Economics
Interest rates The Bank of England Monetary Policy Committee voted 8 to
1 for the quarter-point rate cut earlier this month. Only David
Blanchflower, the arch-dove, voted against the move, preferring a more
aggressive 0.5 per cent cut.
Public finances The Office for National Statistics said public sector
net borrowing, the Government’s preferred measure of the public finances,
was at a surplus £14.1 billion in January, up from a surplus £11.8 billion
in January 2007 and the highest surplus for any month since records began in
1993.
Manufacturing orders The balance of UK manufacturers reporting “above
normal” levels of new orders in February was 3 per cent, up from 2 per cent
in January. Analysts had forecast a fall to minus 3 per cent. The order
balance fell to minus 8 per cent, from minus 4 per cent, the lowest since
October. The balance of manufacturers expecting to raise prices in the next
three months rose to 22 per cent, from 21 per cent in January.
French economic growth will slow to 1.5 per cent this year, according
to the IMF, below the Government’s official prediction of between 2 and 2.5
per cent.
US inflation rose by 0.4 per cent in January, the second consecutive
monthly rise. The consumer price index, the most broadly used gauge of
inflation, climbed 4.3 per cent in the 12 months to January, while core
prices, which exclude food and energy items, rose by 0.3 per cent.
US mortgage applications fell last week and demand hit its lowest level
since the start of the year as interest rates surged. The Mortgage Bankers
Association said its index of mortgage applications fell by 22.6 per cent
last week, after a 2.1 per cent fall in the previous week.
US housing starts in January rose by 0.8 per cent to a 1.012 million
annual rate, from the revised 1.004 million pace in December — the lowest
number of starts since May 1991. Permits to break new ground on US homes in
January fell by 3 per cent to the lowest annual rate in more than 16 years.
Zimbabwe’s annual inflation rate has soared to more than 100,000
per cent, according to the Central Statistical Office. The year-on-year
inflation rate for January, as measured by the all-items consumer price
index, stood at 100,580.2 per cent, up 34,367.9 percentage points on the
December rate of 66,212.3 per cent.
Banking
& finance
Alliance & Leicester, the mortgage lender, issued a warning on its
revenues for 2008 and said that it would turn away from the mortgage market,
sending its shares to a record low and reigniting speculation that it would
become a takeover target.
Société Générale Jérôme Kerviel, the trader who
plunged Société Générale, the French bank, into crisis when he lost €4.9
billion (£3.7 billion), went undetected because controllers
ING, the Dutch financial services group, took a lower than expected
impairment charge on riskier investments in its fourth-quarter results of
€194 million, compared with analysts’ predictions of up to €1 billion. That
was offset by a gain of €1.03 billion on the sale of its stake in ABN Amro,
the Dutch bank, and a lower tax rate.
Standard Chartered, the banking group, has walked away from the rescue
of Whistlejacket, its $7.1 billion (£3.65 billion) structured investment
vehicle, after the value of its assets continued to plummet.
Northern Rock Three independent non-executive directors of Northern
Rock, the stricken bank, are set to step down as Ron Sandler, executive
chairman, unveils its new board of directors.
Construction
& property
Property owners face the prospect of higher premiums after the
widespread floods last year saw the home insurance industry slump to a loss
of more than £300 million, according to Datamonitor, the market analyst.
The housing market is set to implode after years of reckless mortgage
lending, chronic oversupply of newly built flats and widespread fraud,
according to Alastair Stewart, an analyst for Dresdner Kleinwort
Wasserstein.
Consumer
goods
Heineken, the Dutch brewing group, said it will raise prices in all
markets, except the US, to offset rising costs. It said that it expects a 15
per cent rise in overall raw material and packaging costs.
SABMiller, the brewing group tipped as a white knight bidder for
Scottish & Newcastle (S&N), said that it had looked at its rival but
decided against taking any action. Shares in S&N rose 2.5 per cent on
speculation of an offer.
No Catch Group, the world’s first organic cod farm, has been taken into
administration, dragged down by debts of £40 million. The British company,
which has Tesco and Sainsbury’s among customers, has drawn interest from
several potential buyers, said Grant Thornton, the joint administrators.
