cityam 2013-01-23

DAVID Cameron will today promise an in-out referendum on Britain’s continued membership of the European Union by the end of 2017. “It is time for the British people to have their say. It is time to settle t his European question, ” he will say in his much-delayed speech on the EU, which will be delivered this mo rning at a location in the City of London. The Prime Minis ter w ill w arn th at democratic consent for the EU in Britain is “now wafer thin” and say that the UK could “drift towards the exit” unless other European nations are willing to allow some powers be repatriated back from Brussels to Wes tmin ster . “I will not rest until this debate is won . For the fu ture o f my country. For the success of the European Union. And for the prosperity of our peoples for generations to come,” he will say. Altho ugh C amero n wi ll st ress his desire for Britain to remain in the 27-member bloc, he will make it clear he is not willing to accept membership at any price, since a “very different” organisation will emerge from the Eurozone crisis. Yet his p ledg e of a refe rendu m is reliant on the Conservatives winning the 2015 general election. “The next Conservative manifesto in 2015 will ask for a mandate from the British people for a Conservative government to negotiate a new settlement with our European partners in the next parliament,” the Prime Minister will say. “And when we have negotiated that new settlement, we will give the British people a referendum with a very s imp le in or ou t choi ce t o st ay in the EU on these new terms; or come out altogether. It will be an in- out referendum.” “Legislation will be drafted before the next election. And if a Conservative government is elected we w ill in trod uce the enabli ng legislation immediately and pass it by the end o f that year . And we will complete this negotiation and hold this referendum within the first half of the next parliament. ” Cameron pledges to deliver in-out referendum on the EU by 2017 BY JAMES WATERSON BUS INESS WITH PERSONALI TY King: keep UK’s target for inflation BANK of England chief Sir Mervyn King last night welcomed new ideas over the role of central banks in the post-crisis era, but warned against scrapping Threadneedle Street’s inflation-targeting remit. Incoming governor Mark Carney has floated the possibility of switch- ing to a nominal GDP target, but Sir Mervyn – who steps down in June – told business leaders in Belfast that targeting inflation still has merit. “A long-run target of two per cent inflation should be an essential part of our macroeconomic framework,” Sir Mervyn said. “And it is interesting to note that within the past year both the Federal Rese rve and the Bank of Japan have adopted a target for annual inflation of two per cent. “The anchoring of inflation expec- tations has been the most successful aspect of the inflation targeting regime and it has allowed the Bank to avoid an unnecessarily damaging tightening of policy in response to short-run movements in inflation. It wou ld b e ir resp ons ible to los e tha t. ” In a possible swipe at overly-ambi- tious monetary regimes, Sir Mervyn said: “Wishful thinking can be indulged if the costs fall on the dreamers; when the costs fall on oth- ers, it is unacceptable.” Yet the gov ernor hint ed that the UK’s fourth quarter GDP figures may be bad, and that mo re quan titat ive easing could be in the pipeline. “Be in no doubt that we are ready to provide more stimulus if it is need- ed,” Sir Mervyn said on the possibility of more asset purchases, before adding later in the speech: “Growth in quarter four will almost certainly turn out to have been considerably wea ker than in q uarter t hree .” BORROWING INCREASED AGAIN IN DECEMBER THE GOVERNMENT BORROWED £15.4bn IN DECEMBER 3.8% ON THE YEAR CURRENT TAX RECEIPTS 3.6% TO £43.8bn CURRENT SPENDING 5.4% TO £55.3bn IT BORROWED FOR CURRENT SPENDING £13bn FOR INVESTMENT £2.4bn THE GOVERNMENT HAS BORROWED THAT TAKES THE NATIONAL DEBT TO A JUMP OF 10% ON THE YEAR IT NOW STANDS AT SO FAR THIS FINANCIAL YEAR £106.5bn £1.11 trillion 7.3% 70.7% GDP ON LAST YEAR GOVERNMENT borrowing jumped again in December despite George Osborne’s efforts to bring the deficit down, as the chancellor yesterday ordered Whitehall to prepare for deeper spending cuts after the 2015 general election. Economists believe Osborne is now likely to overshoot his earlier borrowing forecasts by as much as £10bn, with man y su gges ting these lates t fig - ures have put the UK’s triple-A credit rating in even greater danger. Yes terda y morni ng the chancel lor told fellow members of the cabinet that they must do “more with less” and find ways to cut departmental budge ts f or th e 2015- 16 financial year . “There is no flinching from the fact that very difficult decisions will have to be made,” the Prime Minister’s offi- cial spokesman explained. “There was agreement around the cabinet table that though the decisions that are going to have to be taken are difficult, they will have to be made. ” The NHS, schools and overseas aid budget s will remain ring-f enced but all other departments face additional cuts. These new budgets will be bind- ing, regardless of who wins the next general election. Figure from the Office for National Statistics show the deficit came in at £15.4bn for December 2012, up 3.8 per cent on the same month last year. This bring s the deficit for the fina n- cial year so far up to £106.5 bn, exclud- ing one-off transfers, a rise of 7.3 per www.cityam.com FREE cent on the year. Tax reven ues r ose 3 .6 per cent to h it £43.8bn in December. But they were far outstripped by increases in current spending, which rose 5.4 per cent to £55.3bn. BY JULIAN HARRIS FTSE 100 M6,179.17 -1.81 DOW ▲13,712.21 +62.51 NASDAQ ▲3,143.18 +8.47 £/$ 1.58 unc £/€ M1.19 unc €/$ 1.33 unc BY TIM WALLACE AND JAMES WATERSON STUART LANCASTER ISSUE 1,803 WEDNESDAY 23 JANUARY 2013 OCADO PICKS ROSE FROM M&S See Page 4, Bottom Line Page 6 See Page 22 ALLISTER HEATH: Page 2 ▲ ▲ POSEN IN WESTMINSTER: Page 8 ▲ ▲ FORUM: Pages 16 , 17 ▲▲ Certified Distribution from 26/11/12 to 30/12/12 is 127,678 And even though the claiman t count has been rising, the social secu- rity bill only increased 3.3 per cent, showing government spending in other areas is rising more quickly. Part of the rapid rise was caused by increasing interest payments on the government’s mounting debts – they came in at £4.4bn in the month, up 5.1 per cent on the year. “If this trend were to continue for the remaining three months of this financial year, borrowing for the whole of financial year 2012–13 would be about £130.5 bn. This is around £10bn higher than forecast by the OBR in its December, ” said analysts at the Institute for Fiscal Studies. And ING economists said the UK could be about to lose its triple-A credit rating, which might hit confidence in the government’s ability to bring down borrowing and potential increase interest costs further. “With the US and France having been down grad ed b y on e r ating s agency in the past couple of years , another disapp ointin g UK borrowing number and a wide ly e xpect ed c ontr actio n i n fourth quarter GDP on Friday will int ensify th e threat of the UK suffering the same fate,” said the bank’s James Knig htley . George Osborne has told ministers to look for cuts NEWCUTSASDEBT HITS £1.1 TRILLION ENGLAND’S RUGBY BOSS ON WHY NO ONE IS TOO GOOD TO DROP

cityam 2013-01-23

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