Posts tagged "London"

Letters: ‘Orwellian’ changes to legal aid provision

As a practising member of the criminal bar, I am horrified at the proposed changes to the provision of legal aid, currently undergoing a so called “consultation period” by the Ministry of Justice (Editorial, 22 May), albeit the justice minister refuses to meet the chairman of the Criminal Bar Association. It is clear that the truncated consultation period is no more than window dressing. Chris Grayling is disinterested in any contribution from the profession. It is beyond doubt that the tendering out of legal aid to private business will herald a decline in standards in a legal system that has been a model of justice for centuries. There is no provision whatsoever in the proposals to ensure standards are maintained when individuals are unable to choose their representation. Once in possession of a contract, a company’s clients will be guaranteed, irrespective of the quality of service. The idea that this service would be properly provided by employees of a profit-driven company, whose lowest bid has rewarded them with the responsibility for the representation of citizens accused of crime by the state, is dubious. The prospect that the same company could be responsible for housing prisoners, transporting them, and representing them is, frankly, Orwellian.
Rebecca Herbert
East Langton, Leicestershire

• You report dissidents in Iran “have been denied adequate legal representation” (22 May). In the UK we are a long way from Iran’s repressive regime, but the present government’s proposals on reforming legal aid to allow Eddie Stobart and the like to turn a profit by supplying third-rate representation to people who are (to use Grayling’s analysis) “too thick to know better”, will have us catching up with the regime in Tehran in no time. Whatever one’s view of defence lawyers, the importance of ensuring that only those proved to the satisfaction of their peers are found guilty, is a matter of social, democratic and constitutional importance to us all.
Ben Summers
Legal aid barrister, London

News story: Woolwich incident – government response

I am the beneficiary of the house-price boom. My children are its victims | Suzanne Moore

When the haves get worried not only about their futures but also those of their kids, the have-nots are really doomed

If all property is theft then I am a colossal thief. I sold my house via Foxtons. Thanks, Nick! See, I know how to get you onside; boasting of my palatial Hackney residence! The truth is that like anyone who bought property 20 years ago in London and tarted it up and just kind of lived in it, the profit made has nothing to do with my canniness or financial nous. It’s just that house prices have soared. I am the beneficiary of that. My children are its victims.

The very mention of property will send some insane. I should pretend, perhaps, that I live in a paper bag and the zillions of pounds my house was sold for was somehow due to me. But I don’t pretend at all.

I got lucky. Having been paid to leave my council flat and therefore being able to be part of a shared-ownership scheme was the game-changer for me.

Moving from a flat to a house changed my life because when you have kids, being able to get away from them is crucial. Indeed, one of the reasons I have now moved to a smaller property is so that they may get away from me. They have never asked me for anything but it is obvious that, with their loans and high rents, even with jobs they will not be able to buy in the city they grew up in, without some help.

You can denounce me as over-privileged because I bought a house, or we can stop this divide and rule and see that housing is at the root of the so-called generational conflict.

Reflexively, I find myself revolted at conversations about inheritance. That plus any discussion about kitchen tiles is, to me, the ultimate sign that I have crossed the floor into the full inferno of the bourgeoisie. Pierre-Joseph Proudhon said that property was always about the exploitation of the weak by the strong. Apparently, Proudhon had not encountered estate agents. Now it’s just “lifestyle”. I never heard the word ”inheritance” when I was growing up in the proverbial shoe box. My mum did indeed make a will but, being my mum, she forgot to sign it so she died intestate and there wasn’t much left anyway other than a fur coat and some er … “objets“.

It was only when I moved to London that I heard people talking about what Mummy and Daddy would leave them, what would one day be theirs. Being middle class seemed to me both morbid and tacky. You see, class consciousness is never learned theoretically, it is a knot in the stomach that forms at some infernal dinner party. It gives you heartburn as you regurgitate the indigestible facts of life: you must live in such a way so that when you die your children get the same stuff – or preferably more stuff – than you had. This is your raison d’etre.

Right now, though, many young people can’t get much stuff at all. What property can a young teacher in central London afford? We are still surrounded by TV and print property porn as tacky as any Kardashian show, yet this is somehow considered respectable.

One of the reasons for my “downsizing” is another facet of the generational divide. My pension fund has collapsed. So I reach for a buy-to-let property – yes, the insane spiral of property madness – that was to provide my pension, but must now, I feel, go towards my children. Therefore I have to work for ever, which is as bad for you as it is for me.

Not only had I imagined I would be lying around somewhere temperate on a chaise longue smoking opium, but the new, fresh hell is this realisation that I am a revolting bourgeois.

