|Bank of America: C&WC shares are a "buy" as the company outlook is stabilising|
|Friday, 13 July 2012 09:00|
News round up: Bank of America, Cable & Wireless Worldwide, Cable & Wireless Communications, Vodafone, Italy, Barclays, Credit squeeze, China, Pensions.
Italy's government bond rating
US ratings agency Moody's downgraded Italy's government bond rating by two notches, citing the knock-on effects of a possible Greek exit from the Eurozone and Spain's banking woes. In reducing the rating to Baa2 from A3, Moody's said that Italy was now "more likely to experience a further sharp increase in its funding costs or the loss of market access" for borrowing to service its budget. The move lowered Italy's rating to two notches above junk-bond status, and came just before the debt-laden country attempts to raise €5.25bn in a medium- and long-term government bond auction on Friday.
Barclays is facing growing protests over its attempts to rig Libor with some customers withdrawing money in response to the bank’s admission that it tried to manipulate the world’s key borrowing rate. Leicester City Council has said it will withdraw the £6m it holds on deposit with Barclays, warning it had been “appalled” by the bank’s behaviour. The latest blow for Barclays came as analysts at Morgan Stanley estimated the costs of Libor-related litigation for Britain’s biggest banks.
Central bank policymakers are today expected to throw down an £80bn challenge to Britain’s biggest lenders in an effort to ease the credit squeeze. The Bank of England (BoE) “funding for lending” programme, which has Treasury backing, will offer the money to banks on condition they pass it on to cash-strapped businesses and households in the form of cheaper loans and mortgages.
China’s economy suffered its worst quarter since the global financial crisis after gross domestic product growth shrank to 7.6 per cent, battered by severe weakness in Europe and America. Official figures this morning confirmed widely held fears of a sharp slowdown in the world’s second largest economy, as output for the second quarter slid to its slowest pace since early 2009, falling from 8.1 per cent at the start of the year.
Two-thirds of Britons do not have a private pension, the Office for National Statistics (ONS) has said, as experts warned that millions of people will spend their retirements in poverty. The ONS’s Wealth in Great Britain report showed that 64% of people in Britain are saving no money at all for their retirement. Pension experts warned that people are not saving enough for their old age and said that the basic state pension of £107.45 will not enough for them to live off.
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