The Business: Tuesday June 24 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
Taxation on savings will exceed ‘sin taxes’ within two years, says the Daily Telegraph. Treasury projections show that revenue from savings and home buyers will overtake that collected from alcohol and tobacco by the end of 2016. The new analysis shows that inheritance tax, stamp duty and similar taxation is projected to raise £21.9bn, compared to £21bn raised through so-called sin taxes, including tobacco, wine, beer and cider duties.
Tesco has received another blow as Fitch cuts its credit rating on the supermarket, reports The Guardian. The ratings agency said it acted because Tesco faces an escalating price war in the UK while its remaining international operations are being threatened by "economic and political headwinds". Fitch, which downgraded its rating on the retailer from "BBB+" to "BBB", follows in the footsteps of rival agency Moody's which last week moved Tesco to its second lowest investment grade.
The crisis in Iraq has hit airlines and travel firms as share prices fall in response to oil price rises. Sky News reports that EasyJet, IAG and TUI Travel saw their share prices fall yesterday. Meanwhile, the cost of a barrel of Brent Crude jumped sharply a couple of weeks ago when the new crisis first erupted. It has now risen even further to stand at above $115, close to Thursday's high and nearing the $115.71 reached in September last year.
Germany and France are holding back the rest of the eurozone, where growth is at its strongest since pre-recession levels. New figures from Markit show that France’s economy was hit by a sharp downturn, while in Germany the pace of expansion was at its weakest in eight months. In contrast, across “peripheral” Europe - including countries hit the hardest by the global financial crisis - output has accelerated and growth is at the strongest since August 2007.
The super-rich are splashing the cash on superyachts once again, reports The Times. During the financial crisis, spending on the luxury vessels declined, with sheiks and oligarchs the main purchasers. However, the yachts are back in fashion with one leading British brokerage boasting the sale of five in as many weeks. Luxury charters have also rebounded this summer with a 15% increase in business reported. Simon Cowell and Sir Philip Green are high-profile fans of superyachts.