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Friday Papers: Osborne faces £9bn budget black hole

Friday Papers: Osborne faces £9bn budget black hole

Top stories

  • Financial Times: George Osborne’s attempt to slash £11.5 billion off public spending in election year has run into cabinet trouble, after ministers identified only £2.5 billion in cuts to their budgets.
  • Financial Times: Tony Hayward, the former BP chief executive who was once described as the US’s most hated man, has sealed a remarkable comeback by becoming interim chairman of commodities group Glencore Xstrata.
  • Daily Mail: Royal Bank of Scotland is slashing 1,400 jobs in the latest round of redundancies since it was bailed out by the taxpayer, it said yesterday.
  • The Guardian: Eonomists at the IMF found the Bank of England could sustain losses of anything up to 5.5% of GDP, or almost £80 billion, when it sells the government bonds back into the market.
  • The Daily Telegraph: Dell has seen quarterly profits plunge 79% from a year ago, as a consumer shift away from PCs hammered the company's bottom line.
  • Financial Times: Yahoo has been spared a potential $2.7 billion payout in legal damages after a Mexican court overturned an earlier ruling against the US web portal in a contract dispute.
  • Financial Times: Blackstone is preparing to launch a “super” hedge fund to cherry-pick the best trades from the hundreds of third-party hedge funds it invests with.

Business and economics

  • Financial Times: French bank Société Générale has announced it remains committed to Russia after a bribery scandal erupted that enveloped its Russian subsidiary Rosbank.
  • Financial Times: A poor performance at Marks and Spencer is set to take its toll on chief executive Marc Bolland’s bonus for the third year running.
  • Daily Express: The Virgin Group airline said the Olympic Games and weak economic conditions were behind a loss of £93 million for the year up to 28 February; the company also said their fortunes suffered from high fuel costs, strong competition and taxes of UK air travel.
  • Financial Times: Honda is returning to Formula One, confirming that it will renew its partnership with McLaren and supply the British team’s engines from 2015.
  • Financial Times: Dow Chemical plans to fight a $1.2 billion damages award for price-fixing using a recent antitrust ruling in the Supreme Court, it said on Thursday.
  • Financial Times: BNP Paribas is to tap rising demand for banking services by mobile phone users with the launch of a full-service dedicated mobile bank across four European countries.
  • Financial Times: Vikram Pandit, the former Citigroup chief executive who was ousted last year, has returned to banking by investing in an Indian financial services group that hopes to launch a new lender.
  • The Daily Telegraph: BP has launched a blistering attack on the judge presiding over its fate in the Gulf of Mexico trial, as it escalates its fight against the "raid on its coffers" for "fictitious" compensation claims.
  • The Guardian: The Serious Fraud Office said on Thursday it is considering a criminal inquiry into alleged price fixing at BP and other oil companies already being investigated by European competition authorities.
  • Financial Times: European banks will face tough regulatory scrutiny of their balance sheets to ensure that bad assets are being properly written down as a precursor to the periodic EU-wide stress tests, the European Banking Authority said on Thursday.
  • Financial Times: JP Morgan has moved to streamline its mergers and acquisitions practice, naming two regional heads of dealmaking as co-heads of global M&A.
  • The Independent: The chief executive and finance director of troubled credit card insurer CPP decided cost-cutting across the company would have to include their own jobs.
  • The Independent: Underlying profits at Vedanta rose 21% last year to $4.89 billion.
  • The Daily Telegraph: Facebook and Twitter have launched applications for Google Glass as developers rushed to learn more about tailoring software for the internet-linked eyewear yet to hit the market.
  • Daily Mail: The retailer Dixons, which trades under the Currys and PC World brands, has staged a remarkable turnaround in a tough economic climate with a staggering 13% rise in underlying sales for the fourth quarter.
  • The Independent: Trinity Mirror's decision to cut the basic salary of new chief executive Simon Fox by a third and introduce a more stretching bonus scheme has failed to satisfy some shareholders.
  • Daily Mail: Private equity firm 3i said it has exceeded cost-savings for the year as boss Simon Borrows attempts to turn the business around.
  • The Independent: The National Lottery operator, Camelot, has increased total National Lottery sales in the year to 31 March to an all-time high of £6.97 billion, an increase of 6.9% on the previous year.
  • The Independent: National Grid has said it is set to make a "strong start" under the new pricing regime which it attacked a year ago as "lacking the essential investments to provide safe, reliable networks".
  • Daily Mail: Shares in Aviva surged yesterday after the firm said the value of new business rose by 18% in the first three months of the year to £191 million.
  • The Independent: Prudential was hit by a minor revolt at its annual meeting as investors criticised the company's decision to hand out £30 million in pay to directors last year.
  • The Guardian: António Horta-Osório, CEO of Lloyds Banking Group, pledged to pull out of tax havens where the bank is not conducting genuine business at its annual meeting on Thursday where investors hit out against its "cosy' boardroom and "appallingly high" bonuses.
  • The Guardian: Amazon is facing mounting questions over the extent of the business activities conducted out of Patriot Court, its headquarters in Slough, threatening to throw the group's controversial UK tax structure into disarray.
  • Daily Mail: Homes for sale which have been reduced in price since first coming onto the market have fallen to the lowest level for almost three years, research has revealed.
  • The Independent: Some 5.5 million people overpaid or underpaid tax last year, HM Revenue & Customs has admitted.
  • The Independent: Eurostar has appointed its first female chairman, with Clare Hollingsworth set to take over from the incumbent Richard Brown in June.
  • The Independent: Demand for gold tumbled to a three-year low during the first quarter as hopes of a recovery in the global economy outweighed a surge in buying from China and India.
  • The Independent: The grim consumer environment in the US led to an unexpected drop in sales in Walmart over the first quarter; same-store sales at the company's core US unit declined by 1.4% in the 13 weeks to the end of April.
  • The Guardian: Pope Francis has hit out at unbridled capitalism and the "cult of money", calling for ethical reform of the financial system to create a more humane society.
  • The Guardian: Asda boss Andy Clarke believes the supermarket has regained the trust of its customers following the horsemeat scandal; the supermarket revealed that sales in the 14 weeks to 12 April were up 1.3%.
  • Financial Times: Billionaire investor Warren Buffett suffered a rare blow on Thursday after Standard & Poor’s cut his investment vehicle Berkshire Hathaway’s credit rating by one notch to AA.
  • The Guardian: CBI yesterday issues a blunt warning about the risks of quitting the European Union after the Conservative party signalled the beginning of a drawn-out parliamentary battle over plans for an in-out referendum by 2017.
  • The Daily Telegraph: CF Partners, the trading house bringing a €164 million damages claim against Barclays, was immediately put on the spot by a judge on Thursday and asked to define exactly how it had allegedly been wronged by the bank.
  • The Daily Telegraph: The golf-loving billionaire founder and chairman of Richemont, Johann Rupert, has announced that he will take a year off from running the Swiss luxury goods group to read books and possibly travel to the South Pole.
  • Financial Times: Farmland prices in the US corn belt have risen at double-digit clip this year despite weaker grain markets.

