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.