Slump drags finance jobs to eight-year low
To cover the cost Bank of America
will use existing reserves, sell the serv-
icing rights on 2m loans and use
$2.5bn in representations and war-
ranties provision, but will still have to
take a $2.5bn hit to fourth quarter
earnings, due out next week.
The combined payments of close to
$20bn take the industry a big step clos-
er to cleaning up the disputes from the
boom years and the financial crisis,
though more banks are still in talks
with the Fed and with Fannie Mae.
US stocks on the Dow Jones fell 0.52
per cent, with the share price of most
of the affected banks slipping.
SunTrust led the fall with its stock
down 1.9 per cent, followed by Wells
Fargo which dipped 1.12 per cent.
Bank of America’s stock initially
edged up suggesting markets had
priced in the charge, but it ended the
day down 0.66 per cent.
The compensation payments will see
10 banks give $3.3bn in cash to cus-
tomers, followed by $5.2bn in other aid
such as eased terms on loans.
Individual borrowers will receive
compensation of between several hun-
dred dollars and $125,000.
The banks involved are: Aurora; Bank
of America; Citibank; JP Morgan Chase;
MetLife Bank; PNC; Sovereign;
SunTrust; US Bank; and Wells Fargo.
The settlement ends the time con-
suming process customers have had to
go through until now to claim money
back, bringing in a quicker process.
Bank of America’s settlement with
Fannie Mae sees the bank pay $3.6bn in
THE MAYOR’S Fund for London and Magic Breakfast has today
launched a campaign to provide 5,000 children with free healthy
breakfasts across London’s most disadvantaged areas. Ninety-three
per cent of teachers say they have noticed an improvement in
behaviour and concentration from children who have had a good
breakfast. Mayor of London Boris Johnson said: “The children and
young people of this great city are its future. It is vital that we invest
in these youngsters now in order to ensure the future of our city.”
The Mayor’s Fund focuses on young disadvantaged Londoners.
US BANKS were hit with compensation
payments and settlement costs of
almost $20bn (£12.4bn) yesterday as
regulators and the industry moved to
end long-running rows over the toxic
debt and aggressive repossessions of
the credit crunch era.
Ten banks will have to pay a total of
$8.5bn in compensation and mortgage
assistance to customers who suffered
from bad foreclosure practices, under
an agreement with the Federal Reserve
and the Office of the Comptroller of
the Currency.
And Bank of America Merrill Lynch
has agreed to pay $10.35bn to Fannie
Mae to settle a long-running battle
over bad mortgage books it sold to the
state-backed agency between 2000 and FREE
FTSE 100 M6,064.58 -25.26 DOW M13,384.29 -50.92 NASDAQM3,098.81 -2.85 £/$ 1.61 unc £/€ 1.23 unc €/$ 1.31 unc

Certified Distribution
from 29/10/12 to 25/11/12 is 129,356
BOOTH Page 20
THE COLLAPSE in UK finance jobs
continued apace in December, with
the number of persons working in
regulated jobs falling to its lowest
level since 2004, according to new
data published yesterday.
Just 153,835 people are now on
the Financial Services Authority’s
approved persons list – down 10.6
per cent on the February 2008
peak, analysts at Imas revealed.
The banking sector led the
decline with a 17.2 per cent fall,
taking the number of staff on the
register down to 36,380. Large-scale
savings programmes – Swiss bank
UBS is cutting 11,000 jobs while
Bank of America is losing 16,000 –
are set to roll on for several years.
“Big banks have high cost bases,
and have been hit hard – there is
very little activity in bond, equity
and derivatives markets, so they are
cutting back,” said Robert Harbron
from the Centre for Economics and
Business Research, which estimates
more than 100,000 City jobs have
been lost since the financial crisis.
In addition it is very hard to set
up a new bank, which could also
drag down approved staff levels.
But a few areas have seen growth,
with the number in investment
advice roles up 7.7 per cent.
cash and repurchase certain residen-
tial mortgage loans for $6.75bn, as it
had previously valued them at less
than the purchase price.
“Fannie Mae has diligently pursued
repurchases on loans that did not
meet our standards at the time of orig-
ination,” said the agency’s Bradley
Lerman, arguing the settlement “is in
the best interest of taxpayers.”
Analysts at ratings agency Fitch
praised Bank of America’s settlement.
“The settlement amount is below
expectations under various stress sce-
narios,” the agency said.
“This settlement substantially
addresses much of the uncertainty
related to this exposure.”
The deal follows another last
February, when Bank of America,
Citigroup, Wells Fargo, JP Morgan
Chase and Ally Financial agreed to give
homeowners $25bn to settle claims
over improper foreclosure practices.
The number of staff approved by the FSA fell to an eight-year low in December
*peaked in February 2005 at 11,970
Category Change on February 2008 peak
All approved persons Down 10.6% to 151,835
Lending Down 17.2% to 36380
Finance and mortgage brokers Down 54.9% to 1454
Traders Down 13% to 21052
Debt management and admin Down 19% to 153
Investment distributors Down 12.1% to 27661
Insurance brokers and distributors Up 4.3% to 10,846*
Insurance firms Down 26.8% to 4,809
Insurance support services Down 7% to 1,048
Fund managers, private equity and actuaries Up 7.7% to 45,911
Life firms and mutuals Down 14% to 1530
Financial technology support Up 22.2% to 912
Research and outsourced services Up 41.8% to 2539
BUIK Page 18
Follow me on Twitter: @allisterheath
MARTIN Glenn, the boss of Iglo
Group, which includes Birds Eye
foods, is quitting after six years
running the company.
The chief executive will leave in
the next few months, Sky reported
last night, after leading the
company through the recession
and austerity.
Birds Eye products have done
well in straitened times, as cash-
strapped consumers have switched
from fresh to cheaper frozen
goods. Birds Eye is owned by
private equity firm Permira.
Birds Eye boss
to step down
THE US Securities and Exchange
Commission (SEC) is investigating
whether accountancy firm Ernst &
Young violated auditor rules by
letting its lobbying unit perform
work for several major audit clients,
according to Reuters.
US rules bar auditors from serving
in an “advocacy role” for audit
clients. An SEC spokesman declined
to comment. An Ernst & Young
spokeswoman told Reuters: “All of
our services for audit clients
undergo considerable scrutiny to
confirm they are consistent with
applicable rules.”
Goldman says austerity
plan is slower than peers’
THE SPENDING cuts and tax hikes
scheduled to hit the UK in 2013 are
milder than most other advanced
economies, according to a Goldman
Sachs research note out yesterday.
Fiscal policy is planned have a
tightening effect of about one per
cent of GDP this year, Goldman esti-
mates, as the government brings the
budget deficit down from the 11 to
12 per cent of GDP it hit during the
heights of the crisis.
But criticism from Labour and
other commentators, attacking the
government’s austerity programme
as “too far too fast” is wrongheaded,
Goldman suggests. “Contrary to pop-
ular perception, the speed of the
planned fiscal adjustment in the UK
in 2013 is actually slower than it is in
most other advanced economies,”
the authors say.
And even though the cuts will add
to the demand shortage in the UK
economy, failing to arrest the speed
the national debt was growing
would have risked a debt crisis led to
“a much worse demand problem” in
the long run, the researchers say.
These comments came in a note
arguing that chancellor George
Osborne and the Treasury would
stick to their so-called Plan A – and
continue trying to erase the cyclical-
ly-adjusted structural budget deficit.
Icelandic raider pleads not guilty
Jón Ásgeir Jóhannesson, the Icelandic
corporate raider who used to own large
parts of the UK high street, has pleaded
not guilty as one of the most notorious
sagas in the collapse of the Icelandic
banking system came to court.
Obama announces new security team
Barack Obama has announced his new
national security team, tapping loyalists
to oversee the continuing pursuit of
terrorists, the implementation of defence
budget cuts and a drawdown of US
military operations overseas. Shrugging
off a campaign against Chuck Hagel as
secretary of defence for his views on Iran
and Israel, Obama said the former
Republican senator was the “leader our
troops deserve” and urged the Senate to
approve him “promptly”.
China media stand-off escalates
Striking Chinese journalists have
escalated their stand-off with censors in
the southern city of Guangzhou,
presenting Beijing’s new leaders with
their first full-blown political crisis since
taking power in November.
Music stops again for Virgin
Virgin France is to close its megastore on
the Champs Elysées and file for insolvency
after a collapse in sales. The music chain
says it is drawing up an emergency plan to
save some of its 27 stores in France.
Wales’s biggest firm looks to grow
IQE, the Cardiff business that uses clever
nanotechnology to manufacture wafers for
microchips, is believed to be in the process
of raising £17.5m with which to make an
US seriously mulling $1 trillion coin
The US is seriously considering creating a $1
trillion (£620bn) platinum coin to write
down part of its debt to stop the world’s
largest economy defaulting as early as next
month, financial analyst Cullen Roche told
BBC’s today programme yesterday.
Sterling faces triple cocktail in 2013
Sterling will weaken this year, HSBC said, as
the UK faces a potentially testing triple
cocktail of sovereign downgrade looms,
austerity hits and the fiscal cliff fades away.
Netflix signs Warner Bros. deal
In a sign that Netflix’s appetite for new
content remains as healthy as ever, the
video-streaming service struck a licensing
deal with Warner Bros., covering a series of
fresh TV shows.
France looks to hike internet costs
The French government is studying ways
to push large web companies to pay local
internet providers more for the
bandwidth being used, a minister said
BALFOUR Beatty last night said Ian
Tyler will step down from his role
as chief executive on 31 March,
marking the end of an eight year
stretch at the top of the FTSE 250-
listed infrastructure group.
Tyler will hand the reins to
deputy chief executive Andrew
McNaughton before “exploring new
opportunities outside Balfour
Beatty”, he said in a statement.
The firm has trebled in size
under Tyler’s tenure, the firm said,
though this year it has seen tough
trading that prompted a profit
warning in November.
McNaughton was promoted to
Tyler’s deputy in July, as part of the
board’s succession plan. He has
worked for the firm since 1997.
“The board is delighted that
someone of Andrew’s calibre has
developed from within the business
and is now ready to take over the
role of chief executive from Ian,”
said chairman Steve Marshall.
Balfour, which is due to release a
trading update today, also revealed
yesterday that it will work
with Skanska on a £321m
contract to upgrade parts
of the M25, and its US
arm has won a power
station contract.
Balfour Beatty
chief to hand
reins to deputy
Goldman Sachs analysts predicted George Osborne would stick to his so-called fiscal Plan A
To contact the newsdesk email
F you travelled abroad over
Christmas, you will have noticed
that goods in shops are often
cheaper than in the UK. A uSwitch
survey cited by the Institute of
Economic Affairs shows that a food
basket costs roughly a fifth more in
the UK than it does in Germany,
France and the Netherlands.
Once again, misguided rules are
responsible for Britain’s woes and for
the excessively high prices that are
hurting all of us – and the poor espe-
cially badly. As explained in an excel-
lent paper by Paul Cheshire, Christian
Hilber and Ioannis Kaplanis, pub-
lished by the London School of
Economics’ spatial economics centre,
planning policies, including the noto-
rious “town centre first” ideology,
have had a devastating impact on
retailers’ productivity – and thus
pushed up the cost of food and goods
Daft planning rules are pushing up the price of food in shops
sold by supermarkets. The LSE paper –
published in 2011 but which I finally
read over Christmas – found that the
total factor productivity of supermar-
kets has been reduced by at least 20
per cent since the late 1980s by plan-
ning policies. Three main factors have
increased space costs and hence
prices: the restriction of the total
availability of land for retail; rules
directly limiting store sizes; and rules
concentrating retail development on
central locations, rather than in out
of town locations. Every minister
should study these findings; we shall
soon find out whether the coalition’s
“relaunch” will actually lead to real
action being taken on this vital front.
Older statistics suggest that at one
stage in British cities the most expen-
sive land for retail was 250 times as
expensive as the most expensive retail
land in comparable US cities. More
recent estimates cited by the authors
suggest that the cost of land for UK
supermarkets is at least five to ten
times greater than in similar
Continental European countries. No
wonder food and other retail goods
are cheaper in those countries; exces-
sive land prices are being passed on to
the consumer, as ever.
Several studies, including one by the
European Commission, have shown
that the planning system also artifi-
cially restricts the competition
sive price of homes relative to
incomes, especially in London and
the commuter belt. But such restric-
tive policies are equally detrimental
to commercial property – and are
therefore pushing up retail prices, the
cost of living and office costs.
I’m certainly not calling for sky-
scrapers in every back garden, or for
the paving over of the countryside –
just for a little more common sense,
greater respect for ownership rights
and a move towards a genuine mar-
ket in property, including mecha-
nisms to compensate losers from
development. Planning rules are now
one of the key factors preventing a
genuine, sustainable recovery of the
UK economy. The coalition needs to
take urgent, radical action.
between supermarkets.
The cost of other kinds of commer-
cial property is also being propped
up. Separate work by Cheshire and
Hilber has found that planning red
tape has massively hiked the cost of
office space – thus also pushing up
rents, the cost of doing business and
hitting jobs. They found that the
extra burden imposed by the UK’s
land use planning system was “not
only substantially higher than in any
other country for which it was possi-
ble to get the requisite data but over
1999-2005 imposed the equivalent of
a tax on construction costs of more
than 800 per cent in the most con-
stricted jurisdiction where demand
was strongest – London’s West End.”
There is growing recognition that
the UK’s housing policies are far too
restrictive and that insufficient house
building is a key reason for the exces-
Goldman said it thought the Office
for Budget Responsibility (OBR) – the
official fiscal watchdog – had now
revised its forecasts to a reasonable
point, after data came in consistently
far worse than predicted. Since policy
is made based on OBR projections, if
these are roughly accurate, the chan-
cellor will not have to engage in any
extra unpopular austerity measures to
meet his remaining deficit target.
And loosening up fiscal policy was
not the only economic intervention
Goldman thought to be on balance
misguided. The bank’s researchers
claimed evidence had shown that the
Bank of England’s quantitative easing
programme was “largely ineffective in
reducing the cost and/or easing the
availability of credit to the private sec-
tor” and said the Bank was unlikely to
add to its £375bn stock of gilts in 2013.
Further, the authors did not place
faith in a switch to targeting nominal
GDP, a policy switch raised by incom-
ing Bank of England governor Mark
Carney and welcomed by Osborne, and
claimed such a change could lead to
out-of-control inflation.
COMMENT: Pages 19, 20

