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Share Price: 457.50
Bid: 455.80
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Change: 0.90 (0.20%)
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Open: 453.70
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Sunday newspaper round-up: Brexit warnings, Rio Tinto copper, Sports Direct

Sun, 12th Jun 2016 17:19

(ShareCast News) - The Bank of England will face huge pressure to cut interest rates to new lows if Britain opts to quit the EU, according to international investors cited by the Sunday Times. With online and phone polls indicating the result is too close to call, fears that a Brexit vote could derail the recovery are mounting and investors are now betting there is a 50% chance of a rate cut by the end of the year, according to recent moves in interest rate markets, up from nearer 20% three months ago.The Bank of England and International Monetary Fund will both this week warn of the economic consequences of leaving the EU. Minutes from the BoE's latest interest rate meeting are expected on Thursday to say that uncertainty surrounding the referendum is delaying investment decisions and weighing on the pound, while on the same day the IMF is due to publish its annual health check of the UK economy, in which it will warn of a vicious cycle of lower growth, weaker spending and higher unemployment if Britain votes 'leave'.Some of the City of London's biggest overseas banks are planning to pull thousands of workers out of the UK if the country's votes to leave the European Union. With polls tightening ahead of the 23 June referendum, foreign lenders are facing the heightening prospect that their London-based operations could lose the right to operate freely across Europe under the EU's passporting rules, the Sunday Times reported, with Paris and Frankfurt expected to benefit.The jobs market is treading water as cautious companies limit new hirings ahead of the EU referendum on June 23, official figures are set to show this week. Numbers to be released on Wednesday are forecast to show employment rising by about 42,000 in the three months to April, the Mail on Sunday said.Sports Direct has made a last-ditch bid to save BHS from liquidation, writing to administrators to reopen talks to "save a number of stores, jobs and the BHS name". The Sunday Telegraph, which has seen the letter, also reported that the government will take the unprecedented step of publishing the Insolvency Service's investigation into the collapse of BHS due to the major public interest.Sports Direct staff are owed more than £20m, union sources and City analysts have estimated following the admission by the firm's owner Mike Ashley that he failed to pay the minimum wage. Founder and majority shareholder Ashley admitted to MPs last week that staff at the group's main distribution centre had not been paid the minimum wage, because they had been forced to spend unpaid time going through security checks, the Mail on Sunday said.Sir Philip Green considered selling Dominic Chappell the bulk of his Arcadia Group high street empire as well as BHS, said the Sunday Times, citing a previously undisclosed document. Retail billionaire Green, who is due to appear in parliament this week to explain his role in the department store's collapse, initially offered the three-time bankrupt the chance to buy any of Arcadia's brands, except the lucrative Topshop chain.The chairwoman of the BHS staff hardship trust has called on billionaire Sir Philip Green to plug the deficit in the staff pension fund and to make a donation to help those who face financial crisis as a result of the company's collapse. Jeanette Bradley, who has chaired the organisation for a decade and was head of human resources for shop workers at BHS under Green's ownership, told the Mail on Sunday that time is running out for pensioners and is urging Green to step in and make 'a grand gesture'.Rio Tinto has hired Goldman Sachs to engineer a takeover of the mining giant's £8bn listed copper operation as it seeks to position itself for a recovery in the metal's price. The £36bn company owns 51% of Turquoise Hill, quoted on the New York and Toronto stock exchanges, and holds a controlling stake in Oyu Tolgoi, a mammoth copper deposit in southern Mongolia. Copper, the Sunday Times reported, is expected by many analysts to be among the first commodities to rally as it is used in home appliances and is less reliant on construction.A pair of private equity firms are in talks to launch a joint £10bn deal to buy mobile phone provider O2 from its Spanish owner. CVC Capital Partners and Apax Partners, the Sunday Times revealed, are mulling a purchase of the UK's second biggest mobile operator, a month after European competition watchdogs blocked a sale by Telefonica to Three owner Hutchison Whampoa for £10bn.The town of Stanley in northeast England has become the first to offer in-home batteries and solar panels for free, in the latest sign of the huge shifts rocking the household energy market identified by the Sunday Times. The programme, a joint scheme between the town council and a startup called North Star Solar, will be offered to all the town's 35,000 households and is expected to be followed by others aiming to cut the "big six" energy suppliers out of their traditional market by turning homes into mini power stations.Marks & Spencer has again paid its executives bonuses that are based on targets which ignore millions of pounds of goods returned, despite warnings from an adviser that this was 'inappropriate', the Mail on Sunday reported. The issue first came to light last year, when it emerged that the retailer had been reporting online sales to the City that included clothing, shoes and other goods that were paid for but later returned because they did not fit or were faulty. And despite a ticking-off by its corporate stockbroker Citigroup, M&S has again used the higher figure to pay executive bonuses, when the only target met was for online sales growth.Budget airline easyJet has examined setting up a separate European business in case Britain leaves the European Union, the Sunday Telegraph reported. Obtaining an air operator's certificate (AOC) in an EU country, which would require it to establish a local holding company, is one of the options the FTSE 100 carrier has looked at as part of contingency planning in the event of a Brexit.Profits for airlines around the globe are expected to total a record £27bn in 2016 thanks to strong passenger growth and cheap oil. The world's biggest aircraft maker Boeing used figures from the International Air Transport Association to calculate that half of that profit will be made by US airlines, the Mail on Sunday noted.Defence Secretary Michael Fallon is set to run into further controversy over British jobs this week, the Mail on Sunday said, when he signs a key agreement to buy nine US-made Boeing P-8 Poseidon maritime patrol aircraft for $3.2bn to replace the scrapped Nimrod fleet. Fallon is already facing protests over an expected deal to buy 50 Apache helicopters, also made by Boeing, putting the future of 600 aeronautical jobs in the UK at risk.Amazon is preparing to launch a music-streaming service to rival Spotify and Apple Music - the latest in a series of aggressive moves by the online retail giant - after it emerged at the weekend that Amazon is negotiating with big music labels for the rights to use their songs. The standalone service will be offered, initially in America, for $9.99 a month via the Echo device, according to reports, and could offer more than 30m songs, the Sunday Times noted.Bain Capital, a giant US buyout firm, is gearing up to offload British car parts maker TI Automotive less than a year after it bought it, the Sunday Times reported. Bain is exploring a £2bn float of the company, which was founded as Tube Investments in Birmingham in 1919, in New York or London at almost double the £1.2bn deal completed last June.Buyout baron Guy Hands faces a legal bill of nearly £20m after the collapse of his court battle with Citigroup bank over his disastrous 2007 takeover of music giant EMI. Hands, the 56-year-old founder of private equity outfit Terra Firma, is set to be hit with a huge costs order after the long-awaited High Court showdown with Citi lasted only two days, the Sunday Times said.
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