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Economics
Interest rates: The Bank of England cut interest rates for the third
month in a row, lowering official rates by a further half-point after
reductions of 2.5 points over the previous two months. The latest cut took
interest rates to 1.5 per cent, a level never before reached in the Bank’s
history, which stretches to 1694.
Eurozone GDP: The eurozone economy was confirmed as having shrunk by
0.2 per cent and entering recession during the third quarter.
Eurozone economic confidence: Sentiment over the economic climate in
the eurozone during December dropped to the lowest levels since at least
1990, according to the latest European Commission poll. Its gauge of
confidence among businesses fell to minus 3.17, the lowest since 1985, from
minus 2.10 in November.
Eurozone unemployment: The number of people out of work in the
16-nation bloc rose to 7.8 per cent of the workforce during November, from
7.7. per cent in October, official data showed. Unemployment in Spain topped
three million for the first time.
German manufacturing orders: New orders flowing to Germany’s factories
fell by a much larger than expected 6 per cent during November, hit by
collapsing demand at home and abroad.
German exports: Europe’s biggest economy reported a record fall in
exports during November, with overseas demand for German goods down by 10.6
per cent, the sharpest fall since the country’s reunification in 1990.
Imports also fell, by 5.6 per cent, so that the country’s trade surplus
dropped to €10.7 billion (£9.6 billion), from €15.8 billion in October.
US employment: The number of Americans continuing to claim unemployment
benefits rose last week by a larger than forecast 101,000 to 4.61 million,
according to official figures. The news came as key non-farm payrolls data,
out today, are expected to show a rise of up to one million in the number of
Americans out of work.
US bailout: The US Treasury said that the first half of its $700
billion (£460 billion) bank bailout fund was probably enough to hold off
further financial crises but urged Congress to release the rest of the cash.
The Treasury has paid out $269 billion of the first $350 billion released by
the Government.
US fiscal stimulus: President-elect Obama warned that the US economy
could remain mired in recession for years without bold action and urged
Congress to approve a new fiscal stimulus package of tax cuts and increased
government spending.
Banking
& finance
Serious Fraud Office: The UK business of Bernard Madoff, the American
fund manager behind an alleged $50 billion (£33 billion) fraud, is being
investigated by the Serious Fraud Office.
Aon: The insurance broker has been fined £5.25 million for
anti-corruption failings after making suspicious payments to help to win
business in overseas jurisdictions. The fine was one of the largest imposed
by the Financial Services Authority and the first for a company failing to
take measures to stop possible bribery.
Aviva: The insurance group said that its joint venture with the
state-owned ABN Amro in the Netherlands would continue after the Dutch
Government reversed a decision by ABN’s previous owner to end the deal. The
Dutch state acquired ABN Amro’s Dutch unit as part of the rescue of Fortis,
the Belgian-Dutch bank, last year.
US banks: The US Government has begun buying $500 billion of
mortgage-backed securities to stimulate the property market, encouraging US
banks to begin offering mortgages at interest rates of less than 5 per cent.
Banking regulatory framework: The Organisation for Economic
Co-operation and Development, the club of rich nations, in its twice-yearly
financial review, criticised the banking regulatory framework as “very
poor”.
Citigroup: The US investment bank has agreed to work with Democratic
senators on a law that will allow judges to set new repayment terms for US
homeowners who cannot pay their mortgages.
Bank of America: Greg Fleming, the former president of Merrill Lynch,
who became head of investment banking at Bank of America after this week’s
merger of the banks, is to become a senior research scholar at Yale
University. He will be the fourth senior executive to depart since the
merger.
Construction
& property
Land Securities: Britain’s largest property company has finally sold
Trillium, its outsourcing arm, for £750 million to Telereal, its rival
property and investment group. Land Securities had first mooted a sale of
the division in November 2007, when it had hoped to fetch £1 billion from
the deal.
Costain: The London-listed construction group, based in Berkshire,
reported a record £2 billion order book and said it had £700 million of work
secured for this year.
Persimmon: The housebuilder said that it would not pay a dividend this
year as it continued to conserve cash. It legally completed the sale of
10,202 units in 2008 at an average selling price of £172,000, against the
£189,558 price reported for 2007.
Foxtons: The London estate agency has broken its banking covenants, and
BC Partners, its private equity owner, has ruled out a rescue of the
business.
Consumer
goods
Scandinavian Tobacco Group: Europe’s largest cigar manufacturer said
that it had bought two family-owned cigar factories in Central America for
an undisclosed sum in Danlí, Honduras, and Estelí, Nicaragua. It will
jointly employ about 950 people producing about 17 million hand-rolled,
premium cigars a year. The sellers are the Olivas and Torano families.
C&C: The management shake-up at the Magners cider maker gathered
pace as Brendan Dwan announced his retirement after 34 years with the group.
Stephen Glancey, the new chief operating officer, will add the role of
finance director to his existing duties.
Engineering
Nissan: The Japanese carmaker is cutting 1,200 jobs at its Sunderland
plant after a dramatic decline in sales. The company, which has already
reduced production at the plant, said that it would cut 800 permanent
workers and would not renew the contracts of 400 temporary staff beyond this
month.
Health
Ipsen: The French drugs maker said that it expected to meet its
financial goals for 2009 as well as its objectives in North America for 2012
and to triple its number of clinical studies. The reiteration of its goals
comes after Ipsen suffered a setback on Reloxin, its anti-wrinkle treatment
that could be a possible rival to Allergan’s Botox. But US health regulators
have pushed back a possible approval of the drug to April.
