Companies, Markets and Finance
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The EU is demanding an extra £1.7bn from the UK because of the success of the economy. The increase would add almost a fifth to the UK's annual contribution. The European Commission has defended the demand, comparing it to personal taxation – the more a person earns, they more they have to pay. The Netherlands is also being asked to pay more, France is among the countries due a rebate.
Tesco is withholding payouts totaling £2m to its former chief executive and chief financial officer, as it absorbs the blow of the discovery of a £263m shortfall in its profits. The payments to Philip Clarke and Laurie McIlwee will be suspended until the FCA’s investigation is complete. Clive Black, analyst at Shore Capital, said: “We can never recall a period so damaging to the reputation of the company.”
The CBI has issued a gloomy update as a sluggish eurozone and strong pound have dragged UK exports to the lowest figure for 18 months. The news put the dampeners on government ambitions for a big push in UK exports. Rain Newton-Smith of the CBI said: “Global political instability, mounting concerns about weakness in the eurozone, and recent rises in sterling are all weighing on export demand.”
Microsoft withstood the shift to cloud computing in the last quarter, enabling it to post revenue and earnings ahead of Wall Street’s expectations, reports the Financial Times. The leading software company said revenue from its core business of selling PC and server software to corporate customers grew by 10% in the three months to the end of September.
Foxtons shares fell yesterday after the estate agent chain warned that profits would fall this year because of a dramatic slowdown in London’s property market. The Guardian says that an unscheduled trading update from Foxton’s revealed that sales commissions fell by 7.8% in the third quarter to £16.4m, helping to push earnings before tax, interest, debt and other items down 21% to £14.2m.
“Here is a new phrase for everyone to learn – ‘brand archaeology’. Apparently it means exploring the origins of a brand rather than suggesting it is prehistoric, which is rather good news for Tesco.” Graham Ruddick of the Daily Telegraph says the grocery giant is set to return to its roots.
FTSE-100: up +0.30 to 6419.15
Dow Jones: up +1.32 to 16677.90
Dax: up +1.20 to 9047.31
Cac-40: up +1.28 to 4157.68
Nikkei: up +1.02 to 15292.94
Hang Seng: down -0.20 to 23287.53
US dollar: buys €0.78970 and £0.62340
Sterling: buys $1.60390 and €1.26680
Oil: $86.84 up +2.4