Sunday newspaper round-up: Banks, Asos, UK defence spending

(Sharecast News) - The Chancellor, Jeremy Hunt, may consider a windfall tax on banks that could raise as much as £90bn. Hunt has indicated that all options to balance the books are under review and he urgently needs to restore the UK's credibility. Just during the previous week, Bank of England deputy governor, Paul Tucker, urged the government to study the possibility of reducing the interest paid on some of the deposits of lenders with the bank. The potential savings from such a move could amount to £60-90bn. - Financial Mail on Sunday A leading credit insurer has cut cover for Asos's suppliers, stoking fears of a cash crunch. Over recent weeks, Allianz Trade, has shrunk its insurance cover for the fashion retailer's suppliers by more than half. The risk is that without such cover suppliers might tend to demand payment from Asos upfront, hitting its cashflow. That would be on top of ructions in supply chains that have pushed its costs higher, resulted in long delays to deliveries and shoppers shifted back towards physical stores. Nevertheless, the company has said that the cut occurred towards the end of August with no negative impact on its relationships with suppliers. - Sunday Times

The Prime Minister's plans to boost the UK's defence spending to 3 per cent of gross domestic product now runs the risk of being torn up, alongside much of the remainder of her economic programmes. Furthermore, the US dollar's strength is hardly helping matters, as spending in pounds no longer goes as far as it once did. According to Francis Tusa, a defence analyst, just in 2023 current UK defence programmes will cost between £800m-1.2bn more on account of the weaker currency. A spokesperson for the Ministry of Defence explained that under a fifth of the current procurement budget was spent on dollar denominated items with the figure expected to reduce to single figures in two years. - Sunday Telegraph

Hargreaves Lansdown is facing a potentially costly battle in the High Court over its controversial involvement in the unravelling of the Woodford Equity Income fund. Dealings in the fund were suspended roughly three years before after the £3.8bn fund was unable to meet a redemption request from Kent County Council for £238m. The claim was brought on by litigation specialist RGL Management on behalf og 3,200 investors who were caught up in the debacle. It is but the first stage of a group action that might result in financial redress for victims of the fund. - The Financial Mail on Sunday

A third Conservative MP, Jamie Wallis, has broken ranks called for the Prime Minister to step down. The MP said that Liz Truss had "undermined Britain's economic credibility" and hurt the party "irreparably". In his opinion, the PM no longer held the confidence of the country, arguing that she had committed "very basic and avoidable errors". Wallis thus joined two other MPs, Andrew Bridgen and Crispin Blunt, who had previously also urged Truss to resign. - Sunday Telegraph