Those without property, suffering the fallout of bedroom tax and benefit caps – all of Generation Rent – are, of course, in a much worse state. But politically we must join the dots. We are all in it together now that the fantasy of growth has stalled. When the haves – people like me – get worried not only about their own futures but those of their kids, the have–nots are really doomed. But housing and Labour must see this: it is the cross–generational, cross-class issue that we have to focus on. Still, like most bad things, this crisis is my fault as I read on Wednesday in a headline in the Times that said: “Flighty older women to blame ‘for pushing up house prices’.”

If property is theft, though, do I want to live in a tent? My accountant always asks this patiently when I explain my house is worth a fair bit.

Across the pond, of course, actual tent cities have sprung up around places such as Detroit. When “home ownership” is elevated to some weird philosophical principle, as it still is, even though we have no idea how to maintain or sustain growth, something crazy is happening. Possession becomes more important than places for people to live in. Home is not where the heart is but where interest rates and inheritance tax are. As everyone says, we need to build more homes. We also need to cap private rents. We need to do this for everyone’s sake.

Otherwise we will remain divided even while we are all living in the same house.

Comments will be opened on this article on Thursday morning.

Q&A with a London derivatives trader | Joris Luyendijk

Joris spoke to this trader about the complex world of derivatives and the more relaxed culture in continental Europe. Join him from 7pm in the thread

‘The culture is so different. We try to build relationships with clients who invest money in real companies, for the long term’. This comes from a recent interviewee who specialised in shares (equity) and who was lamenting the rise of derivatives – financial products such as options, swaps and futures that can be almost infinitely more complex than simple shares. Today’s interviewee is one such derivatives trader:

“Fifteen years ago this job was completely different. Earlier practitioners would be standing up for 10 hours in the ‘pit’, estimating option prices by plugging numbers into a basic calculator (big fat finger error risk!), shouting and waving hand signals. These days you sit in front of many computer screens, clicking and updating code. Lunch would occasionally be my left hand drinking soup and my right hand on the mouse. Trading options is ideal for someone who likes being in front of a screen.”

News programmes continue to illustrate financial news with evocative footage of shouting men in a trading pit. But almost all of those have gone. This is how the interviewee’s day starts:

“I switch on my seven screens. There are many programs to log into. I sort each data feed to update me preferentially on news in the underlying names I trade and on macro developments. I ensure my connections to all relevant exchanges are functioning. I calculate hedge limits and input them into the order book. I make sure all this is done before 8.45am, as the market opens at 9am. At 9.01am there can be some juicy trades – you want to be fast.”

Equally interesting to see is just how mathematical trading has become. If you’re an outsider to finance like me, or you are working in an area of finance far removed from derivatives trading, you are unlikely to follow everything the interviewee says about his work. Still it’s worth skimming if only to get a sense how far removed this kind of work is from the old idea of a market where buyers and sellers physically meet to haggle over the price of something tangible like a cow or a loaf of bread. One sentence to get you in the mood:

“Firstly I look at option ‘greeks’ (first-order derivatives such as ‘delta’, ‘vega’, ‘theta’ and ‘rho’ and then second-order derivatives like ‘gamma’, ‘vanna’ and ‘charm’). When you’re trading ‘vol’ (the annualised standard deviation of returns of the underlying instrument) you’re hypothesising on how much an instrument is going to move. You want to optimise your various ratios (gamma/theta) at different strikes to ensure that you have bought and sold optionality at good levels.”

There is much more good stuff in the full interview, for example about being a migrant worker from the third world, and this observation about the difference between London and the smaller financial centre in continental Europe he used to work in:

“Seniors [in continental Europe] don’t make juniors get food orders. No need for pinstripes. It was completely natural for the secretary to join us for a drink. And it wasn’t like London where sometimes you can’t take your full annual leave without worrying what signal that may send out.”

Or look at this:

“Some derivatives traders take nearly three hours every day to calculate the value of their positions (…) You’re asking how a risk manager would oversee a dozen traders like that, each in his own little field. Well, as an options trader you are your own risk manager – particularly at a smaller firm.”

• Please read the interview in full if you are thinking about leaving a comment. The interviewee will be joining the discussion after 7pm London time today.

Read on

• This banking blog features interviews with more than 80 insiders across the world of finance. Here is a guide to help you find your way. For insiders there is this index of interviewees ranked by activity. Are you by any chance working in human resources in a bank, or are you a trader in government bonds? Please help this blog: jlbankingblog@gmail.com. Anonymity guaranteed.

• This recruiter has some incisive things to say about the “post-national” financial workers, such as today’s interviewee, that the recruiter works with: “Solidarity for the new global elite is not geography-based or tied up with a state.”

• This derivatives trader does work at a major bank: “The trouble is, regulators are idiots. I am sorry to put it so bluntly but you can’t expect it any other way.”

