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Economics
Housing: Home sales slumped to a new 30-year low between September and
November. Agents sold an average of 10.6 houses in England and Wales in the
three months to the end of November — less than one house a week — down from
10.9 in the three months to the end of October, a survey from the Royal
Institution of Chartered Surveyors (RICS) showed. This is the lowest figure
recorded since RICS began its survey in 1978. But the number of househunters
rose to a two-year high, with 14 per cent more agents reporting that new
buyer enquiries rose rather than fell last month.
Producer prices: The cost of goods leaving UK factories fell sharply,
by 0.7 per cent last month, cutting the annual pace of increase from 6.7 per
cent to 5.1 per cent in the latest sign of fast-fading inflationary
pressures. However, “core” output prices, excluding the volatile cost of
food, drink, tobacco and petroleum products, rose by 0.2 per cent, pushing
the annual rate of increase for these up to 5.1 per cent last month, from
October’s 5 per cent.
Input costs: Manufacturers’ costs for fuel, components and raw
materials tumbled by 3.3 per cent last month, drastically cutting their
annual rate of increase to 7.5 per cent, down from 13.8 per cent in October
to the lowest yearly rate since September 2007.
High street trading: The value of total retail sales fell last month by
0.4 per cent from a year earlier, on the heels of a 0.1 per cent
year-on-year decline in October, the latest snapshot of trading conditions
from the British Retail Consortium (BRC) showed. It marked the first
back-to-back drop in total sales since the BRC survey began in January 1995
and fuelled fears of a sharp retreat from the shops by consumers.
Pound: Sterling fell to record lows against the euro amid market
nervousness over Britain’s deteriorating economic prospects. The pound’s
losses drove the euro to levels as high as 87.38p per euro. The single
currency later surrendered some of its gains to close in London at 86.99p.
Shares: The FTSE 100 closed up more than 6 per cent amid hopes that a
big US economic stimulus package would soften the blow of a recession and
might boost demand for raw materials. The index rose 250 points to 4,300.
Jobs market: Employers’ hiring intentions for the first quarter of next
year have plummeted to a 15-year low, Manpower, the employment services
group, reported, stoking concern that unemployment is set to soar as the
recession deepens.
Global economic league: Britain faces being overtaken next year in the
rankings of the world’s biggest economies by both France and Italy, a
leading consultancy said. The Centre for Economic and Business Research said
that the combined impact of the global downturn and the pound’s fall would
leave the UK as the seventh-largest world economy in dollar terms next year,
down from fifth as recently as 2007.
Ratings: Russia became the first G8 country since the start of the
financial crisis to have its credit rating downgraded. Standard & Poor’s
said it was keeping a negative outlook on its new BBB foreign currency
rating and BBB+ rouble rating. Data showed the central bank spent $30
billion (£20.1 billion) in currency market interventions last month.
German manufacturing output: Industrial production in Europe’s biggest
economy fell by 2.1 per cent in October, official figures showed.
Banking
& finance
European banks: French banks will pay back state aid at a much lower
rate than British banks because they are in better shape, the European
Commission said. The average level of interest expected for French banks
will be 8 per cent, compared with the 12 per cent that the Commission
allowed for the Government’s rescue of UK banks.
Securities fraud: A prominent US lawyer who headed Dreier LLP, the
250-attorney corporate law firm, has been charged with perpetrating a $100
million (£67 million) real-estate investment fraud that targeted hedge
funds. Marc Dreier faces federal charges of securities and wire fraud, the
office of the US Attorney in Manhattan said.
Money laundering: The managing partner of a London law firm has been
convicted of laundering the proceeds of a €35 million (£30.3 million) VAT
fraud after transferring client money to an Italian lap dancer. Jonathan
Krestin, managing partner of Butcher Burns, was convicted of one count of
money laundering and fined £5,000 at Isleworth Crown Court.
Share scam: The personal details of 11,000 British shareholders have
been found on a database used by fraudsters who specialise in “boiler room”
share sale scams, the Financial Services Authority said. The database,
obtained from Canadian authorities, contained names, numbers and addresses.
PwC: The Financial Reporting Council criticised PwC for allowing senior
partners involved in making key audit judgments — but outside the audit
department itself — to sell advisory services to audit clients, according to
The Financial Times. While not forbidden by auditor ethical standards, it
felt the policy went against the spirit of rules enacted after previous
accounting scandals.
Construction
& property
Taylor Wimpey: The housebuilder’s renegotiation of its £1.7 billion net
debt burden is going well, according to Peter Redfern, the company’s chief
executive. He told Sky News, the broadcaster, that it was in the banks’
interest as well as the company’s own interests to protect the business.
Consumer
goods
Anheuser-Busch InBev: The global brewing company is to cut 1,400 jobs
in its American beer business. Anheuser-Busch, the Budweiser maker, recently
agreed to a $52 billion (£34.9 billion) takeover by InBev, the
Belgian-Brazilian group behind Stella Artois and Beck’s.
SABMiller: The brewer plans to increase local sourcing as part of its
commitment to boost economic development in the markets where it operates.
By 2012, it will buy raw materials from an additional 15,000 smallholder
farmers in India, Africa and Latin America.
