The Business: Tuesday March 4 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
Stock markets fell sharply yesterday amid fears the Russian aggression in Ukraine could derail the global economic recovery. The FTSE-100 index fell by 1.49% and the German stock market by more than 3%. The value of the pound also fell, while natural gas prices rose by almost 10%. Britain is preparing to rule out trade sanctions against Russia. The ability of European leaders to react is hampered by EU dependence on Russian oil and gas.
The recent floods will cost the UK insurance industry £1.2bn, reports the Daily Telegraph. However, the chaos and damage caused by the wettest winter on record will be “manageable” for British insurers, says Fitch. "This view recognises that the insurers are typically large, well-diversified players with the ability to offset losses through other profitable lines and to capitalise on price increases post-event thanks to strong capital levels," said the rating agency.
Warren Buffett has appointed a new financial adviser – a 29-year-old business school graduate called Tracy Britt Cool. She forms a third of the trio of Berkshire Hathaway executives the investor refers to as the “three Ts” – alongside former hedge fund managers Ted Weschler and Todd Combs. Buffett said his latest protégé’s role at Berkshire consists of doing “all kinds of things that I don’t want to do, so I hand them to her”. He added that she is doing “a perfect job”.
Backbench Tories are urging George Osborne to use his forthcoming Budget to increase the 40p tax threshold, reports the Daily Mail. However, Osborne has told MPs that his priority is to increase the personal tax allowance from £10,000. With Britain’s economy now forecast to be among the fastest growing in the world this year, Osborne will deliver his Budget in a more positive atmosphere than he is used to.
“In the meantime, there are more potent threats to the health of financial markets – the growing Chinese slowdown, and the return of mass leverage to US equity markets, to name but two.” Jeremy Warner believes there are bigger threats to recovery than the Ukraine crisis.
Mark Carney suffered a fresh setback yesterday as it was revealed lending to businesses has fallen again, reports The Independent. The Bank of England’s latest credit data showed lending to businesses fell £600m in January, with loans to small and medium-sized firms down £300m. The impact of the drop was exacerbated by a contrasting surprise jump in mortgage approvals to 76,947 — well ahead of December’s 72,798 and the highest level since November 2007.
FTSE-100: down -1.49 to 6708.35
Dow Jones: down -0.94 to 16168.03
Dax: down -3.44 to 9358.89
Cac-40: down -2.66 to 4290.87
Nikkei: up +0.47 to 14721.48
Hang Seng: up +0.92 to 22707.22
US dollar: buys €0.72670 and £0.59960
Sterling: buys $1.66790 and €1.21200
Oil: $111.06 up +1.8