PRESS DIGEST - Financial Times - March 11

Financial Times

MANUFACTURING INPUT PRICES SOAR TO RECORD LEVEL

Figures from the Office for National Statistics reveal retailers and manufacturers made a stronger start to the year than expected but businesses remain under pressure to raise selling prices. Manufacturers' input prices rose 1.7 percent between January and February, taking the annual rate of increase to 19.4 percent, the highest since records began in 1986. Output prices rose less than expected, at 0.3 percent, keeping the annual rate of factory gate inflation at 5.7 percent. Output growth appears to be slowing less than feared and this may keep the Bank of England from cutting interest rates. The British Retail Consortium is to report today total retail sales for February were 3.9 percent higher than a year earlier, but note a wider gap between thriving food sales and contracting clothing and furniture sales.

DEMAND FOR HOMES REMAINS SLACK, SAYS SURVEY

A survey conducted by the Royal Institution of Chartered Surveyors reveals conditions in the housing market are at their slackest for over a decade. The RICS survey shows the stock of unsold property on the books of estate agents rose by over eight percent in February for a fifth month running. The ratio of recently completed sales to stocks weakened from 28.7 percent in January to 26.5 percent, the lowest since September 1996. A majority of surveyors think house prices have fallen in the last three months and will fall further.

POLL REVEALS SMALL BUSINESS DISMAY

An online survey of 2,657 members of the Federation of Small Businesses has found the government has lost the trust of a vast majority of small business owners. Ninety-three percent say they have less confidence in the government than they did this time last year. Reasons given were the clampdown on family businesses through new income shifting rules and the upcoming increases in corporation tax and capital gains tax. The FSB is calling for the government to drop its planned changes to the rules on income shifting and proposed increase in fuel duty of two pence per litre.

WEST MIDLANDS OUTPACES MOST RIVALS

The number of regeneration development projects in the West Midlands has outpaced that of most other regional centres. According to a study of the sector by the magazine Regeneration and Renewal, the West Midlands is second only to London in the number of regeneration projects under way. London has 18 schemes in the pipeline, the West Midlands 14, and the Southeast and Northwest both have 13 schemes on the way. Birmingham stands out when compared to many northern regions but agents are now warning there may be an oversupply of office space in the city over the next few years. A number of completions are expected over the next 18 months, totalling 930,000 sq ft. But only 17 percent of this space has been leased to tenants.