend: he was the first major finance minister to back her bid to be head of the IMF. In the course of just a few days, the chancellor has decisively lost one of his key personal and institutional allies. He must now prepare for a showdown next month when Fund economists visit London to make their annual inspection.

We can imagine just how embattled the government will be this summer. Take this coming week; it may be that the GDP figures on Thursday show that the UK has narrowly avoided a triple-dip recession – a result that would once have provided rhetorical ammo for the Treasury but will now be easily deflected by any TV interviewer toting a couple of choice quotes from the IMF. Then there will be next month’s local elections. And the setting of a spending review for June is bound to provoke months of mutinous muttering from ministers in charge of unprotected departments (see Vince Cable, Theresa May and Philip Hammond). But the events of the past week also show up the rottenness of our economic policymaking process. The Reinhart-Rogoff argument about a tipping point for debt was influential around the world. Yet the idea that there could be a natural cap for debt, which, when breached, would usher in sharply lower growth, is absurd.

Such mechanical explanations don’t fit with history: in 1945, Britain had debt of 220% of GDP but no economic disaster struck. Nor do they fit with commonsense: why should high debt produce low growth rather than, as is happening now, low growth lead to higher debt? Yet this study and others of similarly murky worth were cited by everyone from Paul Ryan to the austerity crowd in Brussels, and heeded by institutions such as the IMF. Put all this together, and a picture emerges of academics overselling a simplistic argument that is conducive to ministers’ yen for austerity and so gets further simplified for political purposes. The past week has dented Mr Osborne’s reputation; but it should be a chastening one for economic policymakers in Brussels, Frankfurt and Washington, too.

Storm brews over energy price rises and HMRC appointment of npower chief

Category : Business

Energy price changes may see customers overpay by £55m a year, warns Which?, as MPs raise concerns over tax avoidance

Controversy around Britain’s energy industry will intensify on Monday amid revelations that the former head of a low-tax-paying power provider has been hired to help oversee HM Revenue and Customs (HMRC), and a warning that a new price regime demanded by the regulator, Ofgem, could still mean consumers paying £55m more a year than they should.

RWE npower was at the centre of a storm last week after admitting it had paid £2m, £3m and nothing in tax in the years 2009-2011, but now it transpires that Volker Beckers, its former boss, has been appointed as a non-executive director at the HMRC.

Ian Lavery MP, a member of the Commons Energy and Climate Change select committee, whose questioning led to npower’s admission, said: “(Chancellor) George Osborne has serious questions to answer about why he has appointed the boss of an energy firm which paid no corporation tax in the last three years, despite making £766m in profits, to the board of HMRC. HMRC has a bad enough record at stopping tax avoidance as it is.”

EDF*OFF, a group set up to campaign against the dominance of the big six suppliers, says the Beckers row is deeply embarrassing for the HMRC at a time when it is trying to rebuild public trust following the departure of former head, Dave Hartnett, after signing much-criticised sweetheart tax deals with Goldman Sachs and then joining HSBC.

Mark Williams of anti-austerity campaigners UK Uncut added: “It is no surprise the government loses billions of pounds to corporate tax dodgers every year when they hire those same tax dodgers to oversee tax inspectors. HMRC should be throwing the book at people like Volker, not hiring them.”

Npower, which faces a petition signed by more than 93,000 people calling on it to pay more tax, has consistently denied tax dodging and says the low tax payments result from the fact that the German-owned company has been investing billions of pounds in new gas and other power stations.

The Treasury has confirmed this can be legitimately written off against tax but independent tax specialists, such as Richard Murphy, have also questioned the necessity of some of the “interest payments” made by npower to its parent group RWE in Essen which also reduce the scale of npower’s taxable profits. Npower says this is a cheap way to borrow money.

The HMRC told the Guardian Beckers had been taken on under a public appointments process that involved rigorous vetting and disclosure of any conflicts of interest.

“Non-executive directors bring valuable external and commercial experience to HMRC. However, they are not responsible for the day-to-day management of HMRC, nor are they responsible for tax policy or for handling confidential individual or corporate taxpayer issues,” said a spokeswoman.

Meanwhile, analysis by Which?, the consumer group, reveals Ofgem’s proposals to overhaul energy tariffs may mean more than 3.4m households end up paying over the odds for their energy as they struggle to identify the cheapest energy tariffs. This could see consumers collectively paying up to £55m more than they need to on their bills.

Richard Lloyd, executive director at Which?, said: “These proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal, with three-quarters of people being asked to compare prices that are not based on their energy usage.”

Which? is launching a digital campaign on Monday, asking consumers to come forward and pledge their support for single unit prices to simplify the tariffs.

Treasury dismisses SNP currency plan

Category : World News

UK Chancellor George Osborne believes the SNP “are tying themselves in knots” over plans to retain the pound in the event of a yes to independence.

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Osborne to extend lending scheme

Category : World News

George Osborne is set to boost lending to small businesses as he faces growing pressure over his austerity policies.

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