The economy once again dominates the headlines this morning

House prices fall at fastest rate since 1978 is the lead in the Guardian

In a big blow to the government, which claims Britain is well-placed to withstand the global economic downturn, the RICS paints a bleak picture, in which the number of estate agents saying house prices rose, rather than fell, has dropped to the lowest point since the survey began in 1978.
The latest monthly snapshot of the housing market shows that 78.5% more surveyors reported a fall than a rise in house prices. The gulf has widened since February and easily eclipses the previous low of 64.5% in June 1990, when the economy was heading into recession.

The Telegraph also leads with the story adding that

The RICS report blames the falls on the tightened lending conditions, a view echoed by economic commentators.
"Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique blight," said Jeremy Leaf, a spokesman. "The slowdown in prices is directly attributable to a lack of available finance which has hit demand

Banks are told to cut rates and ease pressure on borrowers says the Times

Gordon Brown will hold talks today with mortgage lenders amid growing evidence that the downturn in the housing market could be worse than that of the early 1990s.
The Prime Minister is expected to urge banks to help to shore up the housing market by easing loan costs, passing on cuts in base rates by the Bank of England to borrowers and being less tough on buyers in distress.

The Independent meanwhile reports that Darling embarrassed as Northern Rock fails to pass on rate cut

Next week, the Chancellor, Alistair Darling, will meet the Council of Mortgage Lenders and urge it to pass on interest rate cuts to homebuyers, do more to avoid repossessions by giving people better advice when they fall behind with their payments and help more people get a foot on the housing ladder.Northern Rock, the recently nationalised bank, threatened to further embarrass ministers by declining to pass on to its borrowers last week's cut in rates by the Bank of England. The bank said yesterday that its standard variable rate (SVR) "remained under review". So far, only a handful of lenders have said they will reduce their SVR.

The Times leads with the news that will further embarass the government

Gordon Brown’s Trade Minister has told businessmen that he will resign before the next election because he is not prepared to support the Prime Minister publicly during the campaign.
The Times has learnt that Lord Jones of Birmingham, the former Director-General of the CBI, has decided that he will step down rather than risk a row that could damage the Government

The economy dominates in the Mail and the Express too,the former's front page says

Now the shopping crunch: Food prices soar at fastest rate for 17 years

Families already struggling to cope with the credit crunch face huge increases in food bills because of global shortages.
With the international cost of cereals up by almost half in a year, British meat and dairy products have soared in price.
Costs are rising faster than at any time since 1991 and the average shopping bill is likely to go up by £600 a year.

The Express says

The blame was last night being put squarely on the Prime Minister as factory-gate prices – the costs that producers charge – rose 6.2 per cent in the year to March.
Philip Hammond, Shadow Chief Secretary to the Treasury, said: “We are all now paying the price for Gordon Brown’s economic incompetence in failing to prepare Britain’s economy for these more difficult times.”

The Sun reports

GORDON Brown last night insisted Britain WILL survive the global economic slump.
The PM said he was acting to help families and firms as fears grew of a Labour backlash against his leadership.
Mr Brown – due to fly to the US tonight – vowed to join other world leaders to tackle soaring food costs caused by a wheat shortage.
He called for Middle East oil giants to lower prices and for oil-using countries to improve energy efficiency.

The main story in the Independent links to rising food prices as the paper asks

The production of biofuel is devastating huge swathes of the world's environment. So why on earth is the Government forcing us to use more of it?

On the day when the Renewable Transport Fuel Obligation (RTFO) comes into force, requiring oil companies to ensure all petrol and diesel they sell in the UK contains a minimum level of biofuel, campaigners condemned as "disastrous" the absence of any standards requiring producers to prove their biofuel is not the product of highly damaging agricultural practices responsible for destroying rainforests, peatlands and wildlife-rich savannahs or grasslands from Indonesia to sub-Saharan Africa to Europe.

Away from economic problems and the Guardian reports

Berlusconi sweeps back to power

Talking live to a television political chatshow, the media tycoon said he had already chosen his next cabinet, and it would include at least four women. Berlusconi said he appreciated Veltroni's good wishes, adding that his government would be open to suggestions from the opposition on "measures that affect the wellbeing of the country".

The Times adds that

Most Italians, weary of squabbling, self-serving politicians and chronic political instability, turned out to vote with little enthusiasm. Italians doubt whether the next government — the 62nd since the Second World War — will be able to reverse economic decline, stimulate investment, introduce deregulation and stem price rises for pasta and bread.

The Independent reports that

Iraqi troops free British journalist

Richard Butler, a photojournalist with CBS, was found hooded and with his hands tied behind his back by soldiers searching an area which previously had a heavy militia presence.
The soldiers came under fire, according to Iraqi officials, from four gunmen, one of whom they captured.
Mr Butler told Iraqi television: "The Iraqi army stormed the house and overcame my guards and then burst through the door. I had my hood on, which I had to have on all the time, and they shouted something at me and I pulled my hood off." He described the soldiers as "brilliant".

