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Thursday Papers: Carney drops employment link with rates

1 Comment
Thursday Papers: Carney drops employment link with rates

Top stories

  • Financial Times: Interest rates are unlikely to rise before next year’s election, the Bank of England indicated on Wednesday, as it unveiled bullish economic forecasts that boost George Osborne’s claim that the economic recovery is on track.
  • Financial Times: Seven global banks including Barclays and UBS face new claims of alleged foreign exchange market manipulation in the first US class-action lawsuit to include original research that highlights unusual price spikes in euro, sterling and other major currencies.
  • Financial Times: Six more individuals will be charged criminally by the UK’s Serious Fraud Office by the end of this month in connection with its probe of alleged Libor-rigging, according to two people familiar with the investigation.
  • The Guardian: Royal Bank of Scotland has been warned that it faced a potential downgrade by the credit rating agency Moody's which is concerned that last month's profits warning may have weakened its financial strength.
  • The Independent: The deal maker, Amanda Staveley, is taking steps to sue Barclays for its role in raising £3.5 billion from Qatar as part of the total of £7 billion deal from Middle Eastern investors to bail out the troubled bank.
  • Daily Mail: Furious shareholders and business groups have slammed the head of Barclays’ remuneration committee, Sir John Sunderland, as well as its chairman, Sir David Walker, for rubber stamping the bumper increase in pay-outs.
  • Financial Times: India’s battered investment reputation has suffered a double blow, as it emerged on Wednesday that the Indian government is moving to scrap conciliation talks with Vodafone aimed at resolving a $2.6 billion dispute over taxes allegedly due on a cross-border deal in 2007; Nokia, meanwhile, is appealing to India’s Supreme Court over an unrelated $1.1 billion tax squabble.
  • The Daily Telegraph: North Sea oil production is forecast to fall this year, blowing hole in Alex Salmond's economic plan for an independent Scotland.
  • Financial Times: The criminal probe into whether Rolls-Royce committed bribery in Indonesia and China accelerated on Wednesday after the UK authorities arrested two men following dawn raids.
  • The Independent: Pressure was mounting on Morrisons’ chief executive Dalton Philips on Wednesday after revelations that the supermarket’s founding family has approached some of the biggest private equity groups to discuss turning the business private again.