The new jobs website for London professionals
Incoming Balfour chief
Andrew McNaughton
Ernst & Young
probed by US
COAL miner Bumi yesterday agreed to
a meeting to discuss Nat Rothschild’s
plans for a board overhaul, although it
added that the financier must take a
“significant amount of responsibility”
for the company’s situation.
Bumi co-founder Rothschild is seek-
ing to remove 12 of the 14 current
directors – including chief executive
Nick Von Schirnding and senior inde-
pendent director Sir Julian Horn-
Smith, among others – and replace
them with new directors, including
himself. His proposal has the support
of Schroders’ UK head of equities
Richard Buxton.
Bumi yesterday defended its board,
saying it had taken “extremely serious-
ly” the findings of the Macfarlanes
investigation, and that Bumi’s board
structure had changed “materially”
over the past few months.
“As a board we have been working
extremely hard to solve the various
highly complicated and challenging
governance, operational and legal
issues at the company and to max-
imise value for shareholders,” senior
independent director Horn-Smith said
The Bakrie family, who brought in
Indonesian arm Bumi Resources,
called Rothschild’s proposal “a distrac-
tion”, and again called for the finan-
cier to give up his 16m bonus shares.
Bumi agrees to
Nat Rothschild
board meeting
APPLE has seen more than $10bn
(£6.2bn) spent on apps since it
launched its App Store four and a half
years ago.
The iPad and iPhone maker said
that more than 40bn apps have been
downloaded since July 2008, and that
the rate is increasing, with nearly
20bn of those downloads occurring in
2012 alone.
Apple takes a 30 per cent cut on all
apps, meaning that it has raked in
over $3bn and paid $7bn to develop-
ers since the App Store opened. This
business alone would make Apple one
of the world’s biggest media firms.
The company said December
had been record-breaking, with
more than 2bn apps down-
loaded in the month
that millions of iPhones
and iPads were
unwrapped on Christmas
Over 775,000 apps have been
developed since Apple introduced
App Store has
made $10bn in
sales for Apple
the store along with the launch of its
second-generation iPhone, the 3G.
“Developers have made over seven
billion dollars on the App Store, and
we continue to invest in providing
them with the best ecosystem so they
can create the most innovative apps in
the world,” Apple’s software chief
Eddy Cue said.
App development has become an
increasingly lucrative business for
developers. One of the most success-
ful, Swedish firm Rovio, is now esti-
mated to have revenues of more than
£100m from its wildly-popular Angry
Birds franchise. Meanwhile, average
salaries for app developers in the UK
are now at an all-time high of
£70,000, according to ReThink
Recruitment. Of the 775,000
apps available, around
300,000 are dedicated to the
iPad, Apple said.
Citi’s Corbat hires new exec team
CITI’S new chief executive Michael
Corbat yesterday announced a root
and branch overhaul of the bank’s
senior leadership team just three
months into his tenure at the firm.
Corbat, who replaced former
chief executive Vikram Pandit after
his high profile exit in October, has
promoted Citi veterans Jamie
Forese and Manuel Medina-Mora to
be his key lieutenants in the new-
look regime.
Forese will oversee the bank’s
institutional business and Manuel
Medina-Mora will look after its
consumer banking interests.
Citi also announced plans to
restructure its operations and
technology division, breaking out
the parts underpinning its
commercial and institutional side
and placing them under the control
of Forese and Medina-Mora, as it
seeks to modernise its operations.
The overhaul
follows a torrid
year for Citi,
which saw a
dramatic dip in
profits and the
shedding of
11,000 jobs at the
Yesterday’s announcement also
saw Jim Cowles made chief
executive of Europe, the Middle
East and Africa. He was formerly
chief operating officer for the
region. “Having worked with Jim
very closely last year, I have great
confidence in his ability to lead our
businesses in the region,” Corbat
Top risk officer Brian Leach
has also been made responsible
for overall compliance at the
BRAZILIAN football legend Ronaldo is heading to the UK to work for Sir Martin Sorrell’s
advertising giant WPP. The 37-year-old, who owns sports marketing company 9ine with
WPP, will work on deals ahead of Brazil’s 2014 World Cup. Ronaldo told a Brazilian
newspaper: “Learning from Martin Sorrell will be perfect. I won't leave him alone.”
Medina-Mora (l) and Forese
are Citi’s key lieutenants
Angry Birds is one of
the top-selling apps
CES 2013: Page 13

big four will face a grilling over
the payment protection
insurance (PPI) mis-selling
scandal from a sub-panel of the
Parliamentary Commission on
Banking Standards (PCBS).
The commission, headed by
Conservative MP Andrew Tyrie,
who also chairs the Treasury
Select Committee, is looking for
top executives involved in the
retail side of the banking
business, which sold PPI. It has
PPI mis-selling bankers to face
banking commission grilling
set up a sub-panel, led by Lord
McFall of Alcuith, and manned
by Lord Turnbull, Pat McFadden
MP, Mark Garnier MP and
Andrew Love MP.
This could potentially include
Barclays chief executive Antony
Jenkins, who used to run
Barclaycard, though the
commission has not yet
identified the bankers it wants to
talk to. Barclays declined to
Royal Bank of Scotland, Halifax
and HSBC make up the other
three of the big four UK banks.
BANK shares jumped yesterday after
regulators eased incoming liquidity
rules, giving banks more time to
build up their buffers as well as let-
ting lenders use a wider range of
The aim of the rules is to make sure
banks have a buffer of liquid assets
big enough to match outflows of cash
in a month-long stressed position.
Initially, they were meant to come
in in 2015, but the authorities feared
that could be too rapid, forcing banks
to raise buffers at the expense of lend-
ing and so harming the economy.
Now the rules will be phased in
from 2015 to 2019.
Barclays, RBS and Lloyds all saw
their shares jump sharply – Barclays
led the field with a 3.79 per cent rise.
The banks declined to comment,
but a source at a major lender said the
change was a very positive step.
“Banks have been pulled in several
different directions by regulators, and
it is good that they have recognised
the need for growth,” the source said.
Yesterday the Basel Committee on
Banking Supervision gave more
Markets lap up
easing of bank
liquidity rules
details on the instruments allowed
towards the buffer – including the
retail mortgage backed securities
(RMBS) which will be allowed to make
up below 15 per cent.
They must not be issued by the bank
itself; must have a double-A rating or
better; must be traded in large, deep
and active repo or cash markets; have
a track record of liquidity in markets
even under stressed conditions; and be
based on residential mortgages and
contain no structured products; the
owner of the underlying mortgages
must be liable for any shortfall in sales
proceeds from the property in the
event of a foreclosure; and the issuer
must retain a stake in the assets they
securitise. Similar conditions are
applied to the new equity and corpo-
rate debt securities now eligible.
But despite the tough constraints
bankers praised the move to allow
RMBS into the buffer, both because it
gives another source of liquidity and
because it creates more uses for RBMS
and so stimulates the market.
The authorities also said the buffer
must be regularly tested, selling or
repoing assets to make sure they as liq-
uid and valuable as expected.
Tough new funding rules next
target on finance lobby hit list
BANKS will spend the coming years
pushing regulators to scrap incom-
ing rules which will force them to
match long term lending with long
term funding, emboldened by their
success in getting liquidity rules
weakened, City A.M. has learned.
The British Bankers’ Association
spent several years arguing the
Liquidity Coverage Ratio would
force banks to reduce lending and
so harm the economy, resulting in
regulators giving banks a longer
timetable to comply, as well as a
wider range of instruments to use
in building their liquidity buffers.
So the BBA has now set its sights
on the net stable funding ratio
(NSFR) rules, coming in in 2018.
They will force lenders to back
loans with long-term funding,
which banks say effectively ends the
maturity transformation model on
which they rely, pushing up costs
for customers and hitting lending.
On top of that insurers are facing
new rules which make it more
expensive for them to lend funds
for a long time, making it harder
for banks to get such funding.
“We want regulators to lower the
proportion of one year plus funding
required to recognise such longer
term funding will be expensive for
banks, if it is available at all,” said
the BBA’s Simon Hills.
“That extra cost can only be
passed on to customers. It might
not have a huge impact on
residential mortgages, but for
infrastructure finance the costs will
rise which will affect things like the
price of renewable energy.”
Sir Mervyn King heads Basel’s supervisory committee and announced the easing of the rules
FORUM: Page 21

What is the LCR?
The Liquidity Coverage Ratio is a
measure intended to decide how
big a buffer of liquid assets a bank
needs to survive a month-long
squeeze. The bank will be able to sell
the assets in the buffer to cover the
outflow of cash in the tough period,
relying on its own assets rather than
the central bank.
Residential mortgage backed
securities are assets made up of a
bundle of mortgages. They got a bad
name in the crisis, but
high quality ones are
fundamentally strong
and based on real
underlying assets. But they are not
considered as strong as, say,
government bonds, so banks will
only be allowed a small number in
the buffer.
What about HQLA?
The buffer must be made of high-
quality liquid assets – that is,
assets that they can sell even in a
crisis, and which are not tied up as,
say, collateral in other deals.
LORD Strathclyde, Leader of the
House of Lords, resigned yesterday
after 25 continuous years on the
Conservative front bench. The
hereditary peer, 52, said he took the
surprise decision to quit the cabinet
halfway through this parliament so
he can pursue a second career in
business before it is too late.
“I started my life in the private
sector and at some stage always
hoped to return, I would now like to
do so,” he told the Prime Minister in
his resignation letter.
It is unclear what role Strathclyde
has in my mind but he began his
career in the City as an insurance
broker with Bain Clarkson. He
continues to be a name at Lloyd’s of
London, controls his family’s estate
management business and has held
various non-executive directorships.
His parliamentary private
secretary, Nigel Adams MP, told City
A.M. that the peer has been
an “incredibly astute and
popular politician” who
served with distinction
and “will be sorely missed”.
Strathclyde will be
replaced as leader by
Lord Hill, a former
political secretary
to John Major.
Lords leader
quits to return
to business
DAVID Cameron and Nick Clegg yes-
terday insisted the coalition would
last a full five-year parliamentary
term and said a range of policy
announcements on infrastructure
investment, childcare costs and
housebuilding would form the basis
of the government’s work for the next
two years.
Despite this a leading business
group responded by demanding the
duo “go further, faster” and imple-
ment more radical reforms before the
May 2015 general election.
“The government must redouble
their efforts to enact radical reform
across the board,” said Graeme Leach,
of the Institute of Directors. “On tax
simplification, slashing red tape and
setting the private sector free to grow
we need to see the coalition put the
pedal to the metal.”
CBI director-general John Cridland
agreed: “We don’t need a flurry of
new announcements, but we do need
to see the coalition’s ideas translated
into action now.”
Speaking at a rare joint press confer-
Cameron and
Clegg pledge to
stay until 2015
ence to launch the part-appraisal, part-
manifesto mid-term review document,
the PM and his deputy insisted they
were happy to govern in a coalition.
“It’s not a marriage, it’s a Ronseal
deal, it does what it says on the tin,”
Cameron said. “We said we would
come together, we said we would form
a government, we said we would tack-
le these problems, we said we would
get on with it in a mature and sensible
way and that is exactly what we’ve
done.” Clegg agreed, saying this was
the “unvarnished truth”.
Many of the policies in the mid-term
review have already been announced,
while details on other measures
trailed in the 48-page document –
such as plans to reduce the cost of
childcare, an improved state pension
and caps on care home fees – are
expected before the Budget in March.
Meanwhile MPs will today debate the
Welfare Benefits Up-rating Bill, which
seeks to limit increases to most work-
ing-age benefits to one per cent. Last
night Labour successfully tabled an
amendment backing a jobs guarantee
for the long term unemployed.
Clegg and Cameron last hosted a joint Downing Street press conference in 2010
Strathclyde is an
ex-tourism minister
n Set out detailed plans for public
spending for the 2015-16 fiscal year
before the summer.
n Move as “rapidly as possible towards a
national high speed rail network” by
bringing forward legislation for High
Speed Two.
n Accelerate the road building
programme and upgrade key roads such
as the A1 to motorway standard.
n Encourage private sector investment in
infrastructure, especially the road
n Backing for Airports Commission into
additional capacity.
n Cap care home fees for the elderly and
help parents with the cost of childcare.
n Create a £10bn debt guarantee scheme
to support the construction of new homes
to be made available for private rent or to
buy at an affordable price.
n Invest in action to cut down on tax
evasion and avoidance, with the hope of
raising an additional £2bn a year.
n Strengthen consumer rights against
energy companies and rogue bailiffs.
n Introduce a register of lobbyists before
the next election.
n Reform the state pension to reward
individuals who save for retirement.
n n
MORRISONS chief executive Dalton
Philips yesterday defended his strate-
gy for the group after the grocer con-
firmed its position as the turkey
among “the big four” this Christmas.
The grocer reported a 2.5 per cent
slump in like-for-like sales in the six
weeks to 30 December, despite the
help from an extra pre-Christmas
trading day compared with last year.
Philips said the performance was
“disappointing” and admitted the
grocer’s main challenge was “the
accelerating importance” of online
and convenience.
Philips added that while core cus-
tomers stuck with the grocer over
Christmas, it had lost “floating cus-
tomers” to other grocers via promo-
tions and vouchers.
He said Morrisons needed to
improve on marketing and “shout
about our points of difference” such
as its skilled butchers and bakers.
The group announced it has pro-
moted Nick Collard to marketing and
customer director to spearhead its
Morrisons says
Christmas sales
BY KASMIRA JEFFORD marketing strategy.
Morrisons has lagged behind rivals
in moving online and opening conven-
ience stores. It has opened 12 M Locals
so far and plans to open another 70 by
the end of this year.
The grocer has in the past been reti-
cent about launching online grocery
but Philips said Morrisons was looking
closely at the idea and would update
the market in March.
Defending claims that his role at the
grocer is likely to come under scrutiny
if sales continue to slide, Philips said:
“It’s not just about month-on-month
figures, you have got to look at direc-
tion of travel”.
has become the
latest retailer to
boast of a bumper
Christmas, with
like-for-like sales
up 6.3 per cent in
the period.
Following hot on
the heels of rival
John Lewis, the
department store
group said in a
trading statement
yesterday that its
stores performed
well while online
sales rose a record
48 per cent, with
mobile devices
accounting for 35
per cent of sales.
WM Morrison Supermarkets PLC
31 Dec 3Jan 2Jan 4Jan 7Jan
264 p
Kelly Brook in a dress she
designed for New Look
VALUE fashion retailer
New Look said it enjoyed
a stellar Christmas
trading period as it
benefited from
shoppers delaying
spending and
hunting for bargain
The firm, owned
by private equity
groups Apax,
Permira and
founder Tom Singh,
posted a 3.7 per
cent rise in UK like-
New Look says turnaround plan
paying off as festive sales rise
BY KASMIRA JEFFORD for-like sales for the 14 weeks to 29
Group sales were 4.5 per cent
ahead of last year.
Chairman Alistair McGeorge
said its performance was “ a
testament to the success of our
recovery programme and the
strength of our brand”.
The retailer, which has over
£1bn of debt, has been
attempting to revive sales by
revamping stores and
targeting a more mature
This trading statement is grim, but there is no direct profit warning, in
part because consensus continues to fall. We see continued downside to consen-
sus profits for 2014 and 2015, given the likely sales underperformance
and the costs of entry into new channels.

