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The Bank of England's monetary policy committee today cut interest rates by a full percentage point to just 2%,the lowest for 57 years.
The Monetary Policy Committee said it was worried about stalling business investment and consumer spending as well as falling house prices. It added in a statement that the economic outlook remained poor and credit markets essentially frozen. It also said there remained a "substantial risk" of undershooting its 2% inflation target over the next couple of years.
The Bank's move followed interest rate cuts by central banks in Asia and in Sweden, where the Riksbank slashed rates by 1.75%. The European Central Bank is expected to follow Threadneedle Street with a big cut of its own today.
Today's cut means rates have not been so low since late 1951, when they were raised to 2.5% from 2%. Prior to that they had been at 2% for 19 years bar a blip upwards for a couple of months as war broke out in 1939.
Erinaceous has delayed its results announcement after revealing it is in emergency talks with lenders over breaches of its banking covenants.The group, which employs around 5,000 people, said lenders remained supportive and that it was hopeful of unveiling amended credit facilities by the time of its interim results on Tuesday.
It said the discussions with lenders were in relation to its credit facilities and "certain breaches of the covenants in its credit agreement".The company added: "Good progress towards reaching agreement with lenders on relevant waivers and facility amendments has been made....Discussions are continuing, the lenders have been supportive and the board intends to obtain proposed amendments prior to the issue of the company's interim results.
This so far hasn't come about as the company was due to announce its interim results yesterday in a stock exchange statement, the company said it now expected to announce them by the end of the week.
The city is braced for poor results from the firm, whose directors were in talks over a possible takeover earlier this year. Its share price has fallen more than 70% during the past four months In its last annual results in March, Erinaceous said it had net debts of £152m, up from £67m at the end of 2005, due to acquisitions. The debt was provided by HBOS, Lloyds TSB and HSBC.
A mass sell-off of Northern Rock shares has seen more than £600 million wiped off the mortgage bank's stock market value.Shares dived by 35% as investors scrambled to offload holdings in the bank, with Alliance & Leicester also suffering from the fallout with a 30% drop.
Housebuilders also suffered steep falls amid market concerns that more expensive mortgages stemming from Northern Rock's difficulties could put the brakes on the housing market. Barratt Developments and Persimmon both fell by 7% whilst Redrow, endured a 7% drop and Taylor Wimpey shares lost 5%. Northern Rock's share price tumble has now almost halved the bank's market value to £1.19 billion since it agreed emergency funding facilities from the Bank of England last Friday.
Shares in the group closed at 282.75p, down 155.25p - just over one-fifth of their value in February.
The Government is to provide an additional £1.2m to train van drivers in greener, safer driving techniques. The Safe and Fuel Efficient Drivers (SAFED) initiative aims to encourage driving techniques to cut costs and CO2 emissions. The scheme, a one-day training course involving a mix of classroom and on-the-road tuition, has trained 7,800 drivers at a cost of £2.2m since its launch in 2006.
The new cash will part fund training for new instructors, new assessors and up to 6,500 drivers over the next three years.
Ruth Kelly, secretary of State for Transport, said: "White-van-man is turning green. By learning safe, fuel efficient driving techniques van drivers are playing a vital role in cutting CO2 emissions. They're helping tackle climate change, saving money and improving safety without impacting on customer delivery times"I
A £500m incentive for councils in England to build more homes has been announced by the government today.The scheme,outlined by Housing Minister Yvette Cooper, is aimed at creating more homes for families and first-time buyers.
The cash will be shared out between councils that build enough homes within a set timescale.
The grants also depend on councils building a certain mix of housing, for example homes for young families rather than just flats. Ministers wants three million new "green" homes built by 2020 to tackle a housing shortage in the UK.
The government is concerned councils are not doing enough to identify the homes their communities need. The money will be given to councils that increase home-building, identify land suitable for new homes and produce clear plans for speeding up the delivery of new homes. Areas across the country where housing growth is a priority will be targeted such as the south Midlands and the Thames Gateway. The first payments are expected next year.
From today Home Information Packs (HIPS) will have to accompany all three-bedroom houses placed on the market. That means most family homes and about two thirds of all properties now need a Hip to be sold. This expansion of the scheme has increased the criticism and anger of many industry experts who are already blaming HIPS for the fall in the number of houses with four or more bedrooms on the market since it was introduced for these properties in August. They claim that sellers are being put off by the cost of the packs, which can be more than £600 and also the huge confusion and uncertainty surrounding the new law. Speaking in the Telegraph Jeremy Leaf, the housing spokesman for the RICS, launched a scathing attack on the Government's handling of the issue. "I have never known legislation so badly introduced......Homeowners clearly have no faith in the packs or the policy, which have only brought more bureaucracy and mass uncertainty to an already paralysed market.Before they are heaped on the rest of homeowners, we need to see some evidence-based justification that this policy benefits consumers. At the moment, it doesn't exist." Leading Estate Agents have already pointed out that consumers would be forced to waste more than £200 million on HIPs compiled for the 500,000 properties on the market that fail to sell each year. It would seem that that the debate will continue rage on the benefits of HIPS for some time to come. On one side all most all of the property industry claiming there is no benefit , on the other the government bestowing its virtues at every turn, although with the Treasury standing to gain over £100 million in VAT revenue as a result of HIPS the odds are stacked against the industry changing government policy at this stage.
