...the business main headlines..........
Markets drop as rally questioned
Stocks worldwide slumped as major figures in finance questioned the sustainability of the recent rally. After both George Soros and Marc Faber predicted further difficulties for the markets, the Standard & Poor’s 500 Index lost 2.4 per cent, with futures sliding another 1.1 per cent after the close. In Asia the falls were reproduced, with the MSCI Asia Pacific Index losing 2.7 per cent, pushing the measure down 5.8 per cent for the year. In London the FTSE 100 Index was over one per cent lower in early trade after losing 1.6 per cent on Tuesday.
Ireland reveals emergency budget
The Irish government has unveiled the “harshest austerity measures” in the history of the Irish Republic in its emergency budget, reported the Daily Telegraph. Finance minister Brian Lenihan outlined a “grim package” of 1930s-style cuts, including taking a knife to child benefit and jobseeker allowances. Public works projects on roads and railways will be “frozen” and there will be cuts in the number of junior ministers. But two-thirds of the savings will come from tax rises, with the controversial pension levy rising to two per cent.
RBS to axe further 9,000 jobs
Royal Bank of Scotland is to cut a further 9,000 jobs as part of its “desperate” cost-cutting drive, reported the Independent. The group is attempting to make £2.5bn in savings, but the announcement has angered unions, coming “just a day” after it made public “lucrative” share option packages for directors of the group. The government majority-owned lender said it had begun talks with Unite, which was heavily critical of the move. The trade union’s national officer Rob MacGregor called the plan “truly devastating”.
Millions face water bill rises
Millions of families are being “threatened” with rises in their water bills of up to 29 per cent, reported the Times. The plans were revealed after UK water industry regulator Ofwat received submissions from water companies to increase their charges. Thames Water asked Ofwat for permission to increase its customers’ average bill by 17 per cent by 2015 and some of the smaller companies like Bristol Water announced proposed rises of 29 per cent. The increases come as companies seek to spend £22.5bn on “network upgrades” up to 2015.
US panel suggests bank liquidation
A congressional panel overseeing the financial sector rescue package suggested that “liquidating” problem banks might be a better solution to the country’s economic problems, reported Bloomberg.com. It also said that axing bank chiefs might help the situation and in its report warned that the Treasury’s forecasts may be “too rosy”. It declared the results of the Troubled Asset Relief Programme so far to be “mixed”, even after it was “revamped” by Treasury Secretary Timothy Geithner to focus on capital injections and the removal of illiquid securities.
UK tops economic gloom league
Economic confidence is lower in the UK than in any other leading country, reported the Guardian. According to a worldwide poll published yesterday, conducted in 25 countries, the British are “less positive” about their prospects, “less trusting” of banks and the stockmarkets and “less convinced” by government action than anywhere else. This is the second in a series of polls conducted by the WIN group of pollsters tracking the impact of recession and it is the second time that Britain has topped the table for pessimism, with a “striking” lack of confidence.
...in brief..................
Taylor Wimpey guarantees its future and Nissan secures loan
Britain’s biggest housebuilder, Taylor Wimpey, “appears to have secured its survival” after agreeing refinancing terms with creditors, reported the Daily Telegraph. The company revealed a £2bn pre-tax loss for last year on writedowns, but has refinanced £1.57bn of debt…………
Aon UK, the British arm of one of the world’s biggest insurers, is halving its contributions to workers’ pensions to remain “competitive”, reported the Financial Times. It said it thought it was the first large company in the UK to act as it wanted to stay “ahead of the curve”…………
Online poker firm PartyGaming yesterday vowed to go on the “acquisition trail” after settling a legal dispute with the US authorities, reported the Independent. The company will not be prosecuted for its internet gambling operations after paying a $105m fine, which could “pave the way” for a return…………
The Indian authorities have charged nine people connected to IT outsourcer Satyam over alleged corporate fraud, reported the Times. The Central Bureau of Investigation has made the allegations against the former chairman and family members in what would be India’s biggest corporate fraud…………
Corporate bankruptcies in Japan rose to a six-year high in March, climbing 14.1 per cent from the year before, reported Bloomberg.com. The world’s second-largest economy is experiencing a growing “slump” driven by a “collapse” in exports, which is creating a downward spiral…………
After Jaguar Land Rover’s £340m loan yesterday for investment in fuel-efficient cars, Nissan has now been offered £380m for a research project into cleaner cars, reported the Guardian. The money will be split between its Sunderland and Spanish plants and is part of Lord Mandelson’s £2.3bn aid package…………
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