UK Economy: Triple-Dip Fears Reignited

By Ed Conway, Economics Editor

The pound has fallen by more than half a cent against the dollar as a sharp fall in manufacturing output raised the likelihood that the UK could slip back into recession.

Sterling dropped from just under $1.492 to $1.484 in intraday trading after the Office for National Statistics reported a 1.5% fall in manufacturing output in January.

The figures, which analysts had expected to be flat, feed directly into the first estimate of UK gross domestic product, which will determine whether Britain is back in recession.

They add to growing fears that the UK economy has slumped decisively over the past six months, and will raise the prospect that the Bank of England acts to pump more stimulus into the economy at its next Monetary Policy Committee meeting.

The Bank Governor, Sir Mervyn King, voted for more quantitative easing at last month's meeting.

Overall industrial production, which also includes mining and quarrying, dropped 1.2% in January – far worse than the 0.1% increase economists had expected.

Some analysts said that the figures had been affected by poor weather in the month, but even bearing that in mind, they were worse than anticipated.

James Knightley of ING said: "It looks as though this sector is going to be a major drag on growth in the first quarter of 2013.

"We have already had poor construction numbers for the start of the quarter so the prospect of yet another return to technical recession is very real.

"This will intensify the pressure on the BoE to do more to help support the economy given government officials suggests they have no intention of letting up on austerity.

"As a result more QE remains probable with sterling very much biased to the downside."

The pound has fallen by around 10% against the dollar since the start of the year, and some economists expect it to fall further in the coming months. It has rarely dropped beneath $1.50 in the long run.

00.25 | 0 komentar | Read More

Centerbridge Swoops For RBS Branch Network

By Mark Kleinman, City Editor

An American investment group has become the latest prospective buyer to show its hand in the auction of more than 300 Royal Bank of Scotland (RBS) branches.

I understand that Centerbridge Partners, a private equity firm and hedge fund manager, has joined forces with Corsair Capital, another buyout firm, to lodge an offer for the branch network being offloaded by the taxpayer-backed bank.

Centerbridge and Corsair have come together in recent weeks, according to insiders, but it is unclear whether they will make a formal offer for the business, which RBS has given the code-name Project Rainbow. The duo are being advised by investment bankers at HSBC.

Corsair's interest in the branches is led by John Maltby, a partner who joined recently from Lloyds Banking Group, the other state-backed bank. Lord Davies, the former trade minister who is a vice-chairman of Corsair, is also taking a keen interest in the situation.

Centerbridge raised its maiden fund, worth $3.2bn, in 2006 and invested capital in companies including Dana, a struggling car parts-maker. In 2010, it acquired a $1bn loan portfolio that had been part of GMAC Financial, a subsidiary of a US group called Ally Financial.

The firm recently opened a European office in London in anticipation of a wave of distressed investment opportunities thrown up by the need for banks to offload hundreds of billions of pounds-worth of non-core assets.

The joint bid from Centerbridge and Corsair is not the only private equity-backed offer for the branches. Apollo Management and JC Flowers, a specialist investor in financial institutions, have also teamed up to bid, while Virgin Money, the banking arm of Sir Richard Branson's empire, is also examining an offer.

Their stiffest competition may, however, emerge from an alternative offer being put together by a group of leading City investors, who are backed by the Pears family, one of Britain's wealthiest.

RBS has to sell the branches in return for the £45.5bn of taxpayers' money it received to rescue it during the banking crisis in 2008. It is supposed to dispose of them by the end of the year but is likely to ask the European Commission for permission to extend that deadline, the bank admitted at its full-year results last month.

Santander UK had been poised to buy the 315 branches but pulled out of a deal last autumn, citing difficulties with the network's IT infrastructure.

00.25 | 0 komentar | Read More

Pound Falls To Another Low Against Dollar

The pound has continued to fall against the dollar, hitting a level last seen in the early days of the Coalition.

It fell to $1.4868 on Monday, after slipping below $1.49 for the first time in more than two and a half years on Friday.

The last time it was at this level was around the time of the General Election in 2010, and during the recession of 2008/2009.

The slide highlights the differing fortunes of two of the world's largest economies.

Last week, the US economy was given a boost when its jobless rate fell to 7.7% - the lowest since December 2008.

