PRESS DIGEST - Financial Times - Jan 9

The Financial Times

UNIONS WARN BROWN ON PAY STRATEGY

Unions warned Tuesday that Gordon Brown's proposals for a three-year public sector pay deal will put him on a collision course with workers unless he increases the amount of money in the pay pot. The fear is that Brown is attempting to squeeze pay by spreading it over a longer period. A three-year deal risked leaving workers worse off if the level of settlements were too low, said union leaders. Shadow chancellor George Osborne fanned the flames, saying: "The real reason for this pay announcement is that, thanks to Gordon Brown's economic incompetence the government has run out of money. It's as simple as that."

BUY-TO-LET REMAINS RESILIENT SAYS SURVEY

The latest survey by the Association of Residential Letting Agents reveals that four out of ten existing buy-to-let investors are planning further purchases in the market. Landlords appear to have shrugged off the slide in the value of rented houses with nine out of ten saying they have no intention of selling their properties. The findings indicated that problems caused by the credit crisis had not shaken confidence in buy-to-let, said Arla. "This is good news for the housing market, particularly as it comes from surveys carried out well after the credit crunch had begun to bite," said Arla's head of operations, Ian Potter.

SLUGGISH GROWTH IN PERMANENT JOBS

A closely watched December study by the Recruitment and Employment Federation and KPMG shows that businesses have become more cautious in the job market, with permanent appointments rising at their weakest rate for four and a half years. The report, which also revealed that billings for temporary workers increased at their slowest pace for 20 months, has fuelled speculation that the labour market may be reaching its peak. Alan Nolan, director at KPMG, said: "As the full impact of the credit crunch on the economy is still uncertain, businesses are becoming more cautious . There is even speculation of redundancies within specific sectors such as HR and investment banking."

HOCHSCHILD WARNING KNOCKS SHARES BY A QUARTER

Shares in Hochschild Mines (HOCM.L), the family-owned Peruvian gold and silver producer, fell by about a quarter following its warning that profits in the coming year would be lower than expected. The company said that at the current 2008 consensus on gold and silver prices, gross margin and profit would be hit by higher depreciation costs and lower quality ore from its mines. Gross margins could fall by between 10 and 15 percentage points to about 50 percent, it said. But new chief executive Miguel Aramburu was optimistic that gold prices would be well above the conservative forecasts. "I am sure it will bounce back in the next few days," he said.

JOHN LEWIS WARNS OF A TOUGH 2008

John Lewis Partnership performed exceptionally over the Christmas period with market-beating trading figures for its department stores and Waitrose supermarkets, but has warned of a tough year ahead. Despite out-selling most others in the retail sector, John Lewis's sales growth represented a slow-down on last Christmas and chairman Charlie Mayfield was restrained about the Partnership's prospects in 2008. "I'm pleased with the performance of the divisions, particularly in the context of the demanding market conditions we faced during this important trading period," he said. "Looking ahead, we expect the trading environment to continue to be very challenging this year."