Despite soft comparables, Morrison has had another difficult Christmas
showing that management’s more aggressive promotional strategy has not res-
onated with customers...we expect Morrison to continue to underperform
the industry with risk to consensus forecasts on the downside.

Morrisons ability to deliver its leading fresh offering to consumers through
the fastest growing trading platforms will take time, and in that process trading
updates will remain largely unhelpful. However, we believe that signs of
progress should become more evident by the start of the second half.

EXPECTED? Interviews by Kasmira Jefford


BRITISH retailers failed to see a
Christmas boom, with sales only
edging up on the year and failing to
beat inflation, according to industry
data out today.
Total sales rose just 1.5 per cent
compared with December 2011,
according to the British Retail
Consortium. That compares with
the latest inflation data showing
prices rose by 2.7 per cent in the 12
months to November.
“Against the relentlessly tough
economic backdrop and low
expectations, these results are not a
cause for celebration,” said the
BRC’s director general Helen
But online sales continued to
soar, rising 17.8 per cent, only
slightly slower than the 18.5 per
cent rise in the previous year.
They now make up just over 10
per cent of all retail sales.
Bad Christmas
for retailers as
sales stay flat
UNIVERSAL MUSIC has appointed
a new boss for its international
divisions ahead of a sale of high-
profile assets.
The company – owned by
French media giant Vivendi –
yesterday promoted veteran Max
Hole to be chief executive of
Universal Music International.
Hole, who was instrumental in
Universal’s recent acquisition of
the EMI label, will be in charge of
the company’s presence outside of
the US, effectively
making him
number two at
Universal under
chief executive
Lucian Grainge.
comes as bidding
for some of EMI’s
assets – which
Universal has
ordered to
sell off
Universal hires
exec as rivals
vie for assets
following its £1.2bn acquisition –
hots up, with Sony Music and
Bertelsmann’s BMG teaming up
for a bid.
The two parties are bidding
together with a roughly equal
investment, but will break up the
assets. BMG, whose core business
is in music rights management,
could take rights to legacy artists
such as Pink Floyd and Genesis,
with Sony owning rights to more
current artists, should a deal go
through. Discussions are expected
to be completed within weeks, in
stark contrast to the months it
took for Universal’s EMI purchase
to complete.
There are several parties bidding
for EMI assets, sources close to the
deal said, with a bidding war for
some of the most valuable
property set to erupt. The most in-
demand of the labels EMI is selling
is Parlophone, home to Kylie
Minogue and Coldplay.
Retail sales barely rose in December
Jan2010 Jan2012
8 %onyear
Max Hole is Universal Music
International’s new CEO
TRAVELODGE yesterday hired
Hilton veteran and trained
accountant Brian Wallace as its
new chairman, with chief
executive Grant Hearn heralding
the appointment as key to the
future of the budget hotel
chain’s “successful growth
Wallace brings experience at
some of the world’s biggest hotel
chains, including 12 years at
Hilton where he had stints as
finance director and deputy chief
He has also worked at
Travelodge names industry vet
Brian Wallace as new chairman
BY CITY A.M. REPORTER companies including
Schlumberger and Ladbrokes as
well as holding non-executive
positions at Miller Group, Hays
and Scottish & Newcastle.
He is currently a non-executive
director of transport company
“I am delighted to be joining
Travelodge at an exciting time in
its history,” Wallace said
yesterday. “The management
team did a great job last year in
successfully achieving the
financial restructuring of the
business. I am really looking
forward to working with Grant
and his team.”
Brian Wallace has worked at Schlumberger, Ladbrokes and Hilton during his career
PRIVATE equity heavyweight The
Carlyle Group is set to cash out its
remaining stake in China’s third
largest insurer China Pacific
Insurance, reaping a record profit of
around $4bn (£2.5bn) for investors.
The group, based on the same
avenue as the White House in
Washington DC, has released a term
sheet detailing plans to sell its final
allotment of shares in the firm,
bringing to a close a seven year
The deal will make China
Pacific Insurers the private equity
house’s most successful trade
ever, after it originally
ploughed $740m
into the fledg-
ling company
Carlyle to leave
Chinese insurer
on record high
between 2005 and 2007, before it went
The final tranche of shares to be
sold – some $790m, or 7.3 per cent of
the Hong Kong-listed firm – would take
to $5.1bn the amount of money Carlyle
has made from selling its holdings.
China Pacific Insurance is the third
largest insurer in China behind China
Life Insurance and Ping An. Carlyle
cuts its holdings in the group
to 8.81 per cent from 18.38
per cent in July having
steadily wound down its
holdings since 2010 after
the Hong Kong-traded com-
pany’s share price started to
rise. Goldman Sachs and UBS
are placing the shares.
UK forecast to hold rates for
five more years to fight slump
THE BANK of England will have to
keep printing money to stimulate
the weak economy and will keep
interest rates at 0.5 per cent or
below until 2017, analysts at Citi
warned yesterday.
And the UK is likely to lose its
triple-A credit rating this year
because the government is still
adding to the national debt very
rapidly, the researchers warn.
The private sector will keep
paying down its debts rather than
increasing borrowing and
spending through this year,
keeping a lid on British growth.
“It is more than five years since
the financial crisis began, and the
economy remains stuck in a
liquidity trap, with persistent
headwinds from private
deleveraging, poor credit
availability, fiscal policy and the
Eurozone crisis,” said economist
Michael Saunders.
“Even after colossal monetary
easing, the level of real GDP in the
third quarter of 2012 was still 2.9
per cent below the pre-crisis peak,
with real GDP per head 6.2 per cent
down — making this by far the
worst recession / recovery cycle of
recent decades.”
That could get worse with the
economy potentially hitting a
triple-dip recession. Growth is
believed to have ground to a halt in
the final three months of 2012, and
continued deleveraging is forecast
to continue for the years ahead.
“Real household disposable
income per head is unchanged
from the 2004 level, and surveys
show that households remain
gloomy on their financial
prospects,” said Saunders.
Bill Conway co-
founded Carlyle
The Capitalist is pleased to announce
news of the Mayor’s Fund for
London and Magic Breakfast’s cam-
paign to provide 5,000 children
with free healthy breakfasts.
The Mayor’s Fund has teamed up
with Cazenove Capital
Management, Tropicana Orange
Juice and Quaker Oats and is invest-
ing £660,000 to feed kids in schools
all over London – including
Hackney, Islington, Lambeth,
Lewisham, Newham, Southwark
and Tower Hamlets.
Today the Mayor of London Boris
Johnson (pictured above) backed up
a previous promise to invest in the
youngsters of the future, saying:
“Eating the right type of foods
boosts learning, but unfortunately
Mayor’s Fund
backs healthy
brekkie for kids
some children are missing out on
this vital first meal of the day.  This
brilliant scheme will be a catalyst
for helping fuel the energy of thou-
sands of pupils and enable them to
reach their full potential.”
The three-year scheme will pro-
vide London school children with
over 100,000 bagels and 62,000
bowls of cereal and porridge each
year, as well as 93,000 glasses of
fresh juice.
Chief executive of the Mayor’s
Fund for London Matthew Patten
revealed: “One in three young
Londoners live in poverty and many
of them arrive at school in the
morning having had nothing nutri-
tious to eat since their school lunch
the previous day.”
FOCUS is firmly on the youth of the City this week, with the Lord Mayor Roger Gifford opening
up Mansion House over the weekend to host 350 children from London boroughs for a fancy
dress party. A source tells The Capitalist he even led a conga line at the end of the day – but it
was back to the serious business last night, for the traditional Plow Monday dinner.
Got A Story? Email
For all City folk who’ve resolved to
bring in their own lunch in the New
Year – and failed – welcome Pret's new
January menu. Three new chef’s specials
are on shelves, and The Capitalist cannot
help but wonder if the Pret marketing
gods have been watching too many
seductive M&S food advertisements over
Christmas. The saucy advertising boasts
“Our vibrant naked avocado bloomer
features beautiful avocado and aromatic
basil leaves gently plucked from the
stem, on a pile of spicy wild rocket” or
alternatively a “Lovingly seasoned and
tantalising grilled tortilla wrap with a
squeeze of lemon” might just whet the
City A.M. reported before
Christmas that Twitter faced being
slapped with a fine for failing to file its
UK accounts on time at Companies
House. The internet giant racked up
automatic penalties after missing the
deadline by more than a month. The
Capitalist notices the social network has
now filed the slimmest of financial
statements, which begs the question–
why be tardy for so few sheets. A flick
through the pages, however, reveals that
TweetDeck Limited, a subsidiary
company, is marked with “proposal to
strike off.” The Tweeters declined to
comment on the possibility of it being
struck off as a separate company.
School children
in the City
enjoying their
hearty bagel
CAR SALES appeared to have put the
worst days of the credit crunch well
behind them in 2012, as an upbeat
December capped off an impressive
year for the market.
New car registrations across the
whole of 2012 were 2,044,609, up 5.3
per cent of 2011, and the highest
since 2008, according to data
released yesterday. In fact, this yearly
jump was the biggest for 11 years,
the Society of Motor Manufacturers
and Traders (SMMT), who prepared
the data, said. December’s 123,557
sales were 3.7 per cent up on the
same month a year before.
And cars were getting greener and
greener, on average creating just
133.1g of carbon dioxide per
kilometre driven, a full 22.7 per cent
down on ten years ago.
But the news for the industry was
not all good. New car sales were just
85.1 per cent of where they were in
2007, five years before.
Amongst the manufacturers, Ford
enjoyed continued dominance – the
Fiesta was the UK’s favourite new car
for the fourth year in a row, with
109,265 sales in total. Ford’s Focus,
with 83,115 registrations during
2012, took third place. Vauxhall took
second place with 89,434 sales of its
Corsa and fourth with 63,023 sales of
its Astra. The Volkswagen Gold
rounded out the top five.
2012 marks an
end to slack in
new car sales
GOVERNMENT needs to take “bold
and imaginative” policy steps to guar-
antee 2013 will see the economic
turnaround firms are hoping for, a
prominent business lobby said this
Firms are confident that the coming
year will see an improvement in the
UK’s economic outlook, according to
the British Chamber of Commerce’s
(BCC) quarterly report. But BCC boss
John Longworth called on the govern-
ment to deliver a package of growth-
orientated policy measures to make
sure a 2013 improvement turns into a
lasting recovery.
Both manufacturers and service
firms expressed growing optimism
about their sales and profitability in
the survey, which polled around 8,000
firms in the fourth quarter of 2012.
In the service sector, turnover confi-
dence rose 10 percentage points to hit
plus 38 per cent – the highest net bal-
ance since the beginning of 2008.
While in the manufacturing sector,
confidence in profitability – plus 30
Firms demand
bold policy to
lift 2013 growth
per cent on balance – was above any
point in five years.
As well as the positive forward-look-
ing figures, the proportion of firms
reporting improving order books,
employment and investment
increased, but stayed below long-term
But Longworth said that despite the
positive outlook, significant weakness
remained, and the government must
kick-start growth with measures to
boost private funding for infrastruc-
ture spending, a UK business bank and
reform of the country’s planning
ECORD UK sales for Jaguar
Land Rover in 2012 are a rare
rosy indicator. Up 19 per cent
year on year, without even the
benefit of a government industrial
policy to spur it on, these numbers
must have JLR’s owner Tata Motors
purring in delight.
And this is not a one-off result.
While JLR deserves the credit for
achieving such excellent numbers,
car registrations in the UK are on
the up in general. New research
released by industry body the
Society of Motor Manufacturers and
Traders (SMMT) shows a rise of 5.3
per cent in 2012 in new car
registrations, to 2,044,609. That is
the largest percentage increase for
more than a decade, since 2001.
However, best put on the brakes
before your hopes of auto-led
recovery start zooming ahead of
reality. Despite their impressive
acceleration last year, UK car sales
have yet to reach their pre-recession
top gear, when they used to run at
2.4m units a year or more. UK car
production is expected to grow at
nine per cent a year to 2.2m vehicles
in 2016, according to a report by
KPMG published last September. But
that is due to export demand. UK
sales are on the up but except for
rare players like JLR, firms are not
exactly breaking the speed limit.
UK sales are improving but remain weak
1989 1995 2001 2007
40 netbalanceoffirmsreportingsalesrise
: B
A BIG December jump in house
prices has managed to erase most
of the downward movement seen
in the market over 2012, data
suggested yesterday.
The average house price rose 1.3
per cent going into December,
Halifax said yesterday, a monthly
climb that contradicts earlier data
from Rightmove and Nationwide,
which both suggested 2012’s final
month had been weak.
December boost pushes house
prices out of year-long slump
This monthly rise drove the
quarterly measure into positive
territory for the first time in
seven months – prices were up 0.6
per cent between October and
December compared to the
previous three months.
But the big monthly and
quarterly gains could not push
the annual change above zero,
and prices were still 0.3 per cent
lower in December 2012 than in
December 2011, according to
Vroom-vroom but not a boom

