News round up: BP, RBS, Barclays, HSBC, ring-fencing, high street spending, George Osborne, fiscal austerity, pay and Xtract Energy.

US energy services giant Halliburton Company (NYSE:HAL) is suing BP plc (LON:BP) for defamation and negligent misrepresentation over the disastrous 2010 oil spill in the Gulf of Mexico.

Halliburton claims BP gave inaccurate information to the US company before it did work lining the well with cement.

An official inquiry found that faulty cementing contributed to the disaster, which killed 11 oil rig workers, writes BBC News.

However, BP replied in a statement, saying that Halliburton is trying to divert attention from its own role in the incident:

"BP believes this lawsuit is the latest attempt by Halliburton to divert attention from its role in the Deepwater Horizon incident and its failure to meet its responsibilities, and to deflect all blame to BP.

"BP will vigorously contest the claims should they come to court.

"Multiple independent investigations have identified serious problems with the cementing of the well as a potential contributory factor to the Deepwater Horizon disaster – not only BP’s own investigation."

RBS, Barclays and HSBC

Taxpayer-owned Royal Bank of Scotland yesterday emerged as one of the main targets of a multi-billion pound legal case brought by the authorities in the United States. RBS, Barclays and HSBC are among 17 banks being sued by America’s Federal Housing Finance Agency.

It claims the banks used false claims in sales documents to sell billions of dollars’ worth of mortgage investments to US government agencies, which were then hit by massive losses in the US mortgage crash, writes the Daily Mail.

Ring-fencing

The Independent Commission on Banking's proposed ring-fencing of retail and investment banking will increase business borrowing costs and dent economic growth, a leading economic forecaster predicts today.

Restricting cross-funding by erecting firewalls within banks will increase the cost of borrowing for big companies by up to 1.5 percentage points and cut economic output by up to 0.3 per cent over several quarters, according to the Ernst & Young ITEM Club, according to the Independent.

High street spending

August was the worst month for spending across the high street in more than two years as disruption from riots and looting combined with worsening consumer sentiment to cause shoppers to trim their purchases. Total sales fell back by 2.2 per cent in August compared to the same month a year ago, the worst year-on-year fall since 2009, according to the BDO High Street Sales Tracker, the Financial Times reports.

George Osborne

The founder of the world’s biggest bond fund has urged George Osborne to change course on his deficit reduction strategy, warning that the austerity measures risk pushing the economy into recession.

Bill Gross, of the Pacific Investment Management Company — Pimco — told The Times that a “mid-course correction” of the fiscal plans would lift the economy and should not damage the country’s standing with bond investors, the Times writes.

Fiscal austerity

The International Monetary Fund has called on the US and Europe to abandon fiscal austerity and switch to stimulus measures, warning that the global economy faces a "threatening downward spiral". Christine Lagarde, the IMF's managing-director, said the outlook had darkened suddenly over the summer, according to the Telegraph.

Pay for women

Banks should be forced to publish the level of average pay and bonuses at each tier of management to prevent women being short-changed in the male-dominated world of the City, two Tory backbenchers argue in a new book.

In Masters of Nothing, Matthew Hancock, who was George Osborne's chief economic adviser before being elected to parliament last year, and his co-author Nadhim Zahawi, claim the City's testosterone-fuelled culture created a "sexio-economic effect", which led to reckless risk-taking and helped to cause the credit crunch, the Guardian says.

Xtract Energy

Oil and gas investor Xtract Energy is poised to leave and rejoin Aim this month following a takeover deal and a £3million fundraising. The company is taking full control of one of its part-owned subsidiaries, Elko Energy, which operates in the Danish and Dutch North Sea, using finance from a share placing with institutions, according to the Daily Express.