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Big business finds a way to dodge income tax on dividends

Recent research has show that close to 50 million pounds was paid out shareholders in the form of dividends, in many cases just a few days before the end of the tax year on April 6. Experts believe that many UK companies are employing this tactic as a means to help some of their big-income employees who are also shareholders to avoid the rise in the rate of income tax. If this is the case, it could cost the Treasury as much as £85 million pounds. Analysts estimate that the main "offenders" are directors in small to medium sized companies who want to minimise the effect of the soon to be effective 50 percent tax rate, due to their greater flexibility over returns.

A rise in UK retail sales, albeit a minor one has been reported for March by the Office for National Statistics (ONS) According to the ONS, retail sales volumes during the month grew by 0.4% from February, which is less than the 0.6% analysts had expected. Sales improved in February after a very poor January, report with retail sales being hard hit by the icy weather.


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U.K. property prices set to extend their recovery

According to information from the Centre for Economics and Business Research (CEBR) property prices in the UK are due to rise in 2010 driven by low borrowing costs and the shortage of homes. Property values are due to rise by five percent and mortgage costs will cheapen as the Bank of England retains a its record low 0.5 percent key interest rate. CEBR have reduced their property price forecast from 6 percent after the tax on home purchases rose and cold weather damped demand for property. Average mortgage interest rates are expected to drop by around one percent by the start of 2011.

US based billionaire investor Warren Buffett, has backed Bank of England Governor Mervyn Jones previous comments by stating that said he doesn’t envy the winner of the UK general election, who will be faced with the need to make "politically very unpopular" decisions to cut the deficit. Speaking after the annual shareholder meeting of Berkshire Hathaway before a crowd of 40,000 , Mr Buffett warned the next occupant of No 10 to fear the bond market, which could turn against the UK if public spending is not brought back into balance over the long term.


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IMF calls upon governments to act on curbing the increasing power of banks

The International Monetary Fund (IMF) has stated that governments must act to curb the increasing power of banks in the aftermath of the financial crisis. The IMF has called for cooperation from governments to set out future financial regulatory reform agenda, whilst stressing that some of the "too-big-to-fail" institutions had been made even stronger by the financial crisis. The IMF went on to warn that the large government financed deficits run-up during the financial crisis could pose a risk of starting a second credit crunch.

Proposals from the IMF include imposing two new taxes on banks in order to raise funds to pay for potential future bailouts and to penalise excessive profit-making. UK Chancellor Alistair Darling was reported as having welcomed the proposal:


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Turkish Investment in Africa to Hit $1 Billion

Steps taken after the Turkish government declared 2005 the "Year of Africa" for foreign trade have so far proven fruitful, and the "Africa strategy" devised by the undersecretary for foreign trade has triggered an increasing interest in the continent, TUSKON reports:

As a consequence Turkish investments in Africa started climbing in a steadily increasing trend and are estimated to reach $1 billion in total by the end of this year.

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The Monetary Realist - It’s Not Just About

Financial panics are indeed dramatic and, for many private individuals and economic policymakers, traumatic. They are rarely of lasting significance to the fate of nations or their
currencies, however, as the prompt recovery of Korea, Mexico, and Russia from their travails a decade ago demonstrates—as indeed does the lack of any lasting impact from the United States’ closing of the “gold window” on the dollar’s standing or on U.S. economic performance, Adam S. Posen, the Deputy Director of the Peterson Institute for International Economics writes:


Though such calm is difficult to maintain while the United States experiences a panic in its many interlocking asset-backed securities markets, following years of large current
account deficits and a concurrent sell-off of the dollar against the euro, it would be a mistake to read too much into recent developments.

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Details of Economic Stimulus Package

President George W. Bush signed into law an economic stimulus package that is aimed at staving off a recession by offering tax rebates and incentives to businesses to invest, Reuters reports:
"Here are some details of the plan:
* The total package is worth about $168 billion over two years, roughly 1 percent of U.S. economic output, and will add directly to the U.S. federal deficit."
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Latest Articles
Big business finds a way to dodge income tax on dividends

U.K. property prices set to extend their recovery

IMF calls upon governments to act on curbing the increasing power of banks

Turkish Investment in Africa to Hit $1 Billion

The Monetary Realist - It’s Not Just About

Details of Economic Stimulus Package


Fiscal Study | Global Economy and International Politics : 2007 - 2010