Economics
Producer prices are expected to have dipped again in September after
the decline in the price of oil. Figures due out today are tipped to show
that output prices fell by 0.45 per cent, taking the annual rise to 8.9 per
cent, from 9.7 per cent in August. The prices paid by producers are expected
to have fallen by 1.2 per cent.
House prices Figures to be published tomorrow by the Royal Institution
of Chartered Surveyors are expected to show that 85 per cent more surveyors
reported price falls rather than rises during September, up from 81 per cent
in August.
Inflation Figures due out tomorrow are tipped to show that the consumer
prices index measure of inflation edged up to 5 per cent in September, from
4.7 per cent in August. Inflation on the retail prices index is predicted to
have risen to 4.9 per cent, from 4.8 per cent in August.
Unemployment Figures due out on Wednesday are forecast to show that the
number of people claiming jobless benefits rose by 38,000 in September,
after a rise of 32,500 in August. The ILO rate of unemployment is expected
to have risen to 5.6 per cent in August, from 5.5 per cent in July.
Average earnings Figures due out on Wednesday are expected to show that
average wage growth was 3.5 per cent during August, the same as in July,
while wages excluding bonuses rose 3.7 per cent, also the same as in July.
The pound will continue to slide against the dollar as long as the
financial turbulence persists, analysts say, as international investors dump
the pound and the euro. The pound fell to a five-year low against the dollar
last week, briefly dropping below $1.70 before closing the week at $1.71. UK
interest rates are seen by currency dealers as having farther to fall than
those of other countries, with several economists predicting a drop to as
low as 2.5 per cent next year. (The Sunday Times)
Eurozone inflation during September is expected to be confirmed at 3.6
per cent when official figures are published on Wednesday.
Eurozone industrial production is predicted to have picked up slightly
during August. Figures due out tomorrow are tipped to show that production
rose by 1.1 per cent, after a 0.4 per cent fall in July. This leaves the
annual decline unchanged at 1.8 per cent.
French inflation is expected to have eased slightly during September.
Official figures to be published tomorrow are tipped to show that the
headline rate slipped to 3.1 per cent, from 3.2 per cent in August.
US producer prices are expected to have fallen during September.
Figures due out on Wednesday are expected to show that prices fell by 0.4
per cent, after a 0.9 per cent drop in August, taking the annual rise to 8.7
per cent, down from 9.6 per cent.
US retail sales are tipped to have fallen further in September. Data
due out on Wednesday are forecast to show that sales dropped by 0.6 per cent
in the month, after a 0.3 per cent fall in August.
US inflation is predicted to have eased during September. Official
figures due out on Thursday are tipped to show that inflation rose by 0.1
per cent during the month, but that the annual rate of inflation fell to 5.1
per cent, from the 5.4 per cent reported in August.
US industrial production is forecast to have contracted again during
September. Figures due out on Thursday are expected to show that production
fell 0.8 per cent, after a 1.1 per cent fall in August.
US optimism is tipped to have retreated further in October. The
IBD/TIPP optimism index, out tomorrow, is expected to have fallen to 45,
from 45.8 in September.
US housing starts are expected to have fallen during September. Figures
due out on Friday are tipped to show that 880,000 houses were started in the
month, down from 895,000 in August. The number of building permits granted
is tipped to have fallen to 840,000, from 857,000.
Japan’s consumer confidence is predicted to have fallen in
September. Data due out tomorrow are expected to show that the confidence
index fell to 29.7 in September, from 30.1 in August.
Banking
& finance
Morgan Stanley Mitsubishi UFJ, the Japanese banking giant that had
planned to sink $9 billion (£5.33 billion) into Morgan Stanley, the American
investment bank, is understood to have begun an eleventh-hour internal
review of the deal and may seek to renegotiate the terms.
Britannia, the UK’s second- largest building society, is holding secret
talks with the financial services unit of the Co-op, the high street retail
group, about creating a “super-mutual” that would have more than six million
members and about £75 billion in assets. (The Sunday Telegraph)
Santander Philip Falcone, the American hedge fund manager who made a
large profit by betting against shares in HBOS, now has Santander, the
Spanish banking group, in his sights. In the past week Harbinger Capital,
his hedge fund, has built up a €208 million (£165 million) short position in
Santander, the eurozone’s largest bank and owner of Abbey, Alliance &
Leicester and Bradford & Bingley in the UK. Although shorting of
financial shares is temporarily banned in Britain, this is not so in Spain.
(The Sunday Times)
Wells Fargo has gained US Federal Reserve clearance to take over
Wachovia. This formally makes Wells Fargo the victor in its battle with
Citigroup to buy the bank. Citigroup dropped out of the chase last Thursday.