5.3 %
FROM 2011
1. Ford Fiesta
2. Vauxhall Corsa
3. Ford Focus
4. Vauxhall Astra
5. VW Golf
6. Nissan Qashqai
7. BMW 3 Series
8. VW Polo
9. Mercedes C-Class
10. BMW 1 Series
THE NEW boss of Financial Times
publisher Pearson announced a
£120m writedown yesterday, as he
said the publisher would close its UK
adult educational unit.
John Fallon, who took over from
long-time chief executive Marjorie
Scardino at the start of the year,
said he was closing Pearson in
Practice, which provides vocational
classroom training, due to changes
in public subsidies.
The government now only funds
such training when students have
an apprenticeship lined up, making
Pearson in Practice’s business
model unsustainable.
Pearson will now try to sell off
some of the business, although this
is unlikely to make
much of a dent in the
£120m write-off,
which will be
included in this
quarter’s accounts.
Pearson’s new
boss writes
down £120m
LADBROKES is in talks with Irish
gaming company Betdaq over an
acquisition of the online bookie, the
company said yesterday.
Negotiations, which have been
ongoing for some time, could result
in a deal worth roughly £30m within
the next few weeks.
Buying Betdaq would bolster
Ladbrokes’ online presence, which
has failed to keep up with rivals such
as William Hill.
The talks follow two failed acquisi-
tion attempts to buy Sportingbet and
888 – two other online bookies.
“Ladbrokes enjoys a close commer-
cial cooperation with Betdaq and can
confirm discussions regarding a
potential future acquisition,” the
firm said yesterday. “Negotiations
are ongoing though at this stage
there is no certainty that an agree-
ment will be reached.”
Online gambling companies such
as Betdaq have become hot property
in recent months.
William Hill recently reached a
£485m agreement to take over
Sportingbet. Ladbrokes, though, is in
more need than most, having seen
repeated delays to a crucial revamp of
its own online operation.
Betdaq operates an exchange-based
website, in which customers wager
against each other, and is owned by
Irish billionaire Dermot Desmond.
THE WORLD’S biggest TV
manufacturers yesterday staked
their claims for dominance of the
next generation of sets, unveiling a
host of super-detailed and
sets they hope will
revitalise a
Sharp, Toshiba
and LG all used
yesterday’s curtain-
raiser to the
Consumer Electronics
Show (CES) in Las Vegas to debut
bigger and brighter TVs that they
hope will grab consumer attention
away from a recent shift towards
smartphones and tablet computers.
Faced with falling prices and
increasing competition for high-
definition TVs, as well as the lower-
than-expected demand for 3D TVs,
the Asian giants have struggled.
Sharp and Panasonic in particular
seeing multi-billion dollar losses.
Yesterday, they all appeared to
counter this by
revealing a range
of “ultra-high
definition” TVs
with screens
around four
times as sharp as
current high-
definition ones,
some of which
will cost upwards
of £10,000.
Another key theme of CES
yesterday was “smart TVs” – sets
that connect to the internet to
deliver extra services, and can be
controlled with smartphones or by
voice. Development of these has
been ramped up as rumours of an
Apple-made TV intensify.
Ladbrokes PLC
31 Dec 3Jan 2Jan 4Jan 7Jan
204 p
John Fallon
became CEO
last week
Share your success to give
hope to young people in care
The Share Foundation is establishing 50,000 Junior ISAs for many
of the UK’s most disadvantaged young people: those without any
family support. The Government is contributing £200 to open each
savings account, but we now need to call for your help to build a
meaningful inheritance for them.
All costs of fund-raising are covered, and all donations are fully tax
Visit for details and
make a contribution online, or contact us at
The Share Foundation, Oxford House, Oxford Road, Aylesbury, Buckinghamshire HP21 8PB Tel: 01296-310400
Registered UK Charity 1108068; A company limited by guarantee in the United Kingdom 4500923
Ladbrokes plots
online revival
with acquisition
Digital sales now accounts
for 22 per cent of UK video
entertainment spending
18 per cent of British households
now own a tablet computer
Total spending on video
entertainment was £2.3bn in
2012, slightly down on last year
Blu-ray sales were up
8.9 per cent year on year
Netflix now has more than
1m subscribers in the UK
The Dark Knight Rises was
the top selling film in 2012
SPENDING on digital video increased by 49 per cent in the UK last year,
according to figures from the British Video Association, with much of
the growth driven by the popularity of subscription-based film
streaming services such as Netflix and Lovefilm.
The trade body said that the rise in internet-connected tablet
computers meant that DVD sales were being squeezed out by digital
services, although discs still account for more than three-quarters of spending.
The new
jobs website
for London
TV makers battle for
survival in Las Vegas
Imagination and CSR lifted
nBritish microchip firms CSR and
Imagination Technologies both saw
shares rise yesterday as the companies
hit Las Vegas. CSR unveiled a range of
new wireless audio products, while
Imagination began a gruelling week of
closed-door investor meetings.
Nvidia launches Android
nGraphics chip firm Nvidia unveiled a
handheld games console which will run
on Google’s Android software. The
console, which will play downloadable
games, will pose a challenge to Sony
and Nintendo’s handheld consoles.
HTC tumbles as Lenovo boosted
nTaiwanese smartphone firm HTC saw
a 91 per cent drop in profits in the final
quarter of 2012, as it was squeezed by
the dominance of Apple and Samsung.
Meanwhile, Chinese computing firm
Lenovo said its fledgling smartphone
business was turning profitable.
Google chairman visits North Korea
nGoogle chairman Eric Schmidt was
one technology figure not seen at CES,
landing in the North Korean capital of
Pyongyang yesterday for a visit. The
country has been criticised for allowing
few PCs to access the world wide web.
ITALY’S former Prime Minister Silvio
Berlusconi yesterday announced an
alliance with the right-wing Northern
League party that could prevent the
centre-left forming a stable govern-
ment after next month’s elections.
Berlusconi has been striving for weeks
to seal the deal with his estranged for-
mer allies to strengthen the centre-
right bloc, under a strategy to
confound the centre-left govern-
ment expected to emerge from
a 24-25 February election.
The League had previously
refused a pact because of rank-
and-file opposition to the scandal-
plagued Berlusconi being
candidate for Prime Minister. The
media magnate was driven from office
a year ago at the height of Italy’s eco-
nomic crisis after he was charged with
having sex with an underage
In an interview on Italian radio sta-
tion RTL, Berlusconi left the issue of
the premiership open in a future cen-
tre-right government. He said he would
prefer to be the economy minister.
The centre-left led by Pier Luigi
Bersani has been ahead in opinion
polls for months. The latest survey,
published on Sunday, said it
would win between 38 and 39
per cent.
The elections have been
sparked by the depar-
ture of caretak-
er Prime
M i n i s t e r
Mario Monti.
Eurozone factory prices drop
ahead of rate-setter meeting
Silvio Berlusconi is eyeing
a return to government
EUROZONE factory prices fell for
the first time in five months in
November, pulled down by a slide
in the cost of energy and giving the
European Central Bank ample
room to consider another interest
rate cut.
Prices at factory gates in the 17
countries using the euro fell 0.2 per
cent in November from October,
the EU’s statistics office Eurostat
said yesterday. Economists polled
by Reuters had expected no month-
on-month change in industrial
producer prices.
Compared to the same month a
year ago, the producer price index
was up 2.1 per cent in November,
echoing consumer inflation that
was steady at 2.2 per cent in
December and just above the ECB’s
target of close to, but not above,
two per cent.
Lower world oil prices have also
helped cut the cost of energy for
Eurozone industry and households.
Investors and economists are
looking to the ECB’s monthly
meeting on Thursday to see if the
central bank hints at an interest
rate cut early this year to reduce
the cost of borrowing and help the
Eurozone economy out of
Inflation was stubbornly high for
much of 2012 and complicated the
ECB’s monetary policy task, but is
now more benign and most
economists expect the governing
council to cut its main interest rate
by a quarter point to 0.5 per cent, a
new record low. That may not come
this week, however.
“We expect this week’s meeting
to be relatively uneventful,”
UniCredit said in a note to clients.
Berlusconi pact
could destabilise
Italian coalition
Transport secretary Patrick McLoughlin will reveal the future of franchising this week
JAGUAR Land Rover has enjoyed a
record year for UK car sales and is
gearing up for new launches in 2013.
The firm yesterday said UK sales
rose 19.7 per cent to 68,586 vehicles
last year.
The Land Rover brand posted its
best-ever year in the UK, selling
54,480 vehicles, up 25 per cent on
the previous year.
The off-road marque now com-
mands a 27 per cent share of the
The figures were the first to
include a full year’s sales for the new
Range Rover Evoque, which sold
18,119 units.
Registrations of the luxury Jaguar
brand increased 2.4 per cent to
14,105 vehicles, despite “increasingly
competitive market conditions”, the
company said.
This total was helped by a 10 per
cent rise in sales of the revised
Jaguar XF saloon, which the firm
said was beating rival models such as
Newer models
aid Jaguar Land
Rover UK sales
the Mercedes Benz E-Class and the
Audi A6 when it comes to sales
“It’s a positive 2013 outlook for
Jaguar in the UK with a full year of XF
Sportbrake sales, the launch of the
XFR-S saloon and the highly anticipat-
ed F-Type two-seater sports car,” JLR
said in a statement.
UK managing director Jeremy Hicks
added: “Our product portfolio is
becoming stronger each year as we
respond to the needs of the market
and introduce additional derivatives
and engine options as well as all-new
JLR, which was rescued by India’s
Tata Motors in 2008, has become an
earnings driver for its parent firm.
The company is due to post global
sales figures next week.
•Swedish car maker Volvo, owned
by Chinese group Geely, said yester-
day its sales fell 6.1 per cent last year,
including double digit drops in China
and Sweden and a small rise in the
United States, and expected a tough
2013. European sales fell 10 per cent.
LONDON based private equity firm
HgCapital is eyeing plans to create a
national network of car parts
distributors after kicking off a
spending spree on small
independent outfits across the UK.
The business has just completed
its fourth separate investment in a
car parts distributor in as many
months, after taking a stake in GMF
Motor Factors, a distributor of
components and garage equipment
in South Wales, Gloucestershire and
It is understood the group, which
was formed from the private equity
arm of defunct FTSE 100 fund
manager Mercury Asset
Management, is mulling plans to
acquire more independent
distributors across the UK, as it bids
to add scale to the notoriously
fragmented parts distribution
So far the firm has been targetting
investments in companies from The
Parts Alliance (TPA), a Midlands-
based consortium of 13 autoparts
companies across the UK.
HgCapital has taken three major
stakes in TPA companies since
August. It has invested in Allparts
Automotive, CES UK, and SC Motor
Factors, in addition to its GMF stake.
Terms have not been disclosed.
It is thought HgCapital is
considering buying others in the
consortium in the coming months,
but it is not known how many of the
13 could be acquired.
Minister says civil service rail
mistakes were not deliberate
CIVIL servants did not intentionally
deceive ministers during the
botched West Coast Main Line rail
franchise contest, the transport
secretary Patrick McLoughlin said
“No I don’t think ministers were
deliberately misled but… some of it
was not the proper workmanship
that one would expect from the
civil service,” he told the transport
select committee.
He said the “serious errors” made
during the competition, which led
to the collapse of the process in
October, “will form part of civil
service training for many years to
McLoughlin will this week
publish the Brown report that
examines the way the government
runs rail franchise competitions.
The investigation by Eurostar
chairman Richard Brown was
commissioned after the West Coast
contract for FirstGroup was
scrapped, at a cost of at least £40m
to the taxpayer, when a string of
mistakes were found in the sums
used to judge the bids.
McLoughlin will also reveal the
fate of three other rail franchises
whose contests have been paused in
the wake of the West Coast fiasco,
which led to the suspension of three
civil servants.
The trio have now returned to
work, the Department for
Transport’s top civil servant Philip
Rutnam said yesterday.
However, disciplinary proceedings
have started against an undisclosed
number of department staff, he
“This is a confidential staff matter
and those processes are still
ongoing,” the permanent secretary
told the committee when asked
whether the three civil servants
were involved in disciplinary action.
HgCapital snaps up UK car
parts firms for expansion
Nichols posts sweet rise in sales
nShares in Vimto-maker Nichols
jumped four per cent yesterday after it
said it expects to beat full year profit
forecasts and revealed a strong set of
figures. Nichols, which also makes
Sunkist and Levi Roots, posted a nine
per cent rise in sales to £108m in the
year to 31 December driven by good
performances in both its UK and
overseas businesses. Analysts predict
profits for the year to be around £20m.
Luxury rifle maker loses its aim
nWilliam & Son, the Mayfair jeweller
and gunsmith founded by William
Asprey of the eponymous jewellery
dynasty, sunk into the red in the year to
March 2012. The luxury goods firm made
a £421,563 loss before tax compared
with a £23.6m profit in 2011, filings on
Companies House show. A spokesperson
said the loss “was generated by a
subsidiary company”. Group sales also
fell from £58.1m to £9.3m.
CBRE in £20m central London buy
nCBRE Global Investors yesterday
announced it has bought two central
London properties for £20m, likely to
benefit from improvements in the
completion of the Crossrail link by
2018. The deal includes the £10.5m
acquisition of 110-113 Tottenham Court
Road, a 16,000 square feet office
building let to Halifax and Adecco. The
second £9.5m acquisition is located in
Clerkenwell and is let to a WPP firm.
UK DRINKS group Diageo’s mandato-
ry tender offer to buy up to 26 per
cent of shares in India’s United Spirits
has been postponed as the deal has
yet to receive local regulatory
approvals, a source with direct knowl-
edge of the matter said yesterday.
Diageo agreed in November to buy a
53.4 per cent stake in United Spirits
Ltd for $2.1bn (£1.3bn) under a two-
stage process including the mandato-
ry tender offer which was set to open
yesterday and close on 18 January.
A new date will now be set for the
offer after the deal receives approval
from the capital markets regulator
Securities and Exchange Board of
India and the Competition
Commission of India, said the source.
United Spirits, which is currently
controlled by Indian businessman
Vijay Mallya, declined to comment on
the open offer.
“The initial timings were clearly out-
lined as indicative only,” a Diageo
spokeswoman said in London.
Diageo’s open
offer for United
Spirits delayed
“We continue to work towards our
initial timeline, which would see the
transaction completing in quarter one
2013,” she added. Shares in United
Spirits ended down 1.2 per cent at
1,914.25 rupees yesterday, higher than
Diageo’s offer to minority sharehold-
ers of 1,440 rupees a share. The stock is
up nearly 43 per cent since the
announcement on the deal.
Some analysts have said the sharp
jump in the stock price could mean
the British group, owner of such
brands as Johnnie Walker whisky and
Smirnoff vodka, will be forced to
sweeten the offer price.
Interviews by Jakob Villumsen
These views are those of the individuals above andnot necessarily those of their company
I do not think the relaunch will make a scrap of
difference. It is just words. As long as they
manage the economy well, we will be fine. And at the
moment, I think they are actually doing quite well,
despite the difficult circumstances.

