The Business: Thursday August 14 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
Mark Carney has signalled that interest rates will remain on hold until next year, as wage growth continues to lag behind the rising cost of living. Despite rapid economic growth and falling unemployment, the Bank has slashed its forecast for UK wage growth this year by half. Carney said that earnings growth has been “remarkably weak, even as unemployment has fallen rapidly”.
George Osborne has paused plans for a multibillion-pound sale of shares in Lloyds Banking Group, says The Times. Osborne has postponed the “Tell Sid” style privatisation due to the volatility of markets and the difficulty of finding a suitable window of opportunity this autumn. Officials believe that 7% slide in the Lloyds share price since June has also made a retail offer more difficult.
Surveyors say the housing market "paused for breath" across the UK last month and went into reverse in London. Demand fell for the first since since the start of 2013, says the Royal Institution of Chartered Surveyors. Sales fell more sharply in London than anywhere else. The prospect of higher interest rates and warnings from the Bank of England over a housing bubble are believed to have cooled the market.
HSBC has awarded 15 of its top bankers “fixed pay allowance arrangements” worth £7.1m under a controversial new scheme designed to dodge new rules on bankers’ bonuses. The Guardian reveals that Britain’s biggest lender awarded Samir Assaf, the head of its investment bank, £1.5m worth of shares, as part of a slew of awards to bypass tough European Union restrictions.
“Whatever Carney says, the Bank is groping around in the dark. At the moment it doesn't really know what's going on but hopes that if it sits tight for long enough, the fog covering the economy will lift.” Larry Elliott of The Guardian says the Canadian cannot conceal the BOE’s confusion.
Businesses are being warned to check that all their staff take their full entitlement of leave after a survey found that two out of five managers did not use all their holiday entitlement last year. The Institute of Leadership and Management asked 1,000 managers about they holiday habits. Other surveys have found that people find it hard to switch off from work while on leave.
FTSE-100: up +0.37 to 6656.68
Dow Jones: up +0.55 to 16651.80
Dax: up +1.43 to 9198.99
Cac-40: up +0.78 to 4194.79
Nikkei: up +0.77 to 15330.43
Hang Seng: up +0.07 to 24908.67
US dollar: buys €0.74860 and £0.59920
Sterling: buys $1.66860 and €1.24910
Oil: $104.81 up +0.9