Tuesday newspaper round-up: Halifax, Libya, interest rates

22nd Feb 2011 06:28

Hundreds of thousands of Halifax borrowers are set to receive a windfall because of a poorly drafted paragraph in mortgage offer letters that will cost Lloyds Banking Group £500m. The payout announced by the Halifax's new parent yesterday is a record figure for customer redress by a single financial services company this century ? and it is being made even though hardly any customers noticed or complained, the Times reports.The spectre of full civil war in oil-rich Libya and reports of the creation of an Islamic emirate in country's "Barqa" region has moved the Mid-East crisis into a more dangerous phase, setting off an explosive rise in US crude prices. "This is potentially worse for oil than the Iran crisis in 1979," said Paul Horsnell, head of oil research at Barclays Capital, the Telegraph reports.One of the two publicly declared hawks on the Bank of England's rate-setting committee set forth the case yesterday for an immediate rise in interest rates. Martin Weale, one of the external members of the Monetary Policy Committee, said that a move was needed now to head off a rise in people's inflation expectations, the Times reports.However, the Independent reports that John Lewis's managing director has urged the Bank of England not to raise interest rates amid retail fears over how a rate increase would affect consumer confidence. Andy Street - speaking out about inflationary pressures on the industry as he unveiled plans to open a new store in Birmingham in 2014 - said: "Putting up interest rates would not make a jot of difference to inflation. But it would make a big difference to consumer confidence." News Corporation is to buy Shine, the production company set up by Rupert Murdoch's daughter Elisabeth, in a deal worth £415m. News Corp said that it had reached an agreement in principle to acquire the company whose hit television shows include MasterChef and Merlin. The deal is expected to be completed by the end of April, according to the Times.The total exposure of Spanish savings banks to real estate and building amounts to €217bn, of which 100bn is classed as "potentially problematic", the Bank of Spain said. However, Miguel Ángel Fernández Ordóñez, the governor of the Bank of Spain, insisted that such a risk level did not endanger the Spanish financial sector as a whole, says the Telegraph.BAA should have been better prepared to deal with the winter snowfall that disrupted flights and caused chaos at Heathrow airport for four days in the run-up to Christmas, the airport operator's chief executive, Colin Matthews, has said. Flights were cancelled and thousands of passengers saw their travel plans thrown off course when severe weather led to the closure of Heathrow's runways, the Independent reports.Health secretary Andrew Lansley has filed a high court legal claim, alongside 10 strategic health authorities and 144 primary care trusts, against household goods maker Reckitt Benckiser. The FTSE 100 company insisted it had not been served with papers and knew nothing about the action. It refused to be drawn on speculation that the action might be related to its controversial marketing of Gaviscon heartburn treatment products in 2005 which resulted in Reckitt receiving a £10.2m fine from the Office of Fair Trading for anti-competitive behaviour four months ago, the Guardian reports.The chief executive of e-commerce group Alibaba.com - one of China's biggest online successes - has resigned after an internal investigation showed sales staff "intentionally or negligently" allowed more than 2,300 fraudsters to set up verified stores. David Wei and chief operating officer Elvis Lee departed amid what the firm described as "systemic breakdown in our company's culture of integrity", according to the Guardian.House prices will slump by 20% over the next two years, experts have warned. The property market is heading for a 'double-dip' as rising unemployment and spending cuts strangle demand, according to the analysis. Interest rates are likely to be increased in the coming months to keep rising inflation in check and higher mortgage costs seem certain to add momentum to plunging property prices. Paul Diggle, property specialist at research consultants Capital Economics, said: 'Prices are trending slowly downwards at the moment, but our view is that this is really the start of the second leg of the correction, and we expect prices to fall significantly further,' the Daily Mail reports.