Economics
Interest rates The Bank of England’s Monetary Policy Committee will be
setting interest rates on Thursday after a two-day meeting and is expected
to order a quarter-point cut in official base rates to 4.75 per cent.
The trade gap is expected to have fallen back to perhaps £4.5 billion
in August, from £4.6 billion in July, according to official figures due out
on Thursday.
Manufacturing output is expected to have suffered a further fall in
August, in official data due out today. Output fell by 0.2 per cent during
July and could register a similar decline in August.
Eurozone GDP Revised eurozone GDP figures for the second quarter will
be released on Wednesday and are expected to confirm that the 15-nation
economy shrank by 0.2 per cent.
French industrial production, in data due out on Friday, is tipped to
have fallen by 0.5 per cent during August, after a 1.2 per cent increase in
July.
The French trade deficit is expected to have remained broadly unchanged
in August at about €4.8 billion (£3.74 billion), according to official data
due out on Wednesday.
German industrial production figures, out on Wednesday, are tipped to
show a further fall in output of perhaps 0.6 per cent during August, afer a
1.8 per cent decline in July.
German factory orders are tipped to have fallen by a further 0.5 per
cent or more during August, after a 1.7 per cent decline in July, according
to official figures due out tomorrow.
The German trade surplus is expected to have risen in August to about
€15 billion, from €13.9 billion in July, in official figures to be released
on Thursday.
US interest rates The US Federal Reserve will tomorrow release the
minutes of its latest interest rate-setting meeting, held on September 16.
They will be closely examined for clues to whether a rate cut might be made
at the end of this month.
US consumer credit data, due out tomorrow, are expected to have risen
by perhaps $6 billion (£3.37 billion) in August, after a rise of $4.6
billion in July.
The US trade deficit is expected to have dipped to $59.3 billion during
August, from $62.2 billion in July, according to figures due out on Friday.
Japanese interest rates The Bank of Japan will set interest rates for
the world’s second-largest economy tomorrow. No change from the present 0.5
per cent level is expected.
World economies The International Monetary Fund and the World Bank will
begin their annual meetings in Washinton this week, with a series of key
discussions between central bank governors and finance ministers from across
the world. Ministers and governors from the Group of Seven leading developed
economies will hold talks on Friday.
Banking
& finance
Barclays Small businesses hit by the credit crunch will have their
problems compounded on Wednesday when Barclays drastically increases their
overdraft rate to more than 15 per cent. The bank is raising the interest
rate margin on overdrafts for some of its 50,000 small business customers
from 6.8 per cent above the Bank of England base rate to 10.8 per cent
above. This brings the rate to 15.8 per cent overall.
Britannia Members of the Britannia Building Society are likely to miss
out on their annual dividend as it faces losses on its portfolio of
buy-to-let and property lending. The society, the largest mutual lender
after Nationwide, wrote off more than £40 million of bad debts at its
subsidiary, Capital Investment Group, which carries out its specialist
lending, in the six months to June.
Kaupthing Iceland’s central bank and leaders of its top pension funds
are in talks to put together a rescue plan for the country’s ailing banking
industry. The talks have been triggered by concerns about the financial
health of Kaupthing, Iceland’s biggest bank and a financier of investors in
British businesses.
Aviva, the insurance group, is estimated to have suffered at least 30
per cent of its capital surplus being wiped out by the collapse in global
equity markets. It said in June that a 20 per cent fall in equity markets
would wipe £700 million from its £1.8 billion capital buffer. Since then the
FTSE 100 has fallen by about 12 per cent, while the Dow Jones industrial
average has plunged about 10 per cent.
JPMorgan Chase, the American bank, has been accused by its Wall Street
rivals of dealing the final hammer blow that forced Lehman Brothers into
collapse in a claim that threatens to spark a legal battle. JPMorgan is
alleged to have frozen $17 billion (£9.6 billion) of cash and securities
belonging to Lehman, precipitating the liquidity crisis that then forced
Lehman into bankruptcy protection on September 15.
Unicredit, one of Italy’s largest banks, has outlined its plans for
survival as it said that it was seeking up to €6.6 billion (£5.14 billion)
in fresh funds. The bank, Italy’s second-largest with operations throughout
mainland and Eastern Europe, unveiled a scheme to sell 973 million shares at
€3.083 per share.
Construction
& property
McCarthy & Stone Holders of tens of millions of pounds of mezzanine
debt in McCarthy & Stone, the builder of retirement homes, are bringing
in Houlihan Lokey, the specialist restructuring group, to advise them. NM
Rothschild, the investment bank, is advising the McCarthy & Stone board.
