|TUI Travel plc expected to win FTSE 100 tussle from Direct Line Insurance Group plc|
|Monday, 10 December 2012 09:37|
News round up: TUI Travel, Direct Line, FTSE 100, Barclays, Deutsche Bank, AAA rating, Tesco, Virgin Atlantic, Microsoft, Rolls-Royce, RBS, British Airways, Wages.
TUI Travel plc (LON:TT) and Direct Line Insurance Group plc (LON:DLG) are vying for a place in the benchmark FTSE 100 (INDEXFTSE:UKX). The constituents of the blue-chip index are due to be reviewed this week, with the holiday company and the recently floated insurance group competing to make it into the top flight. However, traders and analysts said they expect TUI to win the race.
Barclays and Deutsche Bank
An international trade war is threatening to erupt over an American plan that would force Barclays and Deutsche Bank to pump more cash into their Wall Street operations. Daniel Tarullo, a governor of the Federal Reserve, wants tougher capital and liquidity rules for all foreign banks operating in America. Tarullo, who is overseeing the implementation of the Dodd-Frank banking regulation reforms, is expected to push for the rules to be implemented at a Fed board meeting in Washington this week.
Britain’s AAA credit rating
The Treasury is warning this weekend that failure to stick to George Osborne’s austerity plans may cost taxpayers tens of billions of pounds if Britain’s AAA credit rating is cut. The Chancellor’s officials have calculated the cost to the public purse of higher borrowing costs should markets lose confidence in British economic policy.
Tesco is to focus its Indian expansion on the major cities of Mumbai and Bangalore as part of chief executive Philip Clarke’s fight back on growth. The Sunday Telegraph understands that Mr Clarke met members of the Tata family – thought to include Chairman Ratan Tata himself – this weekend to begin to flesh out the plans for the retailer’s push into the world’s second most populous country.
Sir Richard Branson could give up control of Virgin Atlantic in just a few days after three-way talks over its future this weekend. Branson is in takeover negotiations with America’s Delta Air Lines and Air France-KLM. The Sunday Times revealed last week that Delta, America’s largest carrier, had approached Singapore Airlines to buy its 49% stake in Virgin Atlantic, with a view to Air France-KLM eventually buying part of Branson’s 51% holding.
The row over the amount of tax multinationals are paying has taken another turn after it emerged that Microsoft pays no UK tax on £1.7bn of online revenues. The US technology group is understood to be channelling online payments for its Windows 8 operating system and other downloads of software through Luxembourg and Ireland, where corporation tax is lower than the UK.
A whistleblower at the heart of a bribery investigation at Rolls-Royce has been fighting for more than six years for his claims to be heard. The British engineering group has been accused of handing 20m dollars (12.5m pounds) and a blue Rolls-Royce car to the son of the former president of Indonesia to help win a contract to supply engines.
Royal Bank of Scotland
Businesses are to be offered discounted loans to help them trim their energy costs under a £200 million deal launched today by Royal Bank of Scotland. The state-backed lender is tapping into the £80 billion Funding for Lending scheme to offer reduced-rate loans for UK firms looking to install energy-efficient heating and lighting, or to generate their own power from wind turbines, writes The Scotsman.
The head of British Airways has accused the Government of failing with its economic strategy and being “fixated” with immigration. In a gloomy verdict on last week’s Autumn Statement, which extended austerity until 2018, Willie Walsh complained that the coalition Government had no growth strategy. The chief executive of BA’s parent, International Airlines Group, suggested that if the Chancellor were running a business, it would be destined for deep losses.
The City's relentless rise has sucked £7,000 a year from the pockets of the average British worker, a report from the TUC will reveal today. The report Where Have All the Wages Gone? found that over the last 30 years the share of national income going to wages has fallen from 59 to 53 per cent. But over the same period the proportion of GDP going to profits has increased from 25 to 29 per cent, while the share of income spent on taxes and subsidies has been broadly consistent at around 11 per cent. This means that the average Briton failed to share in the country's economic success before the financial crisis, losing out on £7,000 in lost earnings on average, The Independent writes.
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