Britain’s debt set to be higher than that of Greece

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By Edmund Conway and James Kirkup

Published: 7:30AM GMT 19 Feb 2010

In surprise news which sent the pound sliding, official figures showed that
the Government borrowed £4.3 billion last month.

It was the first time since 1993 that the public finances had gone into the
red in January – a month in which tax revenues usually push the Exchequer
into the black.

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Reed Elsevier to make fresh disposals as profits slide

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By Rachel Cooper and Rowena Mason

Published: 7:27PM GMT 18 Feb 2010





Reed Elsevier

Erik Engstrom, Reed’s new chief executive, warned that the first half of 2010
would also be challenging, because companies are cutting back on
subscriptions to magazines and information services.

“The performance of most of our subscription businesses tends to lag
economic recovery,” he said. “In marketing and advertising the
rate of decline should start to slow down, but we are going to carry on
restructuring and looking at disposals.”

Full-year pre-tax profits at the publisher sank 29pc to £435m from £617m the
previous year. Overall sales at Reed rose 14pc to £6.07bn on foreign
currency benefits, but advertising revenues fell by 21pc.

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Job cuts at Nokia Siemens and Johnson & Johnson show the economy is still ill

Thousands of job losses at huge global companies were announced yesterday, offering further evidence that the economic slowdown is far from over.
Johnson & Johnson, the consumer goods and healthcare giant, said that it would cut up to 7 per cent of its 117,000 employees worldwide, meaning that as many as 8,190 people could lose their jobs.
Nokia Siemens Networks (NSW), the joint venture between Nokia and Siemens, the telecommunications groups, is set to shed up to 5,700 jobs from its workforce. Rajeev Suri, its new chief executive, is trying to reinvigorate the operation by cutting €500 million (£448 million) from its cost base.
NSW said that it wanted to trim up to 9 per cent of its 64,000-strong workforce and expected to complete the cost-saving plan by 2011. Mr Suri replaced Simon Beresford-Wylie, the Nokia veteran, at the beginning of October.

Johnson & Johnson is the latest healthcare company to have decided to slash costs to negotiate the difficulties of funding research into new medicines. As patents on some of its biggest-selling drugs are close to expiring, it needs to find fresh treatments to fill the gap in revenues. However, bringing a new drug to market costs more than $1 billion (£609 million), with many failing in early stage clinical trials.
By 2011, Johnson & Johnson hopes to save $1.4 billion to $1.7 billion a year through the cuts, with an $800 mill-ion to $900 million cost reduction expected next year. It had already cut about 3 per cent of its workforce in July 2007.
William Weldon, chief executive of Johnson & Johnson, said: “This is what we need to do to ‘rightsize’ the company to make sure we have the resources to invest.”
NSW, which is split 50-50 between the Finnish and German companies, has struggled over the past year. A €908 million impairment charge relating to the unit pushed Nokia, the world’s largest mobile phone maker, into the red in the third quarter. As its owners fight falling sales, they are anxious to cut its costs.
NSW has about 1,000 workers in Britain, where it runs Orange’s network, as well as T-Mobile and 3 UK’s infrastructure. It also owns Apertio, a customer-management platform provider, based in Bristol, which it bought for €140 million early last year.
It is hoped that Britain will not bear the brunt of the cuts as Mr Suri is keen to refocus the NSW business on its services operations — the main part of its UK business. The company also has large numbers of staff in China, India and Brazil, as well as in Finland and Germany.
NSW has increased its workforce since the merger was announced in 2006, when the combined company had 60,000 staff, despite saying at the time that it anticipated trimming up to 15 per cent of its workforce.
Nokia said last month that it expected the unit to lose “significant” market share this year. The company has suffered from competition from low-cost providers, most notably Huawei, the Chinese equipment vendor. Ericsson, its Swedish rival, has weathered the storm better over the past year, but it showed that it was not immune to the downturn in recording a 6 per cent decline in sales during the third quarter.
UPM-Kymmene, a Finnish company that is the world’s largest magazine paper maker, plans to lay off 870 workers and close four mills. Most of the job losses will be in the plywood and sawn timber sectors at its Finnish mills, where it laid off 1,200 workers temporarily this year in an attempt to save costs.
HSBC sheds 1,700 staff
? HSBC is slashing 1,700 back-office staff, taking job losses at the bank this year to 4,600 (Helen Power writes). HSBC — whose chief executive, Michael Geoghegan, has relocated from London to Hong Kong, suggesting its focus for growth is Asia — will close three credit-card processing centres in Southampton, Sheffield and Southend. Rob MacGregor, the national officer of Unite, the bank’s biggest union, said: “Unite views the loss of 1,700 staff as a fundamental mistake. The union does not believe this will do anything to improve the company’s future performance.”

