Economics
Retail sales Figures from the Office for National Statistics (ONS)
showed that retail sales volumes rose by 0.6 per cent during September,
above all forecasts. Over the third quarter, sales were up by 1.7 per cent,
compared with 1.4 per cent in the previous quarter, while year-on-year sales
rose by 6.3 per cent, the strongest figure since 2004. Retail sales values
rose by 0.5 per cent. Prices as measured by the retail sales deflator fell
by 0.1 per cent over the month and by 1.3 per cent over the year.
Gross mortgage lending totalled £30 billion during September, down from
the £34 billion reported during August, according to figures from the
Council of Mortgage Lenders. Over the year, lending rose by 2.5 per cent,
the lowest figure since August 2005.
Public sector net borrowing in September stood at £6.9 billion,
compared with the £5.7 billion reported for September 2006. The cumulative
current budget deficit stood at £15.4 billion, from the £11.9 billion
reported a year ago, raising some doubts over whether the Government would
be able to meet its borrowing forecasts. Net debt was unchanged from a year
ago at 36.9 per cent of GDP, the ONS said.
Eurozone trade surplus The eurozone achieved a trade surplus in August
despite a steady rise in its currency, but economists said that the euro’s
strength would eventually hurt exports. Preliminary data showed that the 13-
country bloc posted a non-seasonally adjusted external trade surplus of ¤5.7
billion surplus in July.
US unemployment New claims for US unemployment aid climbed by 28,000
last week, much more than had been anticipated and the biggest increase for
any week since February.
Oil prices Higher global oil prices have not affected global economic
activity so far but they are a growing risk, the head of the International
Monetary Fund said. Rodrigo de Rato said that the rise in oil prices was
mainly driven by strong demand.
Banking
& finance
Bank of America stunned investors by unveiling a fall in its
third-quarter profits of 32 per cent to £3.7 billion (£1.81 billion),
compared with $5.42 billion last time, on the back of nearly $4 billion
worth of writedowns and trading losses and well below analysts’ forecasts.
PMI Group, the American mortgage insurer, said that it was expecting to
report a third-quarter loss of about $350 million (£172 million) because of
continued weakness in the US housing and mortgage markets and related
problems in credit derivatives.
Pension schemes More than a quarter of large companies say that they
are considering selling their pension schemes, according to a survey by
PricewaterhouseCoopers.
Construction
& property
Spanish house prices rose by just 0.3 per cent in the third quarter,
the smallest rise since 2000, but they fell in 13 of Spain’s 50 provinces.
The selling prices of property dropped by 1.1 per cent in Valencia and by
0.3 per cent in Alicante, two provinces where hundreds of thousands of
Britons own homes.
Consumer
goods
Scottish & Newcastle, Britain’s biggest brewer, said that it is
preparing to examine “all options” as it braces itself to ward off an
impending £9 billion break-up bid from Heineken and Carlsberg, its rivals.
Umbro Nike, the American sportswear group, is believed to be close to
launching a bid for Umbro, the official England football kit maker. Umbro’s
shares rose by 27.5 per cent on the news, valuing the company at £220
million.
Engineering
Citroën, the French carmarker, said that it had launched a new
version of its C5 saloon and said that it hopes to sell 150,000 units in a
full year, more than twice the volume of C5s sold last year.
Health
Pfizer, the US pharmaceuticals giant, reported a 77 per cent fall in
third-quarter profits to $761 million (£374 million), down from $3.4 billion
last time, prompted by its decision to scrap Exubera, an inhaled form of
insulin for diabetics, which the group said would cost it $2.8 billion.
AstraZeneca, the Anglo-Swedish drugs group, said that the European
Patent Office has revoked its patent on Symbicort, its inhaled asthma
treatment, which generated sales of $1.18 billion last year, including $1.02
billion in Europe.
GlaxoSmithKline The European Medicines Agency said it was tightening
the labelling on Avandia, GlaxoSmithKline’s diabetes treatment, to highlight
the risks for certain patients.
Industrials
Danaher Group, the US industrial conglomerate, said third-quarter
earnings had risen by 26 per cent to $483.7 million (£237 million), from
$268.1 million last time, mainly thanks to cost savings and sales of its
testing equipment.
Leisure
FishWorks, the seafood restaurant chain, reported a tripling of
full-year losses to £1.6 million, compared with a £520,000 loss last time,
after a year in which both its board and the chain itself were overhauled.
An aggressive opening strategy appears to have backfired, as the group said
it plans to close its restaurant in Notting Hill, West London, and other
loss-making venues opened in 2006.
Next Generation Clubs Australia, the tennis and leisure club business
that was founded by David Lloyd, the former tennis star, and his son Scott,
is to be sold to KP Capital, the private equity group, for A$80 million (£35
million).
