In brief: Triple dip recession possible and RBS faces huge fine over Libor scandal
FINANCIAL TIMES
World’s top executives query strategy
By Brian Groom, Chris Giles and George Parker
After months of relentless pressure from British business leaders for more effective growth-promoting measures, David Cameron may have been hoping for some respite as Britain stages what the prime minister calls “the greatest show on earth”.
Instead, many of the world’s top executives who are in London to enjoy the Olympics and network with heads of state and politicians – a kind of Davos with javelins – are asking the same questions as their British counterparts.
What, they ask privately, is the British government doing to boost confidence in the flagging economy? How is it preparing for the impact of break-up of the euro? And why, as one US financier put it, is the UK “killing its bankers” instead of supporting the City?
bbc.co.uk
Samsung and Apple's patent clash heads to trial by jury
By Leo Kelion, Technology reporter
Samsung and Apple's patent battle heads to a court in California this Monday - one of the biggest trials of its kind.
The tech firms have accused each other of intellectual property infringement.
Billions of dollars of payments could be triggered from one business to the other and sales bans imposed if the jury finds one or both parties guilty.
Submitted documents and testimony are also likely to throw fresh light on decision making processes and deals made by the two tech firms with others.
Together the two companies account for more than half of all the world's smartphone sales. Despite the fact that Apple buys many of its components from Samsung, the two have failed to agree cross-licencing deals even after the courts forced their bosses to meet for talks.
THE SUN
We’re heading for a triple dip
By Emily Ashton, Whitehall Correspondent
Britain could suffer a triple-dip recession next year after an Olympics bounce, George Osborne was warned yesterday. Top economists said the eurozone crisis could push us back into recession — a disaster for the beleaguered Chancellor. Mr Osborne faced calls to quit last week after a massive 0.7 per cent plunge in gross domestic product (GDP) between April and June. Azad Zangana from fund manager Schroders predicted that the Games would boost the economy by 0.5 per cent this quarter. He said GDP would keep growing until March before two consecutive quarters of negative growth.
He added: “A renewed crisis in the eurozone will lead to a further collapse in business confidence and investment.”... Meanwhile, the British Chambers of Commerce urged the Bank of England to slash the interest rate to zero to help struggling firms...
THE TELEGRAPH
ECB could take haircut on Greek bonds in 'last chance' plan
By Roland Gribben
Intensive discussions now under way among EU policy-makers involve the European Central Bank and a number of central banks taking a significant write-down on their Greek bonds as the price for avoiding a eurozone break-up and losing its weakest link.
France’s central bank, the most heavily exposed, may need to be recapitalised because of the scale of its potential losses. The central banks of Malta and Cyprus are also in the firing line, as well as clearing banks and eurozone governments.
The latest rescue package for the stricken Greek economy is aimed at reducing the country’s debts by another €70bn (£54.6bn) to €100bn, cutting the total to what is regarded as a more manageable level. Details are still being worked out and officials accept there will be opposition to yet another bail-out for Greece. The country’s coalition government will make another attempt on Monday to settle differences over a new austerity package to meet the terms of the last bail-out.
DAILY EXPRESS
Recovery hopes rise as boards gain confidence
By Philip Waller
Boardroom confidence in the UK economy has risen for the ¬second month in a row, boosting hopes for a recovery. Corporate business sentiment regarding broader economic ¬prospects improved for a second straight month in July, according to a survey.
Confidence rose four points to minus 8 although it has still to reverse a large decline in May, the Lloyds Bank Wholesale Banking & Markets Business Barometer showed. But the survey also showed that companies’ sentiment about their own trading prospects in the course of the next year fell to its weakest this year, to 30 per cent from 36 per cent in June.
THE GUARDIAN
RBS faces huge fine over Libor scandal, says Stephen Hester
By Jill Treanor
The boss of the Royal Bank of Scotland is warning the bank faces a further hit to its reputation – and a huge fine – from the Libor scandal, which has engulfed Barclays and caused a fresh wave of anger against bankers..."RBS is one of the banks tied up in Libor. We'll have our day in that particular spotlight as well," Hester said in an interview with the Guardian. He did not know the size of the RBS fine but said that the investigation by the Financial Services Authority was "in process".
Hester is preparing to represent first-half figures – showing another loss – on Friday, when the bank's exposure to interest rate swap mis-selling will also be a focus. RBS is said to have paid £25m to just one businessman who was mis-sold products intended to protect against interest rate rises.
