Tuesday newspaper round-up: Sub-prime, banking reform, Stagecoach, Facebook

Fears about a crisis in sub-prime lending grew yesterday after leading City analysts warned that borrowers have limited flexibility to handle the rising cost of living. Household budgets are under sustained pressure from falling real wages, Liberum told clients. The warning comes amid growing concerns over reckless lending, particularly in the car market. - The Times

Any attempt to unwind the regulatory reforms to banking made since the financial crisis would damage global growth, Mark Carney has warned. Speaking in his capacity as chairman of the international Financial Stability Board, the governor of the Bank of England launched a thinly veiled attack on the White House for threatening to oppose certain reforms. - The Times

British manufacturers are fast approaching a “tipping point” where a lack of certainty over the direction of Brexit negotiations will force them to make painful cuts whatever the outcome, they say. The stark warning, due to be delivered on Tuesday by Engineering Employers’ Federation chief executive Terry Scuoler, comes as business leaders begin a week of crunch meetings with government ministers to try to force the pace of thinking over how to ensure economic stability when Britain leaves the European Union. - Guardian

The most dovish member of the Bank of England’s Monetary Policy Committee is sticking to his view that now is not the time to raise rates, despite a growing sense in financial markets that the central bank is gearing up to increase the cost of borrowing. In an interview with The Independent, Gertjan Vlieghe, an external member of the MPC, said: "This is an environment where a premature hike would be a bigger mistake than one that turns out to be slightly late".

Labour has accused the government of betraying millions of households after the energy regulator published proposals to extend a price cap for vulnerable customers that fell well short of the Conservatives’ election promises. Theresa May had pledged a price cap on energy bills for 17m families during the general election campaign, but the policy was missing from the Queen’s speech. - Guardian

Ministers are pushing to delay or abandon a series of tax cuts to fund an increase in public sector pay. Philip Hammond, the chancellor, is being urged to scrap commitments to reduce corporation tax and raise the thresholds for the personal allowance and the 40 per cent income tax rate. - The Times

The teaching profession has seen average pay fall by £3 an hour in real terms and police officers by £2 an hour, while the wages of nurses have stagnated during a decade of public sector salary freezes, a new report for the government’s pay advisers has found. The academic analysis was quietly published on Monday before a crucial cabinet meeting where Theresa May and the chancellor, Philip Hammond, are likely to face pressure from colleagues to agree a timetable for easing seven years of public sector pay restraint. - Guardian

The cost faced by UK banks of restructuring operations because of Brexit could be as high as €15bn (£13.1bn) and is likely to put a “material strain” on those institutions' earnings over the coming years, according to a new study. Research commissioned by the Association for Financial Markets in Europe and conducted by Boston Consulting Group and Clifford Chance, argues that lenders operating with UK bank licences will most likely have to create subsidiaries within the remaining countries of the EU in order to keep operating as they have done up until now in the aftermath of the split. - Independent

Investors appear to be losing faith in the precious metals sector after outflows from the funds that track the industry hit a record high. Global outflows from exchange-traded funds (ETFs) that invest in miners of gold, silver and platinum hit $4.4bn (£3.4bn) in the second quarter of the year – the largest on record, according to data from IHS Markit. The sum is the biggest since the financial crisis and dwarfs the second largest on record, an outflow of $800m in the fourth quarter of 2015. - Telegraph

Four former Barclays directors, including ex-chief executive John Varley, have been released on bail after they made their first court appearance over the criminal charges they face for the actions they took during the financial crisis. All four must next appear at Southwark Crown Court on July 17. - Telegraph

New drugs approved for sale in Europe after Brexit would be automatically licensed in the UK under new plans. In the first “sector-specific” announcement on Brexit, Jeremy Hunt, the health secretary, revealed that the government wants to continue working with the European Medicines Agency. - The Times

Transport company Stagecoach has won £2.5m in compensation from the Government after the completion date for the Sheffield to Rotherham tram-train project, for which it is supplying vehicles, was pushed back multiple times. The National Audit Office (NAO), in a report released on Tuesday, said Stagecoach had claimed "prologation costs" and loss of revenue for the two-and-a-half-year delay of the government-sponsored project. - Telegraph

The Labour leadership is creating passenger misery on one of Britain’s biggest rail networks by “egging on” unions to take strike action, according to the transport secretary. Chris Grayling accused John McDonnell, the shadow chancellor, of “abusing” his connections with unions to create political strife. - The Times

Facebook could be next in the sights of the competition authorities after Google’s record €2.4 billion fine from the European Commission. In a case of international significance, Germany’s cartel office is investigating claims that the social media and publishing company forces users to sign away their privacy rights for fear of social isolation. - The Times

The NHS illegally handed Google the data of more than one and a half million people, the UK's data watchdog has found. The Royal Free NHS Foundation Trust in London "failed" to comply with data protection rules when it gave 1.6 million patient records to Google-owned artificial intelligence company DeepMind for a trial, the Information Commissioner's Office has ruled as it ordered tighter guidelines. - Telegraph

Elon Musk has been promising to change the motor world for more than a decade and now, finally, he may be on the cusp of achieving his dream. The chief executive of Tesla, the electric car company, said yesterday that the first Model 3 would roll off the production line this Friday, two weeks ahead of schedule. - The Times