PRESS DIGEST - Financial Times - Aug 14

FORECAST SENDS POUND LOWER

Sterling fell against the dollar and the euro on Wednesday after the Bank of England gave its bleakest economic assessment for more than a decade and the markets priced in a series of interest rate cuts.

Mervyn King, the Governor of the Bank of England, predicted inflation would peak at five per cent at least and said that the economy required a 'painful' adjustment to higher energy and food prices. Sterling fell more than one per cent against the dollar, the euro and on a trade-weighted basis.

JOBLESS CLAIMANTS RISE AT FASTEST RATE FOR 16 YEARS

Last month, the number of people claiming unemployment benefit rose at the fastest rate for almost 16 years. The number of people claiming jobseekers allowance rose for the sixth month in a row, increasing by 20,100 to 864,700.

Total unemployment rose by 60,000 to 1.67 million during the three months to the end of June. Chartered Institute of Personnel and Development chief economist John Philpott said that the labour figures were 'the weakest' since the economic slowdown began.

DARLING PRESSED TO CLARIFY STAMP DUTY IDEA

Alistair Darling has come under renewed pressure to clarify any plans for a stamp duty holiday after a poll of estate agents by the National Association of Estate Agents showed that uncertainty on the issue was hitting the housing market.

The survey found that 92 per cent of estate agents believed that the situation had increased consumer concerns with people delaying buying a house in the hope of avoiding stamp duty. The poll of 1,350 agents found that 62 per cent had been asked for advice on whether to hold off purchasing a house until the autumn pre-Budget statement.

NERVOUS INVESTORS TURNED TO NATONAL SAVINGS

The near-collapse of Northern Rock and the credit crunch have led to significant new retail deposits at National Savings & Investment as investors seek to find a safe haven for their money.

The government's retail finance arm said on Wednesday that net financing was 5.9 billion pounds in the year ended March 31 2008. This figure is three billion pounds more than its original target of 2.8 billion pounds. Gross sales of all NS&I products rose to 15.54 billion pounds compared to 14.17 billion pounds in the previous 12 months.

The Treasury uses the money in NS&I to manage the national debt cost effectively and when customers invest in NS&I they are effectively lending money to the state.

HBOS TO AXE 425 JOBS AND HALT NEW MORTGAGES AT TMB DIVISION

HBOS HBOS.L is to cut 425 jobs and close its TMB mortgage brand to new business in a move aimed at reducing duplication between brands, it is also to stop offering conventional mortgages through its Intelligent Finance brand.

The move comes weeks after the bank said it would consider disposals or winding down businesses in order to position itself for a shrinking mortgage market. HBOS recently reported a 72 per cent drop in first-half profits to 848 million pounds and also saw its four billion pound rights issue shunned by most investors.

RBS FAILS TO SELL AUSTRALIAN ASSETS

Royal Bank of Scotland (RBS.L) has scrapped the sale of its New Zealand and Australian operations after the last remaining bidder, Commonwealth Bank of Australia, dropped out of talks to buy the business, blaming uncertainty in world financial markets.

RBS said that the decision to keep the assets would have little impact on its balance sheet ratios as it was not expected to generate large capital gain. Shares in RBS closed at 229.75 pence, down 15.75 pence.

PRUDENTIAL APPOINTS MCGRATH CHAIRMAN

Prudential (PRU.L) has named Harvey McGrath, the former head of Man Group EMP.L, to succeed Sir David Clementi as its new chairman. Mr McGrath will join the Pru board on September 1 and will be paid an annual fee of 500,000 pounds fixed for three years.

Mr McGrath retired from Man Group last year, he is also chairman the London Development Agency and a member of the international advisory board of the School of Oriental and African Studies.

BALFOUR BEATTY BUILDS ORDERS

A focus on big infrastructure projects helped Balfour Beatty (BALF.L) lift its order book by 14 per cent in 12 months and enabled the construction group to avoid the slowdown affecting Britain's builders.

The company on Wednesday reported a 25 per cent increase in interim pre-tax profits to 95 million pounds and said that at the end of June its order book stood at 12.1 billion pounds. Ian Tyler, chief executive, said that Balfour Beatty was 'pretty buoyant' about the future and the order intake and trading performance would remain strong throughout the year.

BRITANNIA HIT BY SHARP RISE IN CITY CENTRE FLAT ARREARS

Britannia Building Society BRTB.L has blamed arrears by landlords who bought new build city centre flats at the height of the property boom as partly responsible for it taking a 40.4 million pound bad debt provision.

The mutual has also seen an increase in arrears among first-time buyers who took out high loan-to-value mortgages at the height of the property boom through its Platform home loans division. Britannia saw interim profits fall to 50.5 million pounds from 81.7 million pounds in the six months to June 30.

THOMAS COOK REPORTS ROBUST HOLIDAY SALES

Thomas Cook(TCG.L) has reported growing sales and resilient demand for holidays. Chief executive of the group, Manny Fontenia-Novoa, said that while there is evidence that customers are cutting back on short breaks, mainstream holiday spending was holding up.

Pro-forma revenue for the nine months to the end of June was 5.3 billion pounds, an increase of nine per cent on the same period last year, and gross profit was at 1.2 billion pounds, 18 per cent higher. Shares closed at 237 pence, down 3.3 per cent.

Prepared for Reuters by Durrants