ENNESS'S MARKET VIEW - OCTOBER 22nd

ENNESS'S MARKET VIEW - OCTOBER 22nd

ENNESS'S MARKET VIEW - OCTOBER 22nd

ENNESS MARKET VIEW - 22ND OCTOBER

Spending Review

The Governments spending review which saw the bank levy become a permanent feature. This levy will raise about 2.5bn a year from 2012, according to draft legislation published by the government. The levy will apply to the global balance sheets of UK banks and UK operations of overseas banks and the Treasury has said that the legislation will encourage banks to take fewer funding risks. The British Bankers Association warned the levy would have a significant impact' on more than 200 overseas banks operating here The Treasury's statement is largely silent on how this levy would interact with taxation in other countries' the BAA said Until this is clearer, some banks could be taxed multiple times by jurisdictions on the same activities' it added. The organisation said it would work with the Treasury to ensure the final levy maintained the UK's position as the world's financial centre.

Bank Of England Monetary Committee

The Bank of England's Monetary Policy Committee was split three ways during its October meeting, released minutes have revealed. Seven of its members voted for no change to interest rates and no additional stimulus spending, while one person wanted to see rates rise. The ninth member, Adam Posen, voted to see Quantitative easing (QE) the bank's main stimulus measure restart. The minutes showed that Mr Posen called for a further 50bn to be put into the QE programme, meanwhile, it was Andrew Sentence who again voted for a rise in interest rates, the fifth month in a row that he has done so.

Accross the Pond

The ultimate cost of rescuing Freddie Mac and Fannie Mae may double, their government regulator has said. The US government has already given the two federal mortgage agencies $148bn (94bn) in capital injections. Because of continuing loan losses, that figure may increase to between $221bn-$363bn, according to the Federal Housing Finance Agency (FHFA). Meanwhile, the FHFA has appointed a law firm to look at suing big US banks for miss-selling home loans to the agencies.

Christmas is Coming

And finally, buying early for Christmas may be a false economy. Many of us are snapping up cut-price supermarket deals early on to help spread the cost of Christmas , yet research shows prices tend to fall further in December. Figures from mysupermarket.com over the past three years show Christmas chocolates are on average 45% cheaper in December than the prices currently on the shelves. Holding off on other purchases can also be worthwhile with Christmas puddings and certain brands of wines and larger being on average 8% cheaper in December.

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