Economics
Home repossessions surged by 40 per cent in the first three months of
the year, according to the Financial Services Authority. New repossessions
rose to 9,152, up from 6,471 in the first quarter of 2007, while the number
of people who have missed three payments or more rose from about 262,159 to
301,853.
Correction: The number of mortgage accounts in arrears last year by the
Finance and Leasing Association, which represents 75 per cent of “second
charge” lenders, was 40,000, not 400,000 as we reported (August 5).
Services sector Conditions in the services sector, the engine room of
the economy, remained dire last month, according to the latest CIPS/Markit
purchasing managers’ survey. Its headline index edged up to 47.4 in July,
from 47.1 in June, but remained well below 50, indicating that services
industries are continuing to contract.
Manufacturing sector output tumbled by 0.5 per cent in June, marking
the fourth monthly fall in a row and the first sustained period of decline
since 2001. The broader measure of industrial production, which includes the
utilities and extractive industries, fell by 0.2 per cent in June.
Economic growth in the three months to July probably slowed to 0.1 per
cent, the National Institute of Economic and Social Research said in its
latest unofficial monthly estimate.
Consumer confidence Nationwide’s consumer confidence index fell to 51
in July, from 61 in June, to reach its lowest level since records began in
2004.
Unemployment The latest Report on Jobs from the Recruitment and
Employment Confederation said that permanent placements of staff fell for
the fourth successive month in July and at the sharpest rate since December
2001. Demand for permanent staff also fell, for the second month running,
with the latest drop the fastest for 6½ years.
Eurozone services sector The headline index of the RBS/Markit
purchasing managers’ survey of the eurozone services sector fell to a
five-year low of 48.3 for July, from a June reading of 49.1.
Eurozone retail sales fell by 0.6 per cent in June to be 3.1 per cent
down on a year earlier, a record annual decline.
The US services sector The Institute of Supply Management index of
services activity rose to 49.5 in July, from 48.2 in June.
US factory orders rose by 1.7 per cent in June, after an upwardly
revised 0.9 per cent gain in May, the strongest monthly gain since December
and beating Wall Street forecasts of a 0.7 per cent rise.
US interest rates The Federal Reserve has held US interest rates at 2
per cent.
Oil prices By late afternoon in London, benchmark North Sea Brent crude
was down by $2.26 at $118.42, while in New York, benchmark US light crude
was down by $1.83 at $119.58 a barrel.
Banking
& finance
Tullett Prebon The merger between Tullett Prebon and GFI, its rival
bonds broker, could be agreed soon, creating a £1.6 billion financial
powerhouse with an estimated 32 per cent of the interdealer broker market.
Barclays, the banking group, reported the sale of its closed life
assurance book to Swiss Re for £753 million.
Legal & General, the insurance group, reported an unexpected 6 per
cent rise in first-half operating profits to £626 million, from £589 million
last time.
Sigma Finance, the $30 billion (£15.3 billion) structured investment
vehicle, saw its creditors appoint Deloitte, the accountants, and Orrick,
the law firm, as advisers.
Standard Chartered, the banking group, has reported a 31 per cent rise
in first-half pretax profits to $2.5 billion, from $1.9 billion last time,
and attributed its record profits to strong performances across Asia, Africa
and the Middle East.
Halifax, the mortgage lender, and Persimmon, the housebuilder, are
offering first-time buyers the chance to get on the housing ladder – if they
can save up to £5,000 – provided they use it to buy a Persimmon home.
Northern Rock, the nationalised bank, revealed a first-half loss of
£585 million, partly because of an increase in the number of borrowers
failing to meet their interest bills.
Construction
& property
Kier Group, the construction company, said that it had won a contract
worth about £100 million to provide civil engineering works for a power
station at West Burton, in Nottinghamshire, on behalf of EDF Energy.
Consumer
goods
Palm oilThe price of palm oil, the basis of many foodstuffs such as
margarine, will remain at record levels, according to New Britain, the
producer based in Papua New Guinea which reported a 93 per cent jump in its
first-half profits to $68.1 million (£34.5 million).
Carlsberg, the Danish brewer, reported better than expected first-half
results as a growing thirst for premium lager in Russia and parts of Asia
helped to offset declines in Britain and Denmark.
Engineering
GKN is expected to sign an agreement with Airbus, the European plane
maker, for the purchase of its Filton site, near Bristol, which would
safeguard hundreds of UK aerospace jobs.
Meggitt, the aerospace engineer, reported a 59 per cent rise in
first-half profits and said it was comfortable that it would meet its
full-year targets.
General Motors The cost of insuring the debt of General Motors, the US
carmaker, against default hit a record high after the $15.5 billion (£7.9
billion) quarterly loss reported by the group last week.
Health
William Ransom & Son, the pharmaceuticals and healthcare group
based in Hertfordshire, has agreed with Navamedic, the Norwegian group, to
terminate the distribution deal for Alateris, the UK’s first licensed
pharmaceutical glucosamine product, effective on November 1.
