Wednesday Papers: Spectre of stagflation returns to haunt UK

Top stories

• Financial Times: The prospect of stagflation has returned to the UK as investors bet on a sharp jump in inflation to its highest level in almost five years; inflation expectations ticked up to near 3.3% on Tuesday, levels not seen since September 2008.
• Financial Times: Symington’s, a British food producer, is delivering arguably the ultimate blow to China, the one-time factory of the world, as it is transplanting noodle-making from Guangzhou to Leeds.
• Financial Times: The Yunnan Geographical Information Bureau of Surveying and Mapping said US drinks company Coca-Cola had been “illegally collecting classified information with handheld GPS equipment”, according to a Yunnan government website.
• The Guardian: Confidence in the UK's ability to recover from the longest depression in 100 years appears to be waning after 1.5% drop in manufacturing sent the pound crashing to a level not seen since early 2010; Sterling was worth a little over $1.48 on Tuesday.
• Financial Times: French prosecutors have been asked to investigate Microsoft’s Skype because of its failure to register in the country as a telecoms operator, in the latest attempt by France to control the activities of global internet companies.
• The Daily Telegraph: Royal Bank of Scotland is set to cut the size of its stake in its Direct Line insurance business to below 50% as the lender moves to comply with a European state-aid ruling.
• The Guardian: The taxpayer faces little prospect of getting back its £45 billion investment in Royal Bank of Scotland if the bailed out bank continues to pursue its current strategy of winding down bad loans and focusing on the UK, according to analysts at Credit Suisse.
• Daily Mail: Big banks have hired some 20,000 staff to clear up complaints from the PPI and interest rate swaps scandals - offering a temporary boost to the UK jobs market.
• The Independent: Aviva's chief executive, Mark Wilson, has put his money where his mouth is by buying almost £500,000-worth of shares in the troubled insurer.
• Financial Times: Boeing’s troubled 787 Dreamliner could return to commercial service within weeks after the main US aviation regulator approved the commercial jet maker’s proposals to upgrade the aircraft’s batteries, giving the go-ahead for test flights.
• Financial Times: A criminal investigation into Autonomy by the Serious Fraud Office has been thrown into confusion just as it began after the UK agency admitted that its £4.6 million contract with the software-maker could present too much of a conflict of interest for it to continue pursuing the probe.
• The Guardian: The boss of Ladbrokes has landed a £2.4 million share bonus on top of his £2.2 million annual pay and bonuses.
• Financial Times: British Land, the UK’s second largest landlord by market capitalisation, became the latest company to take advantage of the country’s resurgent equity markets, asking investors for £500 million to fund an acquisition spree in and around London.
• The Daily Telegraph: Bernard Charles, 55, the head of global technology giant Dassault Systemes, has become the latest French business leader to threaten to move abroad because of looming tax rises.
• Financial Times: Waywire, a social video start-up co-founded by Newark’s social media-savvy mayor Cory Booker, has turned to the 14-year-old son of CNN’s Jeff Zucker for advice on how to appeal to fickle teenage viewers.
• Financial Times: SGX, the Singapore exchange, is to explore processing off-exchange derivatives with the Korea Exchange amid signs that the largest financial centres in Asia are looking at partnerships to allow them to meet wide-ranging global new rules covering derivatives trading.

