OECD warns Britain risks 'debt spiral' - papers

Britain risks a "public debt spiral" unless the Government takes "drastic" action to slash its deficit, according to the Organisation for Economic Co-operation and Development.

OECD upgraded its forecast for growth for Britain to 1.2pc next year, and urged the government to get the budget deficit under control, reports the Telegraph.

The organisation says even if Britain cuts its deficit in line with other leading nations it will still be the world's most indebted rich country until 2017 and potentially beyond, casting serious doubt on its economic credibility.

The warning coincides with shock public finance statistics showing public borrowing in October of 88 times more than the same month last year, increasing the likelihood the Chancellor will miss his £175bn borrowing forecast this year.

The double blow will embarrass Downing Street ahead of next month's pre-Budget report and only 24 hours after it pledged to create a Bill to halve the deficit within four years and to reduce debt every year for the coming decade. Full story..

JAPAN has officially plunged back into a state of deflation with forecasters warning of falling prices and a potentially catastrophic collision between the Finance Ministry and the Central Bank.

The Japanese government is readying itself for the worse case scenario of a "double-dip" recession according to today's report, a disaster most economists believe can be avoided but only if China and Asia retain their recovery momentum, , reports the Times.

Japan declared the "mild deflationary phase" after a week of fierce debate within the ruling Democratic Party of Japan over whether to come clean about the dire truth of the economic situation in the world's second biggest economy.

Many private sector economists have argued since the beginning of the year prices were falling systemically.

The psychological difficulty for Japan of admitting to deflation, though, is considerable: the economy only officially exited deflation in 2006 after nearly a decade in its clutches. Full story...

NATIONWIDE Building Society has reported a big slump in profits and delivered a gloomy forecast for the UK economy and the housing market, reports the BBC.
Pre-tax profits for the six months to the end of September were £143m, down 62% on the £374m reported a year ago.
The company blamed low interest rates and the "dramatic fall" in commercial property prices for the slump.
It also said the recovery would be slow and rising unemployment would put downward pressure on house prices. Full story...

SANTANDER - the bank group which owns Abbey, Bradford & Bingley and Alliance & Leciester - is launching a no-fee current account, with no charges for overdraft use or access to foreign ATMs, reports The Times.

However, the account, called the Santander Zero Current Account, will only be available to customers who take out a mortgage with Santander, or already have one with Abbey.

Customers at Abbey and Bradford & Bingley will be able to take advantage of the offer when the two banks rebrand as Santander from January 2010. Those with Alliance & Leicester will have to wait until the the bank rebrands later in the year. Full story...

A RECORD CRASH in tax receipts and spiralling public spending has left Britain heading for the largest budget deficit of any leading nation, reports Mail Online.

Figures yesterday revealed the Government borrowed £11.4bn in October - an astonishing 88 times the amount for the same month last year. Full story...