Happy Budget Day! The papers are full of what George Osborne will be announcing in his much leaked Budget at lunchtime plus another lender cracks down on interest only mortgages, and gloomy news from the High Street.
FINANCIALTIMES
TAX GRAB ON LONDON’S TOP HOMES
By George Parker, Kiran Stacey and Chris Giles
George Osborne will stage a tax grab on London’s booming top-end property market, in a Budget which will offer significant cuts in the taxes paid by business and low and middle income families. Mr Osborne will confirm he is cutting the top rate of income tax from 50p to 45p, but the wealthy will be hit by a punitive array of higher levies on the purchase of expensive homes and a crackdown on avoidance schemes.
The chancellor will introduce a new 7 per cent stamp duty rate on sales of property above £2m, according to officials involved in the Budget, as new figures revealed that sales of homes worth more than £5m in the capital soared by 98 per cent in the first 11 weeks of the year to £723m.
The highest stamp duty rate is 5 per cent on sales above £1m. Combined with a crackdown on stamp duty avoidance the plan could raise hundreds of millions of pounds a year, going some way towards fulfilling a Liberal Democrat push for a “mansion tax”.Happy Budget Day ! The papers are full of what George Osborne will be announcing in his much leaked Budget at lunchtime plus another lender cracks down on its interest only mortgages, and gloomy news from the High Street.
DAILY MAIL
EARN £9,000 BEFORE YOU START PAYING INCOME TAX: OSBORNE TO ANNOUNCE A MOVE THAT WILL HELP TWO MILLION PEOPLE
By James Chapman
Moves to lift two million people out of income tax and a new levy on the purchase of expensive homes will be at the heart of today’s Budget as George Osborne pledges to sharpen his public spending axe. In an unexpected move, the Chancellor will say he is further reducing public spending by a figure in the ‘low billions’ to fund tax reductions.
His central announcement is an increase in the tax threshold to just over £9,000, meaning two million workers – many of them women doing part-time jobs – will have been freed from paying tax altogether by the Coalition by next April. In all, 23million basic-rate taxpayers are expected to benefit, and the Chancellor will signal that he wants to increase the threshold to £10,000 by April 2014.
THE SUN
TERRY BUTCHER
LEAHY TELLS GEORGE: KEEP CHOPPING
By Steve Hawkes, Business Editor
Ex-Tesco boss Sir Terry Leahy has urged George Osborne to carry on cutting — and let business take the strain. The supermarket legend yesterday said Government spending was still too high, as he laid out a four-point plan to get Britain motoring. He claimed public sector budgets had to be tackled — so ministers weren't forced to cut borrowing by piling yet more tax on families and firms.He also wants action on fuel duty, business rates and the 50p tax in a bid to make Britain THE place to do business.
DAILY EXPRESS
SQUEEZED WORKERS TO GET A TAX BONUS
By Macer Hall
George Osborne will today deliver a cut in the tax burden in a clear signal that Britain is bouncing back to prosperity at last.
The Chancellor will use the Budget to shave around £2.5billion from the overall annual tax bills for families and businesses, Whitehall sources indicated.
That’s equivalent to about £100 for every household and will be funded by a cut in Government spending.
It is understood that a slight improvement in the economic forecasts to be published by the Office for Budget Responsibility today has given the Chancellor some elbow room to help hard-pressed families.
And in non-budget news…
DAILY TELEGRAPH
NATIONWIDE IS LATEST LENDER TO CRACK DOWN ON INTEREST-ONLY MORTGAGES
By Richard Evans
Interest-only mortgages have taken another step towards extinction with Nationwide demanding that new borrowers have 50pc equity in their home if they want to avoid making capital repayments.
The building society, which previously lent on an interest-only basis to borrowers with 25pc equity or deposit, said it needed to "manage application levels" following similar moves from competitors. The change applies to residential customers and takes effect on March 21.
Existing borrowers will be unaffected if they want to stay with their current deal. They can also switch to another Nationwide mortgage or move home without falling foul of the new restrictions, unless they want to increase their borrowings. Anyone who wanted to borrow more would have to take out a repayment mortgage or ensure that their equity remained above 50pc of the total amount borrowed.
THE GUARDIAN
UP TO 40% OF HIGH STREET SHOPS 'COULD CLOSE OVER NEXT FIVE YEARS'
By Julia Kollewe
Four out of 10 shops will have to shut in the next five years as consumers turn their backs on traditional stores in favour of online shopping, according to a report which casts more doubt on the future of the beleaguered British high street.
