PRESS DIGEST - Financial Times - Nov 27

Financial Times

DARLING TO CONCEDE RECESSION WORSE THAN HE FORECAST

Chancellor Alistair Darling will admit in next month's pre-budget report that the recession has been much deeper than he previously forecast. He is also expected to reveal that the economy contracted by 4.75 percent in 2009, at least one percentage point more than predicted in the budget. He is also likely to forecast output growth of 1 to 1.5 percent for next year, as he highlights signs of economic recovery ahead of a probable general election in May. Mr Darling remained reticent about the precise forecasts at Treasury questions in the Commons, though he did express a belief that "we will see growth at the turn of the year".

WATER TARIFFS TO REMAIN FLAT, SAYS REGULATOR

The final determination from water regulator Ofwat reveals that water prices will remain broadly flat for the next five years. Average household bills were forecast to fall by 1 percent over the five-year period, from an average of 343 pounds ($572) per year in 2010 to 340 pounds in 2015. Customers of Anglian Water, Welsh Water (Dwr Cymru), and Portsmouth Water will benefit the most, with reductions of 5 percent over five years, though customers of Essex & Suffolk Water, Bristol Water and Northumbrian Water would all experience price rises.

BATTLE CRY FOR THIRD RUNWAY

Willie Walsh, chief executive of British Airways(BAY.L: 行情), has launched a roadshow highlighting the importance to local economies of a proposed third runway at Heathrow. In an address to business leaders in Newcastle, Mr Walsh said that many "London-based journalists and politicians" failed to understand Heathrow's importance as a hub connecting incoming short-haul passengers to long-haul routes, a factor that was recognised by people elsewhere in the UK. He also pointed out that blocking the expansion would divert growth to rival European airports and fail to reduce emissions.

SIGNS OF GROWTH TURN JOBSEEKERS' TIDE

Data released by the Home Office shows that Britain appears to be attracting an increasing number of applications from East European workers following a flood of departures last year. The latest quarterly figures show that work permit applications hit a low of 25,520 in the first quarter of the year, rising to 29,085 in the three months to September. However, the number was still significantly below the 41,265 in the same period last year.

FOOD SALES WHET M&B APPETITE

Pub group Mitchells & Butlers(MAB.L: 行情) has delivered a trading update, revealing a strong start to its financial year. Like-for-like sales were up by 3.2 percent in the eight weeks to November 21, which was twice the growth rate reported for the 2009 financial year. Food sales rose by 5.9 percent, while drink sales gained 2 percent. Chief executive Adam Fowle said that trading had been boosted by a small upturn in consumer confidence, though he expressed caution that this could be "damped" by possible future tax rises.

TRADING OUTAGE AND SHARE PRICE FALL HIT LSE

The London Stock Exchange(LSE.L: 行情) suffered a double blow on Thursday. being hit by a three-hour trading outage and seeing a sharp fall in its share price on investor concerns over the status of its largest shareholder. The LSE's trading system was hit by what the bourse said were "connectivity problems" which caused the longest halt since its collapse for eight hours over a year ago. Earlier the LSE saw its shares drop by 8.8 percent as investors expressed concerns that Bourse Dubai might by forced to sell its stake amid fears of a default by the emirate.

GREEN LIGHT FOR LLOYDS FUNDRAISING