Leisure resort operator Centre Parcs is to build a fifth UK site in Warren Wood, near Woburn in Bedfordshire, after winning an appeal. The Company had been originally denied planning permission by Mid Bedfordshire District Council Development Control Committee last July. At the time the committee had ruled that plans for a £200m resort with 700 forest lodges and a 75-bed hotel would cause too much damage to the local environment, but the decision has now been overturned by the Government. Martin Dalby, chief executive of Center Parcs, said: “We are delighted that planning approval has been granted for our fifth Centre Parcs. The new village near Woburn will generate significant local economic benefit.” Center Parcs claims the development will create 1,400 jobs. It has also committed to creating a public right of way within the new estate and planting 500,000 new trees in the area. Building is expected to start at the start of 2009 and the new Center Parcs should open by the end of 2010.
A recent Study by National Savings & Investments found has found that first-time buyers are giving up the idea of owning property at home and looking overseas instead. The results show that:
• 84 per cent of 18 to 24-year-olds believe buying abroad is a more viable option than buying in Britain.
• 36 per cent of aspiring first-time buyers renting in London would consider buying abroad.
• Of those, 43 per cent consider Spain the most attractive option for ease of travel.
• Those looking abroad to buy-to-let also like France, Italy, Portugal and the US. Talking to the Daily Mail ,Justin Figgins, head of RightmoveOverseas, said: "Young people buying abroad and renting in Britain are a growing phenomenon. They generally look at spending less than £200,000." Research by Barclays Bank reveals the number of Britons keen to buy property abroad has doubled to 18,000 in a year
Construction and property professionals are overestimating green construction costs by 300%, a new survey has found.
The study by the World Business Council for Sustainable Development (WBCSD), "Energy Efficiency in Buildings: Business Realities and Opportunities," is the first phase of the organization's three-year initiative to pinpoint the environmental footprint of buildings and promote building zero net energy use. Lafarge and United Technologies Corp. are co-chairing the project.
Respondents to the global survey guessed that implementing green building practices boosted costs by 17 percent when in reality, the premium is closer to roughly 5 percent. Respondents pegged building-related greenhouse gas emissions at 19 percent of the world total, half of the actual 40 percent.
That figure is expected to grow, particularly in developing nations such as China and India. The Department of Energy, for instance, predicts electricity consumption in India could grow by nearly 700 percent through 2030.
"The world is undergoing rapid transformation, with strong demographic and economic growth driving a move towards urbanization on an unprecedented scale," said Bruno Lafont, Lafarge's chairman and CEO. "We as industry leaders have a responsibility to ensure that this growth is achieved in a sustainable manner."
The study found that only 5 percent of energy used for interior lighting actually produces light while the remaining 95 percent of energy is wasted. The building envelope is critical to energy efficiency while green building techniques could increase the life of a building.
Three quantity surveyors have joined forces in order to float on the London Stock Exchange. The new group will be called Baqus. Shares will start trading in November. The three privately-owned QS practices are: - Boxall Sayer – offices in Chichester, St Albans, London and Manchester.
- Denley King – offices in Poole, Winchester, Canterbury and London
- Fletcher McNeill – offices in Liverpool, Manchester, Lichfield and Oxford.
The plan is to raise turnover to £20m within three years through acquisitions. They will be funded by money raised at flotation and from future profits. Baqus says that it will not expand by taking on borrowings.They have 110 employees in all. Their combined turnover runs to £7m and latest results show a combined pre-tax profit running to £1m.
New housebuilding starts have fallen sharply since last year, according to government statistics.
Figures released by the Department for Communities and Local Government show that starts of new housebuilding declined by 8% over the 12 months to June 2007. Last year, 184,900 new houses were commenced, while this year the figure was only 168,800.
Figures for the first quarter of 2007 show a 10% dip in starts from the same quarter in 2006. Completions rose slightly over the same period, seeing a 2% increase over the 12 months to June, and a 1% increase on this quarter last year. Over the longer term, starts have risen 19% and completions 26% since the beginning of the decade, but appear to have levelled off in the past twelve months. The full figures can be found here.
The Chairman of the Housing Corporation, Peter Dixon, has had his second term of appointment extended, by up to two years from 1 October 2007, or until the launch of the new homes agency, if sooner.
Sir Duncan Michael has also agreed to up to a two year extension, and Chris Holmes, Kevin Lavery and Peter Rogers have all been reappointed for a second term of three years, also from 1 October. These appointments would also automatically end when the new homes agency launches. In addition, Steve Douglas, the new Acting Chief Executive of the Housing Corporation, has joined the boards of both the Housing Corporation and English Partnerships. Steve Douglas became Acting Chief Executive of the Housing Corporation on 2 July 2007 and his appointments to the boards took effect from the same date. It is customary for the Chief Executives of both organisations to sit on both their own board, and that of the other body, for as long as they remain in post. Communities Minister, Baroness Andrews, said: "I am very pleased that Peter Dixon has agreed to remain at the helm of the Housing Corporation in the run up to the new homes agency. The continuity that this allows will be a great asset. "It will also be enormously beneficial to retain the services of Sir Duncan Michael, Peter Rogers, Chris Holmes and Kevin Lavery at this crucial period for the future of social housing. I am also delighted that, as the new Acting Chief Executive, Steve Douglas will be able to contribute to both Boards at this critical time."
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