Banks to face full competition probe

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Record number of deaths on railways

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Clash over costs of independence

Oil platformThe Treasury claims the Scottish government has made “over-optimistic assumptions” about oil revenues

Danny Alexander has called on Scottish ministers to produce “realistic analysis” of the cost of independence.

It comes as the Treasury prepares to publish detailed findings on the financial impact of a “Yes” vote.

In a speech in Edinburgh on Wednesday, the Chief Secretary to the Treasury will attack “over-optimistic assumptions” about oil revenues.

A spokesman for the first minister said Scotland had the “financial resources to be a successful independent nation”.

Mr Alexander’s attack on the Scottish government’s white paper on independence comes a few weeks before the Treasury’s most detailed fiscal analysis is due to be published.

Chancellor George Osborne and Mr Alexander asked the department’s economists to calculate “in detail the figures that illustrate the benefits of the UK and the cost of independence”.

The UK government said economists had spent months analysing data and forecasts, and consulting with independent bodies.

It said the analysis would set out “in more detail than ever before the impact of having to absorb the higher spending and lower tax caused by declining oil revenues, an ageing population, the Scottish government’s uncosted policy pledges and the set-up costs of independence in a much smaller budget”.

Danny AlexanderDanny Alexander will be speaking in Edinburgh on Wednesday

Treasury officials have also analysed the Scottish government’s white paper and said they had “attempted to produce many of the calculations that were missing”.

Mr Alexander said: “The Scottish government’s white paper contained lots of promises but nothing credible to back it up.

“People are beginning to realise that they can’t answer even the most basic questions.

“It’s damning that the only credible paper we’ve seen from the Scottish government is their finance minister’s secret leaked paper warning about the cuts and tax rises needed to pay for declining oil revenues and an ageing population.

“If their promises seem too good to be true, it’s because they are.”

He added: “This week I will also be challenging some of the myths of independence – people need to know the facts.

“The problems of declining oil revenues and an ageing population cannot simply be wished away – but the broad shoulders of the UK can help absorb them.”

‘Substantial resources’

A spokesman for First Minister Alex Salmond said: “The fact is Scotland is one of the wealthiest countries per head in the world and is more than capable of being an economically successful independent country – the fiction is coming from Mr Alexander and his colleagues in the Tory-led No campaign.

“Scotland has the financial resources to be a successful independent nation.

“In each of the last 32 years, tax receipts per person in Scotland have been higher than the UK as a whole, and in 2011-12 it was in a stronger fiscal position than the UK to the tune of £4.4bn, or £824 per person.”

The spokesman added: “Scotland would have had the opportunity to spend more, tax less, invest in an oil fund, and still borrow proportionally less than the UK.

“Independence will provide Scotland with the opportunity to take spending decisions which better reflect the needs and desires of the Scottish people and the Scottish economy.

“For example, not replacing Trident would free up substantial resources that could put to use delivering better pensions for Scotland’s elderly.”

The Scottish government’s estimates on oil revenues contrast with forecasts made by the Office for Budget Responsibility (OBR), the UK government’s fiscal watchdog.

The OBR estimates oil revenues will be about £3.2bn in 2016, which would be the first year of independence, compared with Scottish government figures which put them as high as £7.9bn.

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New push for energy firm probe

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US Fed hints at rate rise in 2015

Exterior of US federal reserveThe Fed has been buying bonds to keep interest rates low and boost growth

The US Federal Reserve Chair Janet Yellen has hinted that interest rates in the US could start to rise in early 2015.

Ms Yellen said the Fed could begin raising rates six months after it halts its monthly bond-buying programme.

She made the remarks after the Fed said it will scale back bond purchases by a further $ 10bn (£6bn) per month.

This is the third time in a row that the central bank has tightened its stimulus efforts.

The latest reduction brings the Fed’s monthly bond-buying down to $ 55bn from $ 85bn last year.

“This is the kind of term it’s hard to define,” Ms Yellen said at a press conference. “Probably means something on the order of six months, or that type of thing.”

If bond purchases end – as expected – later this year, this would imply rate increases around April 2015.

Broader indicators

The Fed lowered its overnight interest rate to 0% in December 2008 as part of the steps it took to trigger growth in the economy amid the global financial crisis.

That crisis hurt the US economic growth and resulted in high levels of unemployment.

Along with lowering the interest rates, the central bank also started buying bonds in an attempt to keep long-term borrowing costs low.

The idea was to encourage businesses to borrow and spend more, to try and spur growth in the economy and create more jobs.

The stimulus efforts appear to have had an impact and the US economy has been showing signs of recovery of late and the unemployment rate has fallen to 6.7%.

That has seen the central bank scale back its key stimulus measure, the bond-buying programme also known as quantitative easing, for three months in a row.

However in its latest policy decision, the Fed said it would look at multiple factors before approving any rise in interest rates.

It had previously hinted at doing so once the jobless rate fell to 6.5%.

“This assessment will take into account a wide range of information, including measures of labour market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments,” it said.

Nervous markets?

US stock markets fell on the news.

Some analysts are saying the change in the Fed’s guidance had some worried that the rates may rise sooner than expected.

“The Fed moved the goal post again,” said David Molar, managing director at Hightower.

“It goes from a 6.5% unemployment threshold to a qualitative approach which is nebulous for the market.

“No one knows what will trigger further tapering, a pause in tapering or an increase in asset purchase. It’s a major change in policy.”

Mark Grant, managing director at Southwest Securities added: “What seems to be troubling the market is that even though it reiterated that it wouldn’t be raising rates this year, people were put on notice that a hike is coming.”

“We’ll likely see some rise in short rates as a result of this, if not out across the whole curve.”

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New rules to squeeze payday lenders

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Payday lenders face debt probe

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Aviva drivers’ crash details stolen

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Bad weather hits shopper numbers

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Wonga says most clients are happy

Wonga screen grabWonga has a million active customers in the UK

Short-term loan provider Wonga has told the BBC its business practices are being misrepresented and the vast majority of its customers are happy.

Its chief executive, Niall Wass, told Newsnight it had one million active UK customers, of whom 99% were content with the company’s lending terms.

Wonga’s interest rates are typically 1% a day, an interest rate that mounts up rapidly if the loan is extended.

Such loans have faced criticism from many, including Church leaders.

One customer, Liz Matthews, told the BBC she started with a loan of £300 but now owed £2,000 and was having sleepless nights.

Niall Wass said his customers’ views were not being properly represented by the media and “other commentators”.

He said: “The perception is that Wonga customers are poor and vulnerable but there are a silent majority of customers out there who are not.”

BBC News – Business