In a research paper published today, the Centre for Economics and Business Research claims keeping “the euro alive will require cuts in living standards greater than the UK faced in the Second World War” for weaker eurozone members, writes the Telegraph.
His warning came as the Ernst & Young eurozone forecast raised the prospect of a severe recession in the eurozone to one-in-10.
Its “central” prediction is for GDP to grow 1.4% next year, against 1.7% in 2010, and an average of 1.9% for the following three years. Following the resurgence of sovereign debt fears, though, there are now “greater downside risks”.
Banks to blame for lack of lending, says Bank of England
Banks have blamed lack of demand for their poor lending figures but the Bank of England’s latest report suggests the cause is the banks’ own squeeze on credit.
A reduction in the supply of loans rather than a fall in demand appears to have caused the dramatic fall in bank lending since the credit crunch, according to the Bank of England, writes the Guardian.
The Bank’s report, published today, could further fuel the debate over whether the government should impose lending targets. While the Bank did not discuss whether lending targets would certainly increase the supply of credit to businesses and households, its bulletin comes as the government decides whether to honour its pledge to introduce net lending targets.
CBI calls for delay to end of enforced retirement
Leading British businesses face a legal minefield because the government has failed to spell out properly how reforms to the official retirement age will be introduced in just four-and-a-half months’ time, the Confederation of British Industry (CBI) warned today.
The employers’ group said that plans to abolish the default retirement age – which allows companies to require their staff to retire at a set age, typically 65 – were being phased in from April onwards despite the Government’s failure to publish details of how the new rules would work, writes the Independent.
The CBI warned employers had not been given sufficient time to prepare for the new regime and called for a year’s delay.