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Aer Lingus underlines woes facing airlines with 600 job cuts

Published: 9:35AM BST 07 Oct 2009

The struggling
airline today announced a slew of measures designed to return the
airline to profit, including 676 job losses and pay cuts for those who earn
more than €35,000 (£32,000) a year.

The move by Aer Lingus comes a day after British
Airways announced plans to cut 1,700 jobs, impose a two-year pay
freeze and change working practices.

Facing the twin threats of the economic slowdown and rising oil prices, the
International Air Transport Association predicts the industry will rack up
losses of $11bn this year - the worst in its history.

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Gordon Brown says global Tobin tax to curb banks’ risky behaviour is ‘worth a look’

AFP

Published: 8:40AM BST 22 Sep 2009

But Mr Brown said greater cooperation between countries to stop excessive risk
taking was required before such a tax could be considered.

France has proposed introducing a tax to be levied on every financial
transaction, known as a Tobin Tax, with the billions of euros raised to be
used to support economic development.

Brown said such an idea was worth consideration, but global cooperation that
is “cemented” and “action that is successful against tax havens” were
required before taking any steps towards the measure.

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Recession ‘could force unemployment toll to 4m’

By
Daily Mail Reporter
Last updated at 8:53 AM on 31st July 2009

Unemployment could reach 3.8millon while national debt may soar to £2trillion, a think-tank has warned
The unemployment rate could hit almost 4million by the end of the recession - far worse than the post-war peak under Margaret Thatcher. A doomsday scenario by the Centre for Economics and Business Research think-tank says unemployment could rise to 3.8million from its current level of around 2.4million. At the same time national debt could soar to £2trillion. Labour taunted the Tories relentlessly during the 1980s when unemployment hit three million. But now the study by the CEBR and the Taxpayers’ Alliance shows that the worldwide economic slowdown combined with Labour’s handling of the economy could see even more people out of a job. The authors conclude: ‘The Treasury must come clean about the risks they are running with the future of the economy and the public finances.’ The CEBR looked at various scenarios on how the economy might develop in the coming years, including ‘pessimistic’ and ‘moderate’ scenarios. Treasury projections imply unemployment of 2.8million by 2011, but the CEBR’s pessimistic modelling finds that the number could reach 3.8million two years later. Even on the moderate scenario, it would be 3.2million. The CEBR’s report also found that public spending will have to be slashed if the Treasury is to meet its target that Government debt should begin to decline by 2017/18.

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Krugman fears prolonged slowdown

By Steve Schifferes
Economics reporter, BBC News

The economic slowdown could last five to 10 years and cost trillions of dollars, a top US economist has warned.

Paul Krugman, who won the 2008 Nobel prize for economics, told the BBC that any recovery would be "so slow it would feel like a recession".

He is urging the US government to introduce a second stimulus package of $500bn (£300bn) to boost the economy.

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Dubai boot camp

Ben Thompson
Reporter, Middle East Business Report, BBC World, Dubai

With sweat pouring down her face, Kate Shannon is first to cross the line.

There are cheers and hugs from her teammates, before she collapses onto the sand to catch her breath. It is only 9am but already 38 degrees celcius.

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S Korea-EU talks yield trade deal

South Korea says it has reached a provisional free trade agreement with the European Union after nearly two years of negotiations.

A South Korean trade official said the two sides had agreed on almost all outstanding issues. Read more

Dexia loss higher than expected

Financial services group Dexia has reported a higher-than-expected loss after further write-downs on the value of its US mortgage-backed securities.

The Belgian-French group reported net loss for 2008 of 3.33bn euros (£2.94bn; $4.24bn), more than the 3bn euros it had forecast at the end of last month. Read more

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