Industrials
Cookson, the industrial materials group, beat forecasts with a 45 per
cent rise in first-half pretax profits to £99.1 million , led by its
ceramics business, and said it expected a a strong improvement in its
full-year performance.
Leisure
Whitbread, the leisure group, has opened its first Costa coffee store
in Beijing in time for the Olympics, the first of 300 stores planned in
China under a joint venture with Beijing Hualian Group. It already has 25
stores in Shanghai under a separate joint venture with Yueda Group.
Marlylebone Warwick Balfour, the hotel and property company, has
acquired a former warehouse in Canterbury, Kent, from Bell-way, the property
developer, for conversion to a 40-room Hotel du Vin. Christie & Co was
the agent in the sale.
Von Essen Hotels, the luxury hotel group, reported a 16.1 per cent rise
in full-year operating profits to £15.1 million, from turnover up 13.3 per
cent to £56.8 million.
Individual Restaurant Company, the operator of the Piccol-ino chain,
said that it was pressing ahead with plans to open seven more restaurants
this year after reporting a 21 per cent jump in first-half sales.
Media
Sony BMG Sony took full control of Sony BMG, the music company behind
Elvis Presley and Simon Cowell, in a buyout that ended a troubled four-year
joint venture with Bertelsmann.
Taylor Nelson Sofres Apax Partners, the private equity group, has held
talks with GfK, the German market research group, about funding a cash bid
for Taylor Nelson Sofres, GfK’s UK rival.
Cablevision Systems, the US cable TV company, said it would hire
investment banks to help to evaluate a spin-off at least one of its
businesses, sending its shares up by as much as 8 per cent.
News Corporation, parent company of The Times, reported full year
operating profits $5.4 billion (£2.76 billion), up by 21 per cent on last
time.
Natural
resources
Drax, which produces 7 per cent of the UK’s electricity at its Selby
coal-fired power station in North Yorkshire, said it would gain from rising
power prices despite higher coal and carbon costs hitting its first-half
profits by 29 per cent.
Retailing
High street customers Nearly a third of consumers plan to cut their
spending on the high street to cope with food price and energy inflation,
according to a survey from PricewaterhouseCoopers.
DSG International, the electricals retailer behind Currys and PC World,
plans to open the first of its “next generation” superstores near Birmingham
later this year.
Carpetright Lord Harris, founder and chief executive of Carpetright,
said there were no plans to cut the dividend despite a 15.4 per cent plunge
in like-for-like sales over the 13 weeks to August 2.
Marchpole, the luxury fashion group behind the Ungaro, Boateng and
Rossignol brands, cut its final dividend after reporting a £6.1 million
full-year pre-tax loss, from a profit of £6.3 million last time.
Land of Leather, the troubled furniture retailer, is facing a £250,000
lawsuit from Agilo, the investment group that wanted to inject £5 million of
emergency funding into the business only two months ago.
Support
services
Michael Page International, the recruitment group, has rebuffed an
unsolicited takeover offer from Adecco, its Swiss rival, which it says
undervalues the British group. Shares in Michael Page, which has been hit by
the slowdown in its key financial services market, rose after news of the
bid.
Mouchel, the consulting and business services group, said it expects
its full-year results to be in line with management expectations and its
future prospects are underpinned by a healthy bidding pipeline of £2.2
billion.
Technology
Alcatel-Lucent Ben Verwaayen, former chief executive of BT Group, is
understood to have turned down a top job at Alcatel-Lucent, the world's
largest telecoms equipment supplier, after the resignation of its chairman
and chief executive last week.
Autonomy, the Cambridge technology group, said it has won a contract
from an unnamed “international broadcaster” valued at more than $10 million
(£5.1 million) over the next year.
Telecoms
Spirent Communications, the company based in West Sussex which tests
telecoms systems, reported a 179 per cent rise in first-half adjusted
pre-tax profits to £22.6 million, driven by demand for broadband wireless
testing.
Mobile phone sales worldwide are expected to reach 1.28 billion units
this year, an 11 per cent increase from last year, although sales in Europe
will fall for the first time since 2001, according to Gartner, the research
company.
Transport
British Airways said tough conditions caused by high oil prices and a
weak economy had resulted in a 3 per cent fall in passenger numbers in July
to 3,036,000, down from 3,130,000 last time.
Iberia, the Spanish flag carrier, reported a first-half operating loss
of €32 million (£25.3 million), a fall of 146 per cent on last time.
Air France-KLM, Europe’s third-largest airline by passenger numbers,
said that its first-quarter pre-tax income had fallen by 58 per cent to €251
million.
BAA, the airports operator, has started legal action against Ryanair
after the budget carrier refused to pay a 7 per cent increase in landing
charges at Stansted.
Utilities
United Utilities is to pump an additional £2 million a year into its
fund for struggling customers. The group, which manages water and waste
water distribution in the North West of England, will now give £5 million a
year to the charity.
Scottish & Southern Energy said that it has invested £750,000 in
Green Highland Renewables in return for a 33.3 per cent share of the
company. Green Highland, based in Edinburgh, is developing hydro-electric
schemes in Britain.