Derivatives trader: ‘Trading can take over your life – but only if you let it’ | Joris Luyendijk

A migrant derivatives trader working in London talks of how he trades on volatility to buy himself financial security

• This monologue is part of a series in which people across the financial sector speak to Joris Luyendijk about their working lives

He describes himself as “a third-world migrant in his early 20s from near the equator”. He worked as a derivatives trader in a small European country and now trades for a big institution in London after completing a quantitative degree in continental Europe.

“It’s funny. I am the current public bogeyman – not only am I a migrant, but I am a “banker” (deliberate use of inverted commas) too! Ironically, I can buy financial security by undertaking a job dealing with understanding insecurity and uncertainty. That’s a trade I am prepared to make.

“Fifteen years ago this job was completely different. Earlier practitioners would be standing up for ten hours in the “pit”, estimating option prices by plugging numbers into a basic calculator (big fat finger error risk!), shouting and waving hand signals. These days you sit in front of many computer screens, clicking and updating code. Lunch would occasionally be my left hand drinking soup and my right hand on the mouse. Trading options is ideal for someone who likes being in front of a screen.

“When I was working as a derivatives trader in a small European country my routine went like this: I’d come into the office just before 8am and switch on my seven screens. There are many programs to log into. I sort each data feed to update me preferentially on news in the underlying names I trade and on macro developments. I ensure my connections to all relevant exchanges are functioning. I calculate hedge limits and input them into the order book. I make sure all this is done before 8.45am, as the market opens at 9am. At 9.01am there can be some juicy trades – you want to be fast. I would leave around 6.30pm. Weekends were free.

“It doesn’t matter how much of a mathematical genius you are – when you first come in the challenge is learning how all the systems work. It’s more about systems now than ever before.

“I could trade options without knowing the exact proofs of their pricing. The model does that for you. It’s like trading cars. You don’t need to know every last detail of how, say, the piston works. What the firm wants is someone quick, assertive, mathematically competent, prepared to optimise reward/risk ratios.

“Some derivatives traders take nearly three hours every day to calculate the value of their positions and their P&L – I saw it in inflation instruments, but I don’t know exactly how all of them work. There may be “options on options”, “path-dependent options”, “correlation products” and much more.

“You’re asking how a risk manager would oversee a dozen traders like that, each in his own field. Well, as an options trader you are your own risk manager – particularly at a smaller firm. I wasn’t at a company with a big retail division attached to it. If we screw up then we take the hit (as we should!), as do the (wealthy) investors in the firm. No bailouts for us. In general the more complex and opaque the product, the more a trader needs to act as a risk manager. He may be one of the few people who fully understand the risks, though I think larger institutions have been bulking up with sharp risk managers of late, who don’t just hold their tongues.

“You don’t see people doing this work their whole lives. Trading can take over your life – but only if you let it! It can be surprisingly tiring staring at a screen intently for hours, clicking every few seconds. But being a fisherman in Comoros, a paramedic in Eritrea or a lumberjack in Zaire must be way more tiring, surely?

“Some people in finance can exaggerate a lot. I want to emphasise that to the readers. It’s not that stressful! I had my evenings free. I could relax. I could play sport. Sure – I work hard, but so do many billions of people and for far less pay too. I could basically manage my housework myself too, so it couldn’t have been that draining. Most important to me as a migrant worker was that I could save over 50% of my net salary – this is really lucky coming from a continent where 25% of people in my age group are unemployed and even more have no savings. I am very fortunate.

“Things seem very different in London, where finance is more of a lifestyle and a mentality. In northern Europe (possibly excluding Frankfurt) working in finance did not set you apart from society.

“In London if you don’t join your mates for a drink after work, it can be seen as a signal of disinterest. There’s a big culture of spending and splashing out. And job security is probably worse. Where I worked in northern Europe, people conceal their wealth. Ostentatious behaviour is socially unacceptable. There isn’t any discrimination towards the back office. Seniors don’t make juniors get food orders. No need for pinstripes. “It was completely natural for the secretary to join us for a drink. And it wasn’t like London where sometimes you can’t take your full annual leave without worrying what signal that may send out.

“From a lifestyle perspective I believe you have to be flexible. As migrants we are ideally placed to do that. Big institutions are still prepared to offer us work visa sponsorship. If I stayed in northern Europe for too long I might be pigeonholed. You can live a comfortable life. But at some point in your career you tend to gravitate to one of the “hubs” (London, New York, Hong Kong, Singapore).

