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Economics
The economy: The CBI, Britain’s leading business organisation, has
revised its forecasts for the economy, showing output growing from January
next year and unemployment peaking at 3.03 million. In April it expected no
economic growth until next March and said that unemployment would soar to
3.25 million.
Inflation: Official figures due out tomorrow are expected to show that
consumer prices rose at an annual rate of 1.9 per cent in May, after a 2.3
per cent rise in April. Retail prices index inflation is expected to fall to
minus 1.5 per cent, from minus 1.2 per cent.
UK recovery: More than 40 per cent of companies expect to see signs of
life in the global economy before the end of the year, a report from Ernst &
Young (E&Y) shows. More than a fifth of the 570 global companies
questioned foresaw no recovery until the second half of next year. Nearly 70
per cent said that they were taking advantage of the recession to
bargain-hunt for new market operations, up from 59 per cent at the beginning
of the year. "The number of executives intending to carry out strategic
acquisitions in new areas of business was up 7 per cent from January to
nearly 25 per cent," Scott Halliday, managing partner at E&Y, said.
Unemployment: Figures due out on Wednesday are tipped to show that the
number of people claiming unemployment benefits jumped by 63,000 in May,
after a rise of 57,000 in April. The unemployment rate is forecast to have
risen to 7.3 per cent in April, from 7.1 per cent in March.
Average earnings: Data due out on Wednesday are tipped to show that
earnings including bonuses rose by 0.2 per cent in April, after a 0.4 per
cent drop in March. Pay excluding bonuses is forecast to have risen by 2.8
per cent, after a rise of 3 per cent rise in March.
Retail sales: Figures due out on Thursday are expected to show that
retail sales rose by 0.5 per cent in May, after a 2.6 per cent rise in
April.
Net government borrowing: Public finance figures to be published on
Thursday are expected to show that net government borrowing reached £21
billion in May.
Factory output: The CBI’s Industrial Trends survey, due out on
Thursday, is forecast to show that the balance of factories saying that
output was rising rather than falling edged up to minus 40 in June, up from
the minus 56 reported during May.
German economic sentiment: The ZEW index of German economic sentiment,
due out tomorrow, is forecast to have risen to 35 in June, up from 31.1 in
May.
German producer prices: Figures due out on Friday are expected to show
that German producer prices fell by 0.2 per cent in May, taking the annual
decline to 3.6 per cent.
US house prices: The NAHB US house price index, due out today, is
forecast to have risen to 17 in June, up from 16 in May.
US factory gate prices: Data due out tomorrow are tipped to show that
while producer prices rose by 0.6 per cent in May, the annual decline
widened to minus 4.4 per cent, from minus 3.7 per cent in April. Industrial
production is expected to have fallen by 0.8 per cent in May, after a 0.5
per cent drop in April.
US inflation: Figures due out on Wednesday are tipped to show that
prices fell by 0.9 per cent in May, after a 0.7 per cent drop in April. Core
inflation is tipped to have fallen to 1.8 per cent, from 1.9 per cent in
April.
Bric leaders summit: The leaders of the world’s biggest emerging
markets — Brazil, Russia, India and China — will meet tomorrow for their
first formal summit. Leaders of the so-called Bric nations, responsible for
15 per cent of global output, will discuss ways to reshape the global
financial system after the credit crunch-induced downturn.
Japanese interest rates: The Bank of Japan is expected to keep interest
rates on hold tomorrow at 0.1 per cent.
Global economy: A report from Ernst & Young shows that more than 40
per cent of companies expect to see signs of life in the global economy
before the end of the year.
Banking
& finance
Lloyds Banking Group: The finance house is ditching its American
customers based in Britain, pending a crackdown on international tax evasion
planned by President Obama. Clients have been advised to transfer their
assets to other banks. (The Sunday Telegraph)
Insight Investment Management: Commonwealth Bank of Australia, one of
Australia’s biggest banks, is considering a bid for a £75 billlion part of
the fund management division of Lloyds Banking Group. Commonwealth, with a
market value of nearly £30 billion, is one of a number of bidders circling
Insight Investment’s third-party funds business. (The Sunday Times)
Construction
& property
Construction Products Association: The Government has missed a series
of public sector construction targets, according to a damning report to be
released this week by the building sector trade body. It says that more than
700,000 social homes — about 18 per cent of the stock— are not up to
scratch. (The Independent on Sunday)
Segro: The London-listed industrial property group, based in Berkshire,
is working on plans for a £300 million rights issue — its second this year —
to fund its proposed takeover of Brixton, its rival. The combined group
would be one of the largest industrial companies in Europe and would have
property assets of £5.5 billion. (The Sunday Times)
Consumer
goods
Pernod Ricard: The French drinks group is said to be putting Tia Maria,
the liqueur, up for sale, after weeks of speculation. The brand is expected
to fetch at least €200 million (£170 million). (The Sunday
Times)
Anheuser-Busch InBev: The world’s biggest brewer has put its operations
in Central and Eastern Europe up for sale for about $2 billion (£1.2
billion) as it seeks to reduce its debt mountain. SABMiller is tipped to be
interested. (The Sunday Times)
West Cornwall Pasty Company: The food group has reported a 25 per cent
surge in sales this year and plans to open 14 more stores, taking its total
to 70. The business has more than doubled in size since it was acquired by
Gresham, the private equity group, in 2007 for £40 million. (The
Mail on Sunday)
Gü: James Averdieck could be in line for a multimillion-pound
fortune after receiving approaches for the maker of chocolate puddings. The
company, based in West London, employs about 130 staff and is valued at £50
million. (The Sunday Telegraph)
Engineering
LDV: John Caudwell, the Phones 4U billionaire, is weighing up a bid for
the Birmingham-based van maker, which fell into administration last week. He
said that his interest in LDV was at an early stage and that he had not yet
signed a non-disclosure agreement with PricewaterhouseCoopers, the
administrator. (The Mail on Sunday)
Industrials
Ineos: PricewaterhouseCoopers, auditor to the chemicals group, has
raised “material” concerns about its future as it struggles with £6.4
billion of debt. Last month Ineos secured a standstill agreement with its
banks to avoid breaching covenants on its debt. (The Sunday Telegraph)
Leisure
Whitbread: The leisure group is tipped tomorrow to report a fall of 7
per cent in revenue per available room at its Premier Inn budget hotel
chain, ahead of a market hit by falling spending from leisure and business
travellers. Its first-quarter trading update is expected to show modest
progress at its pub-restaurants and Costa coffee shops.
Admiral Taverns: The privately owned operator of 2,000 tenanted pubs is
understood to be in negotiations with Lloyds Banking Group about a
refinancing of its £850 million debt burden amid fears that the bank may
have to write down at least half that figure. Admiral is also selling more
than 400 pubs.
Gala Coral: Britain’s biggest bingo club operator is drawing up plans
to close at least half a dozen of its least profitable clubs after the
recent tax rise, putting a question mark over about 180 jobs.
Cashcade: The auction of the owner of the Foxy Bingo and Getminted
casino web brands is expected to fetch between £70 million and £100 million,
with PartyGaming, the PartyPoker owner, tipped to seal a deal ahead of 888
Holdings and Paddy Power, the Irish bookmaker.
Media
Lovefilm: The online DVD rental company is considering a stock exchange
listing and has hired an adviser, believed to be Jefferies, the investment
bank, to assess strategic options. These could include a trade sale, with
one media adviser suggesting the business could fetch about £50 million. (The
Independent on Sunday)
Setanta: Endemol, the television production company behind Big
Brother, is in talks to join a rescue deal designed to avert the
collapse of the sports broadcaster. Endemol is among a group of new
investors which are looking at injecting about £40 million in exchange for a
controlling stake in Setanta. (The Sunday Telegraph)
Independent News & Media: The publisher of The Independent
newspaper has brought in North Sea Partners, a specialist in debt
restructuring, as it races to refinance a €200 million (£170 million) bond
that matures on June 26. The group has total debts of €1.4 billion. (The
Sunday Times)
Natural
resources
Anglo American: Cynthia Carroll, the chief executive of Anglo American,
has lost the confidence of leading shareholders, who want her to consider
merging the London-listed mining group with Xstrata, its rival.
Addax Petroleum: Sinopec, the Chinese state oil group, is understood to
have tabled a £4.8 billion bid for the London-listed oil group which has
fields in Kurdish Iraqi. The Chinese offer is believed to have trumped an
earlier bid by the Korean National Oil Corporation. (The Sunday Times)
Retailing
Majestic Wine: Full-year figures from the wine warehouse will show
whether the recession has continued to dampen sales when it reports today.
It had reported earlier that like-for-like sales had dropped by 2.9 per cent
in the ten weeks to January 5, compared with growth of 1.2 per cent in the
run up to Christmas.
Price rises: Shoppers should brace themselves for a fresh wave of price
increases as non-food retailers face a £20 billion foreign exchange hit
after the slump in the pound, according to research. The pound has recovered
in the past month; however, because most companies buy foreign currency in
advance, the huge fall in sterling late last year is only now feeding
through to higher prices.
Woolworths reborn: Sir Geoff Mulcahy, the former Woolworths boss, is
working with a group planning to create a 200-strong chain of "Woolworths-style"
stores. He was chief executive of Kingfisher when it owned Woolworths from
1982 to 2001. The group, headed by Tony Page, the former Woolworths managing
director, might buy some of the collapsed retailer’s vacant stores.
Support
services
National Accident Helpline: Senior managers at the no-win, no-fee legal
group look set to receive up to £23 million for selling their stake in the
business to Lloyds Development Capital. At present the management controls
51 per cent of the business, with LDC owning the remainder — a stake it
acquired in 2006. LDC is understood to be in the process of raising the
funding from Yorkshire Bank. (The Mail on Sunday)
Big Yellow: The self-storage company is to overhaul its executive pay
structure and introduce a “clawback” clause. The plan will potentially award
executive directors up to 110 per cent of their salary each year. However,
the awards can be adjusted if performance is judged to be below standard. (The
Sunday Telegraph)
Telecoms
BT: The telecoms group has attacked government proposals to give mobile
operators hundreds of millions of pounds worth of 3G licences in return for
mobile broadband in rural areas. BT said that the move, which is expected to
form part of the Government’s Digital Britain report, due to be
released this week, would be “anti-competitive” and an “uneconomical use of
state assets”. (The Sunday Telegraph)
Transport
Go-Ahead: The travel group will give an update on trading on Thursday
after good news about the Southern franchise, run by its Govia joint
venture, although it had to pledge a 10 per cent increase in train capacity
as part of the deal. Govia is expecting a 2 per cent fall in passenger
numbers in the year to June 2010 in the bleak economic climate.
British Airways: The carrier’s 3,000 pilots are being recommended by
Balpa, their union, to take a 10 per cent cut in pay and accept 100
voluntary redundancies. BA pilots earn an average salary of about £100,000.
Negotiations with the other unions, representing ground staff, baggage
handlers and cabin crew, are continuing. (The Mail on Sunday)
Ryanair: The budget airline has opened talks with Boeing and Airbus
about ordering up to 300 more aircraft in a deal that would make it more
than double the size of British Airways. Despite the recession, Ryanair has
managed to expand its business. It aims to carry 100 million customers by
2012 — three times the number flown by British Airways last year. (The
Observer)
