FLS curtailed
Mortgage lending off
The government has moved to curtail its Funding for Lending scheme (FLS) by proposing the withdrawal of FLS funds for lending to consumers, primarily through mortgages, in a bid to concentrate on improving the flow of credit through FLS to small- and medium-sized businesses. From January, FLS funding will only go to corporate borrowers with the government deeming the mortgage market to be sufficiently robust to survive, especially now that the Help to Buy mortgage indemnity scheme is expected to get into full swing in the coming months. The latest figures for the FLS scheme showed a sharp uplift in loans offered, but with loans to business shrinking.
Tense times
Ukraine, Thailand restive
Anti-government protests have flared up again in Ukraine, where demonstrations have been building for two weeks against the government's decision to dismiss greater integration with the European Union and to push ahead with deeper ties with Russia. The president, Viktor Yanukovych's, Regions Party survived a vote of no confidence in parliament this week. Meanwhile, in Thailand, anti government protesters have taken to the streets to demand the removal of prime minister Yingluck Shinawatra.
Cyber Monday meltdown
RBS glitch
UK consumers were hit by technological glitches at the Royal Bank of Scotland which prevented shoppers from using RBS, Natwest or Ulster Bank cards for online transactions during a three-hour period on Monday. The problems couldn't have struck at a worse time than on 'Cyber Monday' which is generally considered to be the busiest online shopping day of the year, with John Lewis reporting record online transactions over the weekend as Christmas shopping kicked in properly. Analysts were expecting close to £500m-worth of transactions to be processed on Monday and Amazon set a new record for sales in one day when it shifted 4.1 million items, up from the previous record of four million set just three days before.
Green levy lifted
Price cuts coming
The ongoing battle over energy bills took yet another twist this week when British Gas announced plans to slash energy bills by 3.2 per cent, or around £50 a year, in response to pledges from the government to remove some of the green levies applied to domestic energy bills. The other energy companies are likely to follow suit and the government is hoping that, barring any major changes to the cost of fuel, the energy providers may be able to keep a lid on prices until the next election, with the cost of living likely to be one of the major battlegrounds. British Gas' price reduction came just weeks after a 9.2 per cent increase in its fuel bills.
Data delight
Recovery on
The UK economic recovery appears to be more firmly entrenched with each month's data on the output of the various parts of the economy. The latest figures for the manufacturing sector showed it is expanding at its fastest pace in more than two years and is taking on more workers in preparation for new orders which are running at their highest for almost 20 years. Meanwhile, a housebuilding boom has contributed to the construction sector expanding for seven consecutive months, culminating in November's expansion which was at a faster pace than any time since the credit crunch and ensuing financial crisis.
Brazil bombs
Economy falters
Ahead of what should be a momentous year in 2014 when it hosts the football World Cup, Brazil's economy has surprisingly slipped into reverse, with the three months to September showing the sharpest quarterly slowdown in five years, with gross domestic product shrinking by 0.5 per cent during the period. The main drivers of the slowdown were a lack of investment and weakness in Brazil's huge agricultural sector. The quarterly performance was the worst since 2009 and marks a setback for the government, which has regained some poise following huge street protests earlier this year. President Dilma Rouseff will be hoping that the advent of the World Cup and the potential feel good factor that could generate will bring about an upturn in fortunes next year.