“I just can’t plan my career more than two years ahead. The industry can change quickly anyway – for example, suppose you were trading in Sweden before the financial transactions tax came in. After it was extended in 1989 to cover a wider range of instruments, 98% of volumes in bond derivatives in Stockholm went elsewhere. Imagine you had been trading such products, but had married a local woman who insisted on staying put. What do you do? Will you get another similar job in a niche market if you aren’t prepared to migrate? Will you even be the first choice to be hired when volumes come back? Now imagine you are a migrant – probably a single man – no wife, no kids, no house, just savings. It’s easier for us, isn’t it?

“If you’re mid-level and you get laid off, it can be very difficult to get back in. Some financiers in London over-leverage themselves and save virtually nothing, despite their high salaries.

“I don’t understand how they can’t apply the same rules of risk management to their personal lives as they do in their professional lives. How could they be so over-confident?

I don’t think the state steps in to help that much in the Anglo-Saxon world compared to continental Europe (I’m talking about stepping in to help individuals here rather than banks!) Many migrants are from nations where there is no welfare state, so we plan for redundancy. We price it in.

“Let’s dig a little deeper into my job. There is very little information asymmetry anymore. Everyone has the same Bloomberg terminal, same market feed and (nearly) the same variant of the “Black-Scholes” model for pricing options. Making small margins on each trade is critical.

“The “algos” or high frequency computers will always trade faster than a human can. Most of your systems are executing the quick, “scalp” trades for you – your human input is how you programme it to hedge your exposure, and at what level you choose to take on a block trade.

“If you are a market-maker you are obliged to continually make live quotes in a pre-specified range of options, over a range of strikes and expirations. In return for providing this liquidity we can receive a rebate from the exchange.

“Trading options is a reductionist activity: you condense the underlying instrument’s price, the strike (exercise level), contract duration, prevailing market interest rates, stock borrowing rates, dividend expectations and volatility into two numbers – your bid price (where you are prepared to buy at) and your offer price (where you are prepared to sell at). The first three inputs I mentioned are all known – it’s only really the volatility you’re that unsure of.

“That’s essentially what we’re trading – volatility, hence our name – “vol” traders. You want to get as big a spread as possible on each trade – but if you quote too wide your prices won’t be competitive and nobody will trade with you. You need to find a balance between getting execution and minimising your adverse selection probability (that’s your chance of being “picked off” when the market moves uni-directionally).

“There are lots of parameters you need to monitor, and thus lots of ways you can make (and lose) money. Firstly I look at option “greeks” (first-order derivatives such as “delta”, “vega”, “theta” and “rho” and then second-order derivatives like “gamma”, “vanna” and “charm”). When you’re trading “vol” (the annualised standard deviation of returns of the underlying instrument) you’re hypothesising how much an instrument is going to move. You want to optimise your various ratios (gamma/theta) at different strikes to ensure that you have bought and sold optionality at good levels.

“Secondly, I want to make relative value trades between components in the same index or in the same business sector: eg how is volatility priced at the 25% delta put option in this French oil company versus the 25% downside in that Spanish oil company? Does it seem fair? Where has the spread been historically? How divergent are the skews in the volatility smile? How quickly have I noticed this? Can I trade? Have I been fast enough in identifying an anomaly and monetising it? If and when I do, it is back to dynamic hedging, responding to broker requests from our sales traders, coding and repricing in line with new market developments. Depending on how fast your systems are you can implement volatility arbitrage strategies too. It’s like playing Gran Turismo but your gear changes on the controls are manual. Not automatic.

“Vanilla” options are contracts giving you the right (but not obligation) to buy (call) or sell (put) an underlying stock, index future, commodity future or bond future at a particular level and at a particular (series of) moment(s). When the duration of an option contract runs out, it “expires”. When that particular ‘expiration’ moment arrives, it’s incredibly tense. One evening every month I’d be like: “Don’t bother me because I’ll just ignore you.” Imagine having to analyse between seven and ten names between 5.30pm and 5.35pm and ensure that you hedge your “delta” exposure on each one.

Those five minutes are the auction, where market participants determine the closing price. That affects if an option is “in the money” or “out of the money” – ie whether it will be exercised or not.

“Probably the most turbulent time was over the summer of 2011 when it was believed that Greece might default. For three days I just reserved one of my screens to show televised footage of Greek parliamentary votes – that was the market barometer at the time.

“You only saw buyers on the screens – people were too afraid to sell. But I am required to quote prices. I have to react fast enough to keep an offer price at a safe enough level. At times like that it’s not about stocks anymore – what moves markets is macro news. All it takes is for the likes of Ben Bernanke (US Federal Reserve chairman) or Mario Draghi (ECB president) to be a little bit hesitant.

