PRESS DIGEST - Financial Times - June 17

Financial Times

DARLING TO WARN OF REGULATORY CRACK DOWN

In the chancellor's annual Mansion House Speech, Alistair Darling is set to warn the City to expect an increase in regulation and a crack down on sloppy board room practices. The speech will be aimed as a warning shot at those in the City, including the British Bankers' Association, that have recently been speaking out against new regulations on higher liquidity and capital standards at banks. The chancellor's speech comes ahead of a European summit in Brussels to reaffirm plans for EU-level regulation, and before a Treasury white paper on financial regulation due next week.

INFLATION STAYS HIGHER THAN FORECAST

Inflation remained higher than analysts had predicted in May, potentially limiting the Bank of England's ability for further easing of monetary policy. Economists had predicted that April's 2.3 per cent consumer price inflation would fall to two per cent in May; in fact it fell just 0.1 per cent to 2.2 per cent. CPI has fallen for three consecutive months, and is now at its lowest level since the beginning of 2008, but inflation has been higher than the consensus forecast in 11 of the past 14 months.

ACADEMIC FROM US SET TO JOIN BANK'S MPC

American academic Adam Posen is to replace Tim Besley on the Bank of England's monetary policy committee, effective September 1. Posen, director of the Peterson Institute for International Economics in Washington, is widely cited on monetary policy, and the Treasury said that his appointment was made in accordance with the process for external appointments to the MPC. Chancellor Alistair Darling said: "His deep understanding of monetary policy and financial system issues will, I believe, be extremely valuable."

BARCLAYS WEALTH TO MOVE FAST ON ACQUISITIONS

Barclays Wealth's (BARC.L) next acquisitions are unlikely to be on the same scale as last year's purchase of Lehman Brothers, according to comments made by Tom Kalaris, chief executive of Barclays Wealth, in an interview with the Financial Times. Mr Kalaris said that the wealth manager was also hoping to benefit from the planned sale of Barclays Global Investors to BlackRock for 13.5 billion dollars. Under the terms of the sale Barclays would end up with a 20 per cent stake in BlackRock: "Our access to product and investment expertise would be unrivalled should the transaction proceed", Mr Kalaris said.

HUSSEY TO LEAVE LAND SECURITIES

Mike Hussey announced on Tuesday that he will leave his position as managing director of Land Securities (LAND.L) at the end of the month. Mr Hussey had been set to lead a demerger of the property company's London division. However, the plans were abandoned earlier in the year in favour of a rights issue and the sale of its Trillium outsourcing unit. Land Securities said; "Reports of boardroom tension have been overblown. The ambition of Mike is clear - to run his own business. Unfortunately events went against that"

PREMIER INN RIDES INTO BATTLE IN DISCOUNT WAR

Whitbread (WTB.L) chief executive, Alan Parker, has warned rivals to the group's Premier Inn chain of hotels, that he would do "whatever it takes" to win market share, including further discounting. Mr Parker's comments come after Whitbread reported a 7.9 per cent fall in like-for-like sales at the hotel chain for the 13 weeks to May 28. Whitbread reported a 2.6 per cent rise in like-for-like sales at its Costa Coffee chain of coffee shops and a two per cent increase at the group's pub restaurants. Overall group like-for-like sales were down 2.7 per cent compared to the same period last year. However, sales increased 2.5 per cent due to the opening of new hotels and coffee outlets.

SALES SET BACK BUT HALMA LIFTS PAY-OUT

Andrew Williams, chief executive of Halma (HLMA.L) - a supplier of safety equipment and automatic door sensors, has said the company will continue to invest in expanding its business, even though he expects tough trading conditions in the company's core markets of North America and Europe. Halma announced an increase in pre-tax profits from 68 million pounds to 73 million pounds for the year to March 28, on revenues that have increased from 395 million pounds to 456 million pounds over the past year.

NATIONAL EXPRESS IN DEBT TALKS

National Express (NEX.L) is in talks with lenders to renegotiate terms on a portion of its 1.2 billion pound debt, amid concerns that the bus and rail operator could breach loan covenants in December. A slowdown in passenger revenues on the group's East Coast rail franchise and rising payments to the Department for Transport has led the group to seek greater flexibility, though it is still expected to pass a key test of whether it is meeting the terms of its debt at the end of this month.

RESOLUTION TARGETS FIVE TO SEVEN BILLION POUND FIRST ACQUISITION

Clive Cowdery's Resolution (RSL.L) investment vehicle will look to make an initial acquisition in the range of five to seven billion pounds, using its shares to fund part of the deal. Analysts had expected a small initial acquisition, but Cowdery said: "Our investors are expecting to put up two to three billion pounds for deals. With new retained equity participation by vendors this becomes five to seven billion pounds." This price range would put only Prudential (PRU.L) and Aviva (AV.L), the two largest players in the UK listed life and pensions sector, out of the reach of Resolution.

HoF COLD-SHOULDERS DEBENHAMS' AIMS

House of Fraser has no plans to sell any of its 62 stores, and says that it is trading ahead of plan following improved conditions and a rise in sales over the past twelve weeks. The retailer also said that it had paid off 59.8 million pounds of debt in its last financial year to January 24. The announcement dashes hopes that Debenhams (DEB.L) could purchase the privately-owned department store chain or its assets, with Debenhams chief executive Rob Templeman having hinted at a willingness to make acquisitions.

Prepared for Reuters by Durrants.