Wednesday Papers: Chancellor announces kill or cure budget - other news

Financial Times

* In an emergency budget announced on Tuesday Osborne outlined cuts for most government departments of 25 per cent by 2014-15; the chancellor also raised the rate of value added tax from next January to 20 per cent and imposed a £2bn levy on banks, giving him leeway for some tax giveaways; Osborne announced the corporation tax rate would drop by 1 percentage point a year until it reached 24 per cent in 2014-15 and capital gains tax would rise to 28 per cent, but only for higher rate taxpayers;  income tax allowances will rise by £1,000.

* Stocks break 10-day winning streak on a more sober assessment of the benefits accruing to the global economy from China’s de-pegging of the renminbi and renewed concerns about the European banking system; The FTSE All-World equity index fell 1.3 per cent, the S&P 500 was down 1.6 per cent, while the Nikkei 225 in Tokyo lost 1.2 per cent.
 

* Barclays chief John Varley on Tuesday defended the discounted price it paid for Lehman Brothers’ US brokerage in 2008, a deal hatched during what he said was “the riskiest week of my life”.

* Investor worries over eurozone banks resurfaced on Tuesday after a warning by a European Central Bank governing council member that some faced funding difficulties.

* Financially stressed companies which are unable to pay cartel or other antitrust fines will be given reduced penalties in order to limit bankruptcies, Joaquin Almunia, the EU’s new top competition watchdog, told EU lawmakers on Tuesday.

* WestLB wins EU breathing space on state aid.

* Asian millionaires overtake Europeans in rich list, according to The annual Merrill Lynch Wealth Management /Capgemini analysis of investors with $1m or more; the survey quantified the wealth held in Asia at $9,700bn, compared with $9,500bn in Europe.

* The Munich-based Ifo institute reported on Tuesday that its business climate index had risen from 101.5 in May to 101.8 this month – the highest since May 2008 despite debt crisis.

* Belarus cuts gas transit to Europe.

* Berlin plays down G20 spat with US over the need for continued economic stimulus spending to revive growth.

* A federal judge in Louisiana on Tuesday granted an injunction against the Obama administration’s six-month moratorium on deepwater oil drilling in the Gulf of Mexico, imposed after the BP oil spill began nine weeks ago.