Alistair Darling said that Government plans to pump another £30 billion of public money into banks and it represents a better deal for the taxpayer. For this to be done Royal Bank of Scotland and Lloyds Banking Group has agreed to dramatic caps on banker’s bonuses as the price for receiving billions more in taxpayer aid.

RBS have agreed to take another £25.5bn and Lloyds £5.7bn from the Government. Both banks have been forced by the European Union to sell some of their businesses, which may help the reshape of high street banking.

Alistair Darling, the Chancellor, insisted that the deal, which comes after months of tense negotiations with the European Union and the banks, represents a good deal for the taxpayer. Lloyds, is also raising £13.5bn in the biggest cash call in UK corporate history. The fundraising will allow it to exit the Government’s Asset Protection Scheme, but the Government will keep its stake at 43pc in Lloyds after handing over another £5.7bn.

To read more on this story go to telegraph.co.uk. Let us Know your thoughts.

Darling is expected to announce tomorrow that Lloyds Banking Group (LON:LLOY) and RBS (LON:RBS) will be stripped down and parts sold to new owners, this could create as many as three new institutions on the high street. The Chancellor will argue that this is needed to introduce more competition in the retail banking sector.

It was only a year since the Government agreed to the merger of Lloyds and HBOS to create Britain’s biggest bank. All this could mean Lloyds will be forced to sell off TSB Scotland which was brought in 1995.RBS is likely to be forced to give up NatWest branches in Scotland and also its insurance businesses, including Churchill, Direct Line and Green Flag.

It is believed that the Spanish bank Santander will be allowed to bid for RBS’s business banking group. Northern Rock (PINK:NHRKF) is likely to be split by the end of the year into a good bank, Bank Co, which can be sold off, and a bad bank, the assets of which will be wound down. To read more on this story go to timesonline.co.uk.

The Chancellor, Alistair Darling today confessed today in an interview with the Financial that the UK recession is much deeper than they had expected.

Darling, repeated himself several times describing the outlook as “difficult”, he also added that he may have to tear up his previous forecast on the economy. He also talked of how difficult 2009 are going to be and how the government will be faced with some tough calls.

In the Chancellors last forecast he had predicted that the economy would pick up in the second half of 2009, but it’s clear that Britain has not even reached its half way point, with consumer confidents at an all time low and the retail sector crumbling every day, the outlook is gloomy for 2009.

The authorization to print more money to allow the government to spend buying assets from the ailing financial sector is another option the Chancellor talked about, he did rule out handing over the overall responsibility to the Bank of England.

Source: Guardian

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The UK Government has said they are contemplating further plans to encourage UK banks to increase lending to businesses and households.

Alistair Darling, Chancellor said that injecting more taxpayers money into banks was not the “first port of call”. The Chancellor also added that they will be holding further talks as to what steps they should take to kick start lending.

Reports have said that the Treasury is looking into an insurance scheme where banks would pay a fee to reduce possible losses on bad loans.

This could encourage the banks to resume lending more freely because they would have a clear picture of what losses they could face, with the government sharing the risk.

The key to the economic recovery would be for easily obtainable credit for homeowners and businesses, however, Alistair Darling has said that although the banks have began to lend again it’s not at the level the government wants to see.

Source: BBC

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After Alistair Darling was quoted in a newspaper on Saturday saying that the economic times faced by Britain and the world “are arguably the worst they’ve been in 60 years” he is said now to have brushed off the demotion rumours, his comments caused an outrage in the government and clashed with Gordon Brown the Prime Minister who has been emphasising that Britain is in a good position to ride out the recession.

Alistair Darling also joked with The Guardian that “There’s lots of people who would like to do my job. And no doubt,” he was reported as adding, half under his breath, “actively trying to do it.”

In another interview today Alistair Darling told Sky News that he is sure to keep his job, and that the Prime Minister has no reshuffle in the pending. He also said that he is confident that we will get through this economic crisis. Since the interview the Sterling had decreased further in the international currency markets, reaching a two-year low against the dollar and a record low against the Euro.

