Housing help
Scheme gains
The government’s flagship Help to Buy mortgage guarantee scheme, which was introduced to shore up and support the housing market, is proving to be popular. The Treasury scheme supported 11,000 house purchases in the three months to June, up from 7,321 in its first six months, but the aggregate total number of purchases still only accounts for around 2 per cent of transactions in the period. The Help to Buy loan scheme, which was launched last April for purchases of new houses, has supported almost 30,000 transactions.
Grounded
Boris Island sunk
The mayor of London Boris Johnson’s ambitious plans for a brand new international aviation hub to be built in the Thames estuary have been rejected by the Airports Commission charged with recommending the best way of expanding the capacity of London’s airports to a suitable level for the rest of the 21st century. The Commission criticised the huge potential cost of the Isle of Grain idea and said that the choice was now between new runways at Gatwick or Heathrow or extending an existing runway at the latter, options which Mr Johnson has derided.
Mixed data
UK concern
Is the UK recovery beginning to run out of puff? A mixed bag of data this week coupled with downbeat news from key trading partners in Europe added to the sense of uncertainty about the coming months. The first sector to have felt the heat appears to be manufacturing, with the latest purchasing managers’ index this week showing a reading of 52.5, down from 54.8 the previous month and its weakest reading for 14 months. Orders, output and job creation all slipped back along with export demand as European concerns and the stronger pound began to bite. But the dominant services sector showed an improved reading of 60.5 for August, up from 59.1 in July.
Truce?
Markets approve
After weeks of worrying escalation which threatened to turn the separatist uprising in eastern Ukraine into a full blown war between Ukraine and Russia, Ukraine's prime minister this week announced a ceasefire, lifting European equity markets in the process. It is not the first time a truce has been announced and it remains to be seen how much control Russia can exercise over separatist groups on the ground in the Donbas region although a spokesman for the Ukrainian prime minister described it as a ‘permanent ceasefire’.
Tesco tanks
New boss
Tesco’s fall from grace was completed late last week when the company was forced to issue yet another profit warning and a withering 75 per cent cut to its dividend payout. Furthermore, it decided to cut its losses on outgoing chief executive Philip Clarke a month early and parachuted in former Unilever man Dave Lewis on Monday. On his first day, Mr Lewis wrote to all Tesco staff calling for their support as he tries to turn the business around with his main focus on customer service.
Ray of hope for China
Better data
After several worrying economic indicators emanating from China in recent weeks surprisingly positive data from its services sector soothed nerves on Wednesday. An HSBC survey of China’s services sector leapt by 4.1 points to 54.1 points in August, its best figure since March 2013, indicating the sector is in growth mode. Official figures showed a more modest rise from 54.2 to 54.4. Analysts took the figures as a sign that the Chinese economy may be picking up pace into the third quarter despite concerns about the domestic property market.