Share tips, comment and bids

  • Financial Times: Elan, the Irish drug company, has formally rejected as “grossly inadequate” Royalty Pharma’s $5.7 billion takeover bid.
  • Financial Times: Qatar Holding and property group Hines have taken a stake in a high-end real estate development in Milan, underlining the Gulf state’s strategy of diversifying from hydrocarbons.
  • Daily Mail: Thomas Cook has issued a £425 million investor fundraising call to help put its finances on a firmer footing.
  • Financial Times: Invensys is poised to use some of the £500 million war chest left from the sale of its rail division to buy a series of bolt-on acquisitions.
  • The Guardian: Royal Mail said it has conditionally appointed Equiniti to set up £300 million employee share scheme, as postal service moves step closer towards privatization.
  • Financial Times: The Pebble smart watch, which raised $10 million through crowdfunding after being turned down by venture capitalists last year, has received $15 million in new VC backing.
  • Financial Times: All Nippon Airways on Thursday reported a problem with one of its 787 Dreamliners that has been undergoing test flights with a modified battery system.
  • Financial Times: Talk of a North Sea exit helped Cairn Energy edge higher even as the FTSE 100 broke a ten-day winning streak; Cairn added 1.9%.
  • Daily Mail (Comment): Musical chairs as Sir John Bond ousted at Glencore - There can be few more humiliating exits from the chair of a major company than that of Sir John Bond from Glencore in the wake of the Xstrata deal.
  • The Independent (Comment): A massive slump in construction is part of the reason our economy has been stagnant.
  • The Independent (Comment): Sir Mervyn King said this week that an economic recovery is in sight. The trouble is that anything is in sight so long as your binoculars are powerful enough. Despite the better than expected 0.3 per cent GDP growth in the first quarter, I remain sceptical.
  • The Independent (Comment): Shaken and stirred, Sir John Bond is ousted after digging himself into a hole at miner.
  • The Guardian (Comment): Sir John Bond was arrogant to believe he could carry on as an independent chairman of a merged Glencore Xstrata - and the lack of support from shareholders was extraordinary.
  • The Daily Telegraph (Comment): Japan's economy has roared back to life but fears grow that tumbling yen could spark Asian crisis.
  • Financial Times (Comment): The boardroom coup and shareholder revolt that cost Sir John Bond his job as chairman of Glencore Xstrata has few precedents in the City of London.
  • Financial Times (Lex): Google: the interesting question now is not whether they can breach $1,000 but rather what keeps them from the fate of Apple’s shares.
  • Financial Times (Lex): Glencore Xstrata: group chairman must be someone who can challenge chief executive Ivan Glasenberg. It’s a pity investors have discarded Sir John Bond.
  • Financial Times (Lex): 3i: the chief executive of the UK private equity group has done a good job with its share price but he now needs to do the same with its products.
  • Financial Times (Lex): Richemont: the chairman of the Swiss luxury goods group is taking a break just as its biggest market is slowing. What shape will the company be in when he returns?

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