|Vodafone Group plc shares are a "buy" despite weak first-quarter figures, says Questor|
|Monday, 23 July 2012 08:17|
News round up: Vodafone, Barclays, Greece, Drought, Pension liabilities, Energy bill, Austerity, Lending.
Rich Ricci, head of Barclays’s investment bank, has ruled himself out of the running to replace Bob Diamond as chief executive as the troubled bank prepares to announce profits in the region of £1.7bn for the second quarter. Mr Ricci, one of Mr Diamond’s key lieutenants, is believed to have told friends that he neither wants the job, nor thinks it would be sensible for him to be appointed.
Mr Samaras's comments come two days before a team of Greece's debt inspectors arrive in Athens to push for further austerity measures if the debt-laden country wants to qualify for further rescue payments and avoid a chaotic default. Athens wants to soften the terms of a 130bn euros bailout agreed last March with the European Union and the International Monetary Fund, to soften their impact on an economy going through its worst post-war recession. Greek GDP is expected by the end of this to have shrunk by about a fifth in five consecutive years of recession since 2008, hammered by tax hikes, spending cuts and wage reductions required by two EU/IMF bailouts.
The impact of the worst drought to hit the United States in more than half a century has been felt in Britain by an importer that was forced to pay record prices for thousands of tonnes of cattle feed last week. Data published by the US Government show that a British company bought 112,000 tonnes of soya beans from American farmers on Thursday, the day that prices hit an all-time high.
JLT Pension Capital Strategies, a consultancy, said the total deficit of blue-chip schemes stood at £73bn on March 31, compared to £35bn a year earlier. The company said International Airlines Group, BAE Systems and BT are among eight FTSE 100 companies whose pension liabilities are now actually greater than their equity market value. Rising deficits have been driven by poor returns on equities and the Bank of England’s quantitative easing programme. This is because the Bank uses the money to buy debt, which pushes up the price of Government gilts. This creates lower returns, or yields, on pension funds’ investments, The Telegraph holds.
Treasury intervention, unnecessary increases in costs and the risk to badly needed investment are cited by the Energy and Climate Change Select Committee as the result of a catalogue of blunders made in the draft Energy Bill. The Bill, aimed at paving the way to a low carbon energy industry and stimulating investment of £110bn in new plants has already drawn heavy criticism but the committee's report goes further in identifying flaws the MPs say might mean the policies fail to deliver. Ed Davey, Energy Secretary, is already heavily engaged in defending the reform measures and protecting the "green agenda" he sees as a crucial element of policy, The Telegraph writes.
Chancellor George Osborne should introduce a 2p cut in
National Insurance, borrow more and abandon his austerity strategy, a report from an economic think-tank warns today. The report by the Institute for Public Policy Research (IPPR) claims that government cuts are worsening the recession by undermining confidence among businesses and consumers.
Lending to cash-strapped businesses and households is set to fall sharply this year, despite a raft of government initiatives to encourage banks to lend more, Ernst & Young warned today. The accounting firm also said that total income across Britain’s banks could fall 2.5% to £139bn because of higher funding costs and increased competition for deposits, but it has predicted the wider economy will return to growth later this year.
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