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Growth NewsPay strike threat as BT delivers £714 million profitBen Verwaayen delivered a pledge of further cost cuts and sales growth yesterday as he signed off after six years as head of BT. The outgoing chief executive announced a 2 per cent rise in revenue for the fourth quarter, which most analysts had expected to be flat and pre-tax profits were up 3 per cent to £714 million.Read Full Article Germany propels eurozone growthA stunning leap in Germany’s growth fuelled a sharp acceleration in the eurozone economy in the first quarter despite the credit crisis, but failed to quell fears that Europe will soon succumb to the global downturn.Read Full Article Tempus: No hang upsThree months is evidently a long time at BT Group. The below-forecast sales growth and poor cashflow revealed in February’s third-quarter results was enough to trigger a 10 per cent fall in the shares of the £18 billion telecoms operator.Read Full Article Mervyn King to grimace and bear bad newsWhen the Bank of England’s Governor unveils its latest prognosis for the economy this week, he is likely to adopt his sternest demeanour. The message from Mervyn King may not be quite as bleak as Churchill’s famous admonition that he had “nothing to offer but blood, toil, tears and sweat”, but it may not be far off. The Bank’s hardline decision last week to keep interest rates on hold despite the latest spate of dreadful news over worsening economic conditions gave a foretaste of the granite-hard façade that it is set to present to the country in its latest quarterly Inflation Report on Wednesday. The “no change” verdict on interest rates from Threadneedle Street can only have appeared to much of the country at large like an exercise in monetary sado-masochism. Yet the harsh reality that confronts the Bank’s Monetary Policy Committee (MPC) is that it remains trapped between an economic rock and a hard place. Far from easing as the economic outlook has grown darker, the conflicting pressures confronting the MPC – from faltering growth and activity on the one hand and simmering inflationary pressures on the other – have intensified. The deluge of ever more dismal economic indicators now leaves little doubt that the economy is facing its most testing two-year stretch since the early Nineties. Yet as the going gets much tougher, the persistence of the inflation threat condemns the Bank to talk, and act, tough, too. The MPC’s mission to ensure that inflation hits its 2 per cent target over the medium term leaves it scant room for manoeuvre. It is forced to act only cautiously, even as the demands for more aggressive and urgent action escalate. The Bank’s dilemma seems set only to be become more acute through the summer, as the Inflation Report is likely to spell out. If anything, the MPC’s latest assessment is likely to understate the full scale of dangers to growth prospects that have emerged. At the heart of the heightened risks is the increasingly dire straits of the housing market, which appears to be locked into a vicious downward spiral triggered by the mortgage lending drought. The severe squeeze on the availability of home loans is combining with falling house prices to cause demand in the property market to dry up, with cautious buyers holding out for the much lower prices they expect in future. As demand and market activity drop, and the supply of unsold houses grows, prices fall farther and faster. In turn, that farther deters would-be buyers and makes lenders become even more cautious, fuelling an ever steeper downward slide. The scale of these trends is underlined by the Council of Mortgage Lenders’ data, highlighted by Michael Saunders, of Citigroup, which shows the drastic tightening of lending conditions since the start of the year. The number of new home loans agreed plunged by more than 30 per cent in the first quarter, compared with the same period a year earlier. In March, approvals of new mortgages fell to the lowest since 1992. Although the Bank of England’s £50 billion lifeline, designed to ease the funding pressures on lenders, may limit the squeeze, Mr King has been bluntly candid that it is far from intended as a cureall for the mortgage market. The clear peril for the economy is that the toll on sentiment and household wealth from an increasingly severe housing correction now sees the credit crunch mutate into a brutal consumer crunch as households pull back their spending. The Bank tends to play down the repercussions of falling house prices for consumer demand. Yet signs are already accumulating that the consumer may embark on a full-scale retreat from the high street. Consumer confidence has slumped to 15-year lows, while polls show that concern over the state of the economy is at its highest levels since 1993. As other signs of economic weakness