Fears grow over UK's exposure to Dubai - papers

Fears are growing over Britain's exposure to the financial turmoil in the stricken Arab state of Dubai, reports the Daily Mail.

UK banks account for half the £60billion of global loans to the debt-laden emirate, new statistics show.

State-controlled giant Royal Bank of Scotland has helped lead the charge, provoking fears that taxpayers could be stung if the loans go unpaid. The Treasury has already injected £45.5billion into RBS, which became a watchword for reckless lending. Read more

Businesses and consumers remain wary about the economic outlook, amid signs the nascent recovery could easily be derailed.

The CBI's Service Sector Survey reported an 'unexpected fall in sales' for the last quarter.

In business services, which includes the legal and accountancy professions, 48% of firms reported a fall in profits. Read more

The end of the credit crunch is in sight, according to the EEF manufacturers' organisation, which also urged the government not to choke off the recovery by ending its economic stimulus programme.

The article in the Guardian says the proportion of companies reporting that borrowing has become more expensive has fallen to the lowest level since the beginning of the credit crunch, according to the EEF's survey.

Companies are also finding it easier to secure loans.

In a sign of the problems still facing the economy, the CBI says today that an unexpected dip in sales in the services industry cut profits. Volume and value in the sector, which covers everything from accountancy and marketing to pubs, clubs and travel, had been forecast to rise for the last quarter. Read more

The Daily Mail says families face being hit by Labour plans to freeze a planned rise in the inheritance tax threshold.

Alistair Darling is said to be considering ditching the policy of lifting people out of the inheritance tax net.

The Chancellor wants to use next week's pre-budget report to paint a grim picture of severe spending cutbacks over the next four years. Read more

The Times reports that the Central Bank of the United Arab Emirates is taking hard line towards Dubai and its debt problems.

The The fate of $65 billion of unfinished Dubai property projects was in the balance last night as Abu Dhabi and the Central Bank of the United Arab Emirates prepared to take a hard stance over bailing out the stricken Gulf state.

The UAE central bank intervened yesterday, setting up an emergency liquidity facility for lenders in the second-largest Arab economy. Its move was designed to head off a run on local banks when they re-open today after a four-day holiday.
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The Independent says the latest predictions from the Conference Board, an international network of leading business figures, suggest the next few years will see a dramatic acceleration in the shift of global economic power eastwards.

It believes that the sluggish growth in the established economies of North America, Europe and Japan will result in their share of global GDP shrinking from around half today to a third by 2016. In line with other international bodies, such as the IMF and the OECD, the Conference board sees global growth returning next year, after the worst downturn in three-quarters of a century. Read more