Economics

Interest rates Rachel Lomax, the Bank of England’s Deputy Governor for monetary policy, said the Monetary Policy Committee faced a “tricky period” of conflicting pressures as the soaring price of oil stokes inflationary pressures and the impact of the global credit squeeze drags on growth. Her comments dampened hopes for an imminent rate cut.

Investment The Office for National Statistics said companies invested £35.03 billion in the third quarter, compared with £35.01 billion in the second quarter, almost unchanged since the fourth quarter of 2006. Over the year, investment grew by 4.6 per cent, down from the 7.8 per cent annual pace seen in the second quarter.

Exchange rates Jean-Claude Trichet, President of the European Central Bank, said that he was against “abrupt, rapid and brutal movements” in exchange rates, which were detrimental to growth.

The dollar hit record lows against the euro as growing concerns over the American economy strengthened expectations of an interest rate cut. The euro rose above $1.4870.

Banking & finance

Japanese banks Profits in the Japanese banking sector have taken a 1.2 trillion yen (£5.3 billion) hit from the US sub-prime mortgage crisis and the country’s central bank said worse turmoil may be on the horizon.

CIFG Caisse d’Epargne and Banque Populaire, the French mutual banks, pledged $1.5 billion (£730 million) to rescue CIFG, the bond insurer owned by Natixis, the French investment bank, as it was threatened by the US sub-prime mortgage crisis.

Nationwide Almost £2 billion poured into the coffers of Nationwide during September – double the normal monthly take – as savers transferred their cash from troubled Northern Rock to the UK’s biggest building society.

HSBC may have misled shareholders into believing that its executive bonus scheme was much less generous than it really was, according to a QC’s opinion, commissioned by the rebel shareholder Knight Vinke, which is campaigning for change at the bank.

Goldman Sachs intends to raise $4 billion to $6 billion for a new hedge fund to be headed by two of its senior executives, as it attempts to bolster its standing in the hedge fund industry, it was reported last night.

Kensington, Britain’s first sub-prime mortgage lender, is to cease lending to borrowers with poor credit histories, it told mortgage brokers

Construction & property

Home Information Packs will be needed by the sellers of one and two-bedroom properties from December 14. They will have to spend up to £500 for a pack, which includes the title deeds, leases, local searches and an energy efficiency rating.

Spanish property Sun Capital Partners, the owner of Pearl Assurance, is poised to buy €2 billion (£1.4 billion) worth of Spanish commercial property from Santander, the banking group.

Cordea Savills, the property fund management arm of Savills, the estate agent, has formed a joint venture with Nichani Group, a family-owned business, to launch new investments in India. Their first venture is a $200 million fund which is looking to invest in housind and leisure developments.

Consumer goods

Associated British Foods said that Illovo Sugar, its subsidiary, would invest £100 million in building sugar facilities in Mali, including a new sugar mill, an ethanol plant and an electricity co-generation unit.

Umbro, the sportswear company which is being taken over by Nike, the American sports shoe maker, said that the England football team’s failure to qualify for the Euro 2008 championships would hit its revenue.

Engineering

Airbus sounded a warning that the impact of the falling dollar on its business, as the euro is driven to record levels, has “passed the pain barrier”. Tom Enders, the aircraft maker’s chief executive, said that the drag on Airbus from the euro’s rise was now “life-threatening”. His comments came as he signalled cuts in the company’s research and development budgets.

China Railway Group, the state-owned railway and tunnel contractor, is understood to have attracted a record 3.37 trillion yuan (£220 billion) worth of subscriptions for its initial public offering, as Chinese investors showed no signed of being cowed by the recent turmoil to hit the world stock markets.

Health

Acambis, the UK vaccines manufacturer, said that it expects its ACAM2000 vaccine to be licensed by the US Food and Drug Administration and outlined further vaccine orders of $15 million (£7.3 million) under a procurement contract with the US Government.

Industrials

ArcelorMittal, the world’s biggest steel maker has raised its stake in China Oriental Group to 73 per cent as it prepares to make the first foreign takeover of a Chinese steel maker. I

Leisure

Euro 2008 The England team’s failure to qualify for the Euro 2008 football championships is a mixed blessing for the leisure industry, with pubs, pizza delivery operators and bookmakers expected to be among the losers, but restaurants, nightclubs and travel agents to be among the winners.

InterContinental Hotels Group has recognised the growing importance of Asia Pacfic to its growth prospects by naming Ying Yeh, chairman and president for Eastman Kodak’s North Asia region, as a nonexecutive director.