But concerns that the UK is heading for a triple dip recession remain, following a string of weak economic data and the downgrading of its credit rating by Moody's.

Sterling has been one of the worst performing major currencies this year, falling by around 8.5% against the dollar and 7% against the euro to date.

It also lost ground against the euro on Monday, which was up 0.3% against sterling at 87.34p.

Market analyst Nawaz Ali from Western Union said the falls come as investors prepare themselves for next week's Budget.

"The overriding concern is that the Government is giving little indication that it will take its foot off austerity which is hurting economic growth," he said.

He said speculation is also mounting that Chancellor George Osborne may announce a review of the Bank of England's remit.

"Investors are eyeing a change to the bank's inflation targeting, which may give Governor King and the incoming Mark Carney more room to explore new monetary stimulus," he added.

More quantitative easing is likely to hit sterling further because it increases its supply and drives its exchange value lower.

The currency movements came the day before industrial and manufacturing data for January, both of which are expected to show little or no growth over the month.

00.25 | 0 komentar | Read More

Food Firms Told To Cut Salt In Popular Dishes

Food companies will be asked to put less salt in popular dishes such as sandwiches and chips as part of a new government drive.

The campaign aims to reduce people's salt consumption by a quarter, reducing their daily intake from an 8.1g a-day average to 6g.

Public Health Minister Anna Soubry launched the new strategy which will set food companies lower targets for the amount of salt they put in their foods.

New maximum targets will be set for popular dishes and the catering and takeaway sector should "do more" to reduce salt quantities, the Department of Health said.

The department said it wanted more companies to sign up to the Government's salt reduction strategy under the Responsibility Deal.

It comes after a 2012 ComRes poll of 1,805 English adults showed that more than half the public (53%) rarely or never consider the amount of salt when buying food, despite more than four in five people (86%) knowing too much salt is bad for their health.

Firms will be asked to change recipes of popular dishes such as sandwiches

Ms Soubry said: "The voluntary approach is working and we have already seen results in our everyday foods, but to get the greatest impact, we need more companies pledging to reduce salt levels, particularly in the catering and take away sector."

Responsibility Deal Food Network chair Dr Susan Jebb said: "It's essential we maintain momentum in our efforts to reduce salt in our diet if we are to prevent the many thousands of premature deaths each year from stroke and heart disease linked to eating too much salt."

Consumer campaign group Which? called on the Government to "name and shame" companies who do not sign up to new salt targets and to change the law if voluntary action fails.

Richard Lloyd, Which? executive director, said: "The Government needs to establish these new salt reduction targets as soon as possible, name and shame companies which don't respond and be prepared to legislate if voluntary action fails."

00.25 | 0 komentar | Read More

UK-Based Car Dealer's Global Sales Hit £6bn

A London-based car dealer has seen its full-year profit rise 10%, on multinational sales of £6.1bn.

Inchcape, which sells and distributes cars for leading manufacturers, reported 2012 pre-tax profit of £250.3m, up from £227.7m on a year earlier.

The company, which operates in 26 countries, saw sales grow 4.4%, to take it past the £6bn barrier.

Inchcape said it posted the better-than-expected profit rise due to strong growth in Asia and Britain, up 31.6% and 3.6% respectively.

The company said its recent investment in high growth and high margin areas in Asia Pacific and emerging markets, including Hong Kong, Chile and Australia, were paying off.

"The Inchcape group may operate below the radar by associating itself with the diverse number of mainstream car brands that it sells, but that is part of its success," Autocar editor Jim Holder told Sky News.

"Much of Inchcape's success in the past year is believed to have been driven by sales in the luxury car sectors, including Land Rover, Mercedes, BMW and Audi, and the ever-increasing mainstream success of VW."

The company recently bought Australia's luxury car group Trivett, giving it exposure to premium brands to which it was not previously exposed in the region.

Meanwhile sales in Europe fell 23.5% as trading conditions, particularly those in Greece, continued to struggle.

Luxury cars are a premium item in Asian countries, including mainland China

European car sales slumped to a 17-year low in 2012 with only Britain bucking the trend with 5.3% growth - but UK sales still remain at 15% below 2007 levels.