Industrials
Lyondell Chemical: The collapsed US business of LyondellBasell, the
Dutch chemicals company, has won approval for a $2.1 billion (£1.4 billion)
loan to keep its operations running. It needs the cash to pay down more than
$1 billion of debt.
Leisure
Holidays: The weak pound and the recession are forcing consumers to
consider holidaying in the UK or destinations such as Turkey and North
Africa, according to Hitwise, which monitors internet searches. Flight
searches in the week after Christmas fell by 42 per cent, with searches to
America down by 52 per cent and those to the eurozone down by 45 per cent.
Arena Leisure: The racecourse operator said that trading for 2008 would
be in line with the reduced forecasts pencilled in by analysts after its
profit warning in October.
Media
Cineworld: The UK’s second-largest cinema chain, with 75 sites and 775
screens, said that Harry Potter and the Half-Blood Prince was one of several
releases expected to draw film fans to its cinemas in the coming year. The
film’s release has been delayed until the summer, but Cineworld said
box-office successes such The Dark Knight and Mamma Mia! had offset the
effect of the rescheduling.
Virgin Media: The cable television operator said it has signed an
agreement with ITV to show some of the commercial broadcaster’s programming
through its on-demand service, which already offers BBC and Channel 4
programmes. The service has 3.5 million customers.
Mecom: The European newspaper company run by David Montgomery, former
chief executive of the Mirror Group, will probably have to sell about £200
million of its newspapers to help to trim its near-£600 million debt to
acceptable levels.
Natural
resources
Wellsteam: The London-listed oil and gas industry supplier, based in
Newcastle, said that its business had remained buoyant despite falling oil
prices and it expected its full-year results to meet market forecasts for
2008 and 2009. Wellstream said that revenues had grown by more than 35 per
cent last year, although orders had dipped since November.
Retailing
J Sainsbury: The supermarket chain reported a 4.5 per cent rise in
sales over Christmas in what it claims was its best performance so far. The
rise in like-for-like sales, which strips out gains from new stores opened
during the 13 weeks to January 3, had beaten analysts’ forecasts of a 3.9
per cent increase.
Signet: The company behind H Samuel, the jewellery chain, revealed that
its UK sales had dropped in the run-up to Christmas. Signet, which also
trades as Ernest Jones and Leslie Davis from a total of 561 UK stores, said
that like-for-like sales had fallen by 10.9 per cent in the nine weeks to
January 3, leaving the figure 3.5 per cent lower for the first 48 weeks of
the financial year.
Majestic Wine: Britain’s biggest wine warehouse chain said that
although like-for-like champagne sales to individual customers had fallen by
5 per cent over Christmas, purchases of sparkling wines such as cava had
jumped by 25 per cent. In a trading update for the ten weeks to January 5,
the group reported a 2.9 per cent fall in like-for-like sales, an
improvement on the 4.7 per cent decline in the five weeks to November 3.
Support
Services
Clifford Chance: The world’s biggest law firm by revenue is seeking an
average of £100,000 from each of its 400 equity partners to raise more than
£40 million. The move came as it announced that it was in redundancy talks
that could see up to 80 junior lawyers lose their jobs. The firm employs
1,000 staff in London.
Hays: Britain’s largest recruitment company unveiled a 10 per cent drop
in revenues as it reported falling demand for its services around the world.
Michael Page: The recruitment company reported that fourth-quarter
gross profits had fallen by 7.3 per cent to £119 million, from £128 million
in the same quarter of 2007. Last year the group had rejected a bid approach
from Adecco, its Swiss rival.
Technology
Dell: The US computer group plans to cut 1,900 jobs and shut down
production in Limerick, its largest manufacturing plant outside the United
States, in favour of a cheaper workforce in Poland. Dell said that the move
was part of a $3 billion (£2 billion) global cost-cutting drive announced
last year. The company had been the Irish Republic’s second-largest
corporate employer and its biggest exporter.
Autonomy: The London-listed software group, based in Cambridge, said
that it would meet or exceed revenue forecasts for 2008 and would also beat
expectations for earnings per share. The group’s software is used to track
e-mails and telephone conversations for more than 17,000 companies.
Satyam: Indian investors are demanding to know how
PricewaterhouseCoopers, the auditor, missed a systematic £1 billion fraud at
Satyam, the IT outsourcing group, for as long as seven years, while Merrill
Lynch, the American bank, had become aware of the deception within ten days.
Telecoms
BT: The telecoms group will scrap charges for 0870 and 0845 numbers,
costing the company £24 million. The two numbers are used by banks, building
societies, utilities, insurance groups and doctors’ surgeries and cost up to
5.8p a minute for BT’s 14 million customers.
Ofcom: The telecoms watchdog said more than 60 per cent of UK consumers
pay extra for packages providing broadband speed of up to 8 megabits (Mb)
but are receiving an average speed of only 3.6Mb.
Transport
Aer Lingus: The Irish carrier reported a 4.6 per cent drop in its
December passenger numbers to 703,000, two days after Ryanair, the low-cost
airline and its predator, reported double-digit growth.
Virgin Atlantic: The airline plans to cut its business-class fares by
40 per cent on flights to New York and by 38 per cent on flights to Boston.
Utilities
Ofgem: The energy regulator has launched a consultation into
differences between pre-payment meter users and homes that pay their bills
via direct debit.