“Sometimes there’s a deep sense of powerlessness. Suppose I have a short gamma position (ie I’ve sold volatility) in an airline company. That company issues a profit warning at 8.58am and the options market only opens at 9.01am. I know that a profit warning means the price will dive (in general, the smaller the market capitaliaation, the bigger the drop), but there’s nothing I can do in those three minutes but re-price my options, my term structure and put in some respectable bids so I can buy back option premium. Oh – and I need to sell some stocks fast to minimise the size of my “long delta” position I get from being short on options.”

• To comment on this interview, please visit the accompanying blogpost

Woolwich attack: meat cleaver, knife and jihadist claims filmed on mobile

•?British soldier dead in suspected terror attack in London
•?Knife attack near barracks ‘an eye for an eye’, says suspect
•?Killing in street is ‘absolutely sickening’ says prime minister

A man suspected of staging a terrorist attack that left a British soldier dead near a military barracks in London, was caught on camera clutching a meat cleaver and knife in hands apparently covered in the blood of his victim, as he justified the violence as part of a jihadist-inspired fight against the west.

The incident happened in broad daylight, 400 metres from the perimeter of the Royal Artillery barracks, in Woolwich, south-east London, sparking a terrorist alert that saw the government crisis committee Cobra convene in emergency session. Hours later, David Cameron described what had occurred as “an absolutely sickening attack”.

Witnesses said a man was hacked at by two assailants with weapons including a machete in horrific scenes, carrying strong echoes of attacks abroad, at about 2.20pm. It is understood that the victim was a soldier, although neither his identity nor profession was confirmed last night.

The two men remained on the scene, until armed police arrived up to 20 minutes later. They were shot and apprehended by armed officers and taken to two separate hospitals where they were being treated for their injuries under armed guard in the aftermath of the first al-Qaida inspired attack to claim a life on British soil since the 7 July bombings in London in 2005.

As counter-terrorism officials raced to work out if the incident was a random, macabre event or the start of a trend, astonishing footage emerged which explained why the government was so quick to treat it as a terrorist attack.

In mobile phone video footage first broadcast by ITV News, one of the suspects was seen brandishing a cleaver and a knife. With the body of the victim lying yards away, the man said: “We swear by almighty Allah we will never stop fighting you. The only reason we have done this is because Muslims are dying every day. This British soldier is an eye for an eye, a tooth for a tooth.”

Speaking in a British accent, the man said: “We must fight them. I apologise that women had to witness this today. But in our land our women have to see the same. You people will never be safe. Remove your government, they don’t care about you.”

The rhetoric is reminiscent of that used in al-Qaida-influenced propaganda, in particular the reference to “our land” – phraseology used by violent jihadists to describe Muslim territory being despoiled by western soldiers. In the footage, the man then walks away and talks to another suspected attacker, pictures of whom were also circulating.

People spoke of attempts made by some passers by to stop the attackers. One of the assailants reportedly danced near the body, lying in the street, and then approached bus passengers, asking people to take his photograph.

There were unconfirmed reports that the attackers may have had a gun and raised it, possibly even fired it as armed police arrived. Graham Wilders, a witness, said: “I walked back up there and the tall black bloke had changed the gun to the other guy and he had two meat cleavers in his hand.

“And the response police turned up and he’s ran towards them with meat cleavers before I could even get out of the car so they shot him. And then the other one lifts the gun up and they shot him as well.”

Later a photograph surfaced of a second potential suspect holding a bloody knife.

One witness, identified as James Heneghan, said he and his partner saw two black men attack a young man aged around 20 in a Help for Heroes T-shirt with kitchen knives like he was “a piece of meat”.

“They were hacking at this poor guy, literally,” he told LBC radio. “They were hacking at him, chopping him, cutting him.”

The barracks is home to the Princess of Wales regiment and the King’s Troop, which is a ceremonial unit that relocated to Woolwich last year. One source suggested the victim had been returning to the barracks after attending an army recruitment event in central London.

David Cameron, in Paris for talks with the French president, François Hollande, described the killing as “truly shocking” and said he had asked the home secretary, Theresa May, to chair a meeting of Cobra, the government’s emergency committee. He said Britain had faced terror attacks before and added: “We will never buckle in the face of it.”

May said she had been briefed by the director general of MI5, Andrew Parker, on the “sickening and barbaric” incident. The terrorism threat level remains at substantial, meaning an attack is a strong possibility. The threat level is determined by the Joint Terrorism Analysis Centre, Jtac. The attack, if confirmed to be terrorist, exposes a gap in efforts by police and the domestic security service MI5 to keep track of potential violent extremists.

It was a new style of terrorist attack in Britain, and reminiscent of a past and disrupted plot by violent jihadists in Birmingham in 2007 to kidnap and behead a British Muslim soldier. It is believed the person died after suffering knife injuries, possibly around the head area.

