Thursday, February 04, 2010
Bank of England stops prinitng money - for now
So the Bank of England has decided to give its metaphorical printing presses a rest: the Monetary Policy Committee said today that it’s calling a halt to Quantitative Easing (the process by which it basically pumps money into the economy) after various indicators suggested that the UK might finally be in recovery, of sorts. However, the Bank – which also left interest rates at 0.5%, much to nobody’s surprise – did reserve the right to start it up again further down the line, if things take a turn for the worse. Perhaps by then the economists will have reached some kind of consensus about whether QE actually works…
‘On balance, the Committee believes that the prospect is for a gradual recovery in the level of activity,’ the Bank said today, in a typically gung-ho statement. ‘The recession has probably impaired the supply capacity of the economy, but the scale and persistence of the fall in output means that a substantial margin of under-utilised resources is likely to remain for some time to come.’ In other words (we think), it’ll be a while before the UK is operating at full steam again.
Since the Bank finished spending its latest bit of the QE money last week, the MPC’s decision today was seen as a good indicator of how healthy it thinks the economy currently is. But as we’ve seen, the picture is mixed. Although official figures showed the economy moved out of recession last quarter, it was only by a measly rounding-error-esque 0.1% - some economists reckon that may yet be revised upwards, but either way, it’s hardly a firm indicator of recovery. Meanwhile good news from the manufacturing sector and the housing market has been counterbalanced by rotten news from the service sector. And inflation seems to be heading further and further north of the Bank’s 2% target. So today’s decision – which basically amount to an ‘as-you-were’/ ‘wait-and-see’ approach – was probably to be expected.
But has QE worked? Well, the jury still appears to be out on that one, not least (as Bank deputy governor Charlie Bean has pointed out) because we don’t know what would have happened without it. The National Institute of Economic and Social Research is in favour – the think-tank reckons the Bank's scheme boosted output by 0.5 per cent last year, and will contribute another 1% this year – but others are less convinced. So although the Bank’s unlikely to withdraw its support any time soon, with the economy still on a knife-edge, we still have no idea what will happen when it does...
DATED: 04.02.10
FEED: MgmT
V70 and S80 DRIVe go greener
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- Lower emissions for V70 and S80 DRIVe models
- Qualify for lowest diesel company car tax
- Available to order now
Volvo has made two of its cars even greener by lowering emissions on the V70 and S80 DRIVe models.
The two new versions now both emit 119g/km of CO2, meaning they qualify for the lowest 13% company car tax band. Previously, the DRIVe versions emitted 129g/km, putting them in the 18% banding.
As well as lowering emissions, Volvo has improved fuel economy, too - the S80 and V70 DRIVe models now return an average of 62mpg - up 5mpg on the previous DRIVe versions.
The new models use the same 1.6-litre turbodiesel engine delivering 109bhp, but Volvo has added new technology including lower friction internal parts for increased efficiency.
The new DRIVe models are available to order now in SE, SE Premium, SE Lux and SE Lux Premium trim levels.
Prices will be announced later this month, but are not expected to be vastly different from the current models.
DATED: 04.02.10
FEED: CCD
Toyota issues mass recall
- Toyota recalls thousands of cars to fix faulty accelerator pedal
- Aygo, iQ, Yaris, Auris, Corolla, Verso, Avensis and RAV4 affected
- Issue will also affect Peugeot 107 and Citroen C1 models
Toyota is to recall thousands of its cars to fix a potential problem with the accelerator pedal.
Under certain circumstances the pedal can stick in a partially depressed position, or return slowly to the off position.
The vehicles involved are:
- Aygo (built between February 2005 and August 2009)
- iQ (November 2008 - November 2009)
- Yaris (November 2005 - September 2009)
- Auris (October 2006 - January 2010)
- Corolla (October 2006 - December 2009)
- Verso (February 2009 - January 2010)
- Avensis (November 2008 - December 2009)
- RAV4 (November 2005 - November 2009).
This problem has already affected some 2.3 million vehicles in the US. The recall for UK cars is part of a 1.8-million vehicle recall across Europe.
