Bank report to study pounds 36bn windfall effect

The Bank of England announced yesterday it is to commission a special report on the effect of windfall payments from converting building societies, as two more companies announced soaring sales boosted by de-mutualisation spending.

Mervyn King, deputy governor of the Bank of England, said the bank estimated the total windfalls to be worth pounds 36bn and that its report on the economic effects should be completed "in a month or so".

The comments came as Airtours, Britain's second largest tour operator, said a combination of the building society windfalls and increased buying power of sterling had boosted its summer bookings both for 1997 and 1998.

Separately, Rosebys, the furnishings group credited the windfall factor for soaring sales of beds. In the five weeks from 30 June sales at its Bensons Beds subsidiary were 40 per cent up on a like-for-like basis.

Tim Byrne, Airtours deputy finance director, said: "There can be no doubt that pounds 35bn-pounds 36bn of cash sloshing around the economy must have had an effect, although its very difficult to measure."

Harry Coe, Airtours deputy chief executive, expressed caution on the windfall factor, saying: "We would be disappointed if we didn't get some of that money but it is difficult for us to say how much of our increased bookings are being made for that reason."

Rosebys' chief executive, Mike Rosenblatt, said the dramatic increase in sales was not sustainable and that the recent spate of interest rate rises would start to dampen growth: "I think towards the end of the year those interest rate rises will start to make themselves felt and that it will take the edge off the boom that we are currently enjoying."

Airtours third-quarter results to the end of June showed a 24 per cent increase in profits to pounds 24m. Summer 1997 bookings within the UK tour operating business are 19 per cent ahead of the previous year, with sales of holidays to Turkey, the Western Mediterranean and Florida rising strongly at the expense of Greece. Spain is also proving popular due to the sharp rise in the value of the pound against the peseta. Strong demand for late bookings has led to a 15-20 per cent increase in prices for last-minute holidays.

Bookings for winter 1997-98 are 25 per cent up, with Mr Coe admitting that the windfall payments were probably a factor.

Airtours said the strength of sterling was lowering its costs, which it was passing on to consumers. This would be balanced against the impact of currency factors on overseas profits translation. Airtours shares closed 34p lower at 1195p.

Rosebys reported a 111 per cent increase in interim pre-tax profits to pounds 3.2m. Group like-for- like sales across its Benson Beds, Knightingales and Rexmore chains are 18 per cent up in current trading.

PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
News
i100
News
people
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
arts + entsSam Smith’s Mobo triumph is just the latest example of a trend
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker