...the main business headlines..........
Calls mount for interest rate cuts
Policymakers are facing “mounting pressure” to carry out deep cuts in interest rates, said the Financial Times. The Bank of England and European Central Bank will hold meetings this week to discuss rate moves, as surveys indicate that analysts expect a cut of at least half a percentage point in both regions. The banks cut rates by half a point last month but they will “probably be forced to move again” in the wake of cuts last week by Japan and China and Saturday’s half per cent reduction by the Reserve Bank of India.
A trillion reasons to remain gloomy 
Lloyds warns of profit declines
Lloyds TSB warned the markets of severe declines in pre-tax profits for the first nine months of the year. In this morning's trading statement, released with details of its formal bid for HBOS, it said it had written off £270m more in the third quarter, with a further £792m written off against its reserves. It is placing £4.5bn of new shares with the government as well as £1bn in preference stock, but over the weekend a counter-bid looked to have emerged from another bank, headed by former HBOS executive Jim Spowart.
Asian rally continues
Stocks rose in Asia on Monday morning, continuing last week’s moves, as India cut interest rates and South Korea said it would inject $10.8bn into its economy. The MSCI Asia Pacific excluding Japan index rose 4.8 per cent in Hong Kong, with Japan closed for a holiday. The FTSE 100 opened little changed, after US index futures on the Standard & Poor’s 500 rose nearly one per cent. JPMorgan Chase said it would change the terms on $110bn of mortgages to try to reduce home repossessions.
Japan's return from financial oblivion
Ryanair reports drop in profits
Low-cost airline Ryanair reported a 47 per cent drop in profits for the first six months of the year, with fuel costs rising 101 per cent over that period, reported the Daily Telegraph. The airline said that falling oil prices would “drive fares lower”, leading to a loss over the next six months, although in spite of that performance it still expects to break even over the year as a whole. Chief executive Michael O’Leary said that he expects “continuing bankruptcies and consolidations” to occur in the industry.
Barclays deal bags advisor £40m
After the cash injection of 3.5bn into Barclays by Middle Eastern investors, advisory firm PCP Capital Partners, led by founder Amanda Staveley, stands to make £40m, said the Independent. 13 per cent of the value of Barclays shares was wiped out on Friday as investors gave the deal the “thumbs down” in relation to the more generous terms offered by the UK government. The bank announced a £7.3bn overall investment, including £2bn from Qatar’s sovereign wealth fund and £300m from one member of the Qatar royal family.
Newsdesk: Saudis to pledge funds for IMF, says Brown
3m homes to face negative equity
Three million homeowners, amounting to more than a fifth of all households, could end up in negative equity, reported the Times. Analysts at Citigroup believe that the Bank of England's calculations are "too optimistic" and that a further drop of 15 per cent in house prices, on top of the 15 per cent already seen, will leave between 2.5m and 3m householders in negative equity. This would exceed the peak of 1.8m in the early 1990s by some distance, and "deepen the painful, consumer-driven recession" expected by the City.
...in brief..................
SocGen profits slump and Commerz goes to government for funds
Societe Generale, France’s third-largest bank, saw third quarter profit fall 84 per cent on credit writedowns of “at least 1.4bn euros”, reported Bloomberg.com. Net income for the three month period dropped to 183m euros, against analyst estimates of 581m euros…………
Japanese electronics maker Panasonic is in talks to take control of rival Sanyo Electric, reported the Financial Times. The deal would create Japan’s largest electronics group and “spur consolidation” in the sector, which has so far not witnessed a merger on this scale…………
Poor economic news from Australia today signalled further interest rate cuts were in the pipeline. The Reserve Bank of Australia holds a meeting tomorrow and is expected to cut rates by half a point to 5.5 per cent. Retail sales fell 1.1 per cent in September and house prices dropped 1.8 per cent in the third quarter…………
Virgin Media, is “under pressure” to announce whether its lenders have accepted its requests to delay payments on its £4.3bn debt, reported the Daily Telegraph. It has asked for a three year delay until 2012, since scheduled repayments in 2010 and 2011 have been disrupted by the credit markets…………
BT’s pension fund deficit has jumped £5bn to £16bn, according to independent pensions consultant John Ralfe. Falling stockmarkets have brought about the decline, which means the deficit is now more than the telecom company’s £9bn market capitalisation…………
Germany’s Commerzbank is to receive an 8.2m euro cash injection from the German government after it reported a third-quarter loss. It reported a net loss of 285m euros in the three month period and said it will take the injection to “strengthen its capital base”…………
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