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BANKING & INSURANCE
HBoS shares soar on takeover rumourShares in HBoS have soared amid rumours Spanish bank BBVA may be on the verge of launching a takeover bid for the UK's biggest mortgage lender. The supposed bid comes just day
s after the Edinburgh group's £4 billion rights issue flopped and left underwriters Morgan Stanley and Dresdner Kleinwort holding some £2.6 billion in unwanted shares. The bank's stock moved, at one point, up 13 per cent on the back of the speculation, rising above the 275p per share price at which the stock was offered in the rights issue. The Spanish rumour comes a week after Santander agreed a deal to buy Alliance & Leicester for £1.26 billion. BBVA currently serves 35 million customers and is focused on the Spanish and Latin American markets though it has been present in London since 1918 and operates three branches in the capital.
(The Herald)City starts to doubt RBS insurance saleCity analysts are beginning to speculate that Royal Bank of Scotland will shelve its plans to sell its insurance division. The Edinburgh banking giant had hoped to kickstart an auction for its insurance arm as it continues to try and bolster its balance sheet, however, the Scotsman has now claimed the bank would see it as 'no disaster' if it failed to find a buyer for the business. Meanwhile, Commonwealth Bank of Australia has confirmed it is in exclusive talks with the RBS over the sale of ABN Amro's Australian and New Zealand wholesale and investment banking operations. National Australia Bank recently pulled out of negotiations over a similar deal.
(The Scotsman) Read all today's banking news from scotsman.comECONOMYMPC member voted for rate hikeThe minutes of the last meeting of the Bank of England's Monetary Policy Committee have revealed one member of the committee voted for a quarter point rise in the base rate of interest during the group's last meeting. Tim Besley voted for the rate hike in a bid to 'ensure the committee's credibility in light of the current and prospective increase in CPI (consumer price index) inflation'. The move represented the first vote for a rise in interest rates since July last year – unsurprisingly, arch dove David Blanchflower was revealed to have voted for rate cut. The minutes revealed the committee's reasoning behind maintain the base rate at 5 per cent: "An increase in base rate in the current circumstances when confidence was low and the financial sector fragile could impart a downward momentum to the economy that risked a significant undershoot of inflation in the medium term. Keeping bank rate at 5 per cent when the economy was slowing was arguable already sending a strong signal of the MPC's commitment to reducing inflation." ING economist James Knightley commented: "We doubt that rates will be raised given the weak economic backdrop, as highlighted by a new record low in mortgage approvals today, while the plunge in oil prices is also favourable for a lower inflation outlook. Consequently, we see rates at 5 per cent until year-end with rates being cut to 3.5 per cent by the third quarter of 2009."
(The Herald)Fresh mortgage applications downNew British Bankers Association figures have revealed the number of mortgage applications for house purchase have fallen to their lowest level in over a decade. The total of 21,118 loans approved in June is 23 per cent down on the previous May and 67 per cent lower than June 2007. Statistics director at the BBA David Dooks commented "Another record low number of mortgage approvals by the banks for house purchase means that the whole market is likely to be at its least active since the early 1990s. However, even in this rapidly slowing market, net lending has grown by 12 per cent over the past year and there continues to be significant number remortgaging with the banks."
(The Scotsman) Read all today's economics news from scotsman.comENERGY & UTILITIESSubocean secure cable contractAberdeen firm Subocean Ltd has been handed the contract to provide power cables linking an offshore wind farm in the Solway Firth. The £7 million contract will see Subsea using a specially adapted barge to place the cables up to 20 metres below the sea bed. The wind farm is expected to produce enough power to provide energy for up to 117,000 homes and will see 60 turbines spread across two areas off the Dumfries and Galloway coastline.
(BBC Scotland Online) Read all today's energy and utilities news from scotsman.comINDUSTRYTalks over job lossesScottish Enterprise, politicians and council officials have held emergency talks with a Dumfriesshire dyeing firm which has slipped into administration. The Langholm Dyeing Company made a total of 52 workers redundant last week retaining only ten members of staff to assist in the wind up operations. The negotiations took place in a bid to find a potential buyer for the business. Langholm councillor Dennis Male commented: "We believe that the company will still be sold as a company. So, if that is the case, there may be some chance of resurrecting something from the ashes. As a council we have got to be involved in that discussion as urgently as possible. What we've got to remember is the 62 jobs on this site are the equivalent of 500 or 600 in a bigger conurbation. The devastation for Langhol, in this is really quite severe so we have got to try to mitigate that in any way possible." Dumfriesshire MP David Mundell added: "Really that's (the sale of the company) the best thing that can happen because that ensures continuing employment on the site. It may not be as many people as currently employed there, but it would ensure that it continued as a manufacturing location."
(BBC Scotland Online) Read all today's industry news from scotsman.comPERSONAL FINANCEFinancial services take record hitThe Scottish financial services sector has seen its sharpest fall in quarterly output since records began as the credit crunch continues to savage the sector. The 8.4 per cent fall in the first three months of 2008 was believed to have been driven by the similar travails in the banking sector. John McLaren of the Centre for Public Policy for Regions commented: "Financial services continues to contract in Scotland while seeing strong growth in the UK. In the last quarter, GDP fell by 8.4 per cent in Scotland and grew by 4.9 per cent in the UK. Since 2007 Q1, this sector has declined by over 10 per cent in Scotland and grown by 12 per cent in the UK."
(The Scotsman) Read all today's personal finance news from scotsman.comTRANSPORTCromarty port sees profits fallProfits at the Highland's largest deep water port, Cromarty Firth Port Authority, have tumbled as the high price of oil continues to bite. The annual report for CFPA revealed turnover was down from £3.3 million to £2.8 million while profits fell to £284,000 from £505,000 the previous year. Port manager, Captain Ken Gray commented: "The 2007 year was a quieter year compared to the previous excellent trading year in 2006. With a sharp decline in rigs moored in the Firth, this has resulted in CFPA restructuring business activities in the Invergordon service base. The second half of the year in particular showed a reduction in sub-sea activities and a reduction in cruise ship visits. It is expected that 2008 will show an upturn in rig inspection repair and maintenance work at Invergordon and a return in cruise activity back to the 2006 level."
(The Herald) Read all today's transport news from scotsman.com
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