A to Z of the Sunday newspapers
Our summary of what the Sunday papers are reporting from the financial world this week.
Financial Mail on Sunday
›› Banks face pressure to reveal all on UK tax
›› Water bills set for big increases
›› Slumpflation fears grow as prices and jobless rise
›› V
›› Keydata group poised to take banks to court
The Sunday Times
Inflation to hit 4% as prices surge
Inflation is set to soar to 4% this week, increasing the chances of an early hike in interest rates and forcing the Bank of England to admit it has again underestimated the extent of rising prices.
Economists expect the January inflation figures, unveiled on Tuesday, to show the Vat increase and rocketing food, petrol and commodity prices have driven the consumer prices index (CPI) to at least double the Bank's 2% target. Economists also think the Bank will have to cut its growth forecasts.
The jump in inflation will force Mervyn King, the Bank's governor, to write a fifth successive letter to George Osborne, the chancellor, explaining why it is so much higher than the Bank's target.
Hedge fund pushes for N
An aggressive American hedge fund is trying to force the board of National Express to put the transport group up for sale.
Elliott Management, a $17 billion (£10.6 billion) activist firm and the company's second-biggest shareholder, wants National Express to pursue a tie-up with Stagecoach, its British rival, or SNCF, the French state-backed transport group.
However, it is understood that the management of the £1.3 billion coach, train and bus operator, led by chief executive Dean Finch, has rejected Elliott's calls and has no immediate plans for a tie-up.
Northern Rock buys back old loans
Northern Rock's two halves could be partly reunited under plans to accelerate a windfall payment for the taxpayer.
The nationalised bank was split last year, with its most toxic loans siphoned into a separate company, the so-called “bad” bank.
The “good” bank, which includes customer deposits and low-risk loans, has begun studying a scheme that would see it buy back part of the “bad” bank. The partial reunification would make it easier to return the bank to the private sector.
Mobile chip maker set to boost its signal by listing
A microchip maker that supplies the fast-growing market in boosting mobile phone reception is close to appointing an investment bank to advise on a flotation next year.
Picochip, based in Bath, provides chips for special modems, called femtocells, that connect mobiles to a domestic broadband network, boosting their signal and improving efficiency.
As mobile networks sag with the demand from increasing data traffic, ABI Research forecasts that femtocell shipments will increase from 1m last year to 50m by 2015. Britain has become a leader in this technology with three top firms: Picochip, Ubiquisys and ip.access.
The Sunday Telegraph
Inflation: how scared should we be?
In a quiet corner of a Newport office, a group of 10 statisticians worked late into the night on Friday to put the finishing touches to January's inflation update. Theirs looks like any other open-plan office, except that the Office for National Statistics prices team works alone and keeps its market-moving documents hidden in safes over the weekend.
Having already double- and triple-checked the newly updated weightings, tweaked annually, for the basket of goods and services that are used to calculate consumer price inflation (CPI), their final tasks were to identify the likely talking points in the data and pre-empt the likely questions their team leader, Darren Morgan, will face.
Lord Davies rejects quotas for top City women
But the review by Lord Davies of Abersoch, the former chief executive of Standard Chartered, will demand that FTSE 100 companies set clear targets and say if there is not significant change in the next two years, more draconian action should be taken. It is believed quotas could follow.
Lord Davies, the trade minister in the last government, is expected to argue that progress on hiring women on boards has been far too slow and that chairmen in particular have to show they are changing the way they hire senior people.
The report will argue that diverse boards are a question of good governance and institutional shareholders should demand to know if action is being taken. The Financial Reporting Council, which overseas issues of board governance, should also be involved in pushing leading companies to act.
B
The Anglo-Australian miner is expected to reveal the benefits of the commodities boom at its half-year results on Wednesday and confirm that it is likely to make pre-tax profits of more than $30bn at its full-year results in June.
The expected total, which is more than a third bigger than BHP's pre-tax profits of $19.6bn for the full year in 2009, would beat the previous highest total held by Royal Dutch Shell.
The oil major, which has broken the record for the biggest profits in Britain in the past, unveiled pre-tax profits of $28.8bn for 2010 two weeks ago. Three year's ago when Shell unveiled profits of $27.5bn, Tony Woodley of Unite, Britain's biggest union, described the margins as "obscene".
Plan to cure 'sick-note' UK
David Frost, director general of the British Chambers of Commerce, will lead a review to lower Britain's sickness absence bill in the public and private sectors.
The independent review, expected to be launched imminently, was commissioned by the Department for Work and Pensions and the Department for Business, Innovation and Skills as part of the Coalition's drive to create the right conditions for economic growth.
Mr Frost will work alongside business and health experts, expected to include Dame Carol Black, the Government's national director for health and work, who conducted a review into the health of the working age population in 2008.
The Observer
British companies the target of rising takeover fever
Britain is on the brink of a new mergers and acquisitions boom, with companies awash with cash and chief executives emboldened by the surge in share prices over the last year.
Royal London Asset Management (RLAM) has drawn up a list of possible takeover targets that includes Burberry, engineers Smiths Group, Tate & Lyle, Premier Oil, financial adviser Hargreaves Lansdown, Smith & Nephew and mining group Kenmare Resources.
Jane Coffey, head of UK equities at RLAM, said: "We expect a lot more M&A this year with many corporates throwing off cash after aggressively cutting costs in the wake of the financial crisis.
Borders poised for bankruptcy in US
Stricken US bookseller Borders, which has struggled with a long-term shift towards digital sales in the publishing industry, is poised to declare itself bankrupt after failing to reach a deal with bankers over liabilities of more than $1bn (£625m).
Shares in Borders dived 32% on Wall Street on Friday as reports emerged of a chapter 11 bankruptcy filing as early as or Tuesday. The prospect of insolvency at the chain, which has 674 US stores employing 19,500 people, comes 14 months after Borders' UK arm went bust, with a loss of 1,100 jobs.
Surge in manufacturing costs prompts inflation and interest rate fears
The price British manufacturers pay for raw materials surged at the fastest annual rate for more than two years in January – fuelling concerns that mounting pressure on consumer prices could force an early rise in interest rates.
Sharp increases in the cost of oil, food, imported metals and other materials pushed the annual rise in producer input prices to 13.4%, the Office for National Statistics has reported. This is the biggest year-on-year gain since October 2008.
The Independent on Sunday
Introducing Duffy & Daughters Ltd
Robert Duffy can think of 30 different occasions on which people have stopped him in a London street. Tourists approach him holding cameras. Americans, he notes, are particularly fond of having their photograph taken with him and his van.
Mr Duffy, 47, has not appeared on Big Brother, in a film, or as a colourful character in EastEnders. Instead, it is his van that attracts the attention. Or rather, the company name printed on its side: R Duffy & Daughters Ltd.
Ba
Bob Diamond's highly anticipated first full-year results as Barclays' chief executive are expected to show a 9 per cent increase in the bank's profit to nearly £5.8bn.
However, Mr Diamond is unlikely to comment on his own £9m bonus, which has revived public anger over bankers' pay. The scale of that payout will instead be confirmed when the annual report is published next month.
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