With retail experts increasingly painting a picture of a future high street lined with coffee shops and internet kiosks, a report from Deloitte highlights how the boundaries between physical and virtual space are becoming blurred with thousands of shops likely to face closure in coming years.
To remain competitive, retailers may have to reduce their property portfolios by 30–40% in the next five years and adapt what remains to meet the changing demands of consumers, Deloitte said. The growing trend in the US for large warehouse-style retail outlets to have free in-store Wi-Fi to help customers shop online is expected to spread around the world. Tesco has already announced plans for such facilities in its UK stores.
FINANCIAL TIMES
HALF OF GAME GROUP STORES UNDER THREAT
By Andrea Felsted, Senior Retail Correspondent
The troubled video games retailer Game Group is expected to face the closure of as many as half its 600 stores under plans being drawn up by its banks.
Two people familiar with the situation said the banks were proposing store closures at the chain, which is battling for survival as it races to raise a £180m lifeline by this weekend.
Some analysts and industry experts suggested that up to 300 stores, about half of the store base, could be closed.
The banks – led by Royal Bank of Scotland and Barclays – and Game declined to comment, but it is likely that a store closure plan, already outlined by Game, will be accelerated.
THE TIMES
GLENCORE HEADS TO THE PRAIRIES WITH £4BN GRAIN DEAL
By Tim Webb
Glencore has struck a £3.9 billion deal to buy Canada’s largest grain handler, prompting warnings from food campaigners about the commodity giant’s increasingly powerful grip on the wheat market.
The London-listed, Swiss-based company fought off competing bids to agree a buyout of Viterra, an agribusiness with operations across the Canadian prairies. Competition authorities in Ottawa immediately promised to investigate the takeover.
Viterra controls 45 per cent of the grain trade in Canada and has a sizeable presence in Australia.
THE INDEPENDENT
STUBBORN INFLATION HITS HOPES OF MORE QE
By Ben Chu
Official inflation figures yesterday thwarted hopes of a rapid end to the squeeze on incomes and lowered expectations of the Bank of England's Monetary Policy Committee (MPC) extending its programme of quantitative easing (QE) next month.
The latest report from the Office for National Statistics (ONS) showed that consumer price index (CPI) year-on-year inflation fell to 3.4 per cent in February, down from 3.6 per cent in the preceding month. Financial analysts had expected a fall to 3.3 per cent. Retail price index inflation, which includes mortgage interest payments, dropped to 3.7 per cent from 3.9 per cent.
THE SCOTSMAN
CAIRN ENERGY PLAN ACQUISITION CAMPAIGN DESPITE $1BN GREENLAND COST
By Peter Ranscombe
Cairn Energy chairman Sir Bill Gammell today vowed to continue with the Edinburgh-based oil explorer’s drilling campaign off the coast of Greenland despite unsuccessful wells pushing it down to a $1.1 billion (£694 million) operating loss.
Chairman and founder Sir Bill Gammell yesterday vowed to continue with the firm’s drilling plans off the coast of Greenland despite booking $942m-worth of costs relating to failed exploration wells.
Those costs pushed the Edinburgh-based group to the hefty operating loss, based on its continuing operations, according to full-year results.
But the sale of a 40 per cent stake in its Indian subsidiary to FTSE 100 mining giant Vedanta Resources allowed Cairn to post a record profit after tax of $4.6bn and to return about $3.5bn in cash to shareholders.
THE GUARDIAN
EUROPE FACES 'LONG, HARD ROAD' TO RECOVERY, US TREASURY SECRETARY SAYS
By Dominic Rushe
Europe is only at the beginning of a "very tough, very long, hard road" to recovery and its future is still a threat to the US economy, Timothy Geithner, the treasury secretary, warned on Tuesday.
In testimony to the House financial services committee on the state of the international financial system, Geithner warned against draconian spending cuts by heavily indebted countries and called on better-off European countries to help their neighbours.
And finally…
THE GUARDIAN
STOCK, AITKEN AND WATERMAN: NOW THAT'S WHAT I CALL MUSIC 2012!
Rick Astley, Jason Donovan and Bananarama are among those who will appear at the gig on 11 July. Titled "Hit Factory Live", it is being billed as a celebration of the SAW team, consisting of Mike Stock, Matt Aitken and Pete Waterman, and of PWL records. Producer Pete Waterman is billing his Hit Factory Live concert in Hyde Park this July as a "once-in-a-lifetime spectacular", celebrating 250m single sales of his, Stock and Aitken's tunes.
