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Thursday newspaper round-up: China rates, bank stress tests, Scottish Power

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24/10/2013
China's money rates shoots up overnight; Mario Draghi warns European banks need to fail ECB stress tests to prove credibility; Scottish Power chief hits back on proposed windfall tax.

China’s money rates shot up overnight after the central bank withdrew cash from the financial system, fuelling worries that the world’s second-biggest economy might see a replay of a liquidity squeeze that rattled global markets earlier this year, the Financial Times explains.

According to the Financial Times, Mario Draghi warned on Wednesday that some banks in Europe would need to fail a series of European Central Bank stress tests in order to prove the “credibility” of the year-long review. “The blunt comments by the ECB president raised pressure on EU leaders to earmark public money that could in extreme cases be used to recapitalise struggling lenders,” the paper writes.

Keith Anderson, the chief corporate officer of Scottish Power has hit back at calls to place a windfall tax on energy companies after making a loss this year, “which it blamed on having to fund the government’s expanding social and environmental programmes”, reports The Times.

Unite is set to make a “last-ditch attempt” to save the Grangemouth petrochemicals plant as it attempts to salvage 800 jobs, according to The Telegraph. Representatives from the trade union are expected to re-open talks this morning with owner Ineos after just half of the employees accepts it “survival plan” which included bonus cuts, changes to working terms and reduced pensions, countered by a £15,000 one-off payment.

London’s economy is doing even better after the banking crash than during the bubble, while nearly every other part of the UK has seen its economy shrink by comparison. Exclusive findings published by The Guardian show that London and the south-east are racing away from the rest of the UK at a pace that would have seemed almost incredible at the height of the financial panic.

The National Trust is prepared to consider fracking on its land but has all but ruled out wind farms, according to the head of the conservation charity. Dame Helen Ghosh, the trust’s Director-General, told The Times in an interview that it was keeping an open mind on drilling for natural gas and was waiting to see what evidence emerged about its environmental impact. She added that gas was “less bad” than coal in terms of carbon dioxide emissions.

Capacity constraints are starting to bite in the housebuilding sector, the Bank of England said yesterday, amid fresh evidence of a pick-up in the wider economy. The Bank’s regional agents said that they were hearing increasing reports of skills shortages and problems with the supply of raw materials. The warning came as banks reported the strongest month for net lending to businesses for four years, The Times reports.

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