Friday newspaper round-up: Cameron, HSBC, Japan...

28th Jan 2011 06:37

David Cameron and George Osborne will insist today there can be no turning back from their economic strategy and deep spending cuts despite growing fears of a double-dip recession.In separate speeches at the World Economic Forum in Davos, the Prime Minister and the Chancellor will admit there is a long haul ahead but rule out a U-turn following this week's gloomy figures showing the economy contracted by 0.5% in the last three months of 2010, the Independent reports.Key players in the 2008 meltdown that brought the global financial system to its knees and threw millions out of their jobs and homes could face prosecution after the release yesterday of an American Government report into the crisis. The report, the result of an 18-month investigation, concludes that some of the country's biggest banks were guilty of stunning irresponsibility and accuses regulators, politicians and credit agencies of creating an avoidable disaster. "The crisis was the result of human action and inaction, not of Mother Nature or computer models gone awry," Phil Angelides, chairman of the Financial Crisis Inquiry Commission, said, the Times reports.HSBC, the British-based banking giant, has become ensnared in a US tax evasion investigation, after employees were accused of helping one of its American clients hide money offshore. Federal authorities are considering serving a broad legal summons on HSBC, to examine if its bankers sold tax evasion services to dozens or hundreds of its clients, it has emerged. The moves come nearly two years after the Zurich-based bank UBS agreed to pay $780m to the US government and revealed the details of 4,000 US clients' Swiss bank accounts after admitting it helped those who wanted to evade US taxes, the Telegraph reports.Standard & Poor's has downgraded Japan for the first time in nine years, citing lack of a "coherent strategy" to control its monster deficits or grasp the nettle to reform. The move is a chilly reminder that sovereign debt woes continue to fester across much of the industrial world, and still pose a threat to the fragile global recovery, the Telegraph reports.The International Monetary Fund has told some of the world's largest economies to implement deficit cutting plans or risk a repeat of the sovereign debt crisis that has engulfed Greece and Ireland. The IMF said Japan, America, Brazil and many other indebted countries should agree targets for bringing borrowing under control. In an updated analysis on global debt and deficits, the Guardian reports.Governments across the developing world are stockpiling food staples in an attempt to contain panic buying, inflation and social unrest. But the hoarding is driving agricultural commodity prices even higher. The cost of wheat, the world's most important staple, reached a fresh two-and-a-half-year high on Thursday, after countries from Algeria to Saudi Arabia announced extraordinary purchases, the FT reports.Heavy drinking is on the decline across the UK, but the ban on smoking in pubs and restaurants imposed three years ago has failed to have an impact on the country's hard core of smokers, according to figures released on Thursday. Some 21% of UK adults said they were smokers in 2009, a proportion unchanged since 2007 when legislation came into force imposing the ban. The average number of cigarettes smoked also remained constant during the period, at 14 per day for men and 13 for women, the FT reports.Egypt's benchmark index plummeted to its lowest level in over two years on Thursday, dropping almost 10pc as anti-government protests rattled investor confidence and left Hosni Mubarak's regime facing its most serious challenge in years. The EGX30 index was down 9.93pc to 5,728.49 points, continuing its tumble after trading was briefly suspended. The market had tumbled 6.25% just 15 minutes into the trading session, the Telegraph reports.The VAT rise has helped deal a knockout blow to consumer confidence this month, figures show today. A leading measure of sentiment among UK consumers reveals confidence plunging in January at the fastest monthly rate since 1994, from -21 in December to -29. Nick Moon, managing director of GfK NOP Social Research, which carried out the survey on behalf of the European Commission, said that the fall was "an astonishing collapse" and warned that the country faced a "very painful period", the Times reports.Middle-class Australians are facing a controversial "flood tax" as the Government starts to rebuild in the wake of the devastation across Queensland. The measure, a 0.5% levy on all workers earning A$50,000 and above a year, was unveiled yesterday by the Prime Minister. It is designed to raise A$1.8bn (£1.1bn), the Times reports.The European carbon-trading market will remain shut until early February after a cyber attack that led to the theft of €28m (£24m). The raid, thought to be the most serious of its kind on a European exchange, has resulted in severe disruption to the Emissions Trading Scheme (ETS), with the closure of the spot trading market causing the price of carbon to rise to more than €15 a tonne from €14.14 last week. This will have increased costs substantially for companies that need to buy emission permits from the ETS, the Times reports.