Round-up: Recovery threatened by 'psychological scarring'

House prices will rise, workers are taxed more than they think, and the recovery is under threat from psychological scarring left by the financial crisis. Our round-up of the news from the nationals.

"Psychological scarring" in the wake of the financial crisis and a growing reluctance to take risks in financial markets can lead to over-pessimism and threatens to delay the economic recovery, a top Bank of England official has warned. Guardian MORE

The price of an average house will rise 14%over the next four years, reaching the highest ever recorded in Britain, a report will say today.

Analysts the Centre for Economics and Business Research predict the typical home will be worth more than £200,000 by 2015, up from its current £176,000, though this will still be below inflation. Daily Mail MORE

Workers in the highest tax brackets are paying as much as 66% on their earnings as they are hit by large income tax rates while losing out on valuable allowances, a report by a right-wing think tank published today suggests. Telegraph MORE

French regulators have failed in an attempt to extend the short-selling ban to major European stock market indices in a climbdown that will allow investors to continue to bet on further falls in financial stocks. FT MORE