David Dixon, headteacher of nearby Musgrave school, said he heard gunshots and locked the school down: “I saw the body lying in the road. We locked the gates, we locked everything down to make sure the children were safe inside …we kept them safe.”

Muslim community leaders and law enforcement sources said they were alert to the danger of a violent backlash following the attack, a fear heightened by Woolwich’s past history of racial tensions. The Woolwich and Greenwich MP, Nick Raynsford, said: “Obviously at a time when there are rumours circulating there must be cause for concern.” There were reports last night that leading members of the extremist English Defence League were trying to mobilise in the area.

It was Raynsford who first said that a member of the armed forces was most likely to be the victim. He said: “The incident occurred early afternoon. One individual is dead, two others are seriously injured and in hospital. We think a serving soldier was the victim. We don’t know the circumstances surrounding the incident. We do know a number of weapons have been seized. They include a gun, various knives and a machete, apparently.”

The Muslim Council of Britain said: “This is a truly barbaric act that has no basis in Islam and we condemn this unreservedly. This action will no doubt heighten tensions on the streets of the United Kingdom. We call on all our communities, Muslim and non-Muslim, to come together in solidarity to ensure the forces of hatred do not prevail.”

Commander Simon Letchford, from Woolwich police, said: “At approx 1420 we were called to reports of an assault in John Wilson Street, Woolwich where one man was being assaulted by two other men. A number of weapons were reportedly being used in the attack, and this included reports of a firearm.

“Officers, including local Greenwich officers, arrived at the scene and shortly after firearms officers arrived on the scene. On their arrival at the scene they found a man, who was later pronounced dead.

“Two men, who we believe from early reports to have been carrying weapons, were shot by police.

“They were taken to separate London hospitals, they are receiving treatment for their injuries.”

The Independent Police Complaints Commission is investigating the shooting by police, which is standard in cases where officers open fire.

The Cobra meeting was attended by the Metropolitan police commissioner, Sir Bernard Hogan-Howe, MI5 officials and senior government officials. Top of the list of issues they needed to address was a trawl of intelligence to see if there was any indication of further attacks, and clues as to whether the suspected attackers acted alone or with help.

Ministers hold emergency meeting after fatal attack in London street

One dead and two injured in what is feared to be a terror-related attack in Woolwich

The home secretary, Theresa May, has called a meeting of the government’s emergency Cobra committee in response to a suspected terrorist attack near Woolwich barracks, south London, in which one person was killed and two suspects were shot by armed police.

Police say the man who died was attacked by men who they think may have been armed with a gun and knives. It is believed the person died after suffering knife injuries.

Two people have been taken to hospital after they were shot by armed police.

Witnesses described horrifying scenes in an attack that happened in broad daylight. There were reports that a man wearing a Help for Heroes T-shirt was attacked with a machete-style knife and dumped in the street.

The prime minister, David Cameron, described the killing as “truly shocking” and said he had asked the home secretary to chair a meeting of Cobra, the government’s emergency committee. Cobra only meets for the most serious incidents.

The Woolwich and Greenwich MP, Nick Raynsford, said it was his understanding that one person, a serving soldier, was dead but there was no immediate confirmation of this from the Ministry of Defence.

A separate source told the Guardian that the initial version of events was that a man was attacked by two other people. Those suspects were then shot by armed police called to the scene.

Commander Simon Letchford, from Woolwich police, said: “At approx 14.20 we were called to reports of an assault in John Wilson Street, Woolwich where one man was being assaulted by two other men. A number of weapons were reportedly being used in the attack, and this included reports of a firearm.

“Officers including local Greenwich officers arrived at the scene and shortly after firearms officers arrived on the scene. On their arrival at the scene they found a man, who was later pronounced dead. At this early stage I am unable to provide any further information about the man who has died.

“Two men, who we believe from early reports to have been carrying weapons, were shot by police. They were taken to separate London hospitals, they are receiving treatment for their injuries.”

Chiefs at the Woolwich barracks were understood to be trying to account for military personnel, amid reports the dead person may have been connected to the military. The incident happened 300-400 metres from the perimeter of the barracks.

The initial account was confused, and various people claiming to be eyewitnesses posted accounts and pictures on Twitter.

At least one person is pictured lying on the ground, it is possible the social media site pictures show a total of three people lying on the ground.

.

The Independent Police Complaints Commission is investigating the shooting by police, which is standard in cases where officers open fire.

In a statement the IPCC said it had “been made aware by Metropolitan Police Service of an incident in Woolwich, south London. IPCC investigators have been deployed to the scene and to the post-incident process. The IPCC has declared this as an independent investigation.”

Raynsford said: “The incident occurred early afternoon. One individual is dead, two others are seriously injured and in hospital.

