...the main business headlines..........
Markets rise as confidence returns
Shares rose in the US and Asia, after the American government's rescue plan for Citigroup injected confidence back into the financial system. Financial companies and commodity producers saw their shareprices jump as investors returned to the markets. The Standard & Poor's 500 Index moved up 6.5 per cent in the US yesterday, its second day of strong gains, and Asian markets responded, with the MSCI Asia Pacific Index rising 3.4 per cent. In the UK the FTSE 100 Index saw its biggest ever gain yesterday, with a 9.8 per cent rise but this morning opened down 1.5 per cent on profit-taking.
The Pre Budget Report was a purely political exercise 
The Mole: higher tax rate is the last nail in the coffin of Blairism
US to support finance firms
The US Treasury and Federal Reserve are to unveil a lending plan for the consumer finance market, perhaps as soon as today, reported Bloomberg.com. The scheme will use funds from the government's $700bn rescue fund and will pay for new loans which will be repackaged and sold to investors. The Troubled Asset Relief Programme, or TARP, has so far been used to rescue the banking sector but there is increasing pressure for it to be used for consumer areas such as financing for car purchases and education and lower credit-card costs.
Alexander Cockburn: Economic woes pile into Obama's in tray
Tax rises to fund spending plan
Chancellor Alistair Darling announced some "truly shocking" forecasts for borrowing in his pre-Budget report yesterday, as he sought to spend his way out of recession, said the Financial Times. Public borrowing is to hit a "record level" of £118bn in 2009-10 and government debt will top £1tr for the first time in 1012-3. To pay for this spending, Darling announced the expected tax rises in National Insurance and tax, meaning "six years of austerity" for taxpayers.
Bankrupt Britain - it could happen
Germany situation worst since 1949
Industrial orders in the Euro-zone "plunged" 3.9 per cent in September, with Germany's IFO index of business expectations falling to its lowest level for half a century, reported the Daily Telegraph. The falls have raised fears of a "severe slump" affecting Europe next year as the downturn engulfs the EU's biggest economy with "shocking speed". Economists said that German exports to many parts of Europe have "collapsed", with "the next shoe yet to drop" being Eastern Europe. Talks are ongoing on a €130bn EU bail-out plan.
What happens when a Western economy dies
Hungary is counting the cost of capitalism
BHP Billiton scraps bid for Rio
BHP Billiton scrapped its $66bn bid for Rio Tinto this morning, saying that it no longer considers the move to be in the best interests of its shareholders, reported the Times. Marius Kloppers, the BHP chief executive, said that recent falls in commodity prices have "altered risk dimensions" and that the new group's bigger debt exposure, as well as difficulty in selling assets have made the purchase "unacceptable". Placing the blame for the deal falling through squarely on current economic woes he said in normal circumstances the bid would have gone through.
Bankers fly in to bail out Dubai
Investment bankers from London flew in to Dubai last night to help plan the bail-out of the Gulf state's banking sector, reported the Daily Telegraph. On Sunday the ruling council of the United Arab Emirates said that it would inject capital into Emirates Development Bank, a vehicle designed to rescue struggling lenders. Bankers from Goldman Sachs, UBS, Morgan Stanley and Credit Suisse have been despatched to help restructure the country's banking industry as its construction sector turns down.
In pictures: opening night of Dubai's Atlantis
...in brief..................
Barclays pushes plans through and Homeserve shares plummet
Barclays has won shareholder approval for its controversial Middle East capital raising plans "by the skin of its teeth", said the Financial Times. Legal & General's support was vital in the end, as it made a last-minute decision to back the plan with its five per cent shareholding…………
Office rents in the West End of London, midtown Manhattan and Tokyo, fell in the third quarter for the first time in nearly seven years, said Bloomberg.com. The economic crisis drove down rental values, with banks and investment companies feeling the brunt of the problems…………
Dave Whelan, the current owner of Wigan Athletic Football Club, is in talks to take a stake in JJB Sports, the chain he started in 1977, said the Financial Times. He is thought to be prepared to spend £100bn to bail out the troubled retailer, after selling out last year…………
Shares in troubled retailer Woolworths "missed out on yesterday's rally" as they fell to 1.34p, said the Independent. Behind the renewed weakness was a report by broker Panmure Gordon setting a 0p price target, arguing that its shares had little, if any, value…………
Starbucks is predicting a fall in like-for-like sales next year as consumers stay away from its stores, said the Daily Telegraph. The struggling coffee company has seen its shares collapse by 65 per cent in the last year and it expects a "very difficult environment" in 2009…………
Starbucks hopes for a Russian coffee break
Homeserve, the emergency repair company, warned it might make £3m less in profit this year, sending its shares down almost 29 per cent, said the Times. It also announced plans for a £5m restructuring to be achieved by the end of March 2009, which would entail a one-off cost of £3m…………
Posts
