Economy
Britain at 'significant' risk of renewed recession |
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| Economy | |
| Written by Catherine Murray | |
| Tuesday, 24 August 2010 | |
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Morning business news, Tuesday 24 Aug: MPC warning, BHP/Potash, Cairn Energy. Britain faces a "significant" risk of a renewed slide into recession, a leading policymaker at the Bank of England warned on Monday. It would be "foolish” to rule out the possibility of a double-dip downturn, even if it was not the Bank’s central prediction, said Dr Martin Weale, the newest member of the Monetary Policy Committee (MPC). He also feared that the Bank’s central outlook — which is for growth of about 2.8% in 2011 and 3.2% in 2012 — could be too optimistic, the Times reports. Meanwhile, Bank of America has accused the Democrats and Republicans in Congress of endangering the US economy in a game "fiscal chicken", risking a grave policy error by tightening too early. Ethan Harris, the bank's chief North American economist, said early data for August suggest that "an already weak recovery is getting weaker" with a rising risk of a relapse into recession, the Telegraph reports. Potash hostile takeoverThe world’s biggest fertiliser company launched its formal defence against a $39bn (£25bn) hostile takeover by BHP Billiton claiming that several rival bidders were waiting in the wings. Potash Corporation of Saskatchewan is trying to generate an auction to stop the mining group "cheating" shareholders with a low-ball bid. BHP submitted its $130-a-share offer to investors last week, which the board of PotashCorp rejected yesterday, the Times reports. Bid for Cairn India energy companyThree of India’s state-controlled oil companies are considering a bid for a majority stake in Cairn India, in a move that would pose a direct challenge to a proposed £6.1 billion takeover by Vedanta Resources. Oil and Natural Gas Corporation (ONGC), GAIL and Oil India are considering a joint bid for the share in the Rajasthan-focused oil producer, which is held by Cairn Energy, the British-listed oil company, the Times reports. Intrusive investigations into oil spillsBritain’s industrial safety watchdog has launched a programme of more "intrusive investigations" of oil spills in the wake of new figures that reveal a sharp increase in the number of major leaks. The figures, released on Tuesday by the Health and Safety Executive, show a marked rise in the combined number of "major and significant" hydrocarbon releases over 2009-10 by UK offshore oil and gas operators, mainly in the North Sea, the FT reports. And in other company news...Chi-X Europe, the pan-European share trading platform, said on Monday it had received an approach that could lead to an offer being made for the company.It said the “enquiry” from an unnamed third party “may not lead to an offer for the whole or partial sale of the company”, the FT reports. The world’s largest manufacturer of helicopters has suggested that work could return to the UK from Romania as the two countries were on a par for costs in the aftermath of the financial crisis. Eurocopter is understood to have told the Ministry of Defence that it could move a £300m contract to the UK with little impact on the price, reports the Times. Hewlett-Packard has trumped rival Dell's bid for data storage company 3PAR, despite dispensing with the services of its chief executive Mark Hurd a fortnight ago amid sexual harassment allegations. A week after Dell announced a recommended $1.15bn (£741m) bid for 3PAR, HP has made a $1.6bn counter offer, the Telegraph reports. Falling profits at Lord Ashcroft's Caribbean banking business have sent shares in his British holding company towards all time lows. BCB Holdings, which is controlled by the Conservative party deputy chairman and whose shares trade on London's Alternative Investment Market, announced a 39% fall in profits yesterday and additional provisions for bad loans at its main banking division, the Independent reports. The row between property group Minerva and its biggest shareholder, KiFin escalated yesterday when the company hit back at its rebel investor, accusing it of lying to other backers ahead of next month's emergency general meeting. KiFin, backed by the billionaire South African Nathan Kirsh, owns 29.5% of Minerva and is calling for the removal of its chief executive, Salmaan Hasan, and chairman, Oliver Whitehead, the Independent reports. |
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