Wednesday newspaper round-up: RBS/Lloyds, Mervyn King, Lord Wolfson

19th Oct 2011 06:05

Companies are cutting their business with the taxpayer-owned lenders Royal Bank of Scotland and Lloyds amid fears that the cost of borrowing will rise after the recent ratings downgrade by Moody's. The Association of Corporate Treasurers told MPs yesterday that corporate borrowers had already begun talking to rival overseas loan providers, including Japanese banks keen to secure a stronger foothold among British businesses, the Times reports.Britain is at risk from a fundamental crisis in the world economy and "time is running out" to solve it, the Governor of the Bank of England has said. Despite record low interest rates, printing new money and other emergency measures, governments had not yet addressed the underlying problem of overspending that was at the root of the financial crisis, Sir Mervyn King warned, according to the Daily Telegraph.Those in need of spare cash amid troubled economic times could do worse than apply for a new prize set up by Lord Wolfson, who is offering £250,000 to the person who comes up with the best plan for winding up the euro in an orderly way. The Wolfson Economics Prize, launched today, will be the second largest cash prize to an academic economist after the Nobel Prize, the Financial Times says.A surge in the inflation rate last month delivered a ferocious blow to savers and further crushed family incomes, official figures show. A big increase in utility bills helped to push the consumer prices index (CPI) up to 5.2% from 4.5% in August, matching the highest level since 1992, according to the Office for National Statistics (ONS), the Times reports.A Scotsman walks into a pub and buys a 41% proof beer and £10,000 in shares. Serious investors may laugh, but Scotland's largest independent beer maker, BrewDog, plans to offer shares in itself to its customers at new bars in England by the end of the year. For the brewer that introduced super-strength beers served in stuffed squirrels, it is all part of its Equity for Punks finance scheme to help fund the opening of its first bar south of the border in Camden, north London, in December, the Independent reports.Sir John Vickers yesterday warned that ring-fenced retail banks' boards would require a complete overhaul to meet the demands of his banking reforms. Appearing before the House of Lords' Economic Affairs Committee, Sir John said his Independent Commission on Banking (ICB) did not consult headhunters on a requirement for ring-fenced retail banks to have their own boards of non-executive directors, according to the Independent. France and Germany have reached agreement to boost the eurozone's rescue fund to €2tn (£1.75tn) as part of a "comprehensive plan" to resolve the sovereign debt crisis, which this weekend's summit should endorse, EU diplomats said. The growing confidence that a deal can be struck at this Sunday's crisis summit came amid signs of market pressure on France following the warning by the ratings agency Moody's that it might review the country's coveted AAA rating because of the cost of bailing out its banks and other members of the eurozone, the Guardian reports. The Daily Mail's Money Mail has scored a victory for tens of thousands of TalkTalk customers unfairly frozen out of a deal to cut the annual cost of their landline, it says. After Money Mail stressed the unfair nature of the deal, as well as the confusion caused by the mistake, TalkTalk backtracked and said it would honour the original deal offered in its letter.