PRESS DIGEST - Financial Times - April 14

Financial Times

Monday, 14 April 2008

VOTERS LOSE CONFIDENCE IN BROWN'S ABILITIES

A Financial Times/Harris poll has found Prime Minister Gordon Brown is less trusted to steer his country through the current global financial meltdown than any other major European leader. The poll found 68 percent of the respondents were not "confident at all" in his government's ability to deal with the economic crisis. The comparative number of respondents expressing the same sentiments for the governments of Germany, the United States, France, Italy and Spain were 52 percent, 51 percent, 50 percent, 43 percent and 36 percent respectively. The poll confirms findings from other surveys that voters have lost confidence in Brown's economic competence.

GOVERNMENT SET TO SCRAP TWO-YEAR DEFENCE BUDGETS

The government is poised to scrap a system of two-year defence budgets for the Defence Ministry that it introduced four years ago to give the industry greater planning certainty and will revert to its former one-year budget cycle. The move, which risks alienating Britain's defence industry, comes as the government struggles to rein in defence spending. Despite the proposed changes to the budget planning, sources said the government would take a decision on big contracts in the coming weeks.

ECONOMIC UNCERTAINTY HITS ADVERTISING BUDGETS

A survey of UK marketing sentiments published on Monday has found the current economic climate is affecting spending on corporate marketing, with advertising budgets, except for Internet advertising, being cut for the second consecutive quarter. The survey was conducted by NTC Economics, a research group, which polls a panel of 300 companies drawn from the UK's top 2,000 companies every quarter for the Institute of Practitioners in Advertising. The NTC survey also found the steepest budget cuts were in direct marketing, sales promotion and corporate events and hospitality.

SCOTTISH PUBLIC SERVICES "COULD DO BETTER"

A study by the pro-business think-tank Reform Scotland has found improvements in Scottish public services have lagged behind those of other European countries despite huge increases in government spending. The study found while there were many aspects of public services in Scotland that one could be proud of, the government could do much better with the right approach. The study noted that while attainment in schools has increased, Scotland performs below a number of other European countries, including England, in some international educational rankings.

TREASURY AIMS TO EASE BANK TENSIONS

The Treasury sought on Sunday to play down reports of conflicts with mortgage lenders, saying it agreed with banks that the problem lay with the wholesale funding market. The Treasury promised the government would do its bit to help relieve some of the stresses in the mortgage market and called on banks to also do their bit to help people as well. Bank chiefs are expected to meet Gordon Brown on Tuesday to discuss how to fix the problems in the market.

BBC CHIEF QUITS TO LAUNCH ONLINE VIDEO

Ashley Highfield, the BBC's [BBC.UL] director of future media and technology, is expected to announce on Monday he is leaving the corporation to set up a joint online video platform for the BBC, ITV (ITV.L) and Channel 4 that the broadcasters hope will be "a Freeview for the Internet". Experts believe the combined service could attract more online traffic than the individual broadcasters' existing catch-up services. Highfield's successor at the BBC will inherit a remit that includes bbc.co.uk., "red button" and interactive television services.

STOCKS ISAS SUFFER BIG DROP IN SALES

Weak equity market conditions and consumer caution took their toll on investment companies in the past tax year, with the Investment Management Association, saying it was "very likely" the 2007-08 tax year would be the worst ever for individual savings accounts (Isa) sales. Fidelity Fundsnetwork, the biggest investment "platform" for Isa sales, said its net stocks and shares Isa inflows were 820 million pounds for the 2007-08 year, down from 925 million pounds the previous tax year. Chelsea Financial said its own net stocks and shares Isa sales had fallen 11 percent.

MELROSE TO SEEK FUNDS TO MAKE BID FOR FKI

The engineering turnaround company Melrose (NYN.L) is expected to ask its biggest shareholders on Monday to support an issue of new shares to raise about 275 million pounds that will help to fund its planned 500 million pound takeover of the Loughborough-based engineering group FKI FKI.L. Melrose's initial approach to FKI was rebuffed but it returned last month with a sweetened offer. Melrose was set up in 2003 to buy underperforming engineering companies.

NEW CHAPTER FOR CAFE ROYAL

The Cafe Royal on London's Regent Street is to be turned into a luxury hotel to form the nexus of a wider 750 million pound makeover of the area following the acquisition of the 125-year leasehold of the site by the Israeli hotel company Alrov Group. The redevelopment of Cafe Royal, once a haunt for writers and artists such as Oscar Wilde and James McNeill Whistler, forms part of the Crown Estate's one million square feet Quadrant Scheme around Regent Street.

BRADFORD & BINGLEY DENIES A RIGHTS ISSUE

Bradford & Bingley BB.L on Sunday denied reports it was planning to raise hundreds of millions of pounds via a rights issue, insisting that contrary to speculation it was "not intending to issue equity capital by way of rights issue or otherwise". The bank also denied its buy-to-let focus makes its mortgage book riskier that those of residential lenders, saying it does not do sub-prime lending and that its average borrower is an experienced landlord with an average income of 80,000 pounds to help cover any rental shortfall.

Prepared for Reuters by Durrants.