Once again the startups team have been tearing through the nation’s papers to bring you a digest of the week’s top business stories. We read them so you don’t have to.
Financial Times
The European Central Bank has voiced its strongest concerns yet about the economic divergence of the Eurozone countries and has indicated that the six-year-old currency has not been working as hoped. The comments by Lucas Papademos, ECB vice-President, highlights fears among European policymakers about the underperformance of Eurozone members, such as recession-hit Italy.
John Snow, the US Treasury Secretary, has urged European leaders to stop using inflammatory anti-capitalist language or risk losing US investment. He said that American business people go where they feel comfortable, welcomed, and where they can get good returns. He also told them to push ahead with free-market reforms.
The Times
British Nuclear Fuels is expected to agree a £1 billion sale of its US Westinghouse nuclear power station business. The sell-off is likely to be the first of a number of disposals that the government-owned nuclear group will make in the next 12 months as an alternative to privatisation.
RHM, that makes Hovis and Mr Kipling’s cakes, is likely to make a return to the stock market. The company, absent for 13 years, is believed to be valued at £1.3 billion – an exceedingly big float!
Peter Mandleson has called on China to open its markets to more foreign imports and play a more active role in international negotiations to liberalise global trade. The comments come just days after the European Trade commissioner brokered a deal in Shanghai to limit until 2007 the increase in textile sales to the EU and coincides with moves leading to a potential clampdown on Chinese shoe exports to Europe.
BMW could face a huge bill for the recycling of cars produced by MG Rover, its collapsed former subsidiary. The DTI is considering how it will allocate Rover’s liabilities, under a European directive carmakers are responsible for disposing of old cars made by them.
Daily Telegraph
Work and Pensions Minister Margaret Hodge has outraged former MG Rover employees by appearing to suggest that they should apply for jobs at Tesco. In an interview to the Wolverhampton-based Express and Star, she referred to the creation of 350 vacancies in the Yardley area of Birmingham as one place for the region’s unemployed to find work.
Winter fuel bills are likely to soar this year as future gas prices hit their highest level ever. The price of gas for delivery in October was 66p some 75 per cent higher than it was last year.
The Department of Trade and Industry has been accused of accelerating the collapse of MG Rover in order to avoid electoral embarrassment to Labour ministers. Charles Hendry MP said that the government wanted the demise to occur at the beginning of the campaign not at the end.
Global energy consumption has hit a 20-year high as a result of demand from fast-growing economies such as China and India, according to BP. However, the oil company said that there was at least 40 years of oil left and enough gas to last until 2071.
The Guardian
KPMG, one of the world’s biggest accountancy firms, has expressed ‘deep regret’ over its promotion of illegal tax shelters to clients, as it negotiates to avoid a criminal prosecution and the fate of Arthur Andersen. The firm has been under investigation by the US justice department since February last year.
Unemployment in the UK rose for the fourth month running, the longest continuous increase since the end of 1992 when the country was in recession, with half the rise accounted for by 6,000 lay-offs at MG Rover. The Office for National Statistics said unemployment figures, which include only those who are drawing jobless benefits, rose by 13,200 to 855,300.
Mulitplex has triggered fury in the wider building sector by agreeing to pay bonuses of up to £8,000 for steel erectors in a desperate bid to complete Wembley on time for the FA Cup final in May next year. The move by the Australian construction group comes after the company lost its chairman over the late running of the project.
The Sundays.
The Business
Boeing’s chairman, Lew Platt, has backed Washington’s hardline stance against subsidies for Airbus. He said that there could be no more negotiations until Europe scraps its aircraft launch aid.
SAIC, the Chinese car-maker that pulled out of saving MG Rover may ditch the brand and start afresh with a new name for cars that are based on the collapsed car maker’s designs. The company is conducting market research to see how well Rover is recognised in China.
Mail On Sunday
National Grid Transco, that provides gas and electricity to almost every home in the country, is considering selling its gas-metering arm believed to be worth £1 billion. The company has appointed investment banks NM Rothschild and JP Morgan to advise on the deal, a decision will be made in September.
Rolls Royce is set to clinch a huge deal to provide engines for the next generation of Boeing’s best selling 737s. The new planes would come into service in between 2012 and 2014. Boeing expects there to be demand for about 15,000 jets the size of the 737, the deal will be a major boost for the Derby based company.
The Observer
Eurotunnel is on the brink of collapse with debts in the region of £6 billion and could be seized by creditors by the autumn. Creditors have to choose to accept a restructuring plan which if refused is likely to lead the company to go bust.
Head hunters have been appointed to look for a replacement for Wm Morrison chief executive Bob Stott after a revolt by shareholders over the companies handling of its £3 billion Safeway buy-up. Last week the company made its fifth profits warning since it bought up the rival supermarket chain last year.
Sunday Times
American senators are attempting to ban credit card companies from dealing with online gambling companies. The law being proposed by Senator Jon Kyl comes just as Party Gaming prepares to float on the London stock market for £5.5 billion. It is against the law in the US for a company to provide online gambling services, however Party Gaming are based in Gibraltar.
The price of oil could remain above $40 per barrel for the next 20 years, according to senior executives at Shell. Analysts predict that if this view is accepted it could herald a fresh wave of mergers between oil companies.