A whistleblower at the heart of a bribery investigation at Rolls-Royce has been fighting for more than six years for his claims to be heard. The British engineering group has been accused of handing 20m dollars (12.5m pounds) and a blue Rolls-Royce car to the son of the former president of Indonesia to help win a contract to supply engines. Rolls shocked the stock market last week when it said it had passed information to the Serious Fraud Office in relation to ‘concerns about bribery and corruption involving intermediaries in overseas markets’. [The Telegraph]
Japan slipped into a technical recession in the six months to September, strengthening opposition leader Shinzo Abe’s case for more fiscal stimulus and “unlimited” monetary easing to boost growth in the world’s third-largest economy. Final gross domestic product data on Monday showed that output slipped by 0.9 per cent in the three months to September, in line with earlier estimates. However, the government revised down the previous quarter’s estimate to an annualised 0.1 per cent contraction, matching the textbook definition of a technical recession. It would be Japan’s fifth in the past 15 years. [Financial Times]
Businesses are to be offered discounted loans to help them trim their energy costs under a £200 million deal launched today by Royal Bank of Scotland. The state-backed lender is tapping into the £80 billion Funding for Lending scheme to offer reduced-rate loans for UK firms looking to install energy-efficient heating and lighting, or to generate their own power from wind turbines. [The Scotsman]
The head of British Airways has accused the Government of failing with its economic strategy and being “fixated” with immigration. In a gloomy verdict on last week’s Autumn Statement, which extended austerity until 2018, Willie Walsh complained that the coalition Government had no growth strategy. The chief executive of BA’s parent, International Airlines Group, suggested that if the Chancellor were running a business, it would be destined for deep losses. “When I look at what I’ve done to restructure my business, I’ve been very clear — you can’t downsize a business to profitability,” he said. “You can downsize to minimise losses, but you’ve got to pursue growth.” [The Times]
Asset prices across the world have risen to heady levels not seen since the credit boom five years ago and may be losing touch with economic reality yet again, the Bank for International Settlements has warned. “Some asset prices appeared highly valued in a historical context relative to indicators of their riskiness,” said the bank in its quarterly report. Yields on mortgage bonds have fallen to the lowest level ever recorded. Spreads on corporate debt have narrowed to the wafer thin margins of 2007, even though default rates are currently three times higher than they were then for junk bonds and twice as high for investment-grade companies. The venerable Swiss-based institution – almost alone in warning of a global debt crisis in the build-up to the Great Recession – said it is rare for markets to gather steam at a time when the major forecasters are turning gloomy. [The Telegraph]
The row over the amount of tax multinationals are paying has taken another turn after it emerged that Microsoft pays no UK tax on £1.7bn of online revenues. The US technology group is understood to be channelling online payments for its Windows 8 operating system and other downloads of software through Luxembourg and Ireland, where corporation tax is lower than the UK. This means that Microsoft’s Irish registered company, Microsoft Ireland Operations Ltd, has reported £1.7bn of revenues from the UK on which the company has paid no UK corporation tax. [The Telegraph]
US and UK regulators will unveil the first cross-border plans to deal with failing global banks on Monday, outlining proposals to force shareholders and creditors on both sides of the Atlantic to take losses and to ensure sufficient capital exists in the banks’ headquarters to protect taxpayers. Writing in the Financial Times, Martin Gruenberg, chairman of the US Federal Deposit Insurance Corporation, and Paul Tucker, deputy governor of the Bank of England, say this represents the first concrete steps to end the “too big to fail” problem of large international banks. [Financial Times]
The City’s relentless rise has sucked £7,000 a year from the pockets of the average British worker, a report from the TUC will reveal today. The report Where Have All the Wages Gone? found that over the last 30 years the share of national income going to wages has fallen from 59 to 53 per cent. But over the same period the proportion of GDP going to profits has increased from 25 to 29 per cent, while the share of income spent on taxes and subsidies has been broadly consistent at around 11 per cent. This means that the average Briton failed to share in the country’s economic success before the financial crisis, losing out on £7,000 in lost earnings on average. [The Independent]