The company said it was confident it would deliver further growth in 2013 given that 70% of its group profit now comes from non-European markets.

"Asia Pacific and emerging markets ... are underpinned by population growth, wealth creation, increasing car penetration and industry premiumisation," chief executive Andre Lacroix said.

"We are confident that Inchcape will continue to produce sustainable earnings growth and strong returns for our shareholders."

However, early trading in London saw the company's share price drop more than 2%.

"It's a fact that the European car market has split - and that the top and bottom ends are thriving - while the middle market is struggling," Mr Holder said.

"Upmarket cars inevitably carry upmarket price tags, and larger profit margins. That's great news for the car manufacturers and their go-betweens, of which Inchape is one of the most prolific."

The company was named after its founder, James Mackay, who was given the peerage of Baron Inchcape in 1911.

The name refers to a lighthouse built in the early 19th century on a submerged reef offshore of Arbroath, on the east coast of Scotland.

00.25 | 0 komentar | Read More

Inflation Basket: eBooks In, Champagne Out

The growing popularity of eBooks on devices such as Kindles has pushed them into the so-called 'baskets of goods and services' used to measure official inflation rates.

In its annual review of what should be included to calculate the Consumer Prices Index (CPI) and Retail Prices Index (RPI), the Office for National Statistics (ONS) said that eBooks "represent a significant and growing market, with recent increases in the number of people reading books digitally."

The ONS also added digital television recorder/receivers, including personal video recorders, which are replacing standard Freeview receiver boxes.

Some of the more bizarre additions include continental sliced deli type meats and packaged vegetables for a stir-fry.

It said white rum, bought from either off-licences or shops, was being included to cover spirits that are drunk by younger people.

Champagne sold in restaurants and bars was among the goods taken out of the basket, as the amount drunk continues to fall amid the squeeze on consumer spending.

The round lettuce was also removed but is still covered by iceberg lettuce and pre-packed salad, the ONS assured.

CPI and RPI are calculated using 180,000 price quotations every month, covering around 700 goods and services from 150 areas across the UK.

00.25 | 0 komentar | Read More

Telegraph Slashes Jobs For Seven-Day Format

The Telegraph Media Group is to cut 80 jobs as it merges the Daily and Sunday Telegraph newspapers into a seven-day operation, it has been confirmed.

Some 14% of editorial jobs will go from the staff base of 550 posts.

However the restructure of the two newspapers will see the creation of 50 digital content roles within six months.

Chief executive Murdoch MacLennan sent a letter to staff on Tuesday morning revealing details of the new structure.

He said: "We must move now to complete our transition to a digital business.

"To do that we need to invest significantly and I am today announcing an £8m investment in our digital future, our number one priority."

Mr MacLennan also told workers: "We are also going to have to restructure our editorial operation to produce a root and branch change in the way we function.

"To this end, it will be merged into one unified operation, serving digital and print products on a 24/7 basis."

The newspaper industry has struggled to maintain print circulation as news consumers increasingly seek online product.

Advertising rates have also plummeted in recent months, increasing pressure on overhead cost-cutting at the two newspapers.

A source at the Telegraph Group told Sky News: "There is going to be a major change on the editorial floor because of the pressure on print.

"It is still uncertain who exactly is going to be in the firing line."

Sky sources have revealed that the decision on specific job cuts will be made news week.

:: The Daily Telegraph has been published in print form since 1855 and the Sunday stablemate was established in 1961.

00.25 | 0 komentar | Read More

Jobs: Public Sector Hiring After 'Over-Firing'

It is claimed the austerity-hit public sector is hiring again 'over-firing' following the financial crisis.

The finding is made in the latest survey of firms' hiring intentions by employment group, Manpower.

It suggested that the jobs outlook was at a five-year high, with a majority of employers looking to add staff.

Mark Cahill, Manpower UK's managing director, said: "We've noticed that a number of public sector organisations have begun recruiting again with renewed vigour.

"Austerity is still the order of the day, but in their efforts to implement budget cuts there has been a degree of over-firing.

"In other words, in their zeal to cut budgets, too many people may have been laid off."

He also pointed out that some top talent had chosen to leave for improved job security amid the down-sizing.

