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Friday newspaper round-up: US raises interest rates, Oil demand,
Thu, 09 Feb, 2012
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Friday newspaper round-up: US raises interest rates, Oil demand,
Fri, 19 Feb 2010, 06:40:00
The
Federal Reserve
has officially begun the US "exit strategy" from its emergency economic support measures of the past two years, raising the rate at which American banks can borrow money. The US central bank, chaired by Ben Bernanke, raised the so-called discount rate from 0.5% to 0.75% at the request of its 12 regional member banks. The move is highly significant, marking the first time one of the "big three" central banks has tightened policy, rather than merely mooting it, since the crisis begun, the Telegraph reports.
Bank of America
and Barclays Capital, two leading oil traders, have told clients to brace for crude above $100 (£64) a barrel by next year, before it pushes relentlessly higher over the decade. This is a stark contrast from recessions in the 1980s and 1990s, when it took years to work off excess drilling capacity built in the boom. "Oil has the potential to flirt with $100 this year. We forecast an average price of $137 by 2015," said Amrita Sen, an oil expert at BarCap. The price has doubled to $78 in the last year, the Telegraph reports.
Gordon Brown's
launch of a Labour election campaign promising economic recovery was in jeopardy last night as a record slump in tax receipts fuelled fears that Britain could slip back into recession. Official figures showed that the Treasury borrowed another £4.3bn last month. It is the first time since records began in 1993 that the nation has been in the red in January, traditionally the month when government coffers are swelled by big tax receipts, the Times reports. More than
60 leading economists
have backed Alistair Darling's decision to delay spending cuts until 2011, creating a dividing line within the profession on the crucial general election issue of how to tackle the UK's huge public debt. Two letters in Friday's Financial Times warn of the risks of damaging Britain's fragile recovery by "reckless" early cuts. They are a riposte to the 20 economists who wrote to The Sunday Times last weekend supporting the Conservative party's argument that fiscal tightening should start this year, the FT reports. The takeover battle between
Babcock International and VT Group
ignited last night when Babcock's largest shareholder branded the £1.25bn tilt for VT "a deal too far". In a significant setback for Babcock, Andy Brough, a fund manager with Schroders, which controls nearly 10% of Babcock's shares, said that he had supported Peter Rogers, the deal-doing chief executive of Babcock, in previous bids but could not support him in his pursuit of VT, the Times reports.
JP Morgan
has suspended an analyst amid accusations that he deceitfully gained access to a meeting Asda held with suppliers. Rickin Thakrar, a food retail analyst at the investment bank, wrote an explosive 14-page research note with information gained from a suppliers meeting held last week, despite having allegedly been struck off from the delegate list by the organisers, the Times reports.
Akio Toyoda
, Toyota's embattled chief executive, agreed on Thursday to appear before a US congressional committee investigating his company as lawmakers stepped up their scrutiny of the Japanese carmaker with a subpoena for documents held by one of its former attorneys. Mr Toyoda accepted a formal request, issued by the Democratic chairman of the House oversight committee, Edolphus Towns, to appear at a hearing next Wednesday, the FT reports.
Britain's biggest power station
has suspended its plan to replace coal with greener fuel, leaving the Government little chance of meeting its target for renewable energy. Drax, in North Yorkshire, which produces enough electricity for six million homes, is withdrawing a pledge to cut CO2 emissions by 3.5 million tonnes a year, or 17.5%, the Times reports. Britain's first factory making turbine blades for offshore wind farms will go into production in Newcastle this year, the US renewables group
Clipper Windpower
said yesterday, the Independent adds.
Barclays
has slapped higher overdraft charges on two million of its current account-holders, just two days after revealing that its investment bankers will take home more than £190,000 each in bonuses this year. The fee increases will affect those customers who pay a monthly fee for such extras as insurance policies alongside their standard current account services, the Independent reports.
BAE Systems
, Europe's largest defence company, has begun to restructure its once-lauded land and armaments division after losing key armoured vehicle contracts. The company said that it Europe's largest defence company but refused to give exact numbers. It also closed ten sites in the UK and United States last year as part of a "rationalisation programme", the Times reports.
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