Bank of England Comments by two hardliners on the Bank’s Monetary Policy Committee reinforced expectations of rates rising again this summer. Sir John Gieve said that signs of higher rates affecting consumer demand were not “clear cut yet”. Andrew Sentance said that goods price inflation must subside if the inflation target is to be met.
Business confidence The Institute of Directors’ latest poll of sentiment among UK companies found optimism over prospects had slipped to its weakest in two years, although expectations of profitability remained very high and investment plans had held up well despite rising interest rates.
Britain’s trade deficit narrowed in May to its smallest since October 2005, official data showed, although April’s deficit was revised higher. The global deficit on trade in goods fell to £6.3 billion in May from an upwardly revised £6.9 billion in April as exports rose 3.5 per cent and imports fell slightly.
Sterling hit new 26-year highs, reaching $2.0274 after the dollar sagged to a 2½-year low on its trade-weighted index as currency exchanges fretted over ratings downgrades for US mortgage-backed securities and the potential for financial market turbulence. The euro hit a $1.3740 record high.
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Ben Bernanke, Federal Reserve Chairman, played down calls for the US central bank to focus more on headline inflation rates than on “core” measures of price pressures, which strip out food and energy costs. He said swings in volatile energy and food prices will have little impact on inflation so long as public and corporate expectations of future inflation are held steady.
Down 0.03%
Abbey is hoping to win more of the current account market by offering 8 per cent credit interest to small business customers. From July 16, small business owners who switch their current account to the bank will receive 8 per cent on balances of up to £2,500. Loyal clients will still receive just 0.75 per cent.
Bridgewell, the UK investment bank, said it has gained court consent for its takeover by the Icelandic bank Landsbanki Islands, and that Bridgewell shareholders had approved the £60.3 million bid.
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Up 1.14%
House prices North-South divide continues to widen, according Nationwide as buoyant conditions in the South East drive prices ever higher while values stagnate in northern cities. It found prices have not risen at all in Liverpool over the past year, but that the cost of the average property in London rose more than 15 per cent to almost £300,000.
Plymouth Civic Centre’s listing should be rescinded, the Prime Minister is being told by the local authority. A decision to list the 14-storey, 1960s building is a blow to plans to redevelop the site.
Delek Global Real Estate has sold the City Plaza office block in Sheffield, held in a joint venture with Princeton Investments, for £24 million to CBRE Investors.
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Cemex, of Mexico, said it had taken more than 90 per cent of Rinker, the Australian building materials company, allowing it to make remaining shareholders sell.
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Pepsi Bottling Group said quarterly profits gained, aided by price rises it put on drinks. The largest bottler of PepsiCo beverages said net income rose to $162 million, from $148 million a year earlier.
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Up 0.82%
Cohort reported full-year pre-tax profits of £2.5 million, up from £1.4 million, on £34.4 million sales, up from £17.8 million, as the company benefited from acquisitions.
Continental’s automotive systems division said it will build a €48 million engineering centre in Shanghai as it aims to double its sales in Asia by 2010.
Down 0.32%
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Pfizer said it had won a court ruling in the Irish Republic that the basic patent covering atorvastatin, the active ingredient in its Lipitor cholesterol drug, would be infringed by a rival product from Ranbaxy, the Indian generic drugs maker. The decision bars Ranbaxy from launching its drug before the basic Lipitor patent expires in 2011.
Down 1.83%
ArcelorMittal’s plan to reorganise its flat steel operations in Europe is “a serious danger” to staffing levels, Edouard Martin, a union official, said. He said the programme calls for the creation of a centralised organisation in Luxembourg that will take charge of strategy, purchasing and sales.
Up 0.56%
SFI Group Horwath Clark Whitehill, the former auditor to SFI Group, the collapsed pub group, has paid £6 million to settle a claim against the firm by the former Slug and Lettuce owner.
InterContinental Hotels has appointed its chief marketing officer, Peter Gowers, as chief executive for Asia Pacific. Kirk Kinsell is promoted from chief development officer, Americas, to replace Richard Hartman as president, Europe, Middle East and Africa.
The Hilton Cardiff hotel has been acquired by Tonstate, the property company controlled by Edward Wojakovski, from Marcol Group in a rumoured £40 million deal that will see the 200-room hotel retain the Hilton brand.
Autogrill, the Italian catering company, denied is is interested in acquiring Little Chef, insisting that “no such interest exists”.
Young & Co, the pub operator, reported a 6.3 per cent rise in like-for-like sales in managed pubs in the past three months despite the poor weather in June.
