The Business: Tuesday March 25 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
Lloyds Banking Group has been accused of short-changing PPI claimants. A BBC investigation found that the lender has been cutting the compensation it pays to claimants, saving more than £60m over the past year. Lloyds refused to be interviewed about the allegation but insisted it is offering the correct level of compensation in line with regulatory guidance. It cited an obscure regulatory provision known as “alternative redress”.
Royal Mail plans to cut 1,600 jobs, says Sky News. It will make the cuts, mainly among its head officer managerial staff, as part of a drive to cut costs. It aims to make costs savings of £25m in 2014-15. The postal delivery service says the net effect will be 1,300 job losses as it plans to create 300 new or enhanced roles at the same time. Unite, which represents 7,000 managers at the firm, described the proposals as "ruthless".
Investors are withdrawing money from Russia at such a rapid rate that capital flight may reach $70bn over the first quarter of the year. The Daily Telegraph says Moscow may soon have to impose capital controls to stem the soaring losses as the Crimea crisis rumbles on. “Markets have been extremely complacent, fooling themselves that Russia is invulnerable because it has almost half a trillion in foreign reserves,” said Bartosz Pawlowski from BNP Paribas.
“Taxing expensive homes would send a disastrous signal that London has fallen out of love with success while doing nothing to help address the housing shortage. France’s wealth tax has triggered an exodus; a mansion tax would do the same for the UK. City AM’s Allister Heath, outlining one of ‘seven threats that could derail London’s position as a top city’.
The US is losing its status as an employment powerhouse after its labour participation rate fell behind that of the UK. Previously, the US had been regarded as the nation where most people have a job or are looking for one. But its rate started to decline in 2000 and has plunged since 2008 from 66% to 63%. Despite the UK’s lengthy downturn, the labour participation rate her now stands at 63.6% - the first time for 36 years that it has been higher than in the US.
Britain’s video games industry has won a tax break, says The Independent. The industry feared it had lost its long campaign for the break when George Osborne failed to mention any reform in his Budget last week. However, a formal announcement is now expected by the middle of next week after the European Commission gave its approval. To qualify for tax breaks of up to 25%, video games makers will have to ensure part of their games content is “culturally British”.
FTSE-100: down -0.56 to 6520.39
Dow Jones: down -0.16 to 16276.69
Dax: down -1.65 to 9188.77
Cac-40: down -1.36 to 4276.34
Nikkei: down -0.36 to 14423.19
Hang Seng: down -0.37 to 21765.91
US dollar: buys €0.72250 and £0.60590
Sterling: buys $1.65020 and €1.9240
Oil: $106.58 down -0.3