PRESS DIGEST - Financial Times - June 12

The Financial Times

ECB DAMPS RATE EXPECTATIONS

The European Central Bank has signalled a planned increase in eurozone interest rates next month is likely to be a one-off. The move is calculated to dampen market expectations of a flurry of rises in coming months, an expectation that has depressed bonds and the dollar while possibly helping to inflate the price of oil. ECB governing council members sought on Wednesday to correct market assumptions, saying its hardline anti-inflationary policy had been overstated.

PM'S PLEA ON PANIC BUYING DESIGNED AS PLOY

Government insiders have said Prime Minister Gordon Brown's "don't panic" message to motorists ahead of a planned four-day strike by tanker drivers was deliberately designed to achieve the opposite effect. In drawing up contingency plans for the strike, the government concluded on the basis of reverse psychology that the "buy as normal" message issued by Brown on Tuesday would prompt panic-buying by those prone to worry. "We'd rather people started filling their tanks now, giving time for the forecourts to restock before the strike takes hold, than over the weekend," said one government source.

CHANCELLOR AIMS TO HALVE NUMBER OF CITY SUMMITS

Disenchantment about the way the government is handling City affairs is likely to deepen after it emerged that Chancellor of the Exchequer Alistair Darling wants to cut the number of summit meetings he holds with City leaders to just one a year. Thursday's gathering of the high-level group on financial services will hear Darling pushing for annual meetings -- at present they are every six months -- with smaller sectoral working parties chaired by Treasury ministers in between.

JOHNSON UNVEILS PLACING FOR 28 MILLION POUNDS

The day after it moved to Aim from the full London list, Johnson Service Group (JSG.L) has announced a placing to raise 27.8 million pounds as it seeks to pay its debt down further. The proceeds will enable the company to avoid a rise in the interest rate paid on banking facilities negotiated in April. The chairman, Simon Sherrard, said the placing would "allow the group to support the success of its market-leading businesses, which are continuing to trade satisfactorily".

SCS LOSES CREDIT INSURANCE COVER ON RISK FEARS

The precarious state of furniture retailing was underlined on Wednesday when ScS Upholstery SUY.L revealed that a large credit insurer had withdrawn cover for its suppliers, judging the company too risky a proposition. "This crisis of confidence clearly makes a bad situation worse and will send shock waves through the sector," said Sanjay Vidyarthi, analyst at Dresdner Kleinwort. "ScS can survive this, though its chances just got seriously worse."

RBS STAYS UPBEAT ON INSURANCE ARM SALE

Royal Bank of Scotland (RBS.L) confirmed its trading performance had not changed since it launched its 12 billion pounds rights issue in April and expressed confidence that its insurance arm would still fetch a healthy price. RBS launched the auction in May as part of efforts to rebuild its capital reserves and chief executive Sir Fred Goodwin said there was no need to rethink it. "We have a price in our minds and that hasn't changed," he said. "We're working our way forwards in a constructive manner, but it's not something that we're doing against the clock."

RENSBURG SHEPPARDS RECORDS 21 PERCENT LIFT

The wealth management group Rensburg Sheppards (RBG.L) shrugged off a 10 percent fall in funds under management to announce a 21 percent increase in annual pre-tax profits in the year to March 31, from 25.7 million to 31.2 million pounds. The shares closed down eight pence at 552 pence, having done well earlier in the day when the figures, which were at the top end of analysts' expectations, were first announced. Chief executive Steve Elliott said he was "cautiously positive" while agreeing that market uncertainty was likely to persist through the year. "Adversity tends to bring opportunities," he said.

HSBC THREATENS TO HALT SIX BILLION DOLLAR KOREAN BANK DEAL