No, a coalition will never work. There are just
too many different and contradicting views; it
is like having a mini parliament within the government.
A good relaunch, though, would be if they went gentler
on the middle class. They have clearly imposed an own
goal with the child benefit cut.

Any advertising is good advertising at the
moment for the coalition. I guess it is about
showing unity and affirming they are still together, and
the purpose is internally just as much as an external target
audience. I would like them to announce that the deficit is
going down, and a reaffirmation that they are still united.

Christmas rush helps UK airlines
end the year with rising traffic
THE CHRISTMAS getaway has
pushed up ticket sales at some of
the country’s biggest airlines,
according to figures out yesterday.
EasyJet said traffic rose 4.9 per
cent on a year ago to 4.34m in
December. Its load factor – a
measure of how much the firm
fills its planes – rose 2.3
percentage points to 87.9 per cent.
The figures mean EasyJet
carried 59.2m passengers during
2012, up 6.7 per cent on the
previous year.
Ryanair carried nearly 80m
passengers last year, it revealed in
figures also out yesterday. In
December the budget airline
attracted 4.84m passengers, up
two per cent on last year, with a
load factor of 81 per cent.
For the year, Ryanair carried
79.6m passengers, a rise of four
per cent.
Irish rival Aer Lingus posted a
7.2 per cent traffic increase to
734,000 for the month. The
Dublin-based firm carried 10.66m
passengers in the year – a rise of
3.8 per cent.
British Airways parent firm IAG
fared less well, as Spanish arm
Iberia continues to suffer from
tough economic conditions and a
fierce union dispute.
Group traffic, measured in
revenue passenger kilometres, rose
by 0.3 per cent in December.
EasyJet PLC
31 Dec 3Jan 2Jan 4Jan 7Jan
Diageo PLC
31 Dec 3Jan 2Jan 4Jan 7Jan
1,830 p 1,813
ST MODWEN and joint venture
partner Vinci yesterday signed a
contract with the New Covent
Garden Market Authority for the
£2bn regeneration of Britain’s
biggest flower and vegetable
The project will see the
complete overhaul of the 57-acre
site, including 550,000 square feet
of new facilities to house the
market’s 200 businesses and 2,500
In return, the deal gives St
Modwen and Vinci 20 acres of
surplus land on the site, which
will then be developed to create
2,800 new homes as well as 115,000
sq ft commercial and public space.
The market, which moved from
Covent Garden in 1974, sits in the
Nine Elms Opportunity Area, one
of London’s largest regeneration
projects, spanning 450 acres from
Vauxhall to Battersea Power
The Nine Elms district will
create 25,000 jobs when finished.
New Covent Garden Market houses 200 businesses employing over 2,500 people
St Modwen and Vinci sign New
Covent Garden Market contract
Europe’s IPO hopes for 2013
boosted by LEG’s plan to list
GERMAN residential property
group LEG is planning to list its
shares on the stock market within
six months in a sign that a recent
pick up in IPO activity in Europe is
likely to continue.
The share sale, which could be
worth around €1bn (£814m), would
be a positive step for an IPO market
which only started to recover in the
final months of 2012 having
previously struggled amid Europe’s
debt crisis and a sluggish economy.
Auditor PwC said last week it
expects up to 14 IPOs in Germany
this year, after the country saw
only two sizeable flotations in 2012,
of insurer Talanx and mobile phone
operator Telefonica Deutschland.
In the last year as a whole, the
volume of share issues slumped
more than 60 per cent despite a late
pickup in IPO demand driven by
rallying stock markets.
Sources close to the LEG
transaction told Reuters the listing
of the company, which own 91,000
residential apartments, is likely to
take place in February, since an
intention to float is usually issued
four weeks ahead of an offering.
While the IPO recovery remains
fragile, the lack of activity through
much of last year has left a backlog
of deals which could come to
market in 2013, bankers said.
The Duesseldorf-based LEG has
picked Goldman Sachs and
Deutsche Bank as main advisers for
the offering.
Berenberg Bank, Commerzbank,
Erste Bank and Kempen will act as
co-lead managers.
Whitehall and Perry bought LEG
in 2008 from the German regional
state of North Rhine-Westphalia for
€3.4bn. In Germany, LEG is also the
first of two large real estate groups
aiming to list on the stock exchange
this year. Deutsche Annington,
owned by private equity firm Terra
Firma, may list in late 2013.
SERVICES company Serco has won
an 18-month extension to its
Docklands Light Railway (DLR)
contract, worth around £100m,
following a landmark summer for
the transport system.
The extended contract will run
from April this year to September
2014 and will involve Serco
operating, maintaining and
marketing the DLR, which
connects the City and the
The light railway, which is the
busiest of its kind in the UK,
carried 7.2m passengers – more
than double typical levels –
through last year’s Olympic
Games, making it a record
Serco wins £100m extension to
Docklands Light Railway work
summer for the line.
Overall, the DLR has carried
more than 830m passengers over
the past 15 years.
The FTSE 100-listed outsourcing
company, which also maintains
the Boris Bike scheme, has
operated the DLR since 1997 under
two separate contracts.
Last week, investment bank
Espirito Santo upgraded Serco
from “neutral” to “buy”, adding
that the group’s shares had
opportunity to outperform this
“We expect modest
improvement in organic growth
and cash generation,” analysts
from the bank said in a note.
The shares fell 0.09 per cent
yesterday to close down at 551.5p.
UBS Global Asset
Roz Amos has been appointed
head of European consultant
relations at UBS’s asset
management business. She joins
after 15 years at Towers Watson,
where she was most recently
senior investment consultant
with responsibility for overseeing
its indexation research and new ideas research teams.
Vanguard Asset Management
Axel Lomholt has been appointed head of the asset
management firm’s European product development and
management business. He previously spent six years at
BlackRock, where he was managing director and head of
iShares product development for Europe, Middle East and
Africa. Lomholt has also held senior roles at HSBC Global
Asset Management.
Celene Lee has been appointed to the professional services
firm’s pensions advisory team. She joins from Barrie &
Hibbert, where she was most recently head of pensions.
Lee has also held senior roles at Hewitt Associates, and is a
former chair of the National Association of Pensions Funds
North London group.
RiverRock European Capital Partners
Dr Thomas Mirow has been appointed to the senior
advisory board of the investment management firm. He
was most recently president of the European Bank for
Reconstruction and Development, and also previously
served as Germany’s deputy finance minister.
RBS Corporate & Institutional Banking
The bank has announced two appointments to its
healthcare and pharmaceuticals team. Emily Makinson
joins as associate director from RBS’s structured finance
business. Paul Weeks joins as a director from the bank’s
global restructuring group, where he was corporate
relationship director.
Grant Thornton
The law firm has appointed Shaun O’Callaghan as UK head
of restructuring and promoted Sarah Bell to the position of
restructuring partner. O’Callaghan was previously a senior
manager at FTI Consulting, and was the lead partner for
KPMG’s strategic and operational restructuring practice.
Company Watch
The financial monitoring company has appointed Bill
Dunlop as credit industry adviser to its board. He has over
20 years’ experience in credit management, and most
recently worked as a consultant. Dunlop previously held
senior roles at Compaq.
WHO’S SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
US stocks drop
on anticipated
poor earnings
S stocks lost ground yesterday,
as investors drew back from
recent gains that lifted the
S&P 500 to a five-year high, in
anticipation of sluggish growth in
corporate profits.
Shares of financial companies
dipped after a group of major US
banks agreed to pay a total of $8.5bn
(£5.3bn) to end a government inquiry
into faulty mortgage foreclosures.
The KBW bank index, a gauge of US
bank stocks, was down 0.3 per cent.
Other sectors were hit as well, most
notably energy and utilities. The S&P
500 energy sector index fell 0.8 per
cent and the utilities sector was off
1.1 per cent.
The day’s decline came a session
after the S&P 500 finished at a five-
year high, boosted by a budget deal
and strong economic data. The S&P
500 rose 4.6 per cent last week, the
best weekly gain in more than a year.
Earnings are expected to be only
slightly better than the third-quar-
ter’s lacklustre results, and analysts’
current estimates are down sharply
from where they were in October.
Fourth-quarter earnings growth is
expected to come in at 2.8 per cent,
according to Thomson Reuters data.
Aluminium company Alcoa begins
the reporting season by announcing
its results after today’s market close.
Alcoa shares fell 1.7 per cent at $9.10.
The Dow Jones industrial average
dropped 50.92 points, or 0.38 per
cent, to 13,384.29. The Standard &
Poor’s 500 Index fell 4.58 points, or
0.31 per cent, to 1,461.89. The Nasdaq
Composite Index lost 2.84 points, or
0.09 per cent, to 3,098.81.
Ten mortgage servicers – including
Bank of America, Citigroup, agreed
yesterday to pay $8.5bn to end a case-
by-case review of foreclosures
required by US regulators.
In a separate case, Bank of America
also announced roughly $11.6bn of
settlements with mortgage finance
company Fannie Mae and a $1.8bn
sale of collection rights on home
The bank also entered into agree-
ments with Nationstar Mortgage
Holdings and Walter Investment
Management to sell about $306bn of
residential mortgage servicing
Bank of America shares lost 0.2 per
cent at $12.09 while Nationstar
Mortgage Holdings jumped 16.8 per
cent to $38.83.
Citigroup shares were up 0.09 per
cent to $42.47, and Wells Fargo
shares fell 0.5 per cent to $34.77.
Shares of US jet maker Boeing
dropped 2 per cent after a Boeing
787 Dreamliner aircraft with no pas-
sengers on board caught fire at
Boston’s Logan International Airport
Amazon.comshares hit their high-
est price ever at $269.22 after
Morgan Stanley raised is rating on
the stock. Shares closed up 3.6 per
cent at $268.46.
Video-streaming service Netflix
shares gained 3.4 per cent to $99.20.
RITAIN’S blue chip index fell
yesterday for the first time this
year, baulking at technical
resistance levels having reached its
highest close for nearly two years in the
previous session.
The FTSE 100 shed 0.4 per cent in broad-
based losses, with every sector falling apart
from financials, which received a regulato-
ry boost over the weekend.
The index closed down 25.26 points at
6,064.58, having started the year with
three sessions of gains totalling 3.3 per
cent – well over half the total rise the FTSE
achieved in 2012.
The gains took the index to its highest
closing level since early February 2011,
with the 14-day Relative Strength Index hit-
ting 72. A level over 70 suggests that an
index is overbought.
“The FTSE 100 index is nearing a key
resistance threshold around the 2011 top
at 6,105. The upward potential should be
limited now... Intraday oscillators are over-
bought,” Nicolas Suiffet, technical analyst
at Trading Central, said.
“The rally’s likely to lose momentum
around the resistance threshold... It’s too
late to buy but to early to sell.”
Energy and materials – a broad-based sec-
tor including commodity stocks and min-
ers – were the main drag on the index,
combining to take over 12 points off the
Falls in these sectors came in tandem
with base metal and oil prices, traders said,
adding there had been profit taking on the
However, Zeg Choudhry, head of equities
trading at Northland Capital Partners, said
that even if the rally in commodity stocks
had run out of steam, there weren't many
sellers on the market.
“The market doesn’t feel too bad under-
neath, we’ve had a good run,” he said.
“It’s not really a big correction. When you
see a big correction in the materials sector,
it's normally 5-6 per cent falls. Then you
would say people are running for the hills,
but they’re not.”
While only five stocks gained more than
one per cent, only two – National Gridand
Centrica – were down more than two per
cent. They fell after a Deutsche Bank note
warned that the “worst was yet to come”
for the utilities sector.
The only sector to add points to the index
was financials, led by 0.5 per cent gains in
banks on the back of a decision by global
regulators on Sunday to give banks four
more years and greater flexibility to build
up cash buffers so they can use some of
their reserves to help struggling economies
European shares were also led down for
the first time this yesterday, with utilities
leading a broad retreat based on Deutsche
Bank’s note.
After chalking up a 3 per cent weekly
gain and hitting a near two-year closing
high in the previous session, fuelled by a
US budget deal and a solid US jobs report,
the FTSEurofirst 300 ended down 0.3 per-
cent at 1,161.44 points.
“I don’t think it’s a great surprise that we
see a pause,” said Andrew Milligan, head of
global strategy at Standard Life
“Generally the backdrop is that clients do
seem a little more confident about the
world given the economic data that’s
appearing, or the absence of the ‘fiscal
cliff’ debacle which was hanging over the
markets in December.”
Utilities stocks were the standout fallers
yesterday, off 1.6 per cent, after Deutsche
Bank downgraded several firms and
advised that there are no safe havens in the
sector, traders said.
Deutsche downgraded industrial giant
Rexnord from “hold” to “sell”, saying its
shares appeared fully valued.
FTSE retreats for first time this year
after highest close since early 2011
31Dec 2Jan 3Jan 4Jan 7Jan
p 111
7 Jan
Liberum Capital yesterday upgraded its fair value for the media
company with 10p to 155p and reiterated its “buy” recommendation.
According to the analyst, increasing efficiencies in the company and
revenues in non-TV advertising will spill over to the budget sheets, and
ITV is likely to “outperform” in 2013.
31 Dec 3Jan 2Jan 4Jan 7Jan
7 Jan
To appear in CITYMOVES please email your career updates and pictures to
in association with
Big Yellow Group PLC
31Dec 2Jan 3Jan 4Jan 7Jan
p 370
7 Jan
UBS initiated coverage of the provider of self-storage space with a “buy”
recommendation and a target price at 395p yesterday. Big Yellow Group’s
strong presence in the capital and southern regions of the UK “enhances
resilience”, and the analyst predicts occupancy to rise from 67 to 76 per
cent, delivering “potentially high returns.” UBS sees attractive returns in
UK and US real estate investment trusts such as Big Yellow.
Premier Oil PLC
31Dec 2Jan 3Jan 4Jan 7Jan
p 360
7 Jan
Text Nomura has upgraded the oil explorer from “reduce” to “buy” and
has increased its target price to 500p. The analyst sees an attractive
entry point versus the firm’s core asset value, noting that risks on short-
term developments such as its stake in Rockhopper’s Falklands fields
appear to already be priced in. This year, Nomura sees potential for
greater cash generation and even a dividend policy.
S THE markets settled into the
first full week of trading of
the year, the FTSE had its 2013
bull run checked, dropping 17
points yesterday.
The commodity and miner-heavy
benchmark index had been pushed
to multi-year highs by the effects of a
global risk-off sentiment, with the
FTSE breaking the psychologically sig-
nificant 6,000 level for the first time
since May 2011. As tensions mounted
during the congressional stand-off
over the US fiscal cliff during the
later part of 2012, investors sought
safety in precious metals and com-
modities, which were given addition-
al strength by a weakening
greenback. As global faith in the abil-
ity of the US to deal with its fiscal
woes took a slide, so did the purchas-
ing power of the dollar, with dollar-
denominated commodities a major
But with US politicians coming to a
compromise on the package of tax
increases and spending cuts which
many cited as a threat to US GDP,
investors began to unwind their risk-
off positions at the expense of com-
modity prices and mining stocks –
yesterday Fresnillo shed 2 per cent,
while Antofagasta 1.6 per cent.
It was only Britain’s banks – given a
boost by news that increases in liq-
uidity requirements would be
delayed – that prevented the FTSE
from falling further. The announce-
ment that banks would be given an
additional four years to meet Basel III
rules on liquidity sent Barclays surg-
ing, with a rise of 3.7 per cent on the
day, with Lloyds seeing a 1.6 per cent
jump. “It is certainly a sigh of relief
for the banks which have been worry-
ing for years about the impending
implementation of stricter capital
requirements,” says Angus Campbell,
head of market analysis at Capital
Spreads. Campbell adds: “It is actually
quite encouraging for the wider econ-
omy, as it should improve the flow of
credit to businesses and consumers.”
With a week of earnings reports from
retailers ahead of us, it is likely that
the FTSE’s gains will continue to be
checked. WM Morrison lost half a
point yesterday when it reported a 2.5
FTSE mettle is
tested by slump
in commodities
from J Sainsbury tomorrow, as well as
the third quarter statement from
Marks and Spencer on Thursday.
The bullish trend for large cap equi-
ties in 2013 is still intact, but never-
theless there may be some upsets
along the way.
per cent year-on-year drop in
December sales. This disappointing
result contrasts with the upbeat
reports from Next and John Lewis last
week, and will have traders eagerly
anticipating the third quarter and
Christmas trading statement due
N 2001, Tony Blair sought a
second mandate from the
electorate before 9/11, which
would eventually lead to war
in Iraq. Blair’s re-election
seemed more or less a foregone
conclusion. He was still fresh-
faced, energetic and was
brilliant at selling his aspirations
for social reform, which sadly
never really transpired.
At the time, just before setting
up Cantor Index’s political
spreads, I remember taking
counsel from the excellent Nick
Moon, the guiding light behind
the polling company GfK/NOP.
He was always fantastic at
discerning the political wheat
from the chaff – in other words
what was relevant and what
wasn’t. His knowledge had
always been invaluable.
It was becoming apparent that
New Labour was falling in love
with the idea of the UK’s greater
involvement in the EU. I think
the then Prime Minister had
aspirations of becoming
Emperor of Europe. Certainly
that perception rattled a few
cages in the City and, until Moon
put me right, I thought Blair’s
personal ambitions were
relevant to the outcome of the
2001 election. He told me that,
at the time, only 6 per cent of
the electorate gave any
consideration to the European
debate, while a full 80 per cent
cared about the economy and
their disposable income. How
right he was.
Today there is much more
concern over the UK’s
participation in the EU in the
wake of the Eurozone’s debt
crisis. It has certainly galvanised
Ukip, which has usurped the Lib
Dems in the polls, with between
12 and 15 per cent of public
support. More to the point, the
party has split the Tories in
sunder. Whether this is just a
mid-term blip is debatable.
Barack Obama has suggested
that the UK’s non-participation
in the EU would greatly weaken
the UK’s voice on the global
political stage. But the President
would say that, as he wants us all
in his playpen, where he can keep
his tabs on us as a unit. The City
is also concerned that it will lose
its vice-like grip on financial
markets. Europe is now a key
political issue. Should the UK be
in or out or “in and obstructive”?
That is the question. This
ongoing debate is likely to make
foreign exchange, bond and
equity markets very volatile and
challenging for the spread-
betting fraternity.
Cantor Index is hosting a
debate at the Bloomberg
Auditorium on Wednesday 9
January 2013 at 6.30pm, with a
galaxy of experienced orators –
Rt Hon Sir Menzies Campbell MP,
Rt Hon David Blunkett MP, Nigel
Farage and Peter Oborne. It’s
free. Get involved at
Investors are unwinding risk-off positions, writes Craig Drake
Metal prices had been supporting the benchmark UK equities index
Chief Market Strategist, Cantor Index

