Standard & Poor’s has put a “negative watch” on Argentina’s credit rating, citing “rising restrictions to international trade” and “steps to nationalise oil company YPF” as reasons for the move. Despite affirming its “B” credit rating, S&P added that the South American country’s recent actions “could exacerbate existing weaknesses in the economy”, pointing to high inflation and increasingly rigid government expenditure. The news came after Spain’s Repsol threatened legal action against any company that attempts to invest in YPF following its expropriation by Argentina last week, as the government expressed determination to “pay nothing at all” in compensation to the Spanish oil company, The Telegraph reports.
For six years he held the highest civil servant post in the country, referred to by staff and the media alike as GOD. On Monday, Lord O’Donnell hinted he could run for the top job in finance. Responding to speculation that he could throw his hat into the ring to succeed Sir Mervyn King as governor of the Bank of England, Britain’s former Cabinet Secretary admitted to more than a passing interest in the role. Lord O’Donnell suggested he could apply to replace Sir Mervyn when the governor’s second five-year term comes to an end in June next year. “The post will be advertised in due course and I think between now and the time it is advertised I will have to make up my mind on that question, but I certainly haven’t come to a decision yet,” he told the BBC, The Telegraph writes.
Traders, rating agencies and the European Union at large could soon be “manning the barricades” in France. The country boasts a strong tradition of popular revolt but this time it is a socialist leader who is threatening to trigger resistance. François Hollande’s success in Sunday’s presidential run-off has raised the spectre of a day of reckoning for the self-declared enemy of finance and austerity. Hollande will face opposition from both the markets France needs to finance its huge debt and the EU institutions, in Frankfurt and Brussels, that now have the teeth to enforce new euro spending rules, according to The Telegraph.
A landmark victory for Revenue & Customs to deny wealthy investors £117m in tax relief has ushered in a new era of intolerance towards tax avoidance by the rich. Eclipse 35, a film investment partnership whose members include Sir Alex Ferguson, the Manchester United manager, was barred from claiming tax relief on a complex £1 billion deal with Disney. If the 2007 scheme had succeeded, each of the 289 members of Eclipse 35 could have enjoyed an average of £404,000 in tax relief on a personal investment of £173,000. Other investors included Sven-Göran Eriksson, the former England manager, as well as bankers, chief executive officers and hedge-fund managers. The decision of a tax tribunal could have a wide-reaching effect on dozens of other film schemes as well as other investments designed to achieve high tax reliefs, experts said, The Times reports.
The most relentless lending squeeze on record is stifling companies’ ability to invest and derailing Britain’s fading recovery hopes, businesses warned in the wake of dire Bank of England figures. Lending to companies plunged by £4bn in February — the sharpest drop for almost two years, according to the Bank’sTrends in Lending report. Lending has been falling since the middle of 2009, in the longest contraction since official data began in the 1960s.Lord Oakeshott of Seagrove Bay, the former Liberal Democrat Treasury spokesman, called the figures “horrific”, arguing that coalition attempts to use moral persuasion to lift lending by the country’s nationalised banks had failed, The Times says.
The owner of Gatwick is to acquire Edinburgh airport and has raised the prospect of more direct flight connections with overseas destinations. Global Infrastructure Partners, which also owns London City, will pay £807m for the facility after winning an auction forced upon owner BAA by the Competition Commission. The firm will take ownership at the beginning of June and is expected to conduct an extensive review of operations. Michael McGhee, the partner who led the acquisition talks, said he could not elaborate on future management or staffing of the airport. But he said there would be a focus on improving the levels of service for passengers and the airlines, according to The Scotsman.
British Gas intends to close its Southampton call centre which could result in 550 job losses, in a “blow” to the local area. The energy supplier, owned by Centrica, said it needed to abandon the call centre to “reduce costs” and remain competitive, adding that more customers were going online and did not need to talk to someone about their gas bill at the end of a phone. Unions said the decision to scrap the Southampton site, which has been a local employer for many years, was a blow to the local community. A British Gas spokesman said 50 roles could be transferred to a local site, Chandlers Ford, but the majority of the remaining 500 roles were likely to be cut through compulsory redundancy. Some workers may be offered re-deployment elsewhere in the business, The Telegraph says.