“The circumstances causing the incident are not yet clear. It’s been suggested it was the product of a road traffic accident, but that’s pure speculation.

“I’ll be talking to everyone who is involved, we will be trying to do everything possible to try and ensure calm in the area. People will be very, very shocked.

“We think a serving soldier was the victim. We don’t know the circumstances surrounding the incident.

“We do know a number of weapons have been seized. They include a gun, various knives, and a machete, apparently.

“The police clearly had to take action in order to try and arrest these individuals.”

UK spends £2bn housing homeless in B&Bs, hostels and shelters

Rising private rents, lack of affordable housing, benefit cuts and low levels of home-building force costly short-term solution, investigation finds

The UK has spent almost £2bn housing vulnerable homeless families in short-term temporary accommodation, according to figures that demonstrate the scale of Britain’s housing crisis.

Rising private rents, a shortage of affordable housing and benefit cuts have forced local authorities, particularly in London, to place increasing numbers of households in bed and breakfast accommodation, hostels and shelters.

With the number of houses built in Britain falling to new lows, according to figures released last week, a four-month study by the Bureau of Investigative Journalism, has revealed that £1.88bn has been spent on renting temporary accommodation in 12 of Britain’s biggest cities over the past four years.

Campaigners have said welfare changes will exacerbate the problem. Official figures show that in London alone 7,000 families dependent on benefits stand to lose more than £100 a week under the benefit cap, and many are expected to become homeless as a result.

Leslie Morphy, chief executive of the homelessness charity Crisis, said: “For the sake of cutting just a few pounds a week from their benefits, families and individuals are being forced out of their homes, to be put up in B&Bs or temporary accommodation that costs us all far more.”

A separate investigation by the Bureau of Investigative Journalism has uncovered evidence that London councils are rapidly accelerating the rehousing of homeless households outside their home boroughs. Some 32,643 homeless households have been rehoused out of their borough since 2009.

In the year to April, 10,832 households were rehoused in this way – a 16% rise on the previous 12 months. Most left the more affluent districts of inner London for the cheaper outer suburbs, although an increasing number of London’s homeless are being moved to towns outside the capital, such as Dartford in Kent, Slough in Berkshire and Spelthorne in Surrey.

The “destination” boroughs have said the influx of households has put a significant strain on local services. Councillors in Enfield in outer London, where more properties and B&B rooms are secured by London authorities than anywhere else, have said the demand from inner London authorities is pushing up private rents and placing untenable pressure on school places.

“The pressure will not abate,” said Edward Smith, a Conservative councillor in Enfield. “Before long we will have to build more secondary schools.”

The Labour leader of Slough council, Robert Anderson, said: “If authorities put people in our area with complex needs, or even just families; they need to inform us. If we know where they have come from we can make sure the borough does not shirk responsibilities and just pass on their more difficult clients. You can’t just pitch up halfway through a year and expect to get a school place. It’s not McDonald’s.”

The housing minister, Mark Prisk, insisted on Sunday night that councils should be careful about placing families in B&Bs far from their home borough. “There is absolutely no excuse for families to be sent miles away without proper regard for their circumstances, or to be placed in unsuitable bed and breakfast accommodation for long periods of time,” he said. “The law is clear: councils have a responsibility to take into account people’s jobs and schools when securing homes for those in need.”

But Prisk also defended the policy of removing families on benefit from central London. “Nor is it right that those living on benefits should be able to live in parts of the capital that those who aren’t reliant on this support couldn’t afford to,” he said.

Households accepted as homeless by their local council will often be placed in temporary accommodation until a more permanent home can be found for them.

As latest government figures show there were 53,130 households living in temporary accommodation at the end of 2012 – 9% higher than the previous year – a leading law firm is preparing a class action against councils that keep families in B&B for longer than the statutory maximum of six weeks. It is believed a third of British local authorities are in breach of the limit, largely because of a shortage of suitable temporary accommodation.

Official guidance says B&B accommodation should be avoided wherever possible. Lack of privacy and amenities for cooking and laundry means it is “not suitable” for families with children or pregnant women “unless there is no alternative accommodation available and then only for a maximum of six weeks”.

Bureau data shows the amount spent on temporary accommodation across 12 of Britain’s biggest cities was up 5.7% to £464m last year. And London councils have budgeted for further significant overall rises this financial year.

Since 2009, London councils have secured 5,827 properties and B&B rooms in the three London boroughs of Enfield, Waltham Forest and Haringey alone.

The borough suffering the worst homelessness crisis in the country appears to be Newham, in east London which has spent £185.2m placing people in temporary accommodation since 2009.

