The Government's flagship Help to Buy mortgage subsidy scheme could make housing even less affordable, the International Monetary Fund has warned. By launching it when house prices are already rising across the country the plan, formally unveiled this week, 'may lead to even higher housing prices', the Fund said. The Treasury scheme has come under widespread criticism that it could provoke another housing bubble, The Daily Mail writes.
More than 700,000 people have applied for shares
in Royal Mail, the government has revealed, reviving privatisation fever last seen in the 1980s and intensifying fears that the postal service is being sold too cheaply. Vince Cable, the business secretary, said the public had placed orders for more than seven times the number of shares available to them. Small investors could have bought the entire company if 70% of the shares on sale had not been reserved for City investors and pension funds, The Guardian reports.
Hundreds of thousands of private investors will get the bare minimum of shares in tomorrow's Royal Mail flotation as evidence mounted that the government has inadvertently created a stampede by selling it off too cheaply. Another City stockbroker has risked its reputation by saying that it suspects the £3.3bn Royal Mail sell-off has been underpriced by more than 80%. Canaccord Genuity believes that Royal Mail should be valued at nearer £6bn (599p a share) compared with the 330p a share that ministers are likely to ask for when it starts trading, according to The Times.
The Libyan Prime Minister Ali Zeidan has been snatched by armed men in a dawn raid on his hotel in Tripoli, the country's government confirmed this morning. "The head of the transitional government, Ali Zeidan, was taken to an unknown destination for unknown reasons by a group" of men believed to be former rebels, the government said in a brief statement on its website. Mr Zeidan, 63, had been using the Corinthia Hotel, which is popular with diplomats and foreign officials, as his residence, The Times reports.
Flatlining investment by Britain's battered businesses was the main reason the independent Office for Budget Responsibility drastically overestimated the likely strength of the economic recovery, it conceded in its latest forecast review. The OBR, set up by George Osborne to provide a check on Treasury number-crunching, said in its annual forecasting evaluation report that when it set out the expected path for the recovery in June 2010, shortly after the coalition came to power, it was projecting that business investment would bounce back strongly, as in previous recoveries, The Guardian writes.
Policy makers at the US Federal Reserve were split over the merits of slowing its $85bn-a-month asset purchases in September, highlighting the difficult task facing Janet Yellen as she prepares to take the chairmanship of the central bank. Calling her "one of the nation's foremost economists and policy makers", Barack Obama nominated Ms Yellen to the most powerful job in the world economy in a ceremony at the White House, just one hour after the release of the minutes, the Financial Times writes.