Global concerns grow over US recession and Iraq war fears

The Business

FALTERING US economic growth and increasing geo-political tension over Iraq threaten to inject renewed uncertainty into the global markets this week as US president George Bush prepares his State of the Union address to Congress on Tuesday.

Economists expect the US economy to have badly underperformed in the final quarter of last year; some say it may even have succumbed to a double-dip contraction.

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More economic gloom for Britain this week with key reports predicting further job cuts in the City, lower employment in manufacturing and services and a surge in profit warnings.

The Centre for Economics and Business Research will raise estimates for City job losses in London in 2003 to 15,000. It believes that 36,000 jobs, or 10.8 per cent, will have been lost between the industry’s peak in late 2000 - when 324,000 people were employed in City jobs - and the end of 2003, when numbers will be down to 288,000.

Scotland on Sunday

BANK of New York is considering relocating its UK flagship to a new office in Glasgow in a move which could eventually create up to 1,000 jobs in the city, and provide the Scottish financial services industry with its biggest boost in years.

The giant US company has held preliminary talks with Scottish Development International, which might see the relocation of hundreds of staff from London to Glasgow. The transfer of business to north of the Border would represent the largest ever defection from the City of London to Scotland.

IndigoVision, the troubled Edinburgh digital video firm, has closed both its US offices as it strives to cut costs. It has given a week’s notice to all bar one employee in its offices in San Jose in California and Boston. The last remaining member of staff will work from home.

Tom Hunter has put his efforts to take control of House of Fraser on ice for at least six months and has accused the department store group’s board of refusing to enter into productive discussions with him.

The Sunday Telegraph

BRITAIN’S biggest companies are facing a 100 billion black hole in their pension schemes after disastrous falls in share prices on the London stock markets over the past ten days. The shocking deficit represents a tenfold increase on the gap reported just six months ago.

Barclays is to become the first substantial British company to defy the government’s new strictures on board appointments by moving its chief executive, Matt Barrett, to the role of chairman.

The Treasury has decided to split the chairman’s role at the Financial Services Authority after incumbent Sir Howard Davies steps down this year.

The Sunday Times

BRITAIN last year suffered its biggest fall in business investment in since records began in the 1960s, figures to be published next month will show.

The 10 per cent drop means that firms have cut back more savagely than in the deep recessions of 1973-75, 1980-81 and 1990-92 and suggests that the ability of British business to compete is being impaired.

Investment bankers working on the break-up of Six Continents, the hotel to pub chain, are examining ways to release additional capital tied up in its 3.5 billion pub group.

The Observer

BRITISH life insurance companies have sold shares worth more than 20 billion in the past 12 months, with the sell-off gathering pace since the start of this year, according to analysts.

The disclosure helps to explain the huge falls on the London stock market in the past fortnight - the sales have pushed the FTSE 100 down to a seven-year low of 3,603.

The US is set to weaken its seven-year commitment to the "strong dollar policy" this week and accept the greenback’s slide on the world markets. This tacit devaluation will come as figures out next week show that the US economy hit a wall in the last quarter.

The government will launch a crackdown this week on accountancy firms that offer lucrative consultancy services to companies they also audit.

The Independent on Sunday

THE Ministry of Defence has approached leading shareholders in BAE Systems in a secret attempt to bring about a "regime change" at Britain’s leading defence contractor. In the firing line are Mike Turner, chief executive, and chairman Sir Richard Evans

Sir Roger Hurn, former chairman of Marconi, is to come under pressure to step down from blue-blooded stockbroker Cazenove ahead of potential criticism of his actions at the electronics group.

A team of 400 Customs and Excise investigators is scouring the Stoke-on-Trent area in an attempt to stop the spiralling rise in VAT losses to the taxpayer. Customs says VAT scams, mostly involving mobile phones, cost 2.75 billion a year.

The Scottish Mail on Sunday

TUMBLING stock markets have blown a 150 million hole in corporate Britain’s pension funds. The scale of the crisis deepened last week as the stock market hit a seven-year low after falling for ten days amid fears over a war with Iraq.

Controversial Labour MP Geoffrey Robinson has tried to sell the New Statesman magazine to the Scott Trust, owner of the Guardian, for 3 million.

The Scottish Sunday Express

BOSSES of Manchester United, the publicly-quoted English Premier League football club, have held secret talks with executives from Lansdowne Partners, its latest significant shareholder, about its intentions.

Jane Lighting, chief executive of Flextech - the television group owned by Telewest - is expected to be named this week as the boss of Channel 5.


THERE has been a flurry of last-minute property deals in Lanarkshire as investors seek to gain a presence in the Lanarkshire Enterprise zone just days ahead of it losing its status as Scotland’s last surviving enterprise zone.

Sir Ken Morrison, chairman of William Morrison, will visit Scotland this week to drum up support for his 2.5 billion takeover offer for Safeway, after the UK’s fourth-largest grocer removed the "recommended" status from his original story.