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Britain can afford to live with high debt ‘forever’, says IMF: George Osborne’s obsession with reducing Britain’s debt mountain may do more harm than good, research by the International Monetary Fund (IMF) has suggested

In a spin: Annoying when an appliance or investment goes on the blink. You do not expect that factory-fresh washing machine to shrink your socks. Nor do you expect a freshly-floated tech business, such as online white goods group AO World, to mark its first year on the market with a profit warning. On Tuesday, annual results gave Founder and Chief Executive John Roberts the role of the service engineer who comes around to tell you the motor is fine but the drum is a bit unbalanced. He informed investors AO World was continuing to take market share in the U.K. “despite missing financial expectations”. Full-year sales were up 24% at £477 million and adjusted earnings before nasties were ahead of forecasts at £8.5 million. The company would have broken even at an operating level without a £2.5 million share payout to Managers for the flotation.

Pernod Ricard: Absolut or relative?: Pernod Ricard wants to persuade drinkers that it is worth paying extra for whisky that has spent 18 years in a barrel as opposed to 12. This simple strategy has an ugly name: “premiumisation”. Investors, too, must pay a premium price to participate. Pernod’s shares carry their highest valuation in 10 years, over 20 times earnings, using S&P Capital IQ data. A big factor in the dull growth and margins is the well-documented clampdown on largesse in China last year. That coincided with a U.S. downturn at key brand Absolut — for which Pernod paid €5.7 billion in 2008. Pernod’s vodka sales in the U.S. fell 5% in the nine months to March. Only a return to higher and more consistent growth rates would justify the punchy valuation. At Tuesday’s investor meeting, newish CEO Alexandre Ricard, grandson of the Founder, targeted a return to organic sales growth of 4-5% “in the medium term.” Medium term, indeed: that is double the rate this fiscal year. Shares in rival spirits producers like Diageo and Rémy Cointreau, or even consumer heavyweights Procter & Gamble and Unilever, are not notably cheaper. Shares in strong consumer brands may be an attractive alternative to (say) a bond with a shrivelled yield. That does not make them good value.

British shoppers keep ‘caution’ at the top of their shopping lists: British consumers are still more likely to hunt for a bargain than splash out on a luxury item, and have kept the word “caution” at the top of their shopping lists, according to a leading market report.

Seven Investment Management in talks to sell to Cayzer family: Wealth Manager Seven Investment Management is in advanced talks about a sale to the Cayzer family investment trust, according to people familiar with the situation, in a deal that would mark the latest tie-up in the wealth management sector

Chevron forced to delay flagship oilfield project: Chevron has been forced to delay a flagship project in the Gulf of Mexico after suffering equipment failure, in the latest illustration of the difficulties involved with oil production in deep water.

Petrobras returns to selling debt with rare century bond: Petrobras has made a defiant return to international capital markets after being shunned by investors for more than a year, selling $2.5 billion in rare “century” bonds.

U.K. regulator warns insurers over infrastructure asset risks: Infrastructure assets, which have surged in popularity as investors search for yield when interest rates are at historic lows, have been flagged as potentially risky for insurers by a Bank of England official.

Tory election victory gives builders confidence: Britain’s construction industry has bounced back after last month’s election, with confidence figures rising from a 22-month low as businesses reacted positively to the Conservative victory.

UK construction PMI climbed in May In the UK, the construction PMI advanced to 55.90 in May, compared to market expectations of a rise to 55.00. In the previous month, the construction PMI had registered a level of 54.20.

UK net consumer credit advanced more than expected in April In the UK, net consumer credit climbed GBP 1.17 billion in April, higher than market expectations for a rise of GBP 1.00 billion. Net consumer credit had recorded a revised rise of GBP 1.29 billion in the previous month. UK net consumer credit advanced more than expected in April Net consumer credit in the UK advanced GBP 1.20 billion in April, compared to a revised rise of GBP 1.30 billion in the prior month. Market expectation was for net consumer credit to climb GBP 1.00 billion. UK net lending secured on dwellings advanced less than expected in April In April, net lending secured on dwellings in the UK registered a rise of GBP 1.70 billion, compared to a revised rise of GBP 2.00 billion in the previous month. Markets were anticipating net lending secured on dwellings to rise GBP 1.90 billion. UK M4 money supply climbed in April The M4 money supply in the UK advanced 0.40% on a MoM basis, in April. In the previous month, M4 money supply had climbed 0.30%.