You can’t be sure of seeing Shell’s AGM

If you couldn’t travel to the Hague to protest, you could always attend the live link-up in London. But now you can’t even do that

Angry about the oil giants allegedly fixing the price of petrol for more than a decade? You’ll have a chance to harangue Shell – its offices were raided by European Union officials investigating the claims last week – at its annual general meeting on Tuesday. But only if you get on a plane to the Hague.

Royal Dutch Shell, the British part of which was founded by Lord Bearsted in 1897, has been regularly holding its meeting in the Dutch city most famous for trying war criminals.

For the dedicated investor it could make for a nice little outing. The meeting is at the Circus theatre, a stone’s throw from the beach, and that evening the venue is putting on Sister Act – The Musical.

Until this year, less dedicated British shareholders have been able to gather (and protest) at a simultaneous meeting in London to follow a live satellite link-up.

Not this year. Shell says the live link “did not satisfy shareholders”. A spokesman explains: “We concluded that having the satellite didn’t meet shareholders’ best needs.” He said it would be much easier for all involved if they stayed at home and watched the Dutch event live-streamed online.

Protesting from home would also save Shell having to endure images of thousands of petrol-tank-banging motorists, but he didn’t mention that.

Energy regulator set for a roasting

Shell or no, sparks will be flying at Portcullis House, next to the Palace of Westminster, on Tuesday when energy secretary Ed Davey, along with gas and power regulators, will be hauled before the energy and climate change committee to answer questions on “energy prices, profits and poverty”.

The “three p’s” are inflammable subjects at the best of time, but last week’s oil price-fixing raid has turned the dial up to 11.

The select committee is, technically, not there to discuss motorists and the forecourt. But its members are aware that the oil and gas markets are inextricably linked.

Ofgem, the regulator, is first witness and, in Labour’s eyes at least, should turn up wearing a “kick me” placard. The opposition party has already promised to scrap Ofgem, and its boss, Alistair Buchanan, has already announced plans to stand down. But that won’t stop the admirably independent Conservative chairman, Tim Yeo, knocking two bells out of Ofgem and the Department of Energy for allowing the big six energy companies – last week dubbed “the evil empire” – to make millions while service slipped.

Whale of a problem for Dimon

Viewers of this month’s BBC2 documentary Bankers will have seen a imposing silver-haired, perma-tanned chap high-fiving a line up of adoring fans this week.

Nope, it wasn’t the Rolling Stones fan club but an audience greeting Jamie Dimon, boss of US financial firm JP Morgan Chase.

Dimon is a rare thing in banking. He managed to come through the crisis (almost) as adored as beforehand, and with the ears (and hearts) of politicians on Capitol Hill.

But that could all come crashing down on Tuesday (a busy day, obvs – set the alarm now) at the bank’s annual meeting in perma-tan city, aka Tampa, Florida. Here Dimon will face a vote on whether he should be stripped of his combined job titles of chairman and chief executive.

What was that “London whale” business all about, Jamie? “Tempest in a teapot,” wasn’t it?

Bruno “London Whale” Iksil’s trades cost the bank $6bn. Quite an expensive teapot, by even US bankers’ standards.

Let’s hope he does not repeat the phrase to those calling for him to relinquish the combined job he has held since 2006. The vote is only advisory, but there is a real chance Dimon could find himself with little to high-five about.

East Coast trains is on the wrong track with ticket fine

East Coast trains insisted on fining me, although it was a genuine mistake

I inadvertently boarded an East Coast train from London to Newark which was an hour earlier than the one I had booked. It’s a journey I regularly take, but I had had a harrowing experience that morning trying to help save a child’s life and so had forgotten to put my watch back an hour after returning from France. I therefore believed I was on the correct train.

I explained the circumstances to the ticket inspector and offered to get off at the next stop and await the correct train, but he said that since I would boarding from a different station to the one booked, my ticket would still not be valid and I must I pay £74.50 for a full single ticket from London to Newark. I was really distressed but the inspector lacked any empathy or understanding. I do think the whole picture could have been looked at. Since I was expecting a lift from Newark and had to wait an hour once there, getting an earlier train was no advantage to me. NJ, London

In your correspondence with East Coast Trains, the company simply repeats that the rules are the rules and there’s nothing it can do, despite the distressing circumstances. It is referring to the National Rail Conditions of Carriage. However, inspectors are usually possessed of human instincts and you would expect discretion to be applied when it’s clear a genuine mistake has been made.

When I point this out to East Coast Trains, it hastens to exert its humanity: “Due to the customer’s original ticket type, the options she was given by the guard are correct,” says a spokesman. “She was unable to get off and board the next train as her ticket was for a point to point journey, meaning a break in journey is not valid, therefore, she would still have been charged by the next guard. However, after consideration, East Coast is willing, on this occasion, to offer a refund of the original unused ticket.”

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