Genting, the Malaysian owner of Britain’s Stanley Casinos, has been forced to take a hit of almost £130 million against the value of the business – as a result of a rise in gaming duty and also the introduction of the smoking ban in England.

Media

Pinewood Shepperton, the film studio, warned of a £3 million hit to its revenues after production of a film, believed to be Angels & Demons, Sony Pictures’ sequel to The Da Vinci Code, was called off. Pinewood’s shares fell by 10 per cent at one stage as it said that it would “prove challenging” to make up the lost revenues amid the US strike by the Writers’ Guild of America.

SMG, the embattled Scottish media group, faces the prospect of a downturn in TV production revenues because it has not yet reached agreement with ITV over whether to recommission Rebus, its flagship programme.

GCap Media, the UK’s largest commercial radio group, is anticipating the loss of its chief executive, Ralph Bernard, who is expected to announce plans to step down.

Natural resources

Imperial Energy, the UK-listed oil and gas producer, saw its shares fall by 13 per cent after the company said it had rejected an offer from the banking arm of Gazprom, the Russian gas giant, to buy 25 per cent of its shares.

De Beers has sold its Cullinan diamond mine in South Africa, where the world’s largest diamond was discovered a century ago, to Petra Diamonds, the London-listed group, for 1 billion rand (£72 million).

BHP Billiton Two more investment banks have joined the army of advisers lined up by BHP Billiton, the world’s biggest mining group, and Rio Tinto. its Anglo-Australian takeover target. Deut-sche Bank is advising Rio and UBS is an adviser to BHP,

Retailing

Kesa Electricals, which owns Comet, reported an unexpected slowdown in third-quarter revenue growth, weighed down by a 0.2 per cent fall in like-for-like sales at the electrical goods retail chain.

Sports Direct, the retail group, blamed the England team’s failure to qualify for the Euro 2008 football championships for its third profit warning this year. Shares in the embattled group, which listed in February at 300p, fell by nearly 15 per cent to 96p.

New Look Richard Lapthorne has stepped down as chairman of New Look, the high street fashion retailer that called off £1.8 billion takeover talks earlier this year.

Support services

Jarvis, the rail maintenance group, saw its shares fall by 58p to 20p – their biggest one-day fall – after it revealed that its full-year profits would fall materially below expectations.

Technology

Phoenix, the IT services company, reported first-half underlying pretax profits of £9.4 million, from £9.2 million last time, along with an 87.1 per cent rise in revenue, and said that Nick Robinson, chief executive, will become nonexecutive deputy chairman.

Telecoms

Elisa Novator, the largest shareholder in Elisa, the Finnish telecoms operator, said it had asked Elisa’s board to call an extraordinary general meeting to revamp the group. Shares in Elisa closed 2.7 per cent higher at €20.88.

Transport

Iberia, the Spanish flag-carrier which is being courted by British Airways and TPG, said that it would officially study a rival bid from Gala Capital, the private equity company owned by some of Spain’s wealthiest individuals.

Silverjet, the business class air-line, has secured a £22 million lifeline from investors, its third fundraising in the two years since it was established.

Utilities

Eni, the Italian utility, has formed a joint venture with Gazprom, the Russian gas monopoly, to build the South Stream gas export pipeline to southern Europe that will cost at least €10 billion (£7.2 billion). The pipeline will carry 30 billion cubic metres of Russian gas to Europe per year.

Kelda, owner of Yorkshire Water, confirmed that it had received a £3 billion takeover approach from a consortium of infrastructure funds, including Citigroup, GIC Special Investments and HSBC, after its share price rose by 13 per cent to £10.60.

Severn Trent, the water utility, is facing a criminal prosecution and multimillion-pound fines after the Serious Fraud Office said that it was charging the company with three offences relating to the alleged misreporting of data on leaks to the water regulator between 2000 and 2002.

Target 2.0

In yesterday’s regional heats of the annual Bank of England/Times Target Two Point Zero interest rate contest, the winners (W) and runners-up (RU) were: Belfast: Loreto College, Coleraine (W); St Patrick’s High School, Keady (RU) Birmingham: Royal Grammar School, Worcester (W); Bablake School, Coventry (RU) Bristol: South Wilts Grammar School, Salisbury (W); Bishop Wordsworth’s School, Salisbury (RU) Reading: Eton College, Windsor (W); Downe House School, Thatcham (RU) Richmond-upon-Thames: The Tiffin Girls’ School, Kingston-upon-Thames (W); The Godolphin and Latymer School, Hammersmith (RU)

Explore Industry Sectors

• Need To Know

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Public Sector

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts