PRESS DIGEST - Financial Times - Nov 28

The Finanical Times

WARNING GIVEN OF "BUMPY RIDE" FOR ECONOMY

Andrew Sentance of the Bank of England monetary policy committee has predicted the economy will suffer a "bumpy ride" over the next year as the impact of global financial upheaval and rising oil prices is felt. Speaking to the Warwick City Alumni Group in London, Sentance said "judging the appropriate monetary response will not be easy". He said the overriding issue was how far the economy would slow compared with inflationary forces. On Tuesday, Alan Castle of Lehman Brothers forecast a slowdown to 1.7 percent next year, with three rate cuts by March. But Sentance said strong and timely evidence would be required before a move to reduce rates was considered.

CITY SUFFERS "DAMAGE" FROM NORTHERN ROCK CRISIS

Confidence in the City has been eroded by the Northern Rock NRK.L crisis, according to Sir David Walker, senior adviser at Morgan Stanley. In a video for FT.Com's View from the Top, Sir David said he supported the Bank of England "doing more to put liquidity into the home market", and that an earlier and better coordinated reaction from the Bank, the Treasury and the Financial Services Authority could have reduced the impact of negative publicity over Northern Rock. Sir David suggested the credit squeeze could last into the spring of 2008, with the commercial paper market "effectively ceasing to exist around the year end". However, he provided a hint of optimism on prospects for the City, saying: "This is all reparable."

ONE BILLION POUND PIPELINE GIVES BOOST TO GAS SUPPLY

Nick Winser, transmission director of National Grid (NG.L: Quote, Profile, Research, Stock Buzz), has applauded the "fantastic job" completed by National Grid and its contractors in opening a new gas pipeline connecting Milford Haven to the network. However, ExxonMobil and BG Group both still have to finish construction of two new LNG terminals to supply the pipeline, and it is unlikely to come online before the first-half of next year. Oxford based energy consultancy Poyry has said Britain will likely enter a period of "capacity excess" as gas supplies from Milford, the BBL and Langeled could overtake consumer demand.

CARPETRIGHT CHIEF PILES ON THE INCENTIVES FOR ACADEMY TEACHERS

Carpetright chairman and chief executive, Lord Harris of Peckham will shortly detail pay packages and benefits to be offered to successful applicants for teaching posts at his academy schools. The "modest inducements", which include 200 pound bonuses and flooring discounts, will be put to the board of the Harris Federation of London Schools. Reaction from the profession has been mixed, with Sir Cyril Taylor, chair of the Specialist Schools and Academies Trust, calling the bonuses "a fantastic idea", while membership secretary of the Headmasters' and Headmistresses' Conference, Roger Peel, indicated payment based on exam results at his school "would have divided the common room at a stroke".