News digest 19 October 2011
The digest opens with more gloom on the
economy as inflation soars and the economy goes off track as cuts
hit home and misery hits a high. Fox’s exit is still in the
headlines while MPs will debate exiting Europe as the continent
tries to deal with the contagion and debt downgrades, Goldman Sachs
sees a loss but bonuses will still be paid, PPI complaints drop,
construction could come to a halt, but cleaners get a rise and as a
chain maker moves into profit a soldier is released from captivity
in exchange for 1,000 prisoners…
Inflation jumps again –
Inflation hit a 20 year high in September with CPI rising to
5.2 per cent and RPI 5.6 per cent. The governor of the Bank of
England, Sir Mervyn King, warned that time was ‘running out’ for
the world economy although he did argue that the rate should start
to drop after energy price rises and January’s VAT increase drop
out of the index in the new year. Unite general secretary Len
McCluskey said: "Inflation is soaring, unemployment is
out of control and there are no signs of growth. The coalition
government is piling misery upon misery for ordinary families. Now
more that ever Britain needs a 'plan B' from this government. David
Cameron and George Osborne's political cowardice means they are
presiding over an economic catastrophe.” The
September figure is also the month used to set the following year’s
rise in state benefits, but rather than provide a boost for
pensioners and people struggling on Britain’s already low benefits
a number of senior MPs have argued that the figures were distorted
and chancellor George Osborne should look into different ways of
uprating benefits, or not at all, same old Tories… (Mirror p7, Sun p6, Express p1, Mail p6, Times p7, Indie p56, Guardian p4, Telegraph p1/b4-5, FT p1/3, Morning Star p1, Unite
release)
Cuts hit home – The Guardian (p1/14-15) has a special
feature on the Con-Dem coalition’s cuts one year on with Amelia
Gentleman travelling to Durham to see how dwindling investment,
fewer jobs and financial pressures are leading to a lack of
opportunity and a shortage of hope, welcome to Con-Dem Britain…
Squeeze on families continues
– The Times (p46) and
Indie (p1) report that
rent rises mean that families now spend half of their incomes on
rent as the average rent has risen to £890 a month while in London
it is even worse as the average charge is £2,075 closer to three
quarters of a family’s monthly earnings.
Misery index hits new high –
A number of the papers report that the misery index – a combination
of the inflation and unemployment rate – has hit a new high rising
to 13.7. People are now as miserable as they were back in 1992,
that was the year that John Major won the general election and
sterling was forced out of the ERM (Sun p45, Times p7, Guardian p4).
French fears over downgrade drive EU
leaders towards deal – And talk of a downgrade of France’s
credit rating seems to have focused the minds of European leaders
as it looks like the €2 trillion fighting fund will be agreed after
France’s president Sarkozy said the destruction of the euro could
risk the destruction of Europe; so far German chancellor Angela
Merkel has not blinked but the pressure is building for an outline
agreement by the weekend (Sun p2, Times p15, Indie p59, Guardian p29, Telegraph b1, FT p1, Morning Star p6).
Exit the EU? – Prime minister
David Cameron is facing mutiny among his MPs after indicating he
may block a referendum on Britain’s relationship with Europe. A
landmark debate and vote on staging a referendum could be heading
to the Commons after the backbench committee ordered the debate to
be held on 27 October, London mayor Boris Johnson has also waded in
to the debate so you know Cameron is under pressure (Mirror p2, Sun p2, Express p5, Mail p4, Times p15, Indie p8, Guardian p13, Telegraph p1, FT p2, Morning Star p3).
Exit Fox – Most of the papers
report on the publication of inquiry into the Adam Werritty affair
and after former defence secretary Liam Fox was damned for breaking
the ministerial code of conduct and for putting lives at danger
after sharing details of his diary it looks unlikely that he’ll
make a comeback (Mirror p6,
Sun p2, Express p4, Mail p11, Times p8-9, Indie p6-7, Guardian p2, Telegraph p10-11, FT p2).
Exit lobbyists – And as part
of the fall out of the Werritty affair the Times (p1/9) and Indie (p6-7) delve a little
deeper into the potential clampdown on lobbyists with plans for a
compulsory register of ‘professional’ lobbyists to be published
next month. But the plans seem to be so widely drawn that any
organisation that tries to make a case to government will have to
register and that could include not only businesses that act for
private clients, but all organisations that try to influence the
government like the National Trust, charity groups and trade
unions.
Tax blunder traps millions –
Starting from today six million people will start to receive
letters that they have overpayed their taxes and will be entitled
to a rebate, expected to average £400 each. However a further 1.2
million people will be told they did not pay enough and will see
demands averaging some £600 drop through their letterboxes in the
coming weeks (Mirror
p9, Express p5, Mail p1).
