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Equilibrium's Finance and Investment News Roundup

Our finance and investment news roundup this week looks at new Bank of England plans requiring banks to hold more capital and a rise for the FTSE 100 after success for the banking sector when facing its latest stress tests, as well as an apparent preference for online shopping over the high street across the Black Friday weekend, and a slowing of UK house price growth in November.

 

Banks 'to hold up to £10b more capital'

Banks in the UK will hold up to £10 billion more capital following the announcement of new plans by the Bank of England (BoE). The central bank, although not demanding immediate action, explained that the nation's credit conditions have improved significantly since the financial crisis.

The BoE also stated that banks now require an additional buffer to help safeguard against risks associated with emerging markets, as well as against the vulnerability of asset prices to any significant rise in interest rates.

Mark Carney, Governor of the BoE, noted, however, that the bank wished to refrain from forcing banks to hold too much capital because the increased capital costs are ultimately passed on to borrowers. 

Bank stress test pass leads to FTSE 100 climb

The FTSE 100 climbed on Tuesday after it emerged that the UK banking sector had fared well during stress tests carried out by the Bank of England. Britain's top share index was up 0.5% at 6,388.72 in early morning trading, with financial stocks adding 17 points to a 32.63 point advance.

The results of the stress tests also led to increases of between 1.4% and 3% for Standard Chartered, HSBC, Royal Bank of Scotland, Lloyds and Barclays. Both Standard Chartered and RBS were required to make adjustments during the testing process to ensure they passed, but no such action was required of the other banks.

Lenders were assured by BoE Governor Mark Carney that there was no new capital regulation on the horizon, despite explaining to them his plans requiring them to hold extra capital. 

Black Friday figures 'suggest move to online spending'

Consumers appear to be increasingly favouring online purchases ahead of buying on the high street, figures from the Black Friday weekend have suggested. While Black Friday promotions last year made headlines as shoppers raced and even fought for the best deals, physical queues this year were a lot shorter as many buyers preferred to take advantage of promotions online.

Retail group IMRG and consultants Experian both said on Friday that online sales were set to pass the £1 billion mark in a single day - the first time they have ever seen this happen. 

November 'saw UK house price growth slowdown'

House price growth slowed down in the UK in November, new figures from Nationwide have shown. According to the research, prices were 3.7% higher for the month than a year earlier, but this marked a reduction on the annual 3.9% climb seen in October.

The movement, which saw house prices rise 0.1% in November compared to a month earlier, means the average UK property cost now stands at £196,305.

The survey also found that, on the whole, recent house price growth has been in line with earnings growth over the longer term.