Greek lawmakers approved the country’s 2013 austerity budget early Monday, an essential step in Greece’s efforts to persuade its international creditors to unblock a vital rescue loan installment without which the country will go bankrupt. The budget passed by a 167-128 vote in the 300-member Parliament. It came days after a separate bill of deep spending cuts and tax hikes for the next two years squeaked through with a narrow majority following severe disagreements among the three parties in the governing coalition. Prime Minister Antonis Samaras pledged that the spending cuts will be the last Greeks have to endure. “Just four days ago, we voted the most sweeping reforms ever in Greece,” he said. “The sacrifices (in the earlier bill and the budget) will be the last. Provided, of course, we implement all we have legislated,” The Telegraph reports.
Barclays is back in the firing line amid claims US prosecutors are probing whether it made improper payments to win a banking licence in Saudi Arabia. The US Department of Justice is understood to be exploring how the British bank in 2009 won its licence to operate a wealth management business and investment bank in the Middle East state. Any company which contravenes the Foreign Corrupt Practices Act could face prosecution for bribery in any part of the world if any part of its business has links to America, The Daily Mail writes.
The FTSE 100 security group G4S is waiting to hear whether it will be reappointed on a contract to provide electronic tagging of offenders services across England and Wales, worth £50m of annual revenue to the company. G4S and Serco gained an extension to an existing contract in 2009, which is due to expire in March 2013. It is understood that the Ministry of Justice (MoJ) is considering bids for the next phase of the contract with an announcement expected next month. Under the existing contract G4S and Serco manage the entire process including the technology, tagging, and monitoring of offenders, in two regions each. Under the next phase, the contract will not be split into regions but “services”, with one company providing technology across England and Wales and the other providing tagging for example. In September G4S won a contract to provide tagging services in Scotland, The Telegraph writes.
The possible overhaul of one of Britain’s inflation indices could create a “field day” for lawyers because of the complex ramifications for corporate bonds, a leading investor has warned. Jonathan Gibbs, investment director of fixed income at Standard Life, said that if mooted changes to the retail prices index were to go ahead, they had the potential to trigger messy and protracted wrangling within the £34bn inflation-linked corporate bond market. Investors in the commercial property market would also need to consider the impact because inflation-linked increases in rents are indexed to the RPI. Jil Matheson, the National Statistician, is consulting on options for “improving” the RPI, the benchmark used in many contracts and securities, including inflation-protected bonds. Economists believe that a rejig of the way in which it is calculated could shave anywhere between 0.3 and 0.9 of a percentage point off the RPI permanently, depending on the outcome of the consultation, which finishes at the end of this month, The Times says.
The Chancellor should use next month’s autumn statement to abandon January’s rise in fuel duty, give companies a one-year National Insurance holiday when they employ a young person and freeze business rates, in order to kick-start the consumer economy according to the British Retail Consortium. The group, which includes Boots, Asda and Tesco as members used it submission to the Autumn statement to warn the Chancellor that consumer confidence remains “stubbornly weak”, sales growth on the high street is “flat” and costs for businesses are rising “rapidly”. Stephen Robertson, the director general of the BRC, also accuses the Government of launching too many ineffective initiatives to boost growth. He urges the Chancellor to focus on a small number of “concrete” measures to boost the flailing economy, The Telegraph says.
A proposed £1.4bn merger between the owner of Irn-Bru and the maker of Robinsons was facing uncertainty yesterday after a key investor reportedly hit out at the terms of the deal. Britvic, whose brands include Robinsons and Tango, has been in talks with AG Barr, the maker of Irn-Bru, to create a soft drinks powerhouse. Harris Associates, Britvic’s eighth-biggest shareholder with 3.4%, has criticised the “poorly negotiated” share ratio under the terms of the deal, it emerged over the weekend. AG Barr approached its bigger competitor in September after Britvic’s summer was hit by poor weather conditions and a costly recall of its Fruit Shoot product. Britvic shareholders would take 63% of the newly-formed group under the proposed terms being discussed, while AG Barr investors would get 37%. But analysts have said the deal values Britvic at only 1.7 times AG Barr, when its operating profits and revenues are several times higher, The Scotsman writes.
