Good morning: One in 25 businesses would struggle to handle an increase in interest rates of as little as a quarter of a percentage point, according to research published overnight by the insolvency trade body. It is thought that 79,000 businesses would be unable to repay their debts if rates were to rise, four times as many as in September when the Association of Business Recovery Professionals, or R3 as it is known, conducted a similar survey. The research also revealed that 96,000 companies were only paying interest on their borrowings and failing to clear their debts. Philip Aldrick, our economics editor, has a full report, which leads the business section this morning.
The Financial Reporting Council has announced this morning that it has closed its investigation into the conduct of Pricewaterhousecoopers as auditors of Tesco. “The executive counsel to the FRC has concluded that there is not a realistic prospect that a tribunal would make an adverse finding against PWC . . . in respect of the matters within the scope of the investigation.”
Markets snap
Shares in Ocado will be in focus today. The online retailer and wannabe technology group has signed a long-awaited deal to license its software to a European retailer, although the limited nature of the deal (it does not include Ocado’s automated mechanical handling equipment) may disappoint the market. The revelation this morning that Amazon is extending food deliveries to new areas in the southeast of England could also overshadow the announcement.
Oil prices have risen in overnight after Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed their ties with Qatar, accusing the wealthy Gulf Arab state of supporting terrorism. At 6.49am Brent Crude was trading up 1.3 per cent at $50.6 a barrel.
On the economics front we get the closely watched PMI services data for May at 9.30am. City economists expect a reading of 55, down from 55.8 last month. We will have a report later on thetimes.co.uk/business.
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Finally, in the US the Apple chief executive Tim Cook will open the technology group’s annual conference for developers with a keynote address (6pm UK time).
Please do keep sending me any thoughts or observations about Times business coverage to richard.fletcher@thetimes.co.uk.
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