Read full article at timesonline

Are they or aren’t they? it’s what is on all potential homebuyers minds, but the Treasury has ended speculation as to if the proposal has actually been put forward from the government in regards to the much talked about delay on stamp duty payments, the answer from the treasury was that the speculation is “simply wrong and purely speculation”.

Alistair Darling did not rule out changing the tax in order to free up the housing market. But Tories have accused Darling of playing “short-term games”, the Chancellor seems to have upset UK estate agents too with showering them with uncertainty in an already troubled property market.

The Treasury has said the story are just speculation, and that they are looking at a number of options.

It seems clear that the Chancellor is scratching his head, and still needs to make a decision as to an economic recovery package to be put together.

It seems now homebuyers and owners are in an even worse position with a potential delay in property transactions, and with no definite proposal on the table whilst we all wait for Mr Darling to make up his mind.

In the recession during 1991, the Conservative party temporarily suspended the tax on homes worth less than £250,000.

What are your views, do you think that Stamp Duty should be suspended, and indeed do you think it will make that much difference?

http://news.bbc.co.uk/1/hi/uk_politics/7547584.stm

Read more about the British housing market here.

Alistair Darling, the Chancellor in an interview with BBC Radio 4’s Today program stated that he will be increasing measures to combat the flagging housing market in October.

When asked about the article in today’s Sun which reported that the Chancellor will be suspending stamp duty, he said: “I am looking at a number of measures and I’m not going to be drawn on that today because we have not concluded what exactly we need to do. “Another source from the Whitehouse today said that it’s more likely that homebuyers will have more time to pay their stamp duty rather than it be scrapped.

Labour back benchers have been fighting for Windfall tax to be applied on oil or energy companies, Although, Darling, expressed strongly that he had already rejected the proposal about imposing the tax.

Darling, has said that that Britain’s economic problems will get worse before it gets better, with every other country in the world is going through the same economic situation. Gordon Brown will be announcing an economic package in autumn which will help will rising food and fuel prices, and generally help the economic crash.

It’s been reported that ministers are considering helping people raise money in the form of a tax-free savings mechanism to aid people save up for the deposit for their house, this is aimed at helping first time buyers get on the property ladder.

None of the options at the moment have been decided so they may not become policy said a Whitehouse source.

One thing is clear, Darling is looking to work with the energy companies to see how they can reduce energy prices, he doesn’t want to add a windfall tax on the energy companies as he would prefer them to invest in new plants and power stations, he also said that a lot of the energy companies make a lot of money outside the UK, and paid tax in those countries.

Source: Guardian

Read more about the UK property news here.

In London this week the U.K said a review of Britain’s mortgage-financing market, although it’s believed that the government won’t respond to industry demands immediately in the call to improve the current market conditions.

Due to the downturn in the housing market, the U.K. Chancellor of the Exchequer Alistair Darling commissioned a report by former HBOS Chief Executive James Crosby earlier this year, this was in a bid to reverse the squeeze on the market activity.

Although the final report is expected at the end of the year, there will be an interim report that should be presented tomorrow. The interim report by Mr. Crosby’s is believed to be just a analysis of the state of the mortgage market, rather than a policy that will make recommendations, although it will probably set out some areas for the government to consider. It’s unlikely that the government will act on the report before the pre-budget review this autumn.

Meanwhile, U.K. Housing Minister Caroline Flint said Sunday that the government will look at doing more to help the housing market.

The U.K. Housing Minister Caroline Flint is looking both internationally and nationally at ways they can soften the blow for people who are faced with financial worries with the low housing market and cost of living hike.

There is a plan by the Council of Mortgage Lenders to reopen access wholesale mortgage finance and encourage new mortgage lenders. This would allow lenders to swap new mortgage-backed securities for cash. This scheme amongst others is being considered by the U.K. Treasury.

 Source: Walll Street Journal

Read more UK mortgage articles here.