Neteller’s former president, John Lefebvre, followed its co-founder, Stephen Lawrence, in pleading guilty to conspiracy in connection with the alleged transfer of internet gambling funds in the US by the payment processor.
Up 0.57%
Liberty Capital, holding group of the media mogul John Malone, will probably seek full control of the satellite operator DirecTV within 12 months, according to an Citigroup analyst report. It saw a 75 per cent chance of a bid, which could be at $30 a share, against a recent price of $24. Liberty agreed to exchange a stake in News Corporation, parent company of The Times, for a 38 per cent controlling stake in DirecTV in a deal forecast to be closed by the end of the year.
Up 1.60%
Highland Gold Mining’s licence to develop a gold deposit in Russia should be withdrawn, regulators say. The Natural Resources Ministry said that they were arguing that the London-listed group’s licence for the Mayskoye deposit had been violated by failure to submit a plan to develop it.
Up 0.34%
J Sainsbury’s shareholders at its annual meeting today have been urged to oppose a pay deal offered to Justin King, its chief executive. The board raised his pay partly to retain him after a failed takeover approach by CVC, the private equity group. Pirc, the corporate governance lobby group, said it is concerned about the “potentially excessive” rewards on offer.
Marks & Spencer said it is likely to experience continued slowing in market-share gains as it revealed its weakest quarterly sales figures in two years.
Asos, the online fashion retailer, has more than doubled its annual profits.
Up 1.06%
Business Post, the rival to Royal Mail, said new contracts helped to boost revenue by 13 per cent in the first three months of its year.
Aggreko announced an exclusive deal to supply temporary power for the Beijing Olympics in 2008.
WSP, the London-based building and construction consultant, plans to expand into Australia with the acquisition of the engineering and environmental firm Lincolne Scott for £9.8 million in cash and shares. Lincolne Scott, with 440 staff, is a specialist in “green” buildings.
Johnson Service Group, owner of Sketchley, said trading had been hit by a poor performance from its high street dry cleaning business. Johnson gave a weaker than expected trading update for the three months to June 30, with a particularly slow performance by the Johnson’s Cleaners operation.
Safestore, Britain’s largest storage provider, said it is giving “full consideration” to becoming a tax-efficient real estate investment trust. Its comment suggests it may emulate the Big Yellow storage group, which has taken the step.
Up 1.22%
India’s top software services houses should unveil quarterly earnings up by 10 to 25 per cent after winning more outsourcing business from Western clients, but wage rises and a stronger rupee will have dented margins. Analysts expect a slowdown in earnings growth, and will be looking out for companies lowering forecasts even though the outlook for new outsourcing work is still buoyant.
Chinasoft International, the IT service provider, expects revenue from providing outsourcing to Europe and America to triple to about $100 million by end-2008 and is eyeing more overseas acquisitions. The company, of which Microsoft and International Finance each own nearly 10 per cent, should see its outsourcing revenue in Europe and America rise to about $150 million a year by 2010.
Down 0.06%
BT could be forced to pay millions of pounds to Britain’s main mobile operators after Ofcom ruled that the telecoms group was not paying too much to have its customers connected to the mobile networks.
KPN, the Dutch telecoms group, was fined €1.6 million by its regulator for failing to secure consent for two discounts offered to large business customers in 2004 and 2005.
Bouygues Telecom is planning to launch fixed-line consumer broadband services to try to boost sales amid falling wireless prices and win new customers, France’s third-largest mobile operator said. The company, part of the Bouygues conglomerate, is the latest wireless operator to jump on the broadband bandwagon, after similar moves by SFR and Orange.
Up 0.62%
Deutsche Lufthansa said that its June overall load factor was 75.1 per cent, up 1.8 percentage points year-on-year. The passenger load factor rose to 80 per cent, up two points year-on-year, while the cargo load factor rose by 3.3 points to 70.1 per cent. About 27 million passengers flew with Lufthansa in January-June, 5.9 per cent more than a year earlier.
Air China is to buy 23 Airbus A320 jets, with a list price of $1.4 billion, it said. The airline said the aircraft would have delivery dates from January 2009 to December 2012 and the price was below list price. The airline will pay cash, from reserves and commercial loans.
Up 1.37%
Deregulation Just 309 French household customers have switched to suppliers selling power at liberalised prices since European electricity and gas markets were deregulated on July 1, an official of CRE, the sector regulator, said. She said the fact customers cannot switch back to regulated prices “is something that seems to pose a problem to consumer associations”. Gaz de France and EDF still sell power at regulated prices.
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