The Guardian reports

MoD will pay £2m to boy accidentally shot in Basra

The schoolboy, who has not been named, was 13 when he suffered severe spinal injuries following the accident in a camp in Basra in September 2003. Now 17, he needs round-the-clock care from specialist doctors in the UK.
The settlement is the highest the MoD has paid to an individual. A spokesman said it reflected the "height of the negligence" involved. The figure is expected to be finalised by the high court within weeks following a civil claim

MDC activist killed as Zimbabwe court rejects votes plea reports the Telegraph

Since the presidential election last month, about 100 supporters of the Movement for Democratic Change have been assaulted, with 29 victims being admitted to one Harare clinic on Saturday afternoon alone.
The latest violence appears to have been organised by the ruling Zanu-PF party to break the MDC's morale, terrify its supporters and ensure victory for Mr Mugabe if the election goes to a second round.
The murder victim was Tapiwa Mbwada, a prison warder for 22 years who left the civil service to become an opposition activist.

Many of the papers focus on the Ecuador bus crash,the Mirror leads with

THE LAST EMAIL: 'Thanks for giving me the chance to do this and for giving me such a lovely home so nothing could stop me wanting to come back'

The Times says

Her parents discovered the e-mail when they checked their computer at 4am yesterday. They had rushed home from a holiday in Italy after being told of the crash

The Sun reports that

THE lorry driver who ploughed into a bus in Ecuador, killing five British girls on a gap-year trip, was still on the run yesterday.
The man dumped his truck, carrying sand, a few miles away and escaped on foot.
A source said: “Officers are searching the area and speaking to people in the town of Sangan who might have seen the driver.

The paper leads with the story that

THE Royal Marine hailed a hero by Prince Harry has contracted the hospital superbug MRSA, The Sun can reveal.
It is a devastating new blow for brave Ben McBean — who flew home from Afghanistan with cavalryman Harry after losing an arm and a leg in a Taliban mine blast.
Ben, 21, was treated at Birmingham’s Selly Oak NHS hospital, where all badly wounded troops are taken. One anti-bug campaigner said: “Our soldiers are clearly being failed.”

Back to politics and the Telegraph reveals that

Gordon Brown's spending on spin hits £1.75m

When he took office, his promise to bring in a new era of straight dealing and austerity was applauded as a means of reconnecting with a public dissatisfied with the Blair administration over Iraq and cash for honours. But the dramatic reversal in his popularity at the end of last year apparently triggered a dip in confidence that has led Mr Brown to appoint, on average, a new adviser every fortnight since the start of the year

The Mail reveals

'A scared rabbit in the headlights': Gordon Brown bruised by 66 revolts in first ten months in office

The traditionally loyal senior backbencher Graham Stringer said the public is 'disappointed' in Mr Brown, while Ian Gibson, another prominent MP, likened him to a 'scared rabbit in the headlights'.
An unnamed senior Cabinet minister, was said to have issued a dramatic warning about Mr Brown's decision to stake his premiership on steering Britain through the economic crisis.

Meanwhile the Express reports that

MILLIONS of pensioners are struggling to survive on less than £6,000 a year, official figures show.
Campaigners for the elderly last night criticised the Government for failing to guarantee them a decent income

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The Independent reports

Criminal who saved Gerrard from 'kneecapping' flees court

An underworld fixer who boasted of protecting the Liverpool and England footballer Steven Gerrard from a "kneecapping" by a gangster disappeared from court yesterday – minutes before he was found guilty of robbery.
John Kinsella, 43, the central figure in a trial at Lincoln Crown Court, could not be found when the jury reconvened to deliver its verdict. When his solicitor rang him to ask his whereabouts, Kinsella said he was on the toilet but refused to say where

I drank so much my liver failed at 14 reports the Mirror

Schoolgirl binge drinker Natasha Farnham is the youngest person in Britain to be diagnosed with liver failure - at the age of just 14.
Drinking from the age of 12, she was downing four bottles of wine a day by 13.
Two years later, she was rushed to hospital after drinking 16 bottles of wine, cider and spirits during a three-day bender.

Writer's flights of fancy embarrass Lonely Planet reports the Guardian

The language was hardly typical of the CEO of a respected travel guide publisher. "This is a shit," Lonely Planet chief executive Judy Slatyer wrote to employees. "None of you deserve it, given the effort you put in."
The problem for Slatyer and her colleagues was what one of them described in another company-wide message as "a car crash waiting to happen": a Lonely Planet author had published an exposé of the world of budget-travel writing.
Thomas Kohnstamm, co-author of a dozen Lonely Planet guides to Latin America and the Caribbean, has written his own book. In it he tells how the life of a travel writer is one of poor pay, dealing drugs to make ends meet, cribbing information from other sources and, in one case, failing to visit the country he was writing about

Elephant ancestors were semi-aquatic says the Telegraph

A primitive ancestor of today's elephants grazed in swamps 40 million years ago, according to a study of fossil teeth.
The evidence that the ancient relative of today's elephants lived in fresh water is published today by an international team led by an Oxford University scientist

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Finally the Independent reports on a controversy over this year's Glastonbury

Noel Gallagher, the notoriously outspoken Oasis guitarist, criticised the organisers of the Glastonbury Festival yesterday for featuring the American rapper Jay-Z as a headlining act, declaring hip-hop "wrong" for the annual event.
Saying that the festival was "built on a tradition of guitar music", Gallagher said that the scheduled appearance of a rap star on the central Pyramid stage could be the reason why tickets for the summer festival had not yet sold out.