Consumer
goods
C&C, the maker of Magners cider, is expected to confirm that a
sales slump this year has worsened when it reports its interim results on
Thursday. The Dublin-based group forecast that half-year revenues for its
cider division are likely to be 11 per cent lower than last year and overall
revenues for the group – which also makes Bulmers cider – are expected to be
about 8 per cent lower.
Engineering
New car sales in the UK are expected to have slumped by about 20 per
cent in September when the Society of Motor Manufacturers and Traders
publishes its figures today. It is to press the Government for action to
help the industry.
Health
Roche, the Swiss drugs maker, said that Tarceva, its lung cancer
treatment, had been recommended for use by the National Health Service after
Roche reached an agreement with the National Institute for Health and
Clinical Excellence to reduce the price.
Industrials
Steel tariffsThe Russian Government’s Commission for Protective
Measures in Foreign Trade, which is in charge of drafting government
resolutions on customs tariffs, has recommended ending the import tariffs on
some raw materials and steel products used in the car industry and
metallurgy in order to contain rising prices.
Leisure
Pub closures The rate of pub closures is accelerating, according to the
Association of Licensed Multiple Retailers. It said that in 2007 there was a
net loss of about 1,400 pubs, while the figure for this year is expected to
reach more than 2,000.
Media
RTL, the Luxembourg-based media group and the owner of Five, is
understood to have been given the all-clear to bid for ITV, the British
commercial broadcaster, by Bertelsmann, its German parent. The Mohn family,
which controls Bertelsmann, is said to have set aside a £1 billion-plus war
chest for Gerhard Zeiler, chief executive of RTL, to use for European acquisitions.
Natural
resources
Hardy Oil and Gas, the London-listed exploration company, said that it
had plugged and abandoned its GSO1-M1 exploratory well in India after tests
on the well’s geology proved inconclusive. Hardy said that it would continue
to evaluate the M1 prospect by carrying out advanced processing of the 3D
seismic data.
Retailing
MFI, the kitchen supplier, will announce the closure of a substantial
number of its stores this week as part of a business restructuring designed
to safeguard at least 2,000 jobs, from an existing work-force of 3,100.
Kroll, the corporate restructuring specialist, will oversee the process.
JJB Sports Credit insurers are refusing to provide cover for suppliers
to JJB Sports, raising questions about the troubled retailer’s future.
Credit insurers protect suppliers against losses in the event of a company’s
collapse.
J Sainsbury, the supermarket group, will issue a second-quarter trading
update on Wednesday, which will be examined for any evidence that
discounters and the economic slowdown are affecting its sales performance.
It comes a week after bullish comments from Tesco, its rival.
Support
services
IMO Car Wash It is understood that Carlyle, the private equity group,
has requested that its lenders restructure the £350 million debt package
that was arranged by HBOS to finance the 2006 purchase of IMO Car Wash,
which trades at 300 UK sites under the name Arc Clean Car Centres.
Technology
Microsoft, the US software group, has launched a software package for
the Magellan, a Portuguese laptop for schoolchildren aimed at boosting the
country’s technological edge in education. Portugal aims to hand out 500,000
of the laptops, which cost €50 for school pupils, at home and also hopes to
export it to countries in Latin America and Africa.
Telecoms
T-Mobile and 3 UK, through their joint venture company, Mobile
Broadband Network, have signed a five-year managed network deal with BT, the
telecoms group, to provide high-speed, next-generation links connecting
7,500 base station sites. Vodafone, the mobile phone group, is set to
announce a global deal with GoSpoken.com, a website dedicated to putting
books on mobiles. Under Vodafone Books on Mobile, subscribers will have
access to audio books and eBooks on their phones for between £5 and £15.
Transport
BAA, the airports operator, is expected to appoint Royal Bank of
Scotland and HSBC to handle the £2 billion sale of Gatwick. BAA decided to
sell Gatwick last month after a critical report from the Competition
Commission.
Utilities
National Grid is expected to unveil a £17.5 billion capital expenditure
programme tomorrow. The debt-fuelled £3 billion-a-year plan represents a
£1.5 billion increase on a previous forecast to upgrade gas and electricity
networks here and in the United States up to 2012.
Wholesale power prices in the UK have soared close to record levels
because of a squeeze in generating capacity, which is expected to leave the
country with an unusually thin margin of spare supply next month.
Share tips
The Sunday Telegraph buy JD Sports (retailing), LMS
Capital (banking & finance)
The Mail on Sunday buy Primary Health Properties ( construction
& property)
