The Business: Tuesday August 5 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
A leading economic think-tank claims UK productivity is “still abysmal”, GDP per head is unlikely to return to pre-crisis levels until 2017, and real wages are running below the rate of inflation. The National Institute for Economic and Social Research warned that households remain the key driver of economic growth and that despite the economic recovery, there is “some catch-up to be done in the UK”.
The government has shunned BT in its shortlist for a lucrative deal to upgrade the way the emergency services communicate during a major incident, reports The Times. BT’s exclusion from the running for one of the biggest public sector communications contracts of recent years has come as a major blow. The project, to modernise radios and communication devices used by 300,000 police, fire and ambulance workers, is said to be worth around £5bn.
Analysts are expecting the Bank of England’s monetary policy committee to call for an interest rate rise when they meet this week. Although the consensus is that rates will not rise until early 2015 at the earliest, polling by Reuters found that economists expect at least one or two monetary policy committee members to call for rise when it meets this week. The details of the meeting will not emerge until when the minutes are released two weeks later.
The Financial Times says Downing Street is reviewing £8bn worth of arms exports to Israel in the light of the country’s military campaign in Gaza. A spokesman for David Cameron said yesterday that the UK government is “reviewing all export licences to Israel to confirm that we think they are appropriate”. Most of the arms contracts now under review are for cryptographic software and military communications, though parts for weapons are also being sold.
“In the future, shale will be recognised as this decade's version of the dotcom bubble.” Author and researcher Tim Morgan says when investors realise how quickly output from shale wells is declining the industry will collapse.
The Bank of England’s executive director for financial stability is leaving Threadneedle Street to become chief economist of BP, reports The Independent. Spencer Dale’s unexpected departure leaving a gaping hole at the top of the central bank just as it starts to flex its powers to prevent financial crises. Dale, who had been at the BoE for 25 years, quit only two months after starting his role as the head of financial stability.
FTSE-100: down -0.02 to 6677.52
Dow Jones: up +0.46 to 16569.28
Dax: down -0.61 to 9154.14
Cac-40: up +0.34 to 4217.22
Nikkei: down -0.83 to 15345.70
Hang Seng: down -0.21 to 24547.53
US dollar: buys €0.74520 and £0.59290
Sterling: buys $1.68650 and €1.25680
Oil: $105.50 up +0.6