Economics
Housing sector The number of houses sold in November 2007 fell by 22
per cent compared with November 2006, according to figures from the Land
Registry. House prices rose by 0.9 per cent in January, but annual house
price inflation fell for the fifth month in succession to 6.4 per cent.
Consumer confidence fell to a 13-year low this month. The index of
confidence, compiled by GfK/NOP, fell to minus 17, down from minus 14 in
January. The balance of consumers worried about economic conditions in the
coming year slid to minus 40, from minus 36 last month.
Interest rates The Bank of England will wait until May to cut rates
again, because of inflation, according to a poll of economists carried out
by Reuters. The survey showed that 49 of 62 economists predicted that the
Bank’s Monetary Policy Committee (MPC) would next cut interest rates in May,
by 25 basis points to 5 per cent. All but one of the 65 said that the MPC
would leave rates on hold at its meeting on March 6.
US economic growth slowed sharply to 0.6 per cent in the final quarter
of last year, from 4.9 per cent in the previous quarter. GDP grew by 2.2 per
cent for 2007, the slowest rate since 2002.
The dollar fell to a new all-time low against the euro, which soared to
levels above $1.52, The greenback also set a record low on its
trade-weighted index for the third day in succession.
Equity markets Ben Bernanke, the US Federal Reserve Chairman, rattled
equity markets on both sides of the Atlantic with warnings that some small
US banks could collapse because of the housing market slump. He added that
the Fed’s task in shoring up US growth was complicated by persistent
inflationary pressures.
Oil prices The price of oil rose to a new high as Wall Street traders
bought fuel contracts to offset the falling value of the dollar, with light
sweet crude oil for April delivery rising by $2.95 to $102.59 a barrel in
New York.
Banking
& finance
Royal Bank of Scotland, the UK’s second-largest bank, reported a 9 per
cent rise in full-year underlying profits to £10.3 billion, despite a £2.5
billion writedown related to turmoil in global credit markets.
Aviva The cost of last summer's floods sent the full-year operating
profits of the general insurance arm of Aviva down by 39 per cent to £1.033
billion.
Amlin, the Lloyd’s of London underwriter, said that its full-year
pre-tax profits had risen by 30 per cent to a record £445 million.
Freddie Mac, the US mortgage finance group, reported a record
fourth-quarter loss of $2.45 billion (£1.23 billion), from a $401 million
loss last time, as it suffered a surge in defaults on US home loans.
JPMorgan Cazenove, the investment bank, reported a 14 per cent fall in
its full-year pre-tax profits to £158.2 million and added that David Mayhew,
the veteran Cazenove banker, will take the helm once again as Robert
Pickering stepped down as chief executive.
MF Global, the US broker, admitted that Evan Dooley, a trader based in
Memphis, Tennessee, had cost it $141.5 million in unsuccessful bets on wheat
prices.
Peloton, the London-based hedge fund manager, told investors that it
was being forced to liquidate a $2 billion fund of asset-backed securities.
Fidelity Investments, the world’s biggest mutual fund group, said in
its annual report that its full-year pre-tax income had risen to $2.16
billion, up 22.3 per cent on last time.
Construction
& property
Redrow, the housebuilder, reported a 34.5 per cent fall in its
first-half pre-tax profits to £35.8 million after a fall in sales and gave
warning of worse to come.
Consumer
goods
InBev, the Belgian brewer behind Stella and Beck’s, reported a 4.4 per
cent rise in beer volumes in the fourth quarter of 2007, despite a 10.8 per
cent decline in the UK, where it continued to lose market share.
Pernod Ricard, the French wines and spirits group, claimed that the
American economic slowdown was not hurting its premium brands as it met
first-half earnings forecasts and predicted that its full-year operating
profits would grow by “at least” 12 per cent.
British American Tobacco, the world’s second-biggest cigarette maker,
will pay £1.15 billion for the cigarette businesses of Skandinavisk
Tobakskompagni, the Danish group.
Engineering
GKN, the car and aerospace engineering group which is listed on the
London Stock Exchange, said that underlying full-year pre-tax profits rose
by 11 per cent and that it has won “exceptional levels” of new business for
the year ahead.
Health
Eli Lilly, the American pharmaceuticals group, said the US Food and
Drug Administration had expressed reservations about Zyprexa, its
schizophrenia treatment.
Industrials
Filtrona, the speciality plastics and fibre group, reported full-year
pre-tax profits up by 14.8 per cent to £58.2 million and said that it is
well placed for future growth.
Mondi, the paper and packaging group, reported a 33 per cent rise in
full-year pretax profits to €405 million (£306.7 million), reflecting
increased pricing and improved efficiency.
Leisure
Whitbread, the leisure operator, reported like-for-like sales growth of
5.8 per cent in the 50 weeks to February 14. It plans to save annual costs
of £25 million by outsourcing its logistics operation and merging its hotel
and pub-restaurant divisions.
Ladbrokes, the bookmaker, has announced a 60 per cent rise in its
full-year operating profits to £420 million after its first television
advertising campaign and a £240 million losing streak by high-roller
telephone punters.
Media
ITV Peter Fincham, the television executive who had to resign from the
BBC in October after a dispute over a misleading trailer for a programme
about the Queen, is to be the new head of television for ITV, the commercial
broadcaster.
Virgin Media, the pay-television provider, said its fourth-quarter loss
had widened to £163.2 million, from £122.1 million last time, but it gained
61,100 new cable customers in the same period.
Trinity Mirror, the newspaper publisher, said that advertising revenues
could fall by about 3 per cent in January and February.
Natural
resources
Premier Oil, the oil and gas exploration group, has won a 50 per cent
production sharing contract for seismic acquisition, plus one exploration
well, at Song Hong Basin in offshore Vietnam.
Retailing
J Sainsbury, the supermarket group, has created a new role of strategy
director to work on the next phase of its turnaround programme.
Support
services
Rentokil Initial, the support services group, has given its second
profit warning in just over two months and announced the imminent departure
of Brian McGowan, its chairman.
ABC Learning Temasek Holdings, the Singapore state investment group,
has increased to 14.7 per cent its stake in ABC Learning, the Australian
childcare operator.
Technology
Nintendo, the Japanese electronics group, is being investigated by the
Japan Fair Trade Commission over price-fixing of the Nintendo DS, the
handheld games console.
Yahoo!, the internet search engine, is facing seven separate
shareholder actions over its handling of Microsoft’s hostile takeover bid
which values the company at $45 billion (£22.7 billion).
Spirent Communications, the telecoms equipment testing company,
reported a 124 per cent rise in full-year adjusted pre-tax profits to £32.2
million.
Telecoms
Tiscali, the Italian telecoms group, said Tommaso Pompei, chief
executive, has resigned and Mario Rosso will be his successor.
O2 Sales of the Apple iPhone narrowly missed O2’s targets in the final
quarter of last year, but still helped the mobile phone group to outperform
its rivals.
Transport
National Express, the bus and train operator, reported a 13 per cent
rise in full-year pre-tax profits to £177 million, slightly above analysts’
forecasts.
Virgin Rail passengers face setbacks as Network Rail closes the West
Coast Main Line south of Birmingham for four days over the Easter weekend.
Network Rail has been fined a record £14 million for engineering works that
caused severe delays at the new year.
Utilities
Centrica, the owner of British Gas, has poached Philip Davies, director
of markets at Ofgem, the regulator, by reportedly offering to nearly double
his salary.
E.ON, Germany’s biggest utility, has offered to sell its electricity
grid in a deal with the European Commission to protect it from an antitrust
investigation into Europe’s energy markets.