pile up, it is becoming painfully clear that Britain, far from being better placed than its rivals to weather global economic squalls, as the Chancellor and Prime Minister claim, is markedly worse off. As Mr Saunders argues, the UK is left badly exposed by the highest household debt burden in the Group of Seven leading industrial economies, alongside severely inflated house prices and low household savings. The price of a protracted period of living beyond our means may now have to be paid. Long years of high spending, as well as heavy borrowing excess. are making the fallout from the credit crunch more painful and the boost from the Bank’s limited easing of interest rates less potent. Yet, worse still, the same past excesses, in the form of a swollen current account deficit, are adding to the acute pressure on a sharply weakening pound, already hit by Britain’s worsening growth outlook. Sterling’s steep slide – by about 12 per cent in the past year - is aggravating the Bank’s inflation headache by raising the nation’s import bills and further curbing its scope to cut base rates to underpin faltering growth. With the pound set to tumble still farther, oil prices having surged to record levels of above $120 a barrel and the cost of food in global markets soaring, the City expects that the Bank will raise its forecasts for inflation this week. It is likely to give warning that headline consumer price inflation will rise above 3 per cent over the summer, forcing Mr King to pen what will be only his second explanatory letter to the Chancellor. Against this background, the Governor can be expected to make it brutally plain on Wednesday that further easing of interest rates will be only limited and gradual. Ultimately, the extent of the slowdown now taking hold in the economy will quell the inflationary threat that the Bank is, for now, compelled to prioritise over risks the growth.$Read Full Article Inflation prospects will make a master letter writer out of Mervyn KingSince the credit crunch began last August, the Bank of England has been forced into an increasingly difficult balancing act between the conflicting pressures of faltering growth prospects, and escalating price pressures.Read Full Article External News for: growthFinding the REIT Target - Wall Street JournalMiamiHerald.comFinding the REIT TargetWall Street JournalSimon has hired Lazard to explore a bid for rival General Growth Properties, now in bankruptcy court, a deal that would add more than 200 prime properties ...General Growth gets restructure accordBaltimore SunGeneral Growth Makes $9 Billion Debt Restructure DealBloombergGeneral Growth Properties faces new territoryChicago TribuneThe Associated Press -Bizjournals.com -Emii.comall 335 news articles »Finding the REIT Target - Wall Street JournalMiamiHerald.comFinding the REIT TargetWall Street JournalSimon has hired Lazard to explore a bid for rival General Growth Properties, now in bankruptcy court, a deal that would add more than 200 prime properties ...General Growth gets restructure accordBaltimore SunGeneral Growth Makes $9 Billion Debt Restructure DealBloombergGeneral Growth Properties faces new territoryChicago TribuneThe Associated Press -Bizjournals.com -Emii.comall 335 news articles »Are Tom Cruise and Katie Holmes Jeopardizing Suri's Growth With High Heels? - FOXNewsAre Tom Cruise and Katie Holmes Jeopardizing Suri's Growth With High Heels?FOXNewsSecond, she could potentially damage a growth plate with unforgiving shoes. “With an adult, [high] heels that don't fit properly can lead to hammer toes or ...and more »Finding the REIT Target - Wall Street JournalMiamiHerald.comFinding the REIT TargetWall Street JournalSimon has hired Lazard to explore a bid for rival General Growth Properties, now in bankruptcy court, a deal that would add more than 200 prime properties ...General Growth gets restructure accordBaltimore SunGeneral Growth Makes $9 Billion Debt Restructure DealBloombergGeneral Growth Properties faces new territoryChicago TribuneThe Associated Press -Bizjournals.com -Emii.comall 335 news articles »Are Tom Cruise and Katie Holmes Jeopardizing Suri's Growth With High Heels? - FOXNewsAre Tom Cruise and Katie Holmes Jeopardizing Suri's Growth With High Heels?FOXNewsSecond, she could potentially damage a growth plate with unforgiving shoes. “With an adult, [high] heels that don't fit properly can lead to hammer toes or ...and more »Are metro Atlanta's growth days gone? - Atlanta Journal ConstitutionAre metro Atlanta's growth days gone?Atlanta Journal ConstitutionAs bad as the recession has been for metro Atlanta, the biggest effect may be that the damage done will dampen growth for years to come ...The phenomenon of sprawl has passed into historyAtlanta Journal Constitutionall 2 news articles » |
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