The Business: Monday June 16 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
House prices in London have come off the boil, according to figures on a property website. Prices for homes in the capital fell by 0.5% in early June, says Rightmove, in part due to an acceleration of sellers rushing to cash in on rising prices. In some areas of the country, especially in London, prices may have hit an "affordability cap", the website said. However, prices in London are still 14.5% higher than they were a year ago.
Standard & Poor's has upgraded the UK's credit outlook to "stable" from "negative" and kept its AAA assessment of borrowing strength. The credit agency predicts that the UK economy would grow by almost 3% in 2014. S&P says the revision reflects its “robust” view of the recovering UK economy. In a further promising sign, rival agency Fitch said it kept its AA+ credit rating for the UK and gave it a "stable" outlook, pointing to the country's accelerating economic recovery.
The Bank of England says it is “puzzled” by the fact that productivity is 16% below its pre-crisis trend. The lender’s quarterly bulletin states that since the onset of the 2007-08 financial crisis, labour productivity in the UK has been exceptionally weak. This large shortfall has become known in financial circles as the “productivity puzzle. One theory to explain it is that during early stages of financial crisis, companies seem to have kept on workers despite a drop in demand.
The British public spectacularly underestimates how much the poor pay in tax, according to new research. The poorest 10% of households pay eight percentage points more of their income in all taxes than the richest – 43% compared to 35%, according to a report from the Equality Trust. This is in sharp contrast to the perception of nearly seven in ten people that households in the highest 10% income group pay more of their income in tax than those in the lowest 10%.
“Among all of the chaos, one thing is certain: the case for allowing fracking in the UK and elsewhere has become even stronger. It may be the only way the IEA’s forecasts can possibly be met.” City AM’s Allister Heath says the crisis in Iraq is a wake-up call for the world over oil needs.
The UK will push for more Chinese investment this week, reports the Daily Telegraph. The chairman of the China-Britain Business Council says securing more investment for UK infrastructure will be at the heart of discussions during the three-day visit here of Chinese premier Li Keqiang. Britain will be aiming for investment in high-speed rail, nuclear energy and North Sea oil. Mr Li will take meetings with the Queen and David Cameron.
FTSE-100: up +0.06 to 6843.11 Dow Jones: down -0.65 to 16734.19
Dax: down -0.11 to 9938.70
Cac-40: down -0.02 to 4554.40
Nikkei: up +0.78 to 15090.98
Hang Seng: up +0.72 to 23342.47
US dollar: buys €0.73710 and £0.58960
Sterling: buys $1.69600 and €1.25020
Oil: $112.59 up +2.9