|Santander accused of "profiteering" after huge mortgage rate hike|
|Thursday, 23 August 2012 08:57|
News round up: Santander, Greece, Cuts, Borrowing costs, Tax rules.
Greece has "one last chance" to meet its bail-out conditions, according to Jean Claude Juncker in comments that crushed hopes for an imminent change of strategy for Athens and the Eurozone. The head of the eurogroup emerged from a highly-anticipated meeting with Antonis Samaras, Greece’s prime minister, only to signal that there would be no leniency for Greece from Brussels.
A bad week for the Chancellor got even worse yesterday when the economist he appointed to the Office for Budget Responsibility warned of a straitjacket of "self-defeating" cuts. Only days after it was revealed that the public finances plunged unexpectedly into the red last month and a poll found that confidence in the Chancellor had hit at a record low, Kate Barker urged George Osborne to rethink his approach to deficit reduction. Ms Barker, a non-executive member of the OBR, argues that Mr Osborne’s insistence that there should be no deviation from the fiscal plan may be making it more difficult to respond to economic events.
Britain’s second largest lender has dealt a blow to government plans to keep borrowing costs low by raising a key mortgage rate. Up to half a million homeowners with Santander are set to see their repayments jump by an average of £300 a year from October. The bank blamed higher costs for the decision but the move is sure to irritate ministers as they desperately seek plans to boost the flagging economy.
The Treasury is facing criticism for its plans to relax tax rules for multinational companies. Changes going through Parliament "will incentivise multinational corporations to shift profits into tax havens", according to MPs on the International Development Select Committee. The move will cost the Exchequer £1bn in revenue, and is being done to make Britain "more competitive".
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