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Economics
Interest rates: Eight members of the Bank of England’s Monetary Policy
Committee voted for the half-point cut in interest rates at their meeting
earlier this month, while David Blanchflower voted for a full percentage
point cut.
The policymakers also voted unanimously to seek government consent for
quantitative easing — the modern equivalent of “printing money”.
Export orders: CBI figures suggested that export orders are set to
slump despite the weaker pound. A balance of 49 per cent of manufacturers
reported that export orders fell in February, the worst reading since 2001.
Manufacturing output is also tipped to drop, with 56 per cent of factories
expecting output to fall in the next three months, compared with just 12 per
cent expecting a rise. The resulting balance of minus 44 per cent is the
lowest reported since 1980.
US industrial production: Figures showed that US industrial production
fell by 1.8 per cent in January, after a downwardly revised 2.4 per cent
drop in December. Manufacturing capacity utilisation fell to 68 per cent,
the lowest since the data series began in 1948.
US housing starts: Figures showed that the number of US housing starts
fell in January by 16.8 per cent, from December, to an annual rate of
466,000 units, far worse than analysts’ consensus forecast of 547,000 units
and reaching 50-year lows. Permits to build new homes, an indicator of
future activity in the housing sector, fell by 4.8 per cent from December’s
figure to an annualised rate of 521,000.
US economy: The US Federal Reserve moved to bolster America’s defences
against a bout of deflation by releasing long-term forecasts for more than
five years ahead, showing that it expects US inflation to return to levels
of 2 per cent or more on key measures over the medium term.
Banking
& finance
Numis: Michael Spencer, the City tycoon and Conservative Party
treasurer, cut most of his financial ties with Numis as he announced that he
plans to step down as chairman of the stockbroker and investment bank.
Coventry Building Society: The lender is the first to offer re-mortgage
deals worth 100 per cent of a property’s value to help those in negative
equity. It is offering existing customers coming to the end of their
mortgage deal a five-year fixed rate mortgage at 4.99 per cent, worth up to
100 per cent of a property’s loan-to-value.
National Savings and Investments: The Government-backed bank has
reduced interest rates on its variable rate savings accounts by up to 0.75
per cent and on fixed-rate accounts by up to 1.35 per cent for new
borrowers, taking its one-year guaranteed income bond to 1 per cent. It
blamed the falling base rate and a drop in gilt yields for the rate changes.
Construction
& property
Brixton: The industrial property group is considering a rights issue to
shore up its balance sheet after its shares slumped to their lowest since
the early 1980s. Segro, its rival, whose shares have shed almost a fifth of
their value, confirmed similar plans.
Heywood Williams: The London-listed building products distributor said
that it had secured new banking terms in Britain and the United States to
enable it to deal with difficult market conditions.
Hypo Real Estate: Germany has approved a draft law that allows the
forced nationalisation of stricken banks, paving the way for Berlin to take
control of Hypo Real Estate, the commercial property lender.
Consumer
goods
Heineken: The Dutch brewer said that it has been forced to take a hit
of €389 million (£343 million) against the Scottish &
Newcastle businesses that it acquired last year. It also reported tough
trading in the UK as the impact of the economic downturn, two duty rises and
the smoking ban sent volumes of Foster’s lager down by 10 per cent, double
the market’s decline of 5.1 per cent.
Carlsberg: The Danish brewer reported resilient full-year results but
said that its focus for the coming year would be on cutting costs,
preserving cashflow and reducing debt as it responded to the tough economic
conditions. It also booked an impairment charge of DKr197 million (£23.3
million) against the value of its Tetley’s brewery in Leeds, which has been
earmarked for closure.
Engineering
Clean Air Power: The AIM- listed company, which develops technology
allowing diesel vehicles to run on natural gas, said its US components
business had won the first part of a deal worth about $480,000 (£338,290) to
supply gas injectors to Advanced Engine Components, the Australian
manufacturer of parts for buses powered by natural gas.
Danfoss: The Danish maker of refrigeration and air conditioning units
said that it was being investigated by competition authorities in Denmark,
Germany and the United States on suspicion of being part of a global
price-fixing cartel.
Saab: The future of the Swedish carmaker appeared to be in jeopardy
after the Swedish Government ruled out its rescue — despite a warning from
General Motors, Saab’s US parent, that the division could file for
bankruptcy protection within days.
Toyota: The Japanese carmaker said that its UK operations will be
cutting jobs and are looking at implementing pay cuts, a reduced working
week and the temporary suspension of workers.
Health
Sanofi Pasteur: The French vaccines maker has begun a clinical study
testing a vaccine against dengue fever in children. Dengue is the most
widespread tropical disease after malaria. The division of Sanofi-Aventis,
the French pharmaceuticals group, said its experimental tetravalent dengue
vaccine was the first to reach this stage of clinical development. The trial
will take place in Thailand.
Industrials
Goodyear: The US tyre and rubber company said that it will cut 5,000
jobs and freeze salaries as the downturn in car sales hits its profits. The
company reported a fourth-quarter loss of $330 million (£232 million),
compared with a profit of $52 million a year earlier, as American demand for
cars dropped to a 27-year low and tyre production fell by 19 per cent
worldwide.
