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Wednesday Papers: Osborne to extend austerity into 2018

And former HBOS chairman is accused of ‘living in cloud cuckoo land’.

Wednesday Papers: Osborne to extend austerity into 2018

Top stories

  • Financial Times: British Chancellor George Osborne will be forced to extend austerity deep into the next parliament, as he presents a bleak Autumn Statement against the backdrop of weaker growth and a larger deficit.
  • Financial Times: Lord Stevenson, the former chairman of HBOS, stood accused on Tuesday of living in “cloud-cuckooland” after it emerged that he had assured the City watchdog that his bank was “as secure” as it could be – just six months before it collapsed.
  • Financial Times: Warren Buffett’s Berkshire Hathaway is claiming as much as $1 billion in damages from Swiss Re, the reinsurer it propped up during the financial crisis with an emergency capital injection.
  • The Guardian: Xstrata's chief financial officer is to quit the miner following its takeover by Glencore, becoming the first director to abandon ship after investors failed to approve a gold-plated retention plan as part of the deal.
  • Financial Times: David Miller, a former trader at Rochdale Securities, was arrested by federal agents and charged with fraud after an alleged attempt to profit from a $1 billion purchase of Apple stock, which backfired and left the US trading group in distress.
  • The Independent: Tesco chief executive Philip Clarke has been boosted by industry data showing the supermarket giant has delivered sales growth ahead of Sainsbury's, Asda and Morrisons for the first time since he took the helm nearly two years ago.
  • The Guardian: Chelsea owner Roman Abramovich has gained control of Norilsk Nickel, the world's biggest nickel and palladium mine, which is valued at $30 billion.
  • Financial Times: JP Morgan has reshuffled the management team at its corporate and investment banking businesses.
  • Daily Mail: Homebuyers' desperation to climb the property ladder will lead to a surge in mortgage fraud, as Experian, in its latest Fraud Index, has predicted levels of fraud to rise to 43 out of every 10,000 mortgage applications next year.
  • Financial Times: A US appeals court has rejected a request from defaulted creditors led by Elliott Associates, a US fund, to require Argentina to post security of at least $250 million by Monday to demonstrate its willingness to pay any judgment in their favour.
  • Financial Times: Repsol, the Spanish oil company, has filed a suit at the World Bank’s arbitration tribunal seeking $10.5 billion from Argentina for its expropriation of 51% of YPF in May.
  • The Daily Telegraph: Engineering group Amec has won a $528 million contract to manage the construction of a huge new refinery in Kuwait that will be the largest in the Middle East.
  • The Independent: British Airways is looking to shed 400 senior cabin crew jobs, but stressed there would be no compulsory redundancies.
  • The Guardian: Nokia is selling its Finnish headquarters for €170 million and leasing the property back on a long-term deal.
  • Financial Times: Tesco is set to signal today that it is calling time on its American dream, with a review of its loss-making Fresh & Easy venture.

Business and economics

  • Financial Times: Plans to create a eurozone banking union hit a brick wall on Tuesday after Germany’s influential finance minister, Wolfgang Schäuble, cautioned over moving too quickly, casting doubts over whether the EU would seal a deal by the end of the year.
  • Financial Times: The Bank of England is facing calls to support renminbi trading in London, as bankers meet this week to discuss how to boost the nascent market in China’s tightly controlled currency.
  • The Daily Telegraph: Hector Sants, the former chief executive of the Financial Services Authority, is in talks to join accountancy firm Deloitte as a partner less than six months after quitting his post as Britain’s top regulator.
  • Financial Times: Qualcomm, the US technology group that makes microchips for Apple’s iPhone and other mobile devices, has moved to expand its reach into new components by agreeing to invest up to $121 million in the struggling Japanese display maker Sharp.
  • Financial Times: Hewlett-Packard, the embattled US computer maker, is taking legal action against two Taiwanese LCD screen-makers in the latest of a string of lawsuits over price-fixing to hit the industry.
  • The Daily Telegraph: Mike Lynch, the British founder of the software firm Autonomy, has intensified his public battle with HP over allegations of accounting improprieties by setting up a website to rebut the claims.
  • Financial Times: US bank regulators are examining proposals to force the largest and most complex financial institutions to fund themselves with more long-term debt, joining fellow bank supervisors that hope to make it easier to wind down failing institutions.
  • The Guardian: British households on average spent a record £483.60 a week in 2011, up £10 on the year before – but much of the increase was gobbled up by a 9% rise in spending on petrol, the Office for National Statistics revealed.
  • The Independent: London’s workforce is now greater than before the height of the 2008-9 recession, with the number of jobs across the City growing at a record rate in 2012.
  • The Guardian: George Osborne will announce on Wednesday that he is forcing a fresh spending squeeze on cash-strapped Whitehall departments to fund £5 billion worth of investment in schools, transport and science over the next three years.
  • Daily Mail: The British government borrowing will be nearly £100 billion higher than expected over the next five years as economic growth remains ‘weak and inadequate’, according to business leaders.
  • The Daily Telegraph: France’s industrial woes deepened last month as car sales crashed 19% and French brands lost market share at a dramatic pace, raising fears of a serious economic crisis next year once austerity hits.
  • The Guardian: Domestic merger and acquisition activity involving UK companies fell to its lowest level in 20 years in the third quarter of 2012 as risk-averse companies shied away from doing deals.
  • Financial Times: Trading in emerging markets bonds fell 26% in the third quarter to $1.3 trillion – the lowest level in three years – as investors hoarded assets generating higher yields.
  • Financial Times: Shares in Tullow Oil slipped 6% to close at £12.92 on Tuesday after drilling results off French Guiana failed to reveal commercial deposits close to its Zaedyus discovery, made last year.
  • The Daily Telegraph: EDF Energy has confirmed it will keep two UK nuclear power stations that were scheduled to close in 2016 open for another seven years.
  • Financial Times: Blue Capital Global Reinsurance Fund, set up by the Bermuda-based Montpelier Re, said on Tuesday that it had raised $100 million from investors.
  • The Independent: North America helped Wolseley to grow group trading profits by 7.6 % to £198 million over the three months to 31 October.
  • The Guardian: Tui Travel has unveiled an 8% rise in underlying pretax profits to £390 million for the year to 30 September; the company paid zero corporation tax in the UK last year, despite making record underlying operating profits of £197 million.
  • The Independent: Northgate, the van hire firm seen as a barometer of the smaller business end of the economy, saw profits slide 13% to £28 million in the last six months as demand slowed.
  • Daily Mail: Greene King reported a 4.3% rise in like-for-like sales in the 24 weeks to 14 October, while it increased pre-tax profits by 7% to £82.7million in the period.
  • The Independent: Profits of Character Group, the maker of Peppa Pig toys, tumbled by 22% to £7.08 million in the year to 31 August.
  • The Guardian: Airlines will only pay for expansion at one UK airport and that is Heathrow, Willie Walsh, the boss of British Airways' parent company IAG, told MPs, in a pointed rejoinder to Gatwick chiefs pushing for a second runway.
  • Financial Times: The pay-television industry faces renewed competition from Netflix after the DVD and video streaming operator struck a deal with Walt Disney to become its exclusive TV partner with distribution rights to its hit movies.
  • Financial Times: A string of disappointing earnings guidance has left the technology sector as the worst-performing industry group on the S&P 500 this quarter; the information technology index has lost 6.3% since the final quarter started.