Higher inflation will constrain the Bank of England’s room for manoeuvre
of 2012. Friday’s industrial production
figures will be instructive and we’ll
know for sure on 25 January, when the
first GDP estimates are released.
Against this backdrop, don’t expect
too much from the Bank’s Monetary
Policy Committee this week. However,
if there are signs that the weak econo-
my is continuing into the current quar-
ter, it could consider more quantitative
easing in February. But, for now, rates
will stay at their record 0.5 per cent
low, where they’ve been for four years,
and asset purchases will remain at
£375bn. It’s likely that QE will remain
paused for two key reasons.
First, there are encouraging signs
that credit easing through the Funding
My pick: Short euro-Aussie and euro-dollar (pending)
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days
At the end of December, I sold euro-Aussie at Au$1.2720 on
the rationale that a resolution to the US fiscal cliff would push
traders from lower yielding currencies into higher yielding
ones, putting downward pressure on the euro-Aussie.
Technically, the pair was also trading into descending trend-
line resistance from May and October highs. I will take profit
at Au$1.24, and then I may consider switching to a short
euro-dollar position amid pending risk-aversion.
Monetary stimulus unlikely for now
OLL up roll up, it’s 2013 and
the Bank of England is due
to meet for the first time
this year, with an
announcement due on Thursday.
It does so with the FTSE 100 back
over 6,000 for the first time since
July 2011, and 10 year gilt yields
back above 2 per cent for the first
time in eight months.
To be fair, financial markets have
been boosted to some extent by the
fiscal cliff deal, which mostly
avoided any major tax increases,
and benign US jobs data. But the
UK has also had some better news
of its own. The most recent PMI
numbers for manufacturing sug-
gested stabilisation in the sector,
and the latest Bank of England sur-
vey showed that credit may be
starting to flow again.
But the news isn’t all good.
Services PMI hit a 44 month low in
December, and most economists
are now talking about a 0.1 or 0.2
per cent contraction for the UK
economy in the last three months
My pick: Short euro-krona and Aussie-Canadian dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I sold euro-krona at Kr8.7315 last month, with a target of Kr8.4812.
I expect the Sweden’s Riksbank to switch to a neutral policy
stance after December’s rate cut, as the European Central Bank
begins to ease monetary policy in 2013. I also sold Aussie-
Canadian dollar at Ca$1.0340, looking to trade the narrowing
yield differential between the pair. My target is Ca$1.0260, as the
Reserve Bank of Australia continues to ease, and the Bank of
Canada remains on hold in the months ahead.
My pick: Short sterling-dollar and euro-yen, long euro-sterling
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
Volatility came roaring back into the markets in the opening
week of 2013, but its consistency is questionable. Risk has
surged on the back of the sloppy fiscal cliff solution in the US.
A correction in sentiment suggests that sterling-dollar may be
particularly weak, and I favour a move below $1.60. A reversal
of the overstretched euro-yen is another possibility if it can
break ¥113.25. Outside the risk currencies, I like the prospect
of a larger reversal on euro-sterling above £0.8165.
for Lending scheme is finally start-
ing to see money trickle through the
system. A high net balance of lenders
said that they both increased credit
availability over the past three
months and expect to make more
household and corporate credit
available over the next quarter.
Secondly, there’s still a good
chance that inflation will be head-
ing higher over the short term, with
some economist believing it will be
back over 3 per cent. It’s not the
ideal scenario in which to advocate
further stimulus, though real house-
hold pay will continue to be
squeezed regardless.
So in the next few weeks, we may
well see headlines screaming about
triple dip recessions but no immedi-
ate action from the Bank of England.
That could pile more pressure on the
chancellor’s deficit target, which in
turn means gilt yields have room to
head higher.
Ross Westgate co-hosts Worldwide
Exchange daily from London, and anchors
Strictly Money on CNBC.
INCE the financial crisis, the
Bank of England has made use
of some highly controversial
monetary policy measures to
help the UK economy recover.
The most recent was the chancellor’s
decision to claw back £35bn of the
interest payments the Bank of
England made from its holdings of
government bonds. This took several
economists by surprise, and
demonstrated a slight change in the
way quantitative easing (QE) is being
conducted. It brought the Bank that
bit closer to directly monetising
government debt.
But this just reflects the way that
the aims and scope of the QE facility
have shifted while it has been in use.
And these shifting aims have opened
HE foreword to the coalition’s
mid-term review could have
been written in the early 1970s.
Perhaps this is not surprising.
Policymaking tends to lack a
sharp edge in coalition. Compromises
must be made, and this can lead to bad
decisions. Changes to student fees are a
prime example. Most students will pay
a lot more for their education, but the
government will save very little money
because of the complex system of
subsidies that has been introduced to
buy-off the Liberal Democrats.
But it’s not clear whether the
Conservatives would have done better
alone. Changes to child benefits, intro-
duced yesterday, were their decision
and they’re a shambles. There is a clear
case for abolishing child benefit and
using the £12.5bn in savings to create a
system of transferable tax allowances to
lift families out of tax. Instead, the gov-
ernment has bottled it and played
around at the edges. Its reforms create
huge effective marginal tax rates for
families with one earner on over
£50,000 a year, as well as discriminat-
ing against single-earner couples.
Ending child benefits
would’ve freed up
£12.5bn to lift many
more families out of tax
In association with
Twitter: @cityamforum on the web: or by email:
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