Leisure
Starbucks: Lord Mandelson, the Business Secretary, has attacked Howard
Schultz, chairman and chief executive of Starbucks, the US coffee shop
chain, for talking down the British economy. The Starbucks group went into
reverse for the first time last year and in January it announced that it was
to close another 1,000 stores.
Millennium & Copthorne Hotels: The upmarket operator said it was
cutting all non-essential capital expenditure and had frozen all hiring and
salaries after reporting a 21 per cent decline in revenue per available room
in the first five weeks of the year.
Holidaybreak: The camping and activity holiday specialist said that
trading since the beginning of October had been “broadly flat”, reflecting a
later booking market, but added that it remained confident of meeting
expectations after a strong performance from its education division.
Media
Mecom: The newspaper publisher, whose chief executive is David
Montgomery, formerly of the Mirror Group, said that it had agreed to sell
Sunnmørsposten and Romsdals Budstikke, the Norwegian daily newspapers, to
Polaris Media, the Norwegian group, for an enterprise value of about £55.9
million.
Condé Nast International: The US magazine publisher has closed the
German edition of Vanity Fair after just one year, citing “serious business
challenges” and “difficulties which could not have been foreseen even a
short time ago” as the reason behind the decision.
Natural
resources
BG Group: The London-listed oil and gas group saw its A$995 million
(£445.7 million) offer for Pure Energy, the Australian coal-seam gas
producer, gain board support. The recommendation from Pure trumps the latest
offer from Australia’s Arrow Energy and its partner, Royal Dutch Shell.
BP: The oil and gas group has appointed Robert Dudley, the former boss
of TNK-BP, its Russian joint venture, as a board director with
responsibility for broad oversight of activities in the Americas and Asia.
Mr Dudley resigned from TNK-BP last year amid tensions between BP and its
Russian partners.
Rio Tinto: Leading shareholders in the Anglo-Australian mining group
want Jim Leng reinstated as chairman designate in a move that threatens to
throw the board into turmoil. Mr Leng resigned earlier this month over Rio
Tinto’s controversial capital raising, a month after being named as its new
chairman.
Retailing
Zavvi: More than 400 workers at the high street music retailer are to
lose their jobs after Ernst & Young, the administrator, announced the
closure of 18 stores.
Thorntons: The high street chocolate retailer blamed “poor trading” in
its stores for a 39 per cent slump in half-year pre-tax profits to £7.3
million, from £11.9 million last time as it cut prices to try to boost
dwindling customer numbers.
Sports Direct International: The sporting goods retailer said that its
UK stores continued to trade well in challenging market conditions. In an
update on trading in the 13 weeks to January 25, it said total sales were 12
per cent higher at £355 million while gross profits had risen by £1 million
to £143 million. Despite the effect of the weaker pound on the cost of US
dollar imports, Sports Direct said it remained comfortable with market
expectations for underlying earnings of £135 million in the year to the end
of April.
Support
Services
Intertek: The London-listed safety services company has bought two US
groups to boost its industrial division. Intertek said it had paid an
initial £3.5 million for Aptech Engineering Services and £18.5 million for
WISco Enterprises, based in Texas.
Carillion: The London-listed construction services group, based in
Wolverhampton, said that Al Futtaim Carillion, its Middle Eastern joint
venture, had signed a £550 million contract with Aldar, the developer, to
build the Al Muneera residential scheme in Abu Dhabi. The project will
employ some 7,000 workers.
Technology
Nvidia: The American computer graphics chipmaker said that a 2004
agreement with Intel, the US group, had allowed it to make chip sets that
worked with Intel’s next-generation microprocessors. However, Intel had
alleged in court on Monday that the four-year-old licence agreement did not
extend to its next-generation Nehalem products.
Airwave: Staff at the secure digital radio network used by the
emergency services have threatened strike action after its owner announced
plans to cut 11 per cent of the workforce. Airwave was bought by Macquarie,
the Australian investment group, in 2007 for £2 billion at the height of the
boom for infrastructure assets, following a hotly contested auction. Page 49
Google: A US federal judge has ruled against an American couple who had
accused Google, the US internet group, of invading their privacy by
publishing a picture of their house in its free online map service.
Telecoms
Mobile phone calls: The European Commission’s draft guidelines to cut
the cost of mobile phone call routing fees failed to win a clear endorsement
from European Union governments, raising expectations of changes before
their adoption. The Commission had wanted national regulators in the bloc’s
27 countries to cut wholesale call termination fees by up to 70 per cent.
Transport
Stagecoach: The London-listed transport group, based in Perth, has
submitted its bid for the South Central passenger rail franchise, saying it
was confident that it could “play a significant part in improving the
experience for rail passengers in London and the South of England”.
Utilities
Water companies: Water prices across England and Wales are set to rise
by an average of 4.1 per cent including inflation, increasing the average
household bill to £342 a year. These price increases were agreed by Ofwat,
the regulator, in 2004 to provide water companies with funding to invest in
upgrading their networks, leakage control, customer service and environment
improvements.
British Energy: The £12.5 billion takeover of the country’s largest
independent wholesale generator by EDF, the French utility, threatens to
drive up prices and undermine competition in the UK electricity market,
according to Drax Power, operator of Britain’s largest power station.
