Small businesses are facing a new credit crunch that is denting confidence and restricting growth even as the UK government launches an 80bn pound scheme to boost lending. In research published yesterday, the Federation of Small Businesses (FSB) said banks are rejecting more than four in ten firms that seek financing, hampering the economic recovery. Andy Willox, the FSB’s Scottish policy convener, said: “The FSB has long argued that without more flexible, affordable finance provided by a wider range of players, any hopes of a sustained Scottish recovery will remain some way off. “The will of small businesses to grow is there, but the money to enable them to do so seems elusive,” The Scotsman says.
It looks like a bailout, it sounds like a bailout and it most definitely will cost taxpayers like a bailout, but nobody wants to use the “B” word because this is election year in the United States. The US Government said last week that it was entering into a “co-operative agreement” with the country’s principle supplier of enriched uranium in a deal that will cost at least $280m (£178m). Yet the bailout of the United States Enrichment Corporation is unlikely to cause the sort of fuss that the Obama Administration’s part-nationalisation of General Motors generated. Republicans attacked that move as “socialist”, but the Grand Old Party leadership has been uncharacteristically quiet about the USEC aid package. Such reticence — and the White House’s enthusiasm — is easy to explain because the deal will benefit the state of Ohio, whose swing voters could be decisive in the presidential election in November, writes The Times.
An experimental drug for gout that AstraZeneca is acquiring could reap sales of nearly $25bn, according to bullish forecasts circulated by the pill’s American developer. The second-largest British pharmaceuticals company expects completion this week of a $1.26bn (£800m) buyout of Ardea Biosciences, a San Diego-based company that is tackling the inflammatory disease often suffered by older men. The deal will be the first significant milestone reached under the leadership of Simon Lowth, who became interim chief executive of AstraZeneca this month after the abrupt departure of David Brennan, who had been under fire from investors. Mr Lowth is eager to bolster AstraZeneca’s thin research pipeline, which has suffered a series of setbacks as medicines have flopped in the final stages of clinical trials, according to The Times.
The future of Cable & Wireless Worldwide is set to be decided on Monday when shareholders vote on a £1bn takeover bid by Vodafone. More than 75% of CWW investors need to vote in favour of the Vodafone deal at a special meeting in the City for it to be approved. The telecoms giant has threatened to walk away from CWW unless it wins full support for its plans. Vodafone has proposed to take control of CWW through a scheme of arrangement that would allow it to secure full ownership of the company and merge it with its own networks. However, Canadian investment group Orbis, which owns 19% of CWW, has warned it could vote against the proposal, The Telegraph reports.
Savers are losing nearly £18bn a year because record low interest rates and high levels of inflation are diminishing the value of their savings, according to new research. The value of UK savings is declining as inflation is kept higher by the Bank of England’s £325bn quantitative easing program and outpaces low interest rates on savings and current accounts. With retail price inflation currently at 3.5% and the cost of living rising, money in any account with interest rates below inflation is actually declining in value. Accountancy firm UHY Hacker Young says £115bn is deposited in accounts with zero interest and even traditionally higher interest accounts such as Isas are losing value because they are paying out just 2.86% a year on average, The Telegraph says.
The 50,000 savers with Bank of Cyprus UK have a nail-biting week to wait until their money – much of it tied up in fixed-interest bonds – falls under the protection of the UK’s Financial Services Compensation Scheme. Until Monday June 25, and possibly later, savers would have to turn to the Cypriot authorities in Nicosia for compensation if the bank buckled amid the worsening Eurozone crisis. Fears centre on today’s Greek elections, which could propel Cyprus, whose finances are entwined with Greece’s, out of the Eurozone, The Daily Mail explains.
Ordering new nuclear-armed submarines would be an “obscenity”, the SNP said yesterday on the eve of the UK Defence Secretary laying the groundwork with a £1bn order. Philip Hammond will today place a contract for nuclear reactors to power new submarines. However, he has insisted a decision over replacing the Trident nuclear weapons in the current Clyde-based Vanguard submarine fleet will be left until 2016. Scottish Government strategy secretary Bruce Crawford said it was committed to the “earliest possible withdrawal” of the nuclear deterrent. “It’s estimated that the costs for the new Trident weapon system could be anything up to £25bn and, over the lifetime, £100bn,” he said. “What is quite clear from Scotland is that the people of Scotland are opposed to the new nuclear weapons system on the Clyde, The Scotsman says.
Majestic Wine is expected to uncork record profits today as Britons continue splashing out on fine wines around big events such as the Royal Wedding. The wine warehouse chain is expected to unveil pre-tax profits of about £22.5m, up from £20.3m last year, helped by growing sales of wines costing in excess of £20 a bottle. Despite the recession, revenues are tipped by house broker Investec to hit £280.8m, up about 9%. Steve Lewis, chief executive of Majestic, said it was “counter-intuitive” but middle-class Britons are increasingly willing to buy a decent bottle of wine – often instead of going out to drink or eat, The Telegraph says.