Tories pledge to cut corporation tax

The Conservatives have pledged to cut corporation tax by 3p in the pound, in an apparent effort to stay one step ahead of Gordon Brown, as he comes under pressure to deliver a business-friendly Budget this week. George Osborne, the Shadow Chancellor, said that the Tories would cut corporation tax from 30 per cent to 27 per cent if they won power, and would fund it by phasing out many of the capital reliefs that are available in the business tax system. It is the first detailed tax pledge that they have given since the last election. (Gabriel Rozenberg)

Housing market shows resilience

The resilience of Britain’s housing market has been demonstrated again after asking prices for home rose by 1.5 per cent over the past month. Rightmove, the property website, said that prices were up by 12.2 per cent in the year to March, compared with an annual rise of 11.5 per cent in February, as the regular spring increase in activity kicked in. A typical home in England and Wales rose by £3,381 in one month, as supply shortages overtook the effect of interest rate rises. Prices were up 21.8 per cent in London from a year ago. (Gabriel Rozenberg)

Business tax call

EEF, the manufacturers’ group, has urged Gordon Brown to set out plans to lower tax on business in this Wednesday’s Budget statement. It estimated that business will be paying almost £12 billion more in tax in 2008-09 than in 1996-97. The EEF said that the rise in taxation had damaged manufacturing profitability and investment. Advanced economies whose tax burdens have increased have tended to fall down in competitiveness league tables, it said. (Gabriel Rozenberg)

Inheritance blow

Almost one third of the owners of detached properties are now liable for inheritance tax, as house prices have outstripped the £285,000 threshold for the charge, Halifax said. The lender said that 29 per cent of detached homes sell for prices that would attract the tax, up from 16 per cent five years ago. The average detached house price in England and Wales is £326,396, above the £300,000 threshold expected this year and the £325,000 expected by 2010. (Judith Heywood)

Supermarket threat

Leading supermarkets could have their supplies disrupted and face demonstrations outside their stores in the run-up to Easter amid industrial action at a key supplier. The T&G is to ballot 2,000 workers for strike action at Grampian Foods at the end of this week in a long-running dispute over pay, pensions and minimum standards for agency workers. Grampian, which supplies Sainsbury’s, Asda and Tesco, is struggling with a £300 million pension deficit. (Christine Buckley)

Hg sniffs out a deal

HgCapital, the UK private equity firm, has intensified its focus on renewable energy by acquiring a German company that captures gas from fermenting cow dung and other agricultural materials and uses it to generate electricity. The firm has spent €50 million (£34 million) on Aufwind Schmack GmbH Neue Energien, which it says is the world’s leading biogas project developer, with an established presence in wind farms across Central Europe. (Siobhan Kennedy)

Dow Jones set to buy Financial News

Dow Jones, the owner of The Wall Street Journal, is trying to buy Financial News, the specialist weekly City paper for about £25 million.

A sale process, being conducted by NM Rothschild, is in its final stages with the American publisher the front-runner in a race due to be concluded in the next few days. Financial News is privately owned, but with a wide shareholder base. Angus MacDonald, the chief executive, owns about a quarter of the business. He is not expected to stay on after the sale concludes. (Dan Sabbagh)

US inflation fear

The US Federal Reserve cannot afford to let its guard slip in the fight against inflation by lowering interest rates this week, analysts believe. Its Federal Open Markets Committee is expected on Wednesday to peg rates at 5.25 per cent, where they have been since August, amid concern that a 1.3 per cent leap in the producer price index and a 0.4 per cent rise in the consumer price index mean that inflation is not falling fast enough. ( Gabriel Rozenberg)

China aircraft plan

The Chinese cabinet has approved a plan to develop the country’s own large passenger jets, the Government said, in a move that could establish a rival to Boeing and Airbus. The State Council gave the go-ahead to set up a company to build the aircraft, at a meeting chaired by Premier Wen Jiabao on February 26. “The State Council believes that building large aircraft is an important, strategic policy of the Communist Party and State Council,” a government statement said. (Reuters)

German growth

Franz Möntefering, Germany’s Vice-Chancellor, said that Europe’s biggest economy would outperform the Government’s forecasts and would grow “by at least 1.9 per cent” this year, more than the 1.7 per cent officially expected. Mr Möntefering, who is also Germany’s Labour Minister, was speaking at an industry event in the city of Dösseldorf. Leading economic institutes have predicted growth this year of between 2 per cent and 2.8 per cent. ( Gabriel Rozenberg)

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