Ringfencing will cut bank profits 15%, says Morgan Stanley
Morgan Stanley analysts have warned that government proposals to ringfence large parts of UK-based banks could cut their pre-tax profits by up to 15% in three years.
It said the Royal Bank of Scotland will be hardest hit, with ringfencing costing it around £1.4bn a year by 2014, followed by Barclays which would take a hit of £1.4bn within three years – 12% of its pre-tax profits. [Telegraph – Read more]
Fears grow UK is heading for double dip
Two-thirds of Britons believe the UK is heading towards another recession, in an opinion poll that will alarm the Treasury.
ComRes has found that pessimism about the country’s economic prospects has hit a record high, with 69% of people believing the economy has worsened in the last three months. [Independent – Read more]
High street optimism slumps as trading worsens
High street shops are facing the worst trading conditions for 40 years, with optimism among retailers falling to their lowest levels in two years, the Confederation of British Industry (CBI) has said.
Fears are increasing that a collapse in consumer spending could tip Britain back into recession, with economic growth stalling at 0.2% and pressure growing on the government to revise its strategy. [Daily Mail – Read more]
Uneasy markets brace for key Bernanke speech
US Federal Reserve chairman Ben Bernanke will deliver his annual speech today, amid stock market hopes he could unveil a third round of quantitative easing to boost the American economy.
Last year, Bernanke used the speech to start a second round of QE, but expectations of a third lot of asset purchases have been scaled back in the last few days. [Guardian – Read more]