The Business: Tuesday May 20 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
Millions of British householders could become ‘mortgage prisoners’ when interest rates rise, a report will warn today. The Resolution Foundation predicts that over 2.3m householders will struggle to afford their repayments when rates rise. The think tank believes that for these householders their monthly repayments will soak up at least one third of their disposable income by 2018. City analysts expect rates to start rising from April next year.
Marks and Spencer has posted a 3.9% fall in underlying annual profits to £623m. The high street institution also announced that group sales rose by 2.7% to £10.3bn in the year to 29 March. There was a 1.7% rise in like-for-like UK food sales, which strip out the effect of new stores, while general merchandise - which is dominated by clothing - fell 1.4%. Boss Marc Bolland said the retailer has made "solid progress" on its plans to transform the business.
Prices are rising faster than wages again, the Office for National Statistics could warn today. The announcement will contradict claims made just days ago by the Bank of England governor that the cost of living crisis is over. Mark Carney said that Britain was about to experience “sustained real wage growth”. An inflation figure of 1.7% or above today would mark the end of a six-month period of falling inflation figures.
Credit Suisse has pleaded guilty to helping tax cheats, reports the BBC. The Swiss banking giant admitted it helped some clients avoid paying taxes to the US government and agreed to pay a $2.6bn (£1.5bn) fine. It said in a statement it deeply regretted the past misconduct. US attorney general Eric Holder said the lender helped US "tax cheats dodge US taxes". As part of a deal with regulators, the bank will not lose its license in the US.
“When an entrepreneur starts up a company, what are they doing if not challenging the established way of doing things? That is in keeping with the values of the Labour party.” Rising star Chuka Umunna says Labour is the party of small business.
Pfizer has walked away from the bid for AstraZeneca, reports The Guardian, as one of the bitterest takeover battles for a British firm in years comes to an end. Experts, including politicians, scientists, and unions on both sides of the Atlantic had joined a chorus of disapproval of a proposed deal they said was motivated by tax avoidance and cuts to research jobs. Pfizer was described by a former AstraZeneca boss as a "praying mantis" that "sucks the lifeblood out of their prey".
FTSE-100: down -0.16 to 6844.55 Dow Jones: up +0.12 to 16511.86
Dax: up +0.31 to 9659.39
Cac-40: up +0.30 to 4469.76
Nikkei: up +0.72 to 14107.48
Hang Seng: up +0.57 to 22834.55
US dollar: buys €0.72970 and £0.59470
Sterling: buys $1.68130 and €1.22670
Oil: $109.40 down -0.3