Business and economics

  • Financial Times: US and European regulators have reached an agreement over the policing of the $700 trillion over-the-counter derivatives market – bowing to banks’ concerns that their conflicting rules could fragment global trading and push up costs.
  • Financial Times: The US Congress gave its final stamp of approval to legislation that suspends the country’s borrowing limit and removes the spectre of a US debt default until March 2015, after Republican leaders in the Senate scrambled to save the measure from faltering in the upper chamber.
  • Financial Times: The world’s largest banks could be left scrambling to meet a key reporting date for the Volcker rule because US regulators disagree on what the requirements are, people familiar with the matter said.
  • The Guardian: Three online exchanges for the bitcoin virtual currency have suspended conversions into state-backed currencies, saying they are under attack from hackers suspected of trying to create fraudulent transactions.
  • Financial Times: An audit gravy train in the shape of the European Central Bank’s new role as banking supervisor will soon arrive and the Big Four accounting firms are eager to hop on.
  • Financial Times: British banks face a new, multimillion pound bill to compensate savers who lost money when Iceland’s banking system collapsed in 2008.
  • The Guardian: The campaigner who represented Co-operative bondholders has raised concerns about apparent disagreements in the evidence given by two senior regulators over the bank's aborted takeover of Lloyds Banking Group branches.
  • Financial Times: Revenues at Cisco Systems tumbled 8% to $11.2 billion in the latest quarter as it struggled with falling demand from emerging markets and a product transition that has hit sales of its core router business.
  • Financial Times: Supercell, the Finnish software developer behind the highest-grossing games app in the US, has revealed that it had made nearly $900 million in revenues last year, despite having just 132 staff – making it one of the most successful mobile gaming companies in the world.
  • Financial Times: Toyota has recalled 1.9 million of its most advanced Prius cars, almost half of the model’s total production, due to a computer glitch in the hybrid power system.
  • Financial Times: Guy Hands’ plans to transform his private equity business, with the biggest fundraising since he lost a £1.75 billion stake in EMI, has been hit by the departure of Damian Darragh, one of his star dealmakers.
  • The Guardian: Optim Energy, a Texas energy company owned by a Bill Gates investment fund, has filed for bankruptcy protection after piling up losses in a depressed power market.
  • The Daily Telegraph: Avon, a door-to-door seller of cosmetics and consumer products, is looking to resolve criminal and civil investigations into whether it paid bribes in China and other countries to advance its business.
  • Financial Times: 3i investment veteran Cressida Hogg has left the UK-based private equity group, in the latest sign of instability following a strategic overhaul led by chief executive Simon Borrows.
  • Financial Times: KPN will re-establish commercial partnership agreements with Carlos Slim’s América Móvil that were torn up during the failed takeover attempt by the Mexican telecoms group last year.
  • Financial Times: Punch Taverns has scrapped its “final” proposal to restructure its £2.3 billion net debt, with company management now willing to reopen negotiations with senior bondholders to stave off a potential default.
  • Financial Times: Tullow Oil has added the west African country of Mauritania to its list of possible future oil exporters after claiming early-stage drilling success.
  • Financial Times: Vietnamese low-cost airline VietJetAir has signed a $9.1 billion deal to buy 63 Airbus aircraft with an option for 30 more.
  • The Independent: H&M will open its first store in India this year as the world’s second-biggest fashion retailer becomes the latest to take advantage of the opening of its economy to foreign operators.
  • Daily Mail: ITV is to launch a channel called ITVBe aimed at younger women in an effort to tap into the growing appetite for reality TV.
  • Financial Times: Heineken, the Dutch brewer, reported a soberingly slow performance in 2013, reporting 4% drop in revenues to €21.3 billion as price rises failed to offset lower volumes; net profit fell 53% to €1.4 billion.
  • The Daily Telegraph: Mondelez, the food giant behind Cadbury chocolate, reports fourth quarter results short of expectations.
  • Financial Times: L’Oréal intends to continue increasing dividend payments as the principal way to use its cash, chief executive Jean-Paul Agon told the FT.
  • The Independent: Data centre provider Telecity has hiked its dividend by 40% as it revealed a 15.6% jump in operating profit last year to £97.4 million and a 15.1% rise in revenue to £325.6 million.
  • Financial Times: Insurers and bankers in Germany are anxiously awaiting a regulatory decision which could pave the way for a fresh wave of consolidation and shake up the country’s fragmented insurance market.
  • Financial Times: African Barrick Gold slashed its gold reserves by almost a quarter in response to lower prices but said it expected a profitable year on the back of cost cuts and higher production.

Share tips, comment and bids

  • The Guardian (Editorial): Despite Mike Carney's claim that 'forward guidance has worked', it is left looking like an unnecessary disruption to Bank of England action.
  • The Guardian (Comment): George Osborne's Edinburgh speech will challenge the SNP leader to reveal his plan B for an independent Scottish currency
  • The Daily Telegraph (Comment): We keep our fingers crossed as we glimpse the first foam of a deflationary Ch'ient'ang'kian coming our way from China. The world's central banks have no margin for error.
  • The Daily Telegraph (Comment): What Morrisons investors should be most alarmed about is that none of the private equity funds approached about a deal seems to be interested.
  • Daily Mail (Comment – Alex Brummer): The big political dilemma will come next spring: will the Bank of England be independent enough to raise interest rates in the teeth of a general election campaign?
  • Financial Times (Lex): Munis: What’s good for Treasuries is good for US municipal bonds – barring more blow-ups
  • Financial Times (Lex): Tullow: Oil explorers have gone the way of MySpace or flares
  • Financial Times (Lex): Tim Hortons: Canadian coffee chain is rejigging its balance sheet when it could expand
  • Financial Times (Lex): Hospitality LBOs: Blackstone’s success with Hilton was not just luck, as Caesars’ troubles show

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