Engineering
Peugeot, the French carmaker, is revamping a project on its own for a
hybrid diesel car, after the European Commission investigated the French
Government’s joint funding of the scheme. Peugeot said the project is now
likely to focus on the premium end of cars, with more limited volumes,
rather than a “mass hybrid solution”.
Health
Pharmaceutical companies will benefit from the market in prescription
drugs for obesity- related illnesses, according to Standard & Poor’s
Rating Service, which said that the global market for such drugs is worth
about $70 billion (£36.1 billion) at the moment but will double by 2020.
Vernalis, the biotechnology group based in Berkshire, has cut 60 per
cent of its workforce and put its American operations up for sale after a
refusal by the US Food and Drug Administration to license Frova, its
painkiller, as a treatment for menstrual migraine.
Industrials
Rexam, the world’s largest maker of drinks cans, has blamed the rising
costs of aluminium and oil for a 7 per cent drop in its full-year profits.
The company added that it expected to return to profit growth in 2008,
benefiting from recent acquisitions and cost savings.
Leisure
Rangers Football Club reported first-half pre-tax profits of about
£2.27 million, up from a loss of £1.21 million last year, thanks to its Uefa
Champions League performance and market pool income, and the positive effect
on ticketing and hospitality sales.
Media
Universal Music, which is owned by Vivendi, sold 90,000 songs,
including the European publishing rights to most of the Spice Girls’ hits,
for about £75 million to CP Masters, the Dutch music publishing company, in
conjunction with ABP, the Dutch pension fund.
GCap Media Scott Muller, former programme director of Capital 95.8, has
left GCap Media, parent company of the radio station, to return to
Australia. Mr Muller was hired from Nova, the Sydney music station, two
years ago.
Natural
resources
Anglo American, the mining group, reported record full-year earnings of
£5.76 billion, up 5.3 per cent on the previous year. Separately, the company
has agreed a deal with South Africa’s Government to transfer ownership of
some of its assets to black empowerment groups.
Gazprom, the Russian gas giant, said it is confident that talks with
the authorities in Nigeria, will result in a deal to give it a stake in that
country’s gas deposits. Gazprom said it is also ready to invest in Nigerian
energy infrastructure.
Retailing
Pendragon, the car dealership, reported a fall in full-year profits to
£34.8 million, from £69.4 million last time, after an increasingly
competitive market for new cars hit the sales of used vehicles.
WH Smith, the stationer, said that shareholders at a special meeting
had backed proposals related to plans to return £90 million to investors
through a £60 million special dividend and a £30 million share buyback
programme.
Asda, the supermarket chain owned by Wal-Mart, the US retail giant,
plans to double the rate of its expansion in Britain to 20 new superstores a
year after the Competition Commission inquiry into the supermarket sector.
Support
services
Manpower, the recruitment group, and the CBI, the employers’
organisation, have criticised an MP’s proposed legislation on temporary
workers that would give agency workers equal treatment on pay from day one.
The groups argue that it would reduce the flexibility of the labour market,
deter investment and result in 250,000 job losses.
Technology
Toshiba, the Japanese electronics group, will see a limited impact on
its earnings despite plans to withdraw from its high-definition DVD-related
activities, according to Standard & Poor’s Rating Service.
Telecoms
European telecoms The EU said that it has no intention of creating a
“super-regulator” to oversee the European telecoms market, but rather aims
to create a system that “builds on the expertise of existing regulators”.
Transport
British Airways said it is to raise the fuel surcharge for long-haul
flights by up to £6 per flight, in reponse to the continuing rise in oil
prices. It added that the short-haul fuel surcharge will be unchanged at £10
per flight.
Eurotunnel, the Channel Tunnel operator, signalled an end to its
financial difficulties with a €1.7 billion (£1.3 billion) cash call that
will enable it to pay off junior creditors early. The company added that it
would become profitable by the end of this year — for the first time in 11
years of operations and two years earlier than planned.
Utilities
Iberdrola, the Spanish utility, said that its £11.6 billion takeover of
ScottishPower had helped to boost its fourth-quarter profits by 57 per cent
to £560 million, adding that ScottishPower accounted for 24 per cent of
group earnings.
EDF, the French utility, reported stronger than expected full-year
underlying earnings growth, but disappointed investors with a soft outlook,
sending its shares down by 8.1 per cent.
