Car Insurers Debate Over Future Profits

UK car insurers have been running an unprofitable business for 14 years. Independent market analysts, Datamonitor, say 2009 looks to be a profitable year despite the doubts

March 13, 2008

Budget Report Expectations

Chancellor Darling's Budget Report is expected to raise taxes on alcohol, fuel emissions, flights and many other issues concerning the economy. Tax burdens expected to increase on poorer families

March 12, 2008

Card Fraud Rises Again

Card fraud has increased over past year. Whilst chip and PIN technology has been successful in the UK, criminal activity overseas has increased 77 per cent

March 12, 2008

Tax Cuts Needed To Restore Confidence

Appeals for corporate tax cuts are submitted to the Treasury as it prepares its Budget report this Wednesday. Business and banking sectors are worried about the direction of the UK economy

March 10, 2008

First Time Buyers Take Hit From Stamp Duty

Stamp duty tax has not kept up with the rate of increase in house price inflation over the past decade. Yet another hurdle first-time buyers must leap over to get on the property ladder

March 10, 2008

Read all Finance News

Prime Minister Under Attack Following Nationalisation Decision

Following his decision to place Northern Rock into public ownership, Prime Minister Gordon Brown has come under heavy criticism.

After several months of uncertainty looming over the fate of the troubled bank, it was decided this Sunday that the government would go ahead with its plans to nationalise Northern Rock: the first UK nationalisation since the 1970's.

Now, the prime minister is facing a possible legal battle with shareholders who risk losing their holdings during the nationalisation process. The sale of shares has currently been suspended leaving shareholders unable to sell off their stock.

Jon Wood, founder of the bank's main shareholder SRM Capital said, "We will wait to see the details of the nationalisation bill and after that we will pursue all legal and non-legal actions available to us to secure value for shareholders."

Although the government insists the new legislation of nationalisation will only be temporary, the UK shareholders' association has deeply expressed its anger of a future solution allowing an eventual buyer to make a profit.

Without doubt the Prime Minister's reputation has received a severe battering since the start of the Northern Rock crisis last year. Opposition parties have blamed Brown for the crisis saying it comes as a result of the regulatory framework he put in place 10 years ago as Chancellor under the reign of Tony Blair.

The Northern Rock was discovered to be much more reliant on borrowing money in financial markets than its rivals in order to offer home loans and mortgages. It therefore came into difficulties when the credit crunch meant it could no longer raise the cash.

However, Brown has put all blame on the credit crisis which stemmed from risky mortgage lending in the US and insists his decision was based on the best interests of the taxpayers.

Critics are saying the Prime Minister has now sealed his own fate as guardian of financial stability. Nationalising the Northern Rock bank poses both political and financial risks for the government, particularly as it links itself to a mortgage bank during a slowdown in the UK property market. In addition, analysts are already predicting the number of home repossessions, bad loans and job cuts to increase over the course of the year.

Published on February 19, 2008

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Lending Falls Again Says CML

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