Share tips, comment and bids

  • Financial Times: Sir Philip Green, the retail entrepreneur, is close to selling a 25% stake in Topshop and Topman to Leonard Green & Partners, a US private equity investor, in a move that could value the two jewels in the crown of his Arcadia retail empire at about £1 billion.
  • Financial Times: Baxter International has fulfilled a long-held ambition of boosting its presence in the kidney dialysis market by buying Sweden’s Gambro from Investor, the holding company of the powerful Wallenberg family, and EQT, their main investment vehicle, in a deal worth $4 billion.
  • Financial Times: Posco, the world’s fourth-largest steelmaker by output, has been named the preferred bidder for the 15% stake, worth more than $1 billion, in ArcelorMittal Mines Canada.
  • Financial Times: Dexia is in exclusive talks with GCS Capital, a Hong Kong-based private equity fund, over its asset management arm, which could result in one of the first big acquisitions of a European financial business by an Asian buyer since the sovereign debt crisis; the deal could be worth up to €500 million.
  • Financial Times: The British maker of Hula Hoops crisps, KP nuts and Mini Cheddars is about to be sold to German snacks maker Intersnack in a deal that could be worth more than £500 million.
  • Financial Times: Archer Daniels Midland has sweetened its cash offer for GrainCorp and acquired a further 5% of its shares in a stock market raid as it tries to bring the directors of the Australian wheat trader to the negotiating table.
  • Financial Times: Carl Icahn has failed in his second bid to gain control of armoured truckmaker Oshkosh as the veteran corporate raider on Tuesday said he was withdrawing his $32.50 per share tender offer.
  • The Guardian (Comment): Thousands have been driven out of work in Britain by corporate spying outfits. It's an outrage that calls for more than an inquiry.
  • The Guardian (Comment): George Osborne's recovery plan is all about breaking free of the monetary straitjacket, not where his axe will fall.
  • The Daily Telegraph (Comment): British Chancellor George Osborne needs to get a grip on tax row.
  • The Daily Telegraph (Comment): Sometimes, reality can be so painful, so scary that nobody wants to accept it, with even intelligent, perceptive people preferring to twist the facts to make them conform to a deluded, make-believe world.
  • Financial Times (Lex): Olam/Muddy Waters: the Singapore commodities trader has opened its capital-raising arsenal to fend off the short seller. The plan seems to have worked for now, but the war is not yet over.
  • Financial Times (Lex): Norilsk Nickel: Abramovich’s purchase of stake in Norilsk Nickel is – ostensibly – aimed at ending two other Russian billionaires’ battle for control of the producer.
  • Financial Times (Lex): Sharp/Qualcomm: questions remain as to why US chipmaker wants to push further into a business where even Samsung struggles to make a profit.
  • Financial Times (Lex): Tui Travel: the UK’s largest tour operator is benefiting from a resurgence in the popularity of package holidays.

2 comments so far. Why not have your say?


Dec 05, 2012 at 09:00

Everyone speaking about the troubles of Thomas Cook. It is an old establishment and I have no problem in taking up their package holidays. It is scaremongering.

report this


Dec 05, 2012 at 13:31

Each Tui their own

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