Coalition tinkering on family tax
and pensions is too little too late
To complicate matters further, the
government has now proposed tax
relief of up to £2,000 a year to assist
working mothers with the costs of
childcare. In other words, yet more tin-
kering, with stay-at-home mothers
implicitly discriminated against. A bet-
ter solution would have been to deregu-
late the sector to drive down the costs
of childcare – now some of the highest
in Europe. Since the mid-1990s, the
number of child minders has fallen by
nearly 50 per cent, after the last Labour
government pushed up the costs of
training and the bureaucracy associat-
ed with being registered.
There is also no clear direction over
infrastructure. When in opposition,
the Conservatives promised to build a
high speed rail link to Birmingham to
compensate for their opposition to an
extra runway at Heathrow. But this just
replaces a project that would have been
financed by the private sector with one
that will be planned and guaranteed
by government. We have also heard
mutterings that tolls will be intro-
duced on new roads. But which hotel
chain would decide to only charge for
new rooms? Either tolls are a good idea
or they are not.
So, what should the coalition have
done in its relaunch? We cannot expect
it to become coherent overnight. But
the government should recognise that
the state is too big, the role of the fami-
ly in providing for its own needs – espe-
cially in old and young age – is too
small, and that there needs to be a deci-
sive change in direction. We should
also expect rigorous economic analysis
of policy before implementation.
Yes, we need to build new infrastruc-
ture. But it should not be a process led,
directed and financed by the state. The
planning system should work with the
grain of the market. Those affected by
new building should be compensated.
The private sector should finance and
bear the risk of new projects, and road
use should be properly priced.
We also need to transform health,
long-term care and pension provision.
As in many OECD countries, we have
designed a system by which the taxes of
the working generation pay for the old-
age provision of the retired, and we are
sleep-walking towards disaster. When it
comes to pensions and long-term care,
the coalition should be enacting
reforms so that needs are provided for
by the family and through saving.
Unfortunately, we are unlikely to see
any of this. With regard to long-term
care we will see some fudged imple-
mentation of the Dilnot review, where-
by the state contributes even more
towards total care costs than it does at
present. When it comes to pension pro-
vision, increased private sector saving is
the last thing on the mind of the gov-
ernment. It is hammering the last nails
in the coffin of the ability to contract
out of the state pension (a policy sup-
ported even by 1970s Labour minister
Barbara Castle), and it has nationalised
the assets of the Royal Mail pension
scheme. The proposed flat-rate state
pension will be simpler, but this will be
partly financed by using money that
people would have saved in private sec-
tor schemes. This is short-termism at its
While producing coherent policy in
these areas, the government needs to
look again at family tax and benefit
policy. Reform here has been too timid.
People should pay less tax, they should
receive less in benefits and the state
should be smaller. These 17 words
should dominate the thinking of the
coalition at its half-way point.
Philip Booth is professor of insurance and
risk management at Cass Business School,
and editorial and programmes director at the
Institute of Economic Affairs.
the door to lots of other sorts of
easing – like credit easing under
Funding for Lending, or qualitative
easing. What began as a plan to buy
high quality private debt has
morphed in response to subsequent
events. Both the Fed and the Bank of
England are conducting very
different programmes to the ones
they initially intended.
We are experiencing what the
economist Ludwig von Mises referred
to as “the dynamics of intervention”.
An initial policy decision may appear
wise, but if it fails to work then it is
modified. This can make things even
worse. There is a danger that we
enter a vicious cycle, where the
failure of one intervention begets
another, and the result is an
outcome that was never intended at
the start.
A similar phenomenon took place
for my wife during childbirth. The
natural way to give birth is in a calm
and safe environment (like a home),
with a medical expert on hand to
provide assistance. But when my wife
recently went into labour with our
second child, we were forced to go
into hospital. The first intervention
was a fetal heart rate monitor, which
was reassuring but which restricts
the mother’s movement. The second
was a drip to reduce discomfort, but
which again reduced my wife’s
movement. Partly as a result of this,
labour became more painful and an
epidural was required – injected
directly into the spine. The
cumulative effect of all of this was
that the decision to go to hospital
ultimately led to an emergency blood
transfusion in an operating theatre.
The argument is not that
interventions are always bad. A small
minority of home births end in a
tragedy that may have been
preventable with better medical
equipment. Modern medicine is a
marvel and hospital staff do a
fantastic job.
But whether it’s monetary policy
or childbirth, you need to look at the
long game. A narrow focus on
marginal interventions can obstruct
the bigger picture. Decisions we
make can put us on a path that is
almost impossible to turn back from.
Advocates of intervention would do a
better job of selling it to sceptics if
they confronted this point, and
spelled out the downside risks.
There is a dynamic of intervention.
Each decision can seem small in
isolation, but inevitably leads to
further action. What starts as pain
relief can soon go much further.
Anthony J. Evans is associate professor of
economics at ESCP Europe Business School., @anthonyjevans
The dynamics of QE have set the Bank of England on an unintended journey
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The Forum is open for you to take part. Got a sharp comment on
one of today’s columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email or comment at
Broadband policy
[Re: Think tank slams plan to splash out on
UK broadband arms race, yesterday]
This is an essential look at the UK’s costly
and ineffective broadband policies. But it
fails to recommend immediate policy
changes that would result in much-needed,
competition for fixed line and mobile
internet access. Allowing wholesale internet
service providers to lease from BT for both
commercial and residential properties, as
well as offering competitive access to
physical infrastructure are just two
proposals. They would see new businesses
enter the market and create more
competition. Ultimately, it is Ofcom’s
responsibility to ensure that broadband
competition happens. Until we see a review
of Ofcom’s remit, which is unlikely to
happen in this government, taxpayers’
money will be wasted on rolling out
somewhat superfast broadband by BT, the
monopoly incumbent, to some of the
country. There is no guarantee that
consumers will even take it up.
[Re: Public understanding of economic
principles will decide 2015 election, Friday]
The most depressing thing is that the
overwhelming majority seem to think the
government is making swingeing cuts. It is
not. Although James Frayne is right to
recommend a better-framed debate, all the
best arguments come to nothing without
concerted action.
HAT should discipline
how much cash a
business keeps aside to
service its debts – what
we might call its
“liquidity buffer”? The answer’s
pretty obvious: how much the debts
are; how often they fall due; to what
extent they can be called up early;
how secure are the inflows from a
business’s cash-generating activities
and so on.
The key discipline is these “market”
factors. Obviously, it’s undesirable if
firms operate fraudulently, and tak-
ing on additional debts when you are
already bust is akin to fraud. So all
firms are subject to certain regulato-
ry obligations about their liquidity
and solvency. But regulatory require-
ments, of the sort announced on
Sunday by the Basel Committee on
Banking Supervision, should only be
a backstop – the main source of disci-
pline must always be market factors.
What is true of other businesses is
also true of banks. There is nothing
magical about a bank that means it
shouldn’t have to repay its debts, or
that it should not be mainly market
factors that discipline its activities.
What is unusual about a bank, and
intrinsic to its business, is that a rela-
tively high proportion of its debts are
subject to early recall – in particular
the loans to the bank we call
“deposits”. Banks need to keep ade-
quate liquidity available, or have
available credit lines, to pay ordinary
and unusual withdrawals by deposi-
tors. If it does not maintain adequate
liquidity for that purpose, the bank
should fail, as other businesses fail.
And as with other business failures,
that might mean that not all credi-
tors are made whole. In the case of a
bank, that means depositors may lose
money. That’s not improper or some
epic failure of the economic system.
It’s just what a “business failure” is.
Something tells me Nick Clegg’s regular
phone-in to “hear what people think” may be
a rather short-lived initiative.
UK car sales have reached a four year high.
Could this be a reflection of the poor state of
national public transport?
More inflation. My first day in London in 2013,
and my train ticket was up by 4 per cent -
double the Bank of England inflation target.
Joined up government? Its child benefit
changes are costly, confusing and complicated.
Now it wants to help fund childcare.
As Gérard Depardieu flees to Russia, will
the 75 per cent tax rate damage France?
François Hollande’s policy of a 75 per cent rate of income tax for
top earners is already a disaster for the country’s image, and it will
have a negative impact by reducing France’s economic
competitiveness. France needs entrepreneurs and risk-takers to
create wealth. Heavy taxation is unfair on talented people who
create jobs for others. The tax may be symbolic to some, since it
will supposedly only affect 1,500 people. But such confiscation will
discourage anyone who wants to be financially successful from
being domiciled in France. This affair has once again demonstrated
Hollande’s incompetence. The idea of a 75 per cent income tax was
improvised during his presidential campaign. Sadly, although the
Constitutional Council has rejected this tax as being illegal, there
are already plans to present this policy again.
Emmanuelle Savarit is the former UMP candidate for Northern
Europe in the French Parliament.
Emmanuelle Savarit
Axelle Lemaire
President Hollande made a pledge during his campaign: everyone
must contribute to the efforts towards reducing deficit and public
debt. He chose that approach on the grounds of social fairness and
was elected by the French people as a result. Conservative
governments have asked the vast majority of citizens to pay the
price of the crisis. These citizens have consequently lost their jobs
and seen a reduction in the benefits and services provided by the
welfare state at a time when they needed them most. But French
public debt has doubled in the last ten years, and fiscal rebates
haven’t created economic value. It was time we reversed this trend.
In a crisis of historic proportions, everyone should be making an
effort, and those who are least affected should contribute as much
as they are able to. What we need is a stable fiscal and economic
environment to support competitiveness and the real economy.
Axelle Lemaire is Parti Socialiste MP for Northern Europe.
Basel III extension
is a pointless tonic
to a deeper disease
In a fractional reserve banking sys-
tem, the central bank may be a
source of at-a-pinch liquidity – “last
resort lending” – for an otherwise-sol-
vent and otherwise-liquid bank. Such
a central bank should not provide last
resort lending to a bank that does not
manage its own liquidity properly. So
it is perfectly proper for the central
bank to tell banks that they will only
receive last resort lending if they hold
a certain amount of liquidity in nor-
mal times. The Basel rules are an
example of this. But, fundamentally,
liquidity requirements cannot be set
by a committee in Switzerland for
the whole world. They must be deter-
mined in a supervisory relationship
by the last-resort lender, the central
The Basel Committee is increasing
liquidity requirements, but now not
phasing them in until 2019. If they
were not set excessively high, the tim-
ing would be irrelevant, since the
Bank of England should only grant a
banking license to banks with ade-
quate liquidity now, not in 2019. But
unfortunately, the banking commu-
nity sees regulation as the key disci-
pline of liquidity, because it is yet to
face up to the need to expose deposi-
tors to genuine risk of loss, and hence
use market disciplines properly.
Only when depositors are credibly
exposed to losses will the banking sys-
tem become more healthy. We’re a
long way from politicians and regula-
tors accepting that.
Andrew Lilico is chairman of Europe
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Get set for Europe’s finest boatshow
HE Tullett Prebon London
Boat Show returns to ExCeL
London from 12-20 January
2013 and promises to light up
the capital with a stunning
showcase of all things marine.
The annual Show, this year situat-
ed within ExCeL’s South hall, is
widely renowned for being the first
place to see the newest marine
innovations, designs and technolo-
gy. The 2013 Tullett Prebon London
Boat Show will host the latest
launches, products and marine
brands, as well as offer a wide range
of activities that will entertain the
whole family. The 2013 Show
Attractions Include:
The Knowledge Box is the place to
head for those keen to learn from
leading experts on a wide range of
subjects. This year’s Knowledge Box
programme will consist of a variety
of talks, such as how to successfully
maintain an engine to compelling
tales of journeys across the oceans.
Show visitors will be able to see
experts from renowned TV chef
Richard Fox giving seafood cookery
demonstrations, power boating spe-
cialist Alan Priddy and the first
woman and youngest person to row
solo across the Indian Ocean, Sarah
Two Global Challenge yachts will
be out on the marina for the 2013
Show. These 72ft boats will also be
available for visitors to climb
aboard and explore. There will also
be the Gulliver G, a Nicholson 32
Mk V Sailing Yacht.
Some of the most acclaimed and
luxurious brands will be holding
world launches for their latest mod-
els at the Show, such as the Princess
82 Motor Yacht. Other super yachts
on display will be the Sunseeker
Predator 115 and the Fairline
Squadron 60.
The bar is centrally located and the
perfect place to indulge in a cock-
tail or two. On Thursday, 17
January, the Show will be open
until 9pm. With live music to enter-
tain, grab a drink and some food
and soak up the atmosphere.
The On The Water multi-activity
pools are at the centre of the
Show’s action and offer the perfect
opportunity to test your skills at a
variety of activities. You can either
try canoeing or kayaking, or if you
prefer not to get wet, head down to
the Micro Magic attraction to take
part in the model yacht racing.
Brand new for 2013, the World
Cruising attraction will immerse
visitors into the life of a cruiser.
Show goers will have the chance to
speak with experts and gain first-
hand “how-to” advice.
Scaling from model boats right
through to the largest vessels on
display at the Show, the marina is
an essential spectacle, as is the
500m of dock edge, which will
boast some impressive craft and on-
water displays from four times
British Jet Ski Freestyle Champion
Jack Moule.
This three day live regatta is a first-
of-its-kind collaboration between
world class yachting and interna-
tionally acclaimed fine artists, fea-
Four times UK Freestyle Jet Ski Champion Jack Moule (above) will perform at the 59th Tullett Prebon London Boat Show, a showcase of the very the best marine industry has to offer
For details and more information about
the Show, please visit
n Book your tickets in advance either
online or by calling 0871 230 7140.
Calls cost 10p per minute plus network
extras. If you are calling outside of the
UK please use the international number
+44 1159 934 456
n Two children, 15 years and under go
free with every paying adult ticket
n Located at ExCeL, it could not be
easier to visit the Show, with the new
cable car spanning the river from
Greenwich to the Royal Docks
n The Show is also accessible by DLR,
rail and car. Parking tickets can be
purchased in advance for a daily price
of £12 with an adult or concession
advance Show ticket.
turing over 18 renowned Olympic
and World champion sailors and
world-famous artists such as Ben
EINE, Goldie and Eley Kishimoto.
The Show continues the element of
enjoying the very best the marine
lifestyle has to offer with the com-
plementary Luxury Brand Show, sit-
uated within the South hall.
From 17-20 January, the North
Hall, opposite the Tullett Prebon
London Boat Show, will play host to
the London Bike, Outdoors and
Active Travel Shows. Access to all
these shows, including The Luxury
Brand Show is granted with just
one ticket, offering excellent value
for money with entrance to five
Shows for the cost of just one.
City A.M. readers have the chance to purchase tickets with £5
off the full ticket price of £20.
Simply log on to www.londonboatshow.comor call the ticket
hotline* on 0871 230 7140 and quote PL23 when booking.
*Calls cost 10p per minute plus network extras
London Collections Men: day one
FTER A stellar debut last summer,
London Collections: Men kicked off
in style yesterday with David
Cameron officially opening the
festivities with a reception at Downing
This year’s event will showcase over 60 of
the capital’s best menswear designers,
cementing the capital’s position as a key
player in the international menswear world.
Scottish born designer Lou Dalton was
perfect to open the event. She continues to
be one of the most promising emerging
designers on the schedule owed, in part, to
her ability to fuse traditional tailoring and
wearability with artistic flair and a nod to
the new – in that respect, her latest collec-
tion was business as usual. This season she
took inspiration from the North Sea oil
boom and the rugged beauty of the
Northern Isles, sending models down the
runway in classic utilitarian oversized outer-
wear. Naturally, it wasn’t all traditional. As
the collection progressed, skinny tartan
trousers, oilskins and proofed technical fab-
rics were thrown in for good measure. The
collection also showcased the designer’s lat-
est collaboration with British boot makers
Grenson. This season she created a modern
take on the label’s iconic “Monkey Boot”,
transforming it into a bold, workwear style
that will no doubt go down well with retail-
ers like Harvey Nichols and Mr Porter, whose
buyers were positioned front and centre,
pens at the ready.
Next up was Bally. The Swiss label took
over Bedford Square for the morning, filling
it with a big tent full of explorer gear to cel-
ebrate the 60th anniversary of the first
Everest ascent. The event marked the first of
many celebrations to mark the time when
Tenzing Norgay took the trip to Everest in
1953 with Sir Edmund Hilary, wearing a pair
of Bally Reindeer Himalaya boots. Guests
including Dominic Cooper and Benedict
Cumberbatch tucked into bacon buttys and
cups of tea while viewing the collection.
If there’s ever a brand that can fall victim
to being gimmicky, it’s Topman but this sea-
son the label outdid itself and the show took
guests on a sartorial adventure. Like Kim
Jones at Louis Vuitton last winter, it was all
about travel. Tibetan-print boiled wool pea
coats made a welcomed appearance along-
side oversized cropped parkas and explorer
knits in rich orange and warm red.
Functionality was key too, particularly on
accessories. All of the models sported over-
sized rucksacks that came complete with
leather hip flask, iPad and compass holders.
Lee Roach was another highlight. For
autumn, the designer continued his pen-
chant for minimalism and sobriety. The cuts
were clean and the colour palette stark,
rarely deviating from monochromatic
shades. Fabrics were where he really experi-
mented, presenting knitwear for the first
time by teaming cashmere sweaters with
angular jackets.
The highlight of the day was the latest
offering from design duo Agape Mdumulla
and Sam Cotton of Agi & Sam. The pair, who
showed as a part of the Topshop and Fashion
East menswear platform MAN, went all
English gentleman, but in a modern way.
Tweed trousers came styled with clashing
printed trousers and tailored blazers were
updated with puffa jacket-style sleeves.
If yesterday is anything to go by, this is
going to be another stellar week.
The inaugural three-day
showcase is back and
bigger than ever
Lee Roach stuck to his guns and presented
the minimalist pieces he’s known for
Despite showing more separates this
season, suits still dominated at Mr Start
It was all about rich mixed textures at the
latest Topman show
Lou Dalton had the English weather in mind
when creating this waterproof parka
The traditional English gentleman aesthetic was updated at Agi & Sam with single
breasted peacoats coming with contrast collars and teamed with clashing trousers
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Review11pmESPN FC Press
Pass: Football-related debate.
11.30pmFIS Alpine Ski World
Cup Report 12amLive NBA
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for 30 4.30amPlanet Speed
5amSerie A Review
5.30am-6amESPN FC Press
7pmCriminal Minds 8pm
Bones 9pmCSI 11pmCriminal
Minds 1amSupernatural
2.40amBones 3.30amCSI
4.20amNothing to Declare
5.10am-6amMotorway Patrol
7pmGreat Movie Mistakes IV
7.30pmFILMMonsters vs
Aliens 2009. 9pmSun, Sex and
Suspicious Parents 10pm
Pramface 11pmEastEnders
11.30pmFamily Guy 12.15am
Sun, Sex and Suspicious Parents
1.15amPramface 2.15am
Russell Howard’s Good News
Extra 3am-3.55amSun, Sex
and Suspicious Parents
7pmHollyoaks 7.30pmHow I
Met Your Mother 8pmFILM
Avatar 2009. 11.20pmRude
Tube: Mashed “n’ Mixed
12.25amThe Big Bang Theory
1.25amHappy Endings 1.55am
The Ricky Gervais Show
2.25amThe Cleveland Show
2.50amRude Tube: Mashed “n’
Mixed 3.45amThe Secret Life
of Us 4.30am-6amMade in
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Pawn Stars 9pmStorage Wars
10pmStorage Wars Unlocked
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1amStorage Wars Unlocked
2amAmerican Pickers 3amIce
Road Truckers: Deadliest Roads
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Gold 11pmSwamp Loggers
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Guns 3amJungle Gold 4.40am
Discovery Atlas 5.30am-6am
Meerkat Manor
7pmDr Oz 8pmJon and Kate
Plus 8 9pmI’m Addicted to
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10pmFILMSpecies 1995.
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Wildlife SOS
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits 1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
Using only the letters in the Wordwheel, you have
ten minutes to find as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd,
1 2 3 4 5 6
8 9 10 11
13 14 15
16 17 18
19 20 21 22
3 23 11
12 12 8
22 13
9 11
14 20
10 7
30 21
15 8
10 17 12
12 11 9
4 Protective cover
spread on the soil (5)
7 Geographical feature
such as Krakatoa (7)
8 Moon-related (5)
10 Occupy (a dwelling)
illegally (5)
12 Sleeveless outer
garment worn
by Arabs (3)
13 Group of musicians
playing trumpets,
horns, etc (5,4)
17 Calm central region
of a cyclone (3)
19 Kick out (5)
22 ___ Asimov,
writer (5)
23 Even-tempered (7)
24 Back of a ship (5)
1 Reproductive
structure (5)
2 Two-dimensional (6)
3 Former name of
the Indian city of
Chennai (6)
4 Kate ___, celebrity
model (4)
5 Stead (4)
6 Country, capital
Port-au-Prince (5)
9 Become less
intense (5)
11 Wharves (5)
14 Capital of Lebanon (6)
15 Close at hand (6)
16 Ursine creatures (5)
18 Eight singers who
perform together (5)
20 Speed (4)
21 Right to withhold
the property of
a debtor (4)