At 0330GMT today, Brent crude oil one month futures contract is trading 0.6% or $0.39 lower at $65.10 per barrel, ahead of the Energy Information Administration weekly oil inventory data, scheduled to be released later today. Yesterday, the contract climbed 0.94% or $0.61, to settle at $65.49 per barrel. However, the American Petroleum Institute (API) showed that US crude oil inventories rose by 1.8 million barrels in the week ended 29 May.

British mortgage approvals grew at their fastest pace in six years in April, the Bank of England said on Tuesday. Mortgage approvals for house purchases totalled 68,076 in April, a share increase from the previous month's reading of 61,945 and the highest level in 14 months, exceeding expectations of a 63,000 reading. The increase was the biggest since February 2009, the BoE said. A combination of cooling house price growth and new controls on mortgage lending saw the number of approvals decline throughout most of last year, although they have risen in four of the last five months. Together with an increase in the pace of price rises, the pickup in approvals suggests a revival might be underway in the housing market. "Mortgage approvals data fully tie in with our view that housing market activity has now turned around and will pick up over the coming months," said Howard Archer, chief European and UK economist at IHS. "This is notably a view shared by mortgage lenders. It is notable that the Bank of England's latest credit conditions survey released in early-April, reported that lenders expect demand for mortgages to pick up in the second quarter." Meanwhile, data released on Tuesday showed net mortgage lending rose by a less-than-expected £1.73bn in April. Consumer credit exceeded expectations and grew £1.17bn compared with consensus of £1bn.

Official figures from the Land Registry show that average house prices are edging closer to their 2007 peak, following an annual increase of 5.1% in April. This puts the average property value in England & Wales at £179,817, compared with £181,014 in November 2007. London is continuing to fuel this rise, with prices in the capital experiencing the greatest annual increase of 10.9%, followed by the South East (8.8%) and the East (7.8%). The North East was the only area to see an annual fall in prices, down by 0.6% compared with April 2014. On a monthly basis, prices rose by 0.9% from March, with Yorkshire and the Humber experiencing the greatest monthly rise (2.7%). Conversely, Wales saw the largest monthly decrease of 1.1%, followed by the North East, which saw a monthly change of -0.5%. It was also revealed that housing transactions have decreased, with the number of completed house sales in England & Wales standing at 54,103 in February 2015 (the most up-to-date figures available), a drop of 17% from 64,994 in February 2014. This followed a similar reduction in transaction volumes in January (-16.1%), suggesting that although prices continue to rise, the market overall is cooling. There are indications that the high-value market is experiencing a particular downturn, with sales of properties worth over £1m falling by 18% in February, with 722 transactions taking place (down from 882 the previous year). This could be a result of the stamp duty reforms introduced in December, which means that those buying high-value properties pay a higher rate of tax.

UK housing: The £24bn Property puzzle As more people struggle to buy or even rent a home, critics say the government should ensure there is an adequate supply

Ultra enhances its electronic war capabilities in $265 million Kratos bid: U.K. Defence firm Ultra Electronics Holdings announced it had agreed to acquire the electronic products division (EPD) of Kratos Defence and Security Solutions for up to $265 million (£174 million).

Strong U.K. market lifts manufacturers amid lacklustre export sales: The U.K.’S manufacturing sector grew at a slightly quicker rate in May, according to a survey, but its growth remains subdued due to weak demand from abroad and lower investment in the oil industry

Bowleven starts drilling onshore well in Cameroon after delays: Bowleven has started drilling its first onshore well in Cameroon after experiencing delays with work in the West African country

U.K. house prices set to surge over rest of 2015 as election uncertainty clears: Boom conditions are back in the U.K. housing market and prices look set for a new surge before the end of the year after the Conservative election victory has galvanised buyers and sellers.

Sell Plus500 on Playtech deal: Plus500’s ended a roller coaster ride for investors when the trading firm accepted a 400p per share cash offer from rival gambling firm Playtech. The problems started when the company halted U.K. customer withdrawals and accounts, after the city regulator, the Financial Conduct Authority, demanded the Israeli firm tighten up “know your client” identity checks. Broker Liberum has estimated that revenue for this year is likely to be flat or slightly below last year’s level following the debacle. Plus500 shareholders must contact their broker and complete a form, which will be sent to the Israel Tax Authority, to apply for this tax relief and avoid paying the higher rate. The whole saga brings to an end one of the more interesting Questor tips. We tipped the shares at 147p (Buy, October 18, 2013) and recommended taking profits after gains of 320% (Time to take some profits at Plus500, May 14, 2014). We also advised an outright sell just two months ago (Sell Plus500 as major investors exit, 682p, April 2). Plus500 at 374.5p+4.5p. Questor Says “Sell”.