Wednesday newspaper round-up: Banks, House prices, Standard Chartered...

29th Dec 2010 08:56

Banks are essential to the economic recovery, and the coalition must not succumb to the temptation to cast them as the enemy, the Government's growth czar has told The Times.Lord Heseltine mounted a strong defence of financial services and the City of London, making the politically unfashionable suggestion that problems existed in the Square Mile only "at the fringes". He marked a sharply different tone to that of Nick Clegg and Vince Cable.Thousands of cash-strapped shoppers braved sub-zero temperatures after Christmas to pick up significant bargains in the sales before next month's VAT increase. More than 800,000 people shopped in London's West End on "Mega Monday", the biggest day of the retail calendar, while major shop chains have cut prices by up to 75%, the Independent reports.The housing markets in the UK expected to suffer most from public-sector spending cuts are already under heavy pressure going into 2011, new research shows. Data from Savills for The Daily Telegraph paints a bleak picture of the housing market in the North East and North West of England, with housing transactions, repossession levels, and new development starts the worst in the country, the Telegraph reports.House prices have further to fall in 2011 as government austerity measures bite and banks continue to restrict the supply of mortgages, say economists polled by the Financial Times. UK house prices fell by 20% from a peak in 2007 to a trough in 2009 and subsequently recovered roughly half those losses. But since the summer, prices have again been slipping and economists expect them to fall further, the FT reports.The average first-time buyer has to find a deposit of almost £29,000 to buy a place on Britain's property ladder, despite a year of falling house prices. For first-time buyers in wealthier parts of Greater London, that figure almost doubles to more than £56,250, according to the Halifax's latest assessment of the housing market for first-home owners, the Times reports.As many as 200,000 jobs could be shed in 2011 in what is predicted to be a "worse year for jobs" in 17 years, an analysis revealed. Raising fresh doubt over the pace of the UK's economic recovery, a report by the Chartered Institute of Personnel and Development (CIPD) warned 80,000 private sector and 120,000 public sector jobs will be lost next year. Unemployment is forecast to rise from 7.9% to 9%, or 2.7m, in 2011 as the private sector struggles to create jobs to offset wide-scale state redundancies, the Telegraph reports.Telecoms giant Alcatel has agreed to pay more than $137m (£89m) to settle charges brought against it by US government agencies. The Securities and Exchange Commission said that the French-based group had been paying bribes to officials in Latin America and Asia, in order to win business illegally, under the Foreign Corrupt Practices Act. Alcatel agreed to pay some $45m to settle the SEC's suit. It will also hand over an additional $92m to settle separate charges which are being pursued by the US Justice Department, the Independent reports.Britons will spend every penny they earn during the first five months of next year on taxes, a leading think-tank has calculated. Tax Freedom Day is the day when Britons begin working for themselves rather than the taxman and falls on May 30 in 2011, compared to May 27 this year, the Adam Smith Institute revealed, the Telegraph reports.Standard Chartered has launched a review of its compliance with US sanctions, after revealing it is in discussions with American authorities about its "past business" with Iran. The company cut all ties with Iran in 2007 and did not disclose any discussions with the US authorities about its dealings with the pariah regime until this year, the Telegraph reports.China is cutting its export quotas for rare earth minerals, which are essential for devices such as mobile phones and hybrid cars. The cut of more than 11% in the first half of next year will further shrink global supplies after China, which produces about 97% of the 17 lanthanide and associated elements, slashed quotas for 2010, the Times reports.