9 8 7 6 7 8 9 2
8 6 4 2 5 3 9 7 1
1 2 4 6
1 2 5 7 9 4 9
9 7 8 2 4 6 3 1 5
9 7 6 8 5
8 3 7 4 1 5 2 9 6
3 1 8 9 1 3 2
9 6 8 4
4 6 8 1 3 2 9 7 5
2 1 4 3 1 6 3 2
The nine-letter word was
The return of the drama starring Ben
Miller as a British detective working in
the Caribbean where the owner of a
sugar plantation is murdered.
Dara O Briain and Professor Brian Cox
explore the night skies, asking viewers
to help investigate an uncharted area
of Mars’ surface.
New series. Return of the
documentary following people with a
range of restrictive conditions as they
search for romance.
PARIS Saint-Germain president
Nasser Al-Khelaifi insists the football
club’s contentious £570m deal with
the Qatar Tourism Authority (QTA) is
“justified” and should not fall foul of
financial fair play (FFP) rules.
Experts behind European govern-
ing body Uefa’s FFP regulations,
which stipulate clubs’ losses for the
period 2011-13 must not exceed €45
(£37m) if they want to play in the
Champions League, say the deal
“stretches credibility”.
Teams are not permitted to boost
their revenues artificially through
contracts with related companies
under FFP. QTA is controlled
by the Qatari state, which
also ultimately owns the
French club.
PSG stand to receive
€150m (£122m) per sea-
son, rising to €200m
(£163m) by the end of the
four-year contract, despite
the deal not giving QTA
shirt sponsorship or stadium
naming rights – their most obvi-
ously valuable branding assets.
“The contract with QTA is justified
because PSG’s influence in the whole
region, not only in Qatar, has been
important,” said Al-Khelaifi, speak-
ing about the record-breaking agree-
ment for the first time.
“We have been building an inter-
national brand. This deal is a strong
Paris Saint-
Germain chief
says £570m
deal justified
symbol. Qatar have benefited a lot
from their investments in PSG.”
PSG have spent more than £200m
net since summer 2011, when Qatar
Sports Investments took over the
French giants, who had fallen behind
Lyon, Marseille and other rivals over
the previous decade.
The deal with QTA is back-
dated to the start of the sea-
son, meaning it could
help them balance their
books and meet FFP
requirements – unless
Uefa deem it to be a
breach of rules regard-
ing related companies.
David Lampitt, the chair-
man of Supporters Direct
who sat on an expert panel that
helped fine-tune Uefa’s FFP rules, told
City A.M. last month that PSG’s deal
would pose a major test to the govern-
ing body.
“It looks like a pretty astounding
deal that certainly stretches credibili-
ty,” Lampitt said. “Whether it under-
mines FFP or not rests with Uefa and
how they deal with it.”
New bowling rules play into our
hands, declares England coach
ENGLAND bowling coach David
Saker expects the latest rule tweaks
to make them a more formidable
force in one-day international
Fast-bowlers will now be able to
deliver two bouncers per over,
rather than just one – a change that
should suit England’s Steven Finn,
Stuart Broad and Tim Bresnan.
The only immediate drawback is
that it may have little effect on the
flatter wickets of India, where
England are set to begin a five-
match ODI series on Friday.
“I think they [the rules] will be in
favour of us with the fast-bowling
attack we have, definitely in English
conditions although India may be a
little different,” said Saker.
“My philosophy is to do the basics
right and our normal plans should
still work well, but the big thing is
the extra bouncers that will be
bowled. If the wicket is conducive
then it is going to play into our
Captain Alastair Cook is expected
to return from illness to lead
England in their final warm-up
match today as they look to restore
morale after beginning their 2013
campaign on a disappointing note.
The tourists lost by 53 runs to
India A on Sunday – Ian Bell’s 91 in
his audition as opening batsman was
one of the few high points – but
Saker believes England could benefit
from the unexpected defeat.
“I think it was a good wake-up call
not to take any side lightly and make
sure you’re on top of your game,”
Saker added.
“The game of cricket has a habit of
biting you on the bottom if you don’t
get the basics right and we probably
didn’t get the basics right [on
“We’ll be concentrating really
hard to put that right. We didn’t get
things right but better to do that in a
warm-up than the first ODI.”
Value in millions of
pounds per year of
PSG’s deal
SARACENS director of rugby Mark
McCall has signed a contract
extension that will keep him at the
club until 2015.
McCall, who took over from
Brendan Venter during the 2010-11
season, led the Vicarage Road outfit
to the Premiership title in his first
season, as well as reaching the
Heineken Cup semi-finals last year.
The 45-year-old has been joined by
four members of his backroom staff
in signing new contracts.
Kicking coach Dan Vickers, backs
coach Kevin Sorrell and forward
coaches Paul Gustard and Alex
Sanderson all put pen to paper on
deals running until the end of the
2014-15 season.
Saracens boss
gets new deal
TOTTENHAM face possible action
from European governing body
Uefa over November’s Europa
League clash at Lazio – a match in
which Spurs fans were allegedly
subjected to racial abuse.
Uefa has opened a case against
the Rome club over claims some
supporters targeted their rivals,
known for their links to the Jewish
community, with anti-Semitic
chants during the 0-0 draw.
A Tottenham fan suffered knife
wounds on the eve of the match in
an attack by dozens of Lazio Ultras
in a busy bar in the Italian capital.
But Spurs are also facing
investigation over claims their
supporters were involved in crowd
disturbances at the fixture.
Tottenham could be without
Emmanuel Adebayor until mid-
February after Togo chiefs said the
striker had performed a U-turn and
agreed to play at this month’s
Africa Cup of Nations. Adebayor
had originally suggested he would
opt out of the tournament,
following disagreements with the
Togo Football Federation.
But president Ameyi Gabriel
said: “We’re in the African Nations
Cup with Adebayor, we will be
together in South Africa. It is very
important to have him there.”
Spurs in dock
over race-row
Lazio fixture
WEST HAM have had a £2m bid for
Blackburn full-back Martin Olsson
rejected, as boss Sam Allardyce looks
to bolster his squad.
The Sweden international has
impressed for Blackburn in the
Championship this season, and
Hammers boss Allardyce is known to
be an admirer, having worked with
him during his time at Ewood Park.
A defender who likes to maraud
forward down the left flank, Olsson
made 27 Premier League
appearances last season.
The east London side have been
performing well in the top flight
this season, but with George
McCartney out for some time with
medial ligament damage they were
forced to play 18-year-old Dan Potts
at left-back against Manchester
United on Saturday, and Allardyce is
thought to be keen to bring in
another defender or two during the
January transfer window.
If the deal were to go through
Olsson would be the third high-
profile player to join West Ham this
January, alongside Joe Cole and
Marouane Chamakh. Midfielder Cole
left Liverpool on a free transfer while
forward Chamakh is on loan from
Arsenal. The Hammers have also
picked up Irish teenager Sