The Business: Friday 13 December 2013
Company news, markets and financial talking points, available from 8am Monday to Friday
George Osborne says he has started a “quiet revolution” on tax cuts, reports the Daily Telegraph. The chancellor told the Treasury Select Committee that cutting corporation tax will have long-term benefits. The coalition has already cut the rate from 28% to 23%, and will lower it to 20% over the next two years. This puts Britain on course to become one of the lowest corporation tax jurisdictions in the Western world.
Sports Direct is in a battle with Adidas after the German sportswear manufacturer banned the chain from selling Chelsea FC replica kits next years. The retailer’s management said that Adidas’s ruling is “impossible to understand” and vowed to fight the decision, using its position as the UK’s largest sports retailer as a bargaining chip. The row emerged as Sports Direct reported slowing profit growth for the six months to October.
It will “take some time” for the UK to regain its AAA rating, says the rating agency Fitch. In his first media interview since becoming Fitch’s global head of sovereigns, James McCormack told Reuters it was the “right call” to downgrade Britain to AA+ in April. He says some of the economic progress since then has “been a pleasant surprise”, adding: “one of the things we have said about getting triple-A ratings back is that it is going to take some time.”
A profit warning has wiped nearly 60% off the share price of leading sports broadcast firm Perform Group, says The Times. As the company announced that its soaring growth in the video rights market had stalled, its shares crashed by 58% to 180p, wiping £650m off its market value. Perform blamed a slowdown in advertising revenue in the final quarter. The news sent shockwaves through the digital media industry.
Blockbuster will close down completely this weekend after failing to attract a buyer. The DVD rental chai will close 91 stores nationwide on Sunday, with the loss of more than 800 jobs. Over the weekend there will be a closing down sale at all the remaining outlets, with up to 90% off the already discounted prices. The capitulation brings to an end nearly 25 years in the UK for the Blockbuster brand. It arrived from the US in 1989 as VHS ownership took off.
“I find it inconceivable that, without forward guidance, I, or any of my colleagues, would have already voted to raise Bank rate and that the only thing that has stopped us is forward guidance.” Martin Weale, of the Bank of England’s Monetary Policy Committee, plays down the significance of Mark Carney’s flagship policy
Four former executives from the Icelandic bank Kaupthing have been sentenced to between three and five years in prison. In the heaviest sentences for financial fraud in Iceland’s history, the former chief executive, the chairman of the board, one of the majority owners and the chief executive of the Luxembourg branch were all jailed after being accused of hiding the fact that a Qatari investor bought a stake in the firm with money lent - illegally - by the bank itself.
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US dollar: buys €0.72680 and £0.61200
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Oil: $108.51 down -1.1