Mr David Cameron, the Prime Minister, and Mr Nick Clegg, the Deputy Prime Minister, rather oddly wrote a letter to the rest of the Cabinet. ‘Deficit reduction and continuing to ensure economic recovery is the most urgent issue facing Britain,’ they said. Mr George Osborne, the Chancellor of the Exchequer said that banks had an ‘obligation’ to increase their lending: ‘Every small and medium-sized company that I have visited in recent weeks has had some problem with their bank,’ he said. The profits of HSBC, which took no money from the government during the financial crisis, doubled for the first half of the year to £7 billion. Lloyds, 41 per cent of which is owned by the taxpayer, made £1.6 billion, compared to a £4 billion loss a year earlier. Northern Rock Asset Management, the ‘bad bank’ part of the old Northern Rock business, made profits of £350 million in the first six months of the year; Northern Rock plc, the ‘good bank’ arm, which holds savers’ deposits, made a loss of £143 million. Santander bought 318 branches of RBS. The value of Britain fell by £94 billion last year, according to the Office for National Statistics, which valued all the nation’s houses and infrastructure at £6,670 billion.
The Prime Minister welcomed President Asif Ali Zardari of Pakistan to London. A week earlier he had said in India: ‘We cannot tolerate in any sense the idea that this country is allowed to look both ways and is able, in any way, to promote the export of terror.’ A small protest in Karachi had carried a banner reading: ‘David Camroon the loos mouth.’ Mr Zardari said on the eve of his visit: ‘I believe that the international community, which Pakistan belongs to, is in the process of losing the war against the Taleban.’
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