Friday newspaper round-up: Interest rates, referendum, pensions, BT

4th Nov 2011 06:36

In a speech on Thursday, Barclays chief executive Bob Diamond gave his strongest endorsement yet of the government's economic policy, saying it had saved Britain from having to pay far higher rates to borrow on international markets."I know it's oversimplified, but if the UK government had to pay 6% interest on its current outstanding debt, it would cost all of us in the UK another £40bn a year. That's about half the annual budget for the National Health Service," said Mr Diamond. The Barclays chief warned that if the country was not able to generate stronger economic growth it could risk "further social unrest", The Telegraph reports.Despite hints from Greek Prime Minister George Papandreou that a referendum on the Greek bail-out would be abandoned if the coalition was formed, the opposition walked out of parliament. Antonis Samaras, the opposition leader, demanded Papandreou's departure. "Mr Papandreou pretends that he didn't understand what I told him. I called on him to resign," he declared. A former governor of the Greek central bank was being lined up last night to take over in the event the government collapses after a no-confidence vote tonight, The Telegraph comments.Nick Clegg is threatening to veto a controversial Treasury plan to freeze pensions and state benefits next April. George Osborne, the Chancellor, is considering whether to break the government's pledge to raise benefits in line with inflation in order to save up to £10bn, but the move has provoked a rift with the Liberal Democrats, who are arguing that the most vulnerable people in society should not bear the brunt of efforts to reduce the deficit, says The Independent.As leaders convene at the G20 in Cannes, one of America's leading economists calls on them all - including David Cameron and George Osborne - to back the controversial Financial Transactions Tax and bring the banks to heel. A recent study by mathematicians confirmed what most of us feel intuitively: that the financial sector lies at the core of global corporate power. Barclays, Deutsche Bank, Goldman Sachs, and other financial houses are at the very nerve centre. It is no wonder that our politicians often cower in their presence.This week's G20 summit offers a rare opportunity to bring this sector under some control, by adopting the long-discussed Financial Transactions Tax, says The Daily Mail. France was caught up in the Eurozone panic yesterday as it was forced to accept a sharp rise in interest rates for long-term bonds. In an issue seen as a barometer of investors' diminishing faith in the Eurozone, the French Treasury Agency managed to raise a total of €6.9bn (£5.9bn).(...) However, the rate on debt due to be repaid in 2026 fell from 4.03% to 3.77%. The gap between German and French yields diminished slightly to 132.4 points on secondary markets after the issue, but remained significant. Commentators said the spread illustrated France's difficult, halfway position between the safety of Germany and the fragility of southern Europe, writes The Times.Britain is poised to provide billions of pounds for a new global economic rescue package, prompted by concerns that the EU plan to save the euro will not be enough to stabilise the world economy. A deal being negotiated by world leaders at the G20 summit in Cannes could see the International Monetary Fund (IMF) double in size. David Cameron will face strong opposition from Conservative MPs over the potential use of taxpayers' money to assist European countries after repeated assurances from the Government that Britain would not provide extra funds to help the Eurozone, The Telegraph says.BT has outstripped BSkyB in the race for TV and broadband customers, and pledged to raise the stakes in its battle with the satellite broadcaster by accelerating the rollout of a superfast network that will boost its appeal in the multichannel market. BT Vision, the company's pay-TV offering, reported its strongest performance in two years, adding 41,000 viewers in the third quarter compared with 26,000 for BSkyB. It is the first quarter that BT Vision has beaten BSkyB for pay-TV subscribers since launching in mid-2007, The Guardian reports.AB