PRESS DIGEST - Financial Times - Dec 5

RATES HIT LOWEST SINCE 1951

The Bank of England cut interest rates from three percent to two percent on Thursday, their lowest level since 1951. The CBI praised the move, but its chief economic adviser Ian McCafferty warned that "what is critical for business and consumers alike is that this reduction is passed on". Not all banks, however, have promised to pass on the full extent of the reduction to its mortgage borrowers. The rate cut coincided with further grim economic news, as the pound continued to fall in value.

HALIFAX PAINTS GLOOMY HOUSE PRICES PICTURE

Mortgage lender HalifaxHBOS.L has released figures showing that November saw the biggest month-on-month drop in house prices for 16 years. The average price of a home fell by 2.6 percent over the course of the month. On a straight comparison basis, prices have eased by 16.1 percent since November 2007 - an even bigger decline from the top of the market than that seen in the early 1990s. "Both the fundamental backdrop of a lending drought combined with a rapidly slackening labour market support the Halifax's assessment [of the market]", said Richard Maguire, a fixed interest strategist at RBC Capital Markets.

NOVEMBER NEW CAR SALES DECLINE 37 PERCENT

Data from the Society of Motor Manufacturers and Traders indicates that new car registrations in the UK fell by 37 percent in November compared to the same month in 2007. These figures defy attempts by manufacturers to stimulate sales with discounts on prices and lending rates. "November has been another difficult month for the motor industry and whilst some consumers may have delayed their purchases to take advantage of the recent [value added tax] reductions, overall demand continues to fall", said Paul Everitt, chief executive of the SMMT.

ENERGY SUPPLIERS CUT BILLS TO SOOTHE REGULATOR

Energy suppliers accused of implementing unfair pricing by the regulator Ofgem have cut prices over the past week to avoid any further action, although not all have accepted all the recommendations made by Ofgem in its October inquiry. The plummeting price of oil has led to a corresponding fall in wholesale gas and electricity prices, but consumer groups are displeased by suppliers' reluctance to reverse the large increases in energy prices made earlier in 2008. Ofgem's argument that consumers should have greater freedom to switch between suppliers, however, met with stiff opposition from companies including Scottish Power(IBE.MC), EonEONG.DE and EDF(EDF.PA).

BDO AND PKF JOIN RANK OF JOBCUTTERS

Accountants BDO Stoy Hayward and PKF have become the latest in the professional services sector to announce jobs cuts. BDO announced on Thursday that it will get rid of 250 staff, eight per cent of its total headcount. PKF is anticipating a weaker demand for services next year and will cut its workforce by five per cent. The news follows the announcement last week of cuts at Grant Thornton; PwC and Deloitte are also offering small voluntary redundancy programmes.

EMI IN US DISTRIBUTION TALKS WITH COMPETITORS

Terra Firma, which bought EMI in 2007, is understood to have approached Universal Music, Sony BMG and Warner Music over the potential 20 million pound sale of EMI's U.S. warehouses and distribution network. The talks, which are aimed at raising funds to pay off part of the 2.6 billion pounds owed to Citigroup, were led by Chris Rolling, one of the senior Terra Firma executives departing EMI. EMI's more profitable music publishing division will be unaffected by the talks.

SAINSBURYS BUYS POWER FROM GENERATOR

J Sainsbury(SBRY.L) has agreed to take all the power from a 6MW wind farm to be built near Glasgow. The deal, with A7 Lochhead, will provide one per cent of Sainsbury's electricity needs from next year, and makes the retailer the first company in Britain to sign an electricity supply contract directly with a generator. Neil Sachdev, commercial director at Sainsbury, said: "In the same way as we buy food, when we want to know its heritage, we want to be able to trace the supply of the electricity production we have bought."