The warning to Spain’s banks comes after ratings agency Moody’s shocked the markets with a downgrade of the country’s debt, the Guardian reports.
Spain’s rating woes hit banking stocks, with Barclays, which is heavily exposed to the Iberian peninsula, down 4.1p at 301.4p and Royal Bank of Scotland dropping 1p to 43p at the FTSE close last night.
The Spanish units of Deutsche Bank and Barclays were among several banks to fail tests set by the Banco de España, Spain’s central bank, with Barclays the worst hit by a demand to inject €552m to reach a core capital ratio of 8%.
Both banks were committed to taking measures to cover their capital needs, the central bank said, but the markets took fright over concerns Spain had underestimated the extent of bank debts.
Manufacturing grows at fastest rate in 16 years
British manufacturing grew at its fastest annual rate in 16 years after output grew 6.8% in the year up until January, according to official figures.
Demand for UK goods from the U.S., China and mainland Europe also drove exports up 5.4% to an all-time high of £25.1bn, the Daily Mail reports.
The surge was led by electrical and transport equipment industries and
The Office for National Statistics figures, which follow earlier positive trade figures, add to hopes the UK economy may have recovered in the first quarter of 2011, after it surprisingly declined by 0.6% in the final three months of last year.
The Government is relying on the private sector to pick up the expected slack in the economy as its £81 billion package of spending cuts starts to bite.
NI and income tax should be merged, says OTS
George Osborne is being urged to use his budget this month to merge national insurance and income tax into a single system, the Guardian reports.
In a report on small business tax commissioned by the chancellor last July, the Office of Tax Simplification (OTS) – staffed by a team of fiscal experts – calls for an end to the parallel systems of national insurance and income tax.
“The overwhelming conclusion is that genuine and long-lasting simplification can only be brought about through major structural change to the UK tax system,” the report said.
The OTS points out only six state benefits depend on a worker’s accumulated national insurance contributions (NICs).