Concerned customers can call a special hotline - 0800 138 8744 - for more information. Once Toyota has identified which cars may be affected by this problem, they will contact the relevant owners with an official recall notice.
The recall will also affect the Citroen C1 and Peugeot 107 - sister cars to the Aygo - which are built at the same factory in the Czech Republic.
No other Toyota models and no Lexus models are affected.
DATED: 04.02.10
FEED: CCD
Cowboy clamping clampdown
- New law to counter cowboy clampers
- Tribunals to rule on unfair clamping
- Law comes into effect next year
If you think you've been unfairly treated by cowboy clampers, help is at hand - although not until next year.
The Government intends to set up independent tribunals to investigate instances where people are unfairly clamped on private land. It also wants to limit the fines that private clamping companies can charge.
However, the proposals will only come into effect in 2011 when the Crime and Security Bill becomes law.
Under the proposals, rogue clampers could be forced to pay back excessive fees and the tribunals could award compensation to the drivers affected.
Clamping companies which fail to comply with the tribunal orders would face prosecution or have their licence to operate taken away.
The new law will apply in England, Wales and Northern Ireland. Clamping on private land in Scotland is already illegal.
The move is aimed at stemming the rise in the number of clamping companies who are operating - up from 1,200 in March 2008 to more than 2,000 today.
DATED: 04.02.10
FEED: CCD
Hybrid tax bombshell
- Company car tax on certain hybrids to rocket
- Government removes 2% tax discount
- Lexus LS600h hit by £3,000 per annum rise
Certain hybrid cars are going to cost much more in company car tax thanks to a change in the way the Government treats them.
From the 2011/12 tax year, hybrids will lose the 2% benefit-in-kind discount they currently enjoy. Coupled with a tightening of the company car tax bands, the changes could amount to thousands of pounds a year in extra taxation.
Among the biggest losers tax-wise will be drivers who have opted for hybrids such as the Lexus range - GS450h, RX450h and LS600h models.
The driver of a GS450h currently pays benefit-in-kind tax based on 21% of the car's P11D value. This includes the 2% discount, which will continue to apply in the 2010/11 tax year. However, as the emissions bands tighten, company car tax will be based on 22% of the P11D price next year.
But in the 2011/12 tax year, when the 2% discount ends, the tax will be based on 25% of the P11D value, rising to 26% in 2012/13.
Today, a 40% tax-paying driver will be paying £3,425 a year in company car tax, but by 2012/13 this will have risen to £4,250 per annum. These figures also assume that the P11D price remains static for the next four years.
It's a similar story for the Lexus RX450h, which is currently taxed at 15% of P11D value. This rises to 16% in 2010/11, 19% in 2011/12 and 20% in 2012/13.
As a result, company car tax for a 40% taxpayer will rise from £2,580 a year now to £3,440 in 2012/13.
And in the LS600h, company car tax rises from the 29% banding now to 32% in 2010/11, rising to 33% and then 34% in 2012/13. Coupled with the abolishing of the £80,000 ceiling price in 2011/12, this spells a massive increase for the £90,000 plus saloon, from £9,280 a year now to £12,295 per annum in 2012/13. Or an extra £250 a month.
Even much lower emission hybrids will suffer. Honda's Civic IMA will be taxed at 10% of P11D until the 2012/13 tax year, when it rises to 12%. A 20% tax-payer's bill will rise from £372 a year now to £447 in 2012/13.
The same is true of Honda's other hybrid, the Insight, which also remains at 10% until moving to 11% in 2012/13, resulting in a tax billfor a base rate taxpayer increasing from £325 per annum to £357.
Only the Toyota Prius, with its sub-100g/km of CO2 emissions, remains in the 10% tax banding, costing a 20% taxpayer £388 a year.
DATED: 04.02.10
FEED: CCD
Government extends Scrappage
NEWS ALERT
The government has announced this morning that the scrappage scheme will be extended to the end of March or until the money runs out. It had been due to end on February 28. By January 24th, 330,722 vehicles had been ordered. There is an allocation for 400,000 vehicles. Orders are now being handled on a quota basis.
More here: (http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=410919&SubjectId=2)
DATED: 04.02.10
FEED: ARN
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