Construction
& property
Rugby Estates David Tye and Andrew Wilson, chairman and chief executive
of Rugby Estates, the AIM-listed property group, are wooing leading
shareholders over a plan to raise £100 million in fresh equity. The duo met
Laxey Partners, the biggest shareholder, on Friday to seek approval for the
equity proposal, which would buy commercial properties cheaply as the credit
crunch worsens. (The Independent on Sunday)
Consumer
goods
SABMiller, the brewing group, is considering restricting the sales of
Peroni in the UK to ensure that the top-selling beer does not suffer the
fate of Stella Artois, its rival. Speaking ahead of a trading statement due
this week, Alan Clark, the managing director of SABMiller Europe, said that
restricting the distribution of the Italian premium label was one way to
maintain the brand. (The Independent on Sunday)
Premier Foods, the owner of Hovis bread and Oxo stock cubes, has begun
secret talks with CCMP Capital, formerly the private equity business of
JPMorgan, about a cash injection likely to be worth several hundred million
pounds. Sources said that the investment would enable Premier to pay down
part of its near-£1.8 billion debt pile. (The Sunday Telegraph)
Engineering
General Motors and Chrysler, the US carmakers, have been in
talks that could lead to a merger. Shares in GM fell by 46 per cent last
week to their lowest level in more than 50 years after the company was
downgraded by Standard & Poor’s, the rating agency. Chrysler is
privately owned and so no longer has to publish its results, but it is
believed to have been severely affected by the economic downturn because
more than 90 per cent of its cars are sold only in the United States.
Health
The British Association of Pharmaceutical Wholesalers said that the
country could face a shortage of medicines this winter as the value of
sterling slides. Another factor in the shortage is that in January there
will be a switch to a new drug-pricing regime in which the National Health
Service will pay about 5 per cent less for medicines than it does now. This
is forcing drug wholesalers to run down their stocks before Christmas.
Industrials
Ineos, the Hampshire-based chemicals group that is one of Britain’s
biggest private companies, is considering selling some of its assets in an effort
to reduce its debt burden. The company, which has expanded rapidly through
debt-fuelled acquisitions, is understood to be looking at the disposal of a
number of its businesses in the United States, according to sources. (The
Sunday Telegraph)
Leisure
Whitbread Robert Tchenguiz, the property tycoon, is believed to have
sold his entire 3 per cent holding in Whitbread, the hotels and coffee shops
leisure group. Mr Tchenguiz, who last week unwound his stakes in Mitchells &
Butlers, the pub operator, and in J Sainsbury, the supermarket group,
resulting in losses totalling up to £1 billion, is thought to have broken
even from the sale of his £50 million holding in Whitbread. (The Sunday
Times)
Media
ITV Some of ITV’s biggest stars may have to take a pay cut, the
commercial broadcaster said as it tries to trim its budgets while its
advertising income plunges. It has already announced that it will be cutting
1,000 jobs, including 430 from its regional newsrooms, in response to the
tough market conditions. (The Sunday Times)
Boosey & Hawkes, the classical music publisher that controls the
rights to works by Stravinsky and Rachmaninoff, has emerged as a contender
to buy the Rodgers and Hammerstein collection of music and shows, including
Annie Get Your Gun and South Pacific. The back catalogue of more than 3,000
songs is expected to fetch £120 million. (The Sunday Times)
Natural
resources
BG Broup KazMunaiGaz, the state energy company of Kazakhstan, is
seeking a share in Karachaganak, the gas and condensate field that accounts
for almost a fifth of the oil and gas output of BG, the Berkshire-based
exploration company. KazMunaiGaz wants part of the huge field north of the
Caspian Sea, which since 1995 has been under the control of foreign oil
companies and which last year produced more than 120 million barrels of
hydrocarbons.
Opec, the oil cartel, is to meet in Vienna in November to discuss a
reduction in supply after a dramatic fall in the price of oil. The price of
crude fell by 17 per cent last week and closed at $77.70 a barrel on Friday,
the lowest level in more than a year.
Retailing
Baugur Sir Philip Green, the retail billionaire, is poised to stave off
the collapse of Baugur, the Icelandic retail investor, meaning that
potentially he could control parts of Baugur’s holdings in House of Fraser,
the department store group, as well as Mosaic Fashions, owner of the Karen
Millen, Oasis and Warehouse chains. (The Observer)
Whittard of Chelsea Baugur, the stricken Icelandic retail investor, has
appointed KPMG to review cash management at its Whittard of Chelsea chain,
which sells tea, coffee and crockery, after underperformance at the retailer
and the collapse of the Icelandic banking system last week. (The Sunday
Telegraph)
JJB Sports has appointed specialist debt advisers at KMPG to help to
secure the troubled retailer’s short-term financial future as its problems
increase. KPMG will lead negotiations between JJB and its lending banks HBOS
and Barclays in an effort to get firm agreements that they will continue to
support the company, which has been hit by a number of financial problems.
(The Sunday Times)
Support
services
Cat Protection Britain’s biggest cat charity, has £11 million deposited
with Kaupthing, the bank that was nationalised by the Icelandic Government
last week. Many British charities are also facing a tax threat from the
decision to charge 17.5 per cent VAT on the wages of temporary staff from
next April. (The Observer)
Utilities
EDF, the French energy group, is to consider the sale of British
Energy’s sole coal-fired power station to clear competition hurdles. It is
understood to be confident that regulators in Brussels will approve its
proposed £12.4 billion takeover of British Energy quickly without recourse
to a lengthy inquiry.
The Energy Intensive Users’ Group, which represents factories
that use large amounts of gas and electricity. said that high energy prices
in Britain could lead to factory closedowns during the winter. (The
Observer)