Mr Cahill continued: "Now councils and other bodies have realised that if they want to maintain vital public services they are going to need to start recruiting again, but this time a lot more smartly."

The group said the NHS was among the bodies looking to add staff in the public sector, with hiring intentions particularly strong at call centres as ambulance services roll out the new '111' service.

The report  said the health service was just one area where an outsourcing of services had led to a readjustment in public sector employment.

Local authorities and central Government are hiring people to manage the commissioning of services, it found.

While the outlook for construction staff remained poor, Manpower said thousands were finding work with finance firms handling the fall-out from the PPI mis-selling scandal.

Manpower estimated that 20 thousand people had so far been taken on by banks as they faced growing claim volumes.

Mr Cahill added: "With around 600,0002 new jobs created in the last year alone, you'd think the UK employment phenomenon must surely be coming to the end of the road but the good news looks set to continue till at least the summer."

00.25 | 0 komentar | Read More

Fuel War: Price Slash Gives Motorists Hope

Consumers may benefit from an impending petrol price war, after one supermarket chain decided to slash vehicle fuel costs.

Sainsbury has announced that it would drop its fuel prices at the company's 279 forecourts.

Prices will dip by 4p a litre, with diesel being reduced by 3p a litre, from Wednesday onwards.

Rivals were expected to respond with decreases of their own.

What Car? editor-in-chief Chas Hallett told Sky News: "Drivers are being hit by ever increasing fuel prices, so any retailer initiating a drop like this is good news.

"No doubt that what your car does to the gallon is certainly the number one concern of anyone who relies on their car for work and personal life."

Supermarkets have increasingly become the point of delivery of fuel for many motorists.

Traditional branded forecourts have struggled against supermarket equivalents in recent years, which have offset costs from elsewhere in their businesses.

Motorists have also struggled as prices remain elevated, despite weaker demand from the depressed global economy.

"Fuel prices are still higher than they should be and the Government really needs to take a harder look at the huge amount it rakes in from fuel duties," What Car?'s Mr Hallett said.

"Any politician who promises to drop them would doubtless get the vote from motorists."

Sainsbury's head of fuel, Richard Crampton added: "We know that fuel is a big part of many customers' weekly budget so we're keen to do anything we can to help."

00.25 | 0 komentar | Read More

Gordon Brothers Advances Blockbuster Talks

By Mark Kleinman, City Editor

The retail restructuring specialist Gordon Brothers Europe is hoping to move into exclusive talks to salvage the rump of Blockbuster's UK operation as soon as this week, Sky News can reveal.

Gordon Brothers, which has worked with struggling retailers including Focus, the DIY chain, is one of two remaining parties in active talks with Deloitte, which was appointed as administrator to Blockbuster UK in January.

Gordon Brothers has submitted a bid for the DVD rental firm predicated on retaining roughly 275 of the 528 Blockbuster shops that were open before the chain's collapse, according to insiders.

The other prospective bidder's identity was unclear on Tuesday, although it is understood that Gordon Brothers' offer has a more compelling 'going concern' status. People familiar with the process said the other party was not GA Europe, another restructuring firm, which had been reported last week as a rival bidder.

People close to the talks cautioned that there was "no done deal" and that any rescue of Blockbuster's UK business could yet collapse altogether.

Sources confirmed, however, that Deloitte was targeting a deal ahead of the 'quarter day' towards the end of the month when retailers make their rental payments for the following three months.

It is unclear how many of the 275 stores being sought by Gordon Brothers will be retained for a protracted period, given the structural challenges faced by Blockbuster's business.

Since the appointment of Deloitte, 293 stores have been put on notice of closure, some of which have now shut their doors. Nearly 50 shops have been sold to Wm Morrison, the supermarket chain.

Insiders said that Deloitte was in ongoing talks with Dish Network, Blockbuster UK's US-based parent, about the inclusion of the DVD retailer's brand as part of the package of assets that would change hands in any deal.

Blockbuster is one of several prominent chains to have fallen into administration this year, the latest being Dreams, the beds retailer. Others which have fallen victim to a combination of a downturn in consumer spending and the migration of shoppers to the internet include HMV and Republic, the youth fashion chain.

Deloitte and Gordon Brothers Europe declined to comment.

00.25 | 0 komentar | Read More