Business and economics

• Financial Times: Japan has moved closer to unlocking a potential new energy source, after a research group extracted methane gas from frozen undersea deposits for the first time.
• The Daily Telegraph: Mayor of London Boris Johnson said the capital would have a major role to play in Britain’s economic recovery as he revealed plans to build the UK’s largest floating village at the city’s Royal Docks.
• Financial Times: Republicans in the US House of Representatives have unveiled a staunchly conservative fiscal package that would slash government spending by $4.6 trillion over a decade and balance the budget within 10 years, with spending and revenues each worth 19.1% of the economy.
• Financial Times: François Hollande has declared that France will significantly overshoot its budget deficit commitment this year, earning a stiff rejoinder from Germany that missing the target would be a “bad signal” for the eurozone.
• Financial Times: Germany has leapfrogged the UK as the most sought-after destination for European property investors, in a power-shift that underlines easing fears of a eurozone break-up.
• Daily Mail: Airline bosses are trying to arrange a pre-Budget meeting with George Osborne in the belief they can convince him to scrap aviation taxes they say damage the economy.
• Financial Times: Stefan Ingves, chairman of the Basel Committee on Banking Supervision, said on Tuesday that the group plans to complete work this year on the “leverage ratio” which will require banks to disclose the ratio of their equity to total assets – without any risk adjustments – in 2015 and hit a minimum ratio of three per cent in 2018.
• Financial Times: The Information Technology Industry Council, a lobby group representing US technology companies, is set to attack India for its domestic procurement policies at a congressional hearing Wednesday, in a sign of growing concern among multinationals about market access in the south Asian nation.
• The Independent: The woes of the debt-laden Yellow Pages directories publisher Hibu took an unexpected turn as its chief executive, Mike Pocock, fired Jim McCusker, US president, and Mark Cairns, chief publishing officer, amid speculation they were plotting a buyout.
• The Guardian: The Co-operative Group is to set new targets for increasing the number of women on its boards under moves to make the business more representative of the communities it serves.
• The Daily Telegraph: Apple will relinquish its dominant position in the tablet market this year, as research firm IDC warned that when phone manufacturers lose favour they fall “faster and further” than anyone expects.
• Financial Times: Antiguan and US receivers liquidating convicted fraudster Allen Stanford’s offshore bank reached a settlement that could return a portion of the $300 million in disputed assets to victims.
• The Independent: Bupa is offering patients "pay-as-you-go" operations to boost business after the double impact of poorer Britons and rising healthcare costs cut UK profits at the private medical giant by one-fifth to £109.7 million last year.
• Financial Times: Yandex, Russia’s leading search engine, has launched an up to $600 million share offering, as early shareholders including the group’s co-founders seek to reduce their stakes in the company.
• The Independent: Punch Taverns, the hugely indebted pubs group, sold 164 pubs for a total of £55 million in the past six months, which puts it on target for £105 million raised from sales by the year-end.
• Financial Times: Alliance Trust said it expected the rally in share prices to slow this year as it revealed a 7% annual dividend increase on Tuesday.
• The Independent: Quarto, the British publisher of how-to guides, saw pre-tax profits tumble by a quarter to $7.1 million last year, with sales down 2.8% at $180.9 million.
• The Daily Telegraph: Britain's biggest farm management company Velcourt is branching out into agricultural investment in Romania, believing eastern Europe offers far more fertile opportunities than those at home.
• The Independent: Chilean copper mine Antofagasta announced a 12.5 cents final dividend and a 77.5 cents special dividend, bringing its total final dividend to 90 cents a share and its full-year payout to 98.5 cents.
• Financial Times: Computacenter, the IT consultancy and outsourcing company, said it would return up to £75 million in extra cash to shareholders despite reporting a decrease in annual profits.
• The Independent: Demand for smart TV sets is helping to keep profits on track at Imagination Technologies, the British company which designs graphic processors for smartphones and tablets including the iPhone and iPad.

Share tips, comment and bids

• Financial Times: First Quantum Minerals is poised to seize control of fellow Canadian miner Inmet after changing the terms of its hostile C$5.1 billion takeover designed to create one of the world’s largest copper producers.
• The Daily Telegraph: Asda, Britain's second largest supermarket group, is considering a rescue bid for entertainment retailer HMV.
• The Independent: Shoe retailer Shoon, which is owned by the restructuring firm GA Europe, will buy Jane Shilton's 39 department store concessions, such as in retailers Browns and Beales.
• The Independent: Charles Rolls and Tim Warrillow have sold 25% stake in their Fever-Tree drinks business in a deal which values it at £48 million.
• The Guardian (Comment): The pound crashes and a triple dip looms, but according to the chancellor bad news is only proof that his policies are working.
• The Daily Telegraph (Comment): British Chancellor George Osborne needs shock-and-awe tax cuts to avert a 1970s-style disaster.
• The Daily Telegraph (Comment): There is no getting away from it, trust between business and the rest of society has been severely dented.
• Financial Times (Lex): Blackberry: the smartphone maker has said sales in the UK, Canada and India have been brisk.
• Financial Times (Lex): Munich Re: at least the company is not powerless in the face of negative trends.
• Financial Times (Lex): SBM Offshore: the Amsterdam-listed oil services company provides a case study about the perils of companies venturing beyond what they do best.
• Financial Times (Lex): Corporate leverage: it is widely thought that companies are carrying little debt and have deleveraged since the crisis. Not true.