Black August for US markets |
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| Economy | |
| Written by Catherine Murray | |
| Wednesday, 01 September 2010 | |
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Morning business news, Wed 1 September: US markets slump, Tomkins investors short changed, Tony Blair's memoirs. US stock markets suffered their worst August in almost a decade, as evidence mounts that the recovery in the world’s biggest economy is slowing to a crawl. After a volatile trading session on Tuesday, the Dow Jones Industrial Average ended the month 4.3% lower, while the S&P 500 was down 4.7%. The weak performance of equity markets was mirrored across the world’s major financial centres, with the FTSE 100 losing 0.6% in the month, Tokyo’s Nikkei 225 7.5% and Germany’s Dax 5.8%, reports the Telegraph. The announcement by US president Barack Obama that US troops will be pulled out of Iraq may provide a ray of hope for the markets however. Obama called an end to front line operations in Iraq on Tuesday night amid telling warnings about the failure of the United States to end the threat of al-Qaeda or install a stable government. The US president announced from the Oval Office that "now, it is time to turn the page" on a war that has claimed more than 4,400 American lives and cost $1 trillion. The move signals that the US government is focussing its energy and priorities on solving internal issues. Obama said America's "most urgent task" was now to "restore [the US] economy", but that the US would continue to support Iraq's government and people in their mission to restore stability. Tomkins sold on the cheapGreg Hutchings told The Times he believed that Tomkins investors had been short-changed in the £3.1bn Canadian takeover of the company. The man who transformed Tomkins into one of Britain’s biggest conglomerates in the 1990s landed a £31m windfall from his stake in the company but claimed that his former business had been sold on the cheap. "Over the last decade Tomkins dividends have gone from 17.5p a share to not much more than 5p a share and earnings per share have gone from 28.3p to a loss. I am amazed that some shareholders are happy to see Tomkins being sold at the bottom of the market," he said. Blair blames tack to the leftTony Blair claims Gordon Brown lost the last election because he abandoned New Labour, in a swipe which will be seen as a direct attack on Ed Miliband, a contender for the party leadership. In long-awaited memoirs, the former prime minister claims Labour could have extended its 13 years in power if it had not tacked to the left. Ed Miliband was the author of the party’s election manifesto, the FT reports. Credit Suisse defends mid-year bonusCredit Suisse has defended a decision to award its London-based bankers with a surprise mid-year bonus by claiming that it had no choice after its compliance with British rules on pay backfired. The Swiss bank suggested its decision to distribute a multi-million pound bonus-round, a move that looks set to re-ignite the row over City pay, was necessary to avoid losing key people to its rivals over the next few months, the Telegraph reports. Lenders write off credit-card debtLenders were forced to write off a record £2.1bn of credit card debt in the April-to-June quarter as their customers struggled to cope with repayments. Write-offs by banks and building societies jumped by 70% between the first and second quarters, Bank of England figures showed yesterday. That drove total write-offs of all loans to individuals to £3.47bn, another record high, the Times reports. Complaint about inflation managementThe president of the Royal Statistical Society has written to the chairman of the UK Statistics Authority, Sir Michael Scholar, complaining about changes to the official inflation measurement, the Independent reports. The move that will embarrass Treasury ministers keen to move the uprating of benefits to the consumer price index (CPI) rather than the retail price index (RPI). EDF ups electricity pricesEDF Energy will raise electricity prices by 2.6% for more than a third of its customers from October 1 and is reviewing its gas prices. Europe’s biggest utility company said that it was forced to raise tariffs after being hit with a 16% rise in distribution and transmission costs since it last increased electricity prices in March last year, the Times reports. Alliance Boots outsources pension schemeAlliance Boots is to hive off £300m of pension liabilities by outsourcing its pension scheme to a buyout vehicle. The high street chemist and pharmaceutical wholesaler has signed a deal with the Pension Corporation that will give the specialist control of a closed scheme that is a legacy of the Alliance Unichem business, which merged with Boots in 2005, the Times reports. |
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