Engineering
Car companies: America’s three biggest car companies stand a good
chance of receiving a $15 billion (£10.1 billion) loan by the beginning of
next week as politicians in Washington studied a draft version of the
bailout Bill.
Wagon Automotive: The British division of the car parts maker has been
put into administration, putting 500 jobs at risk. There will be immediate
job cuts at its headquarters in Birmingham, but Zolfe Cooper, the
administrators, said that they hoped to sell Wagon’s factories in Coventry
and Walsall as going concerns.
Fiat: The Italian carmaker needs to find a partner because it is too
small to survive as an independent company, Sergio Marchionne, its chief
executive said. He expects the industry to consolidate in the next two
years.
Health
AstraZeneca: The drugs company said that it would expand its
collaboration with Bristol-Myers Squibb to develop and commercialise
Dapagliflozin, a treatment for diabetes, in Japan.
Industrials
Dow Chemical: One of America’s biggest chemicals producers is to cut
more than 11 per cent of its workforce. The company said that it would cut
about 5,000 full-time jobs, lay off 6,000 contractors, close 20 of its
facilities and sell non-strategic businesses in an aggressive attempt to
cope with the economic downturn.
ArcelorMittal: The world’s largest steelmaker said that it would lay
off up to 800 white-collar workers in Belgium, as part of a global plan to
shed as many as 9,000 jobs. It has also temporarily laid off or cut the
hours of staff at its plants across the world after reducing output by 35
per cent.
Leisure
Whitbread: The owner of Premier Inn, Britain’s biggest operator of
budget hotels, said that sales through Premier’s business account had risen
by 33 per cent, boosting like-for-like sales by 8.5 per cent in the 39 weeks
to November 27.
Gala Coral: The gambling operator announced a 10 per cent decline in
underlying full-year earnings to £362 million, although at a pre-tax level,
losses widened from £128 million to £397 million after its interest bill
jumped by £53 million to £498 million.
McDonald’s: Consumers hungry for a deal boosted worldwide sales
at the fast food chains’ established outlets by 7.7 per cent in November, it
said. US same-store sales or sales at locations open at least a year rose
4.5 per cent.
Media
Tribune: One of America’s largest newspaper groups, the publisher of
the Los Angeles Times and the Chicago Tribune, has sought bankruptcy
protection as it struggles to renegotiate its estimated $13 billion (£8.7
billion) debt mountain.
Playboy: Christie Hefner plans to step down next year as chairman and
chief executive of Playboy Enterprises, the publisher of one of the world’s
best-known adult magazines, after two decades in the job, the adult
entertainment company said.
Entertainment Rights: The owner of Postman Pat, Basil Brush and Rupert
Bear said it planned to cut a third of its workforce as the collapse of
Woolworths has left it about £800,000 out of pocket. Entertainment UK,
Woolworths’ distribution business, was one of the largest customers of its
home entertainments division.
Natural
resources
Aquarius Platinum: The miner said that operations at its Everest
platinum mine in South Africa had been temporarily suspended because of
geotechnical issues. It expects operations to be suspended for at least one
week. .
Retailing
Carphone Warehouse: David Ross, the co-founder of the mobile phone
retailer, resigned after failing to declare using his stock to secure
personal loans. He also used shareholdings in National Express, Big Yellow
Group and Cosalt as collateral to borrow money.
Interflora UK: The world’s largest flower delivery company is suing
Marks & Spencer and Flowers Direct Online for buying its brand name as a
keyword on Google. The company has filed a lawsuit to stop the two companies
from using 'Interflora' as a sponsored search term, meaning that when users
search for Interflora, Google returns sponsored links to rival companies.
Tesco broker: We reported (December 5) that JPMorgan Cazenove is the
joint house broker to Tesco. We have been asked to point out that, while
Cazenove is joint house broker to Tesco, JPMorgan is not.
Support
Services
Interior Services Group: The group, which provides construction and
project management services, gave warning of a rising number of shelved or
cancelled projects. Clients are deciding to mothball projects as they take a
more cautious view of the economic crisis, it said.
Healthcare Locums: The recruitment agency, which provides staff for the
healthcare and social care sectors, said that it was confident of meeting
full-year profit forecasts and that it expected strong growth to continue.
Technology
Sinosoft Technology: The China-based software company said it expected
net profit for the year to December 31 to be below expectations because of
higher marketing and operational costs. Revenue growth has been limited by
the economic slowdown.
Filtronic: The wireless electronics group said its first-half sales
were slightly lower than a year ago and it reiterated that it expected
weaker trading in the second half because of an industry-wide slowdown in
infrastructure spending.
Telecoms
Nokia Siemens Networks: The telecoms company has signed a five-year
network management deal with Tata Teleservices. It includes network
planning, network roll-out and systems integration.
Transport
Qantas: The Australian airline has told British Airways to choose
between it and Iberia, of Spain, as a merger partner. Alan Joyce, the chief
executive of Qantas, said that a three-way tie-up would not work.
Eurowings: The regional airline is to sell Germanwings, its low-cost
subsidiary, to Lufthansa. Financial details were not discussed. The
transaction should be effective from January next year.
Utilities
Novera Energy: The renewable energy company has submitted planning
applications for two wind farms in Northumberland, one with six turbines
near Longframlington and one with four turbines close to Morpeth.