Goldman Sachs sees $428 million
loss – Investment bank reports a third quarter loss of
$428 million, only the second quarterly loss in its history since
it was floated in 1999. The company’s investment and lending
business reported a steep loss, but the company did indicate that
it was considering its response which would be a mixture of jobs
cuts and a shrinking of its bonus pay outs, the fund will only be
$10 billion in contrast to the $13.1 billion in the previous year
(Express p50, Mail p72, Times p49, Guardian p27, Telegraph b1, FT p1).
Corporate borrowers shun state owned
banks – The Times (p43) reports that the
Association of Corporate Treasurers told MPs that companies are
cutting their borrowing with RBS and Lloyds amid fears that their
borrowing costs may be raised after the recent downgrade of the
banks by credit rating agency Moody’s.
Vickers call on bank boards –
The Indie (p56) reports
that the chair of the Independent Commission of Banking, Sir John
Vickers, argues ringfenced banks need to look at truly independent
boards for their ringfenced operations.
Lawson attacks Vickers – The
Telegraph (b3) reports
former chancellor Lord Lawson launched a scathing attack on Sir
John Vickers’ report saying he was astonished by some of the
proposals in the report.
PPI complaints drop –
Complaints over payment protection insurance have tailed off
dropping by more than half between July and September (Mirror p40, Indie p60, FT p4).
Fears over foreign doctors –
House of Lords committee report concludes there are risks in
employing some foreign medical staff due to concerns over the level
of training, different standards and the sharing of records, or
lack thereof (Mail p17,
Indie p14).
Benefit tourists bill hits £42
million – The NHS has written off £423 million in unpaid
bills by foreign tourists that were treated in UK hospitals, the
biggest losers was Guy’s and St Thomas’ which has written off £6.2
million since 2004 (Mirror
p14, Sun p17, Mail p17).
Eurostar up – Talking of
tourists and the channel tunnel operator Eurostar has seen a 1.6
per cent dip in traffic between July and September although
revenues rose by £14 million to £197 million, with a 1 per cent
rise in passengers to 7.3 million (Express p51, Mail p73).
Construction ballot on the
cards – And the building of big projects like the channel
tunnel or new power stations could come to a halt after Unite
announced it is preparing to ballot over 1,000 members in
construction firm Balfour Beatty Engineering Services for
industrial action in a dispute over deskilling and wage cuts of as
much as 30 per cent. Unite’s Bernard McAulay said:
“Unite is not opposed to change, but change needs to be
negotiated not imposed. Unite members have made it clear how angry
they are over this attack and made it clear to us that they want to
be balloted, so they can defend their skills and
pay.” (Times p54, FT p4, Unite
release)
Fine energy firms – The
Telegraph (b2) reports
that Glasgow MP John Robertson has called on Ofgem to use its
powers to fine electricity and gas suppliers billions of pounds for
uncompetitive behaviour.
G4S deal hit by fears over
debts – The Telegraph (b5) reports that the
chief executive of G4S, Nick Buckles, is on his way to the US
to try and shore up his bid for ISS as investors could vote down
the merger over the level of debt; the merger would create a giant
in the outsourcing sector.
Royal cleaners get a rise -
The Mirror (p10) reports
that poorly paid cleaners at Buckingham Palace have finally
clinched a decent pay rise as the palace has agreed to raise their
pay from £6.45 an hour to £7.50 hour from 1 November. The fight to
get the London living wage of £8.30 an hour goes on, so a little
longer before champagne corks go pop.
Coke has sparkle – Talking of
pop the Telegraph (b5)
and FT (p23) report on soft drink
giant Coca-Cola said it had sold more drinks in each region of the
world despite the global downturn, with volumes up five percent.
Profits climbed eight per cent to $2.2 billion with the company
seeing growth in sparkling beverages although still drinks remained
the largest sales by volume.
Boosted by beans but bars lose
fizz – Costa Coffee owner Whitbread says coffee shops are
becoming the new locals and turning into community hubs for
business meetings, family trips and places fro people to hang out.
The company reported a 15 per cent rise in profits to £174.9
million while profits fro the last six months to September jumped
42 per cent to £27.9 million (Mirror p40, Sun p45, Express p50, Mail p75, Times p44, Indie p58, Guardian p28, Telegraph b8, FT p20).
Renold sales up – The
Mail (p75) report that
the chain maker said underlying sales rose 13 per cent in the past
six months with the company forecasting £11.6 million profits on
revenues of £208.5 million for the year to March 2012.
Chains released – And finally
Israel’s ‘boy soldier’ Gilad Shalit who was captured as a teenager
has been released after being in captivity for five years, he was
swapped for 1,000 Palestinian prisoners, 477 were released
yesterday. On his release Shalit said: “Let’s hope the
deal leads to peace between Israel and the
Palestinians.” (Mirror p16-17, Sun p4, Express p27, Mail p25, Times p4-5, Indie p2-4, Guardian p18-19, Telegraph p20-21, FT p1/14, Morning Star p7)
Edited by Mik
Sabiers
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