PRESS DIGEST - Financial Times - Jan 7

The Financial Times

UK FACES DANGEROUS YEAR, SAYS BROWN

Prime Minster Gordon Brown has said the economy of Britain faces a "dangerous" year ahead as it battles against higher pay awards and higher energy prices. Brown said he saw dark clouds gathering across the Atlantic with fears of a serious U.S. downturn, but he remains confident the British economy will dip only slightly this year before a recovery in 2009, a view based on a belief that inflation has been largely tamed.

DARLING SEEKS TALKS AS ENERGY PRICES SOAR

Amid fears for his anti-inflation policy, the Chancellor of the Exchequer, Alistair Darling, has called for urgent talks on whether sharp energy price rises are necessary. Darling has summoned Alistair Buchanan, chief executive of Ofgem, to explain why energy companies are citing recent rises in the wholesale price of energy to justify big increases in domestic bills. Darling wants reassurances energy companies are not using short-term fluctuation in wholesale prices as an excuse to push up domestic prices when most have long-term energy contracts.

RAIL LINE PROJECTED TO ARRIVE ON TIME

Barrie Noble, Transport for London's construction manager for the extension of London Underground's East London Line, has said the project should be able to avoid the pitfalls of previous big infrastructure projects and open on time. The 1.4 billion pound scheme is part of plans by Transport for London to create an orbital railway around London to carry commuters to destinations such as Canary Wharf. Noble said because much of the viaduct work, on which most of the northern extension will run, had been done during the lengthy wait for final approval for the project, contractors would be able to lay track quicker than usual.

INDUSTRY FEARS OVER EU GREEN LEGISLATION

UK business leaders have said plans to tighten European anti-pollution legislation may force the closure of swathes of industry in the country. Just before Christmas the European Commission put forward proposals to tighten directives dealing with dust, nitrogen and sulphur emissions. However, BusinesEurope, which represent employers across the EU, says the cost of compliance could force many industrial plants to close. Crucially, it said, government rights to allow flexibility according to the design and location of industrial plants would be taken away.

WEALTH SCATTERED ACROSS BRITAIN

New analysis from the Work Foundation has found wealth in Britain is divided less on traditional north/south lines than between cities which are able to take advantage of the knowledge economy and those that are failing to do so. The foundation said the future economic success of the UK is "increasingly dependent on well-educated minds, cheap computers, high-value businesses and sophisticated goods". But these cities are scattered across the country and those that are not part of this knowledge economy are being left behind with low productivity

PRESSURE ON S&N TO ACCEPT BID

Scottish & Newcastle SCTN.L is coming under increasing pressure from shareholders to look more favourably on even a slight improvement in the 750 pence a share offer from rivals Carlsberg (CARLb.CO) and Heineken (HEIN.AS). The Takeover Panel last month imposed a "put up or shut up" deadline of Jan. 21 for Carlsberg and Heineken to increase their offer or walk away. Most shareholders initially thought the 750 pence offer undervalued the company, but recent evidence of falling beer consumption in Europe and the UK and uncertainty about the prospect for the financial markets has prompted some shareholders to lower their expectations.

MAN UTD TO UNVEIL TURNOVER OF 245 MILLION POUNDS

Premier League champions Manchester United [MNU.UL] will this week announce a record gross turnover of 245 million pounds. United will say gross turnover has risen 21 percent, up from 202 million pounds the previous year. The results, however, will exclude merchandising revenues as these are recorded under Manchester United Merchandising Ltd, a wholly owned subsidiary company. The club will this week also highlight market research, commissioned from TNS Sport, that estimates it has a fan base of 333 million people.

IMPERIAL ENERGY PLANS FLOAT OF DRILLING SPIN-OFF

After receiving approaches from several private suitors, Imperial Energy IEC.L is drawing up plans to list its drilling division, Rus Imperial Group (RIG), on AIM. The spin-off comes only weeks after Imperial rejected an offer from Gazprom's banking arm to take a stake of 25 percent. Imperial has appointed Unicredit and ABN to advise on a possible flotation of RIG, which those close to the company value at 300 million dollars.

QUORUM MAKES ITS LSE DEBUT

The Canada-based investment fund, Quorum Oil and Gas Technology, will today be admitted to the London Stock Exchange's main listing, having raised 43 million dollars. Among UK investors planning to buy are Baillie Gifford, Henderson and New Star Asset Management. The chief executive of Quorum, Wanda Dorosz, said: "We're attacking a perfect storm of opportunity by listing now. There are several interesting opportunities to invest in the high-tech oil and gas industry, and we will be the only global pure-play fund set up to go after them."

PERSIMMON AND REDROW TO ISSUE UPDATES

Housebuilder Persimmon (PSN.L) is to issue a trading update on Wednesday, followed a day later by Redrow (RDW.L), its smaller rival. Investors will be looking for clues on the state of the housing markets. In October, Persimmon's chairman repeated the company's confidence in growth opportunities, but since then there have been signs of more deterioration in the new housing market. Persimmon's shares fell to a two-year low of 746 pence on Friday.

Prepared for Reuters by Durrants.