THE TIMES
British investors hit out at rate-rig banks with group action to demand money back
By Dominic Kennedy, Investigations Editor
The first British group legal action against banks that rigged interest rates is being prepared, demanding that millions of pounds of contracts should be ripped up and all the money paid under tainted deals given back to the clients.
Lawyers will argue that banks that colluded to drive down rates to the detriment of customers are in breach of competition law. Deals signed with those banks based on the flawed rates can be treated as void, they say, because the banks were “loading the dice”. Claims are also being considered on behalf of other financial institutions and their clients who lost money because they trusted the rigged rates and used them to calculate payments.
Although only Barclays has so far admitted manipulating Libor, the London interbank offered rate, the US Department of Justice said that the British bank’s managers had been doing so to try to stay “within the pack”.
DAILY MAIL
Barclays' chairman Marcus Agius rules out break-up of investment banking empire
By Ruth Sunderland
Barclays is turning a deaf ear to pressure from investors to break itself up in order to signal a decisive move away from the tarnished reign of former boss Bob Diamond.
Agius has weighed up the idea of splitting off the so-called casino bank, Barclays Capital, the investment banking empire that was built by Diamond and that fuelled his controversial rise to the top. But the bank’s remaining board – depleted by the resignations of Diamond, his aide Jerry del Missier and pay committee chair Alison Carnwath – is of the view it is too valuable to ditch, given that it contributed more than 60 per cent of the bank’s £4.2billion profit in the first six months of this year.
THE SCOTSMAN
Tax break ‘would bring massive investment to North Sea oil fields’
The Treasury must set the right decommissioning tax breaks if the North Sea is going to successfully compete with East Africa and North America for foreign investment, oil and gas industry experts have warned.
Overseas investors and private equity firms are known to be circling UK waters following last week’s pair of blockbuster deals involving Chinese firms.
Sinopec bought a 49 per cent stake in the North Sea assets of Canadian firm Talisman Energy for about £1 billion, while state oil company China National Offshore Oil Corporation is buying Canadian rival Nexen for £9.7bn in a blockbuster transaction that would represent China’s biggest-ever foreign corporate takeover.
Acquiring Nexen will make the Chinese firm the operator of the Buzzard oilfield, the UK’s largest, and give it a major role in setting the price of Brent crude.
CITY A.M
House prices on slide
By Ben Southwood
House prices across the country fell for the first time in seven months in July, with even resilient London and the south east of England seeing a slowdown in growth, claims research out today from Hometrack. Rising house prices in London and the south east have been offsetting the decline across the rest of the country in recent months, but this trend appears to be running out of steam.
Across England and Wales as a whole, prices slipped 0.1 per cent in July, having been flat in June, driven by a 2.1 per cent fall in demand, the biggest drop in six months.
Meanwhile supply, measured by new property listings, rose by 1.4 per cent. The gap between supply and demand is forecast to widen during the traditionally slower summer months, pointing to a further fall in prices.
THE INDEPENDENT
A £100m payday for owners of Harrods
By James Thompson
The Qatari owners of Harrods, the world-famous London department store, have paid themselves a whopping £100m dividend in their first full year of ownership after the retailer posted record annual profits.
The sterling performance reflects the significant capital expenditure made by the new owners of the Knightsbridge emporium in its operations, as well as the buoyant demand for luxury products among wealthy visitors to London from Asia, Russia, Brazil and the oil-rich countries of Africa, such as Nigeria.
Harrods, whose managing director is Michael Ward, is also likely to be enjoying strong trading during the Olympics, as foreign tourists flock to the capital. Qatar Holding, the investment fund of the emirates royal family, acquired Harrods for £1.5bn in May 2010 from its former owner, Mohamed al-Fayed.
FINANCIAL TIMES
Social media blamed for poor data flow
By Roger Blitz, Leisure Industries Correspondent
Widespread use of Twitter and other forms of social media by thousands of spectators lining the men’s cycling road race was to blame for poor transmission of race data, Olympic officials said. The interference meant race officials could not keep track of timings and positions of competitors on Saturday, which also made it difficult for commentators to explain to TV viewers how the four-hour race was unfolding.
Billed as the first social media Olympics, London 2012 has already shown up the significance of mass instant communication at big events such as the opening ceremony, which caused Twitter to break down...The BBC bore the brunt of UK viewers’ complaints about the men’s road race, but made clear that the pictures were produced by OBS, the International Olympic Committee’s in-house broadcast team.
