A Bank of England policymaker has admitted the widely-held belief that interest rates have been set in response to changes in growth rather than the official inflation mandate. Ben Broadbent, an external member of the Monetary Policy Committee (MPC), made the revelation as part of an attempt to explain the Bank's new 7 per cent unemployment target, which he claimed was now more relevant than growth due to productivity bottlenecks in the economy, The Daily Telegraph says.
One of the US Federal Reserve's most senior officials talked down the health of the world's largest economy on Monday, saying it does not have enough momentum to justify slowing down the central bank's $85bn monthly asset purchases. "The economy has not picked up forward momentum and a 2% growth rate - even if sustained - might not be sufficient to generate further improvement in labour market conditions," said William Dudley, president of the New York Fed and vice-chair of the rate-setting Federal Open Market Committee, the Financial Times says.
BlackBerry was thrown a lifeline yesterday after its biggest shareholder offered $4.7bn to take the Canadian company private. A consortium led by Fairfax Financial, the Canadian private equity company owned by Prem Watsa, its billionaire founder, has offered to pay $9 for each share in the ailing smartphone maker a small premium on Friday's closing price of $8.23, but a drop in the ocean compared with the $147.55 that marked BlackBerry's peak in June 2008, The Times reports.
The US Justice Department is preparing to sue JP Morgan Chase over mortgage bonds it sold in the run-up to the financial crisis, according to reports. A lawsuit, first reported by Reuters, could come as early as Tuesday, people familiar with the matter said. JP Morgan spokesman Brian Marchiony and Justice Department spokeswoman Adora Andy Jenkins declined to comment. The bank disclosed in August that federal prosecutors in California were conducting criminal and civil investigations into the bank's mortgage securities, The Daily Telegraph says.
The Government is to plough on with re-privatising the East Coast Main Line before the election in a competition that could attract the most international cast of railway bidders yet. The Department for Transport will begin the tendering process for a sell-off of the Kings Cross-to-Edinburgh line next month. It is understood that the invitation to tender for the franchise will go out by the end of October, with the aim of having it in private hands by the first quarter of 2015. The line has twice been taken back into state hands after the failures of franchises run by Sea Containers/GNER and by National Express, The Times explains.
British families are yet to feel the full benefits of the economic recovery as household spending power fell again last month. Yet strains on domestic budgets have begun to recede and confidence about job security is gradually beginning to improve consumers' perceptions. Asda's Income Tracker revealed that household disposable income was down by £2 a week from the same month last year and £6 a week from its February 2010 peak, The Daily Mail writes.