The Business: Monday July 28 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
Profit warnings from UK companies are at a three-year high despite the economic recovery, a report from the EY consultancy has found. Listed firms issued 137 warnings in the first half of this year, 9% up on a year ago and the highest number since the first half of 2011, according to the report. Among the reasons cited by the BBC for the trend are increased competition, squeezed margins and a strong pound.
House prices across the UK are to rise by a third within five years as the rest of the country starts to catch up with London, experts have predicted. Property adviser CBRE has forecast that the average price of a home in the UK will jump by 12% this year and by 20% in London. It also predicts that by 2019 prices will still be 30% higher in both London and the rest of the country at £520,000 and £243,000 respectively.
Retailers are warning that a ‘Tesco Tax’ would cause price hikes, reports the Daily Telegraph. The controversial proposal, drawn up by 20 councils led by Derby City, for a £400m levy on large supermarkets has been criticised by business leaders who say it will drive up prices but leave the “onerous” business rates regime untouched. The British Retail Consortium says the tax would punish investement and cost jobs.
A former chief of the CBI is to assist George Osborne’s bid to restore trust in the scandal-hit financial markets, reports Sky News. Sir Richard Lambert, who ran Britain's biggest employers' group until 2011, is to be an independent member of the Fair and Effective Markets Review, which was set up by the chancellor. Gay Huey Evans, a former Barclays executive, and Jonathan Moulds, who previously ran the European operations of Bank of America Merrill Lynch, will join him.
“If the proponents of modern laissez-faire economics could point to a single economy where technology and markets had worked, alone, to create a vibrant, confident, high-growth economic model, their arguments would be stronger.” Writing in The Guardian, Paul Mason argues that state intervention drives technological innovation.
Deals that allow bosses of failing companies to drop their debts and carry on trading under a new name could be banned, reports The Times. Under “backstop” legislation, controversial “pre-pack” deals could be scrapped unless the insolvency industry improves scrutiny of their use. The government will be given the option to outlaw the sale of failed businesses back to the existing management team when a company has been through a pre-pack administration.
FTSE-100: down -0.44 to 6791.55
Dow Jones: down -0.72 to 16960.57
Dax: down -1.53 to 9644.01
Cac-40: down -1.82 to 4330.55
Nikkei: up +0.36 to 15513.12
Hang Seng: up +1.07 to 24475.75
US dollar: buys €0.74430 and £0.58890
Sterling: buys $1.69790 and €1.26390
Oil: $108.24 up +1.1