InterContinental Hotels Group, the Holiday Inn and Crowne Plaza
operator, reported a 5.4 per cent increase in third-quarter revenue per
available room in its Americas region, a slight slowdown from the 6.1 per
cent rise reported in the first half.
Media
ITV said it will take an £18 million operating charge to cover costs of
the premium-rate phone-in scandal, and will pay out up to £7.8 million in
reimbursements to consumers. The broadcaster announced the findings of a
report by Deloitte into concerns over competition callers being charged when
they had no chance of winning.
Emap A string of bidders may be through to the second round for Emap
Radio, but bankers are understood to be concerned that many will not be able
to afford the whole business, believed to be valued at about £400 million.
Natural
resources
Diesel prices The price of diesel hit £1 a litre at forecourts across
Britain after the price of US crude oil rose to $89 a barrel. The AA added
that unleaded petrol has hit 97.76p a litre, nearly 13 per cent up on a year
ago.
Sasol, the South African producer of fuel from coal, said that it
planned to order a reactor that will increase its synthetic fuels output to
about 180,000 barrels a day by 2015.
Retailing
Tesco, the supermarket group, is to start transporting freight along
the Manchester Ship Canal, which it says will cut its carbon emissions by 80
per cent because of the reduction in road traffic. Separately, the retailer
announced the departure of Julia Reynolds, buying director of its Central
European clothing unit, to become chief executive of Figleaves.com, the
online lingerie retailer.
Wal-Mart, the world’s largest retailer, announced plans to cut the
prices of 15,000 items in its stores, which is 30 per cent more than the
number of items that had price cuts at the same time last year.
DSG International, owner of Currys, the electronics retail chain, said
full-year profits would be up to £10 million short of expectations after
Microsoft’s Vista operating system failed to boost the sales of computers as
much as had been expected. DSG said it had sold 50 per cent more laptops in
the UK than a year earlier. But over-optimistic sales estimates meant it had
been forced to discount to clear stocks.
Saks A consortium led by Baugur, the Icelandic retail investment group,
is thought to be considering a $3 billion (£1.47 billion) offer for Saks,
the upmarket American department store group.
Support
services
May Gurney Integrated Services, the support and construction services
company, said that it had acquired Willows Plant, the gas utility
maintenance contractor, in a deal that was initially valued at £4.6 million,
although May Gurney said that it could pay out an additional £10 million.
Technology
Sony, the Japanese electronics giant, is planning to sell its
production lines for the computer chip in its PlayStation 3 gaming console
to Toshiba, its rival, in a deal expected to be worth about $858 million
(£421 million). Sony, which has been struggling to sell the gaming system in
the face of fierce competition from Nintendo’s Wii console, has also cut the
retail cost of the PlayStation 3 in the United States to $499, down from
$599.
Google, the web search giant, beat Wall Street expectations when it
reported a 46 per cent rise in third-quarter net profits to $1.07 billion,
from $733.3 million last time, fuelled by accelerated gains in market share
against rivals and tighter cost controls.
Nokia, the world’s largest maker of mobile phones, said its
third-quarter earnings had been boosted by demand for cheaper phones,
despite a fall in phone prices. The company reported that its earnings per
share rose to €0.40, up from €0.21 per share last time.
Telecoms
BT Group, Britain’s largest telecoms operator, said that it was
planning to start a £250 million programme to build wind turbines across the
country. The turbines are intended to produce one quarter of the company’s
power needs by 2016.
Ofcom, the communications regulator, said that mobile phone calls and
text messages should be allowed on aircraft, if specific airlines decide to
allow passengers to make calls. The proposals were developed jointly with
other European Union members.
France Télécom has been ordered by the European Union’s
highest court to pay back about €1.1 billion (£766 million) that the company
had been paid in illegal state aid. The court was upholding an earlier
European Commission ruling, which had said that the aid had come in the form
of a business tax exemption and a shareholder's advance.
Transport
European freight transport The European Commission plans to ease
international freight traffic in Europe by opening up priority rail
corridors and cutting red tape for ships moving between ports within the
European Union.
Eurotunnel, the Channel Tunnel operator, said that it is to postpone a
planned capital raising, which had been intended to be used to pay back
convertible loan notes, until market conditions improve. The decision means
that the company has accepted that some of its bonds will convert to shares.
Utilities
French nuclear utility workers went out on strike yesterday, cutting
10,000 megawatts of power, or almost 16 per cent of the total electricity
output. The workers were taking part in a 24-hour strike, along with other
public sector workers, in response to plans by President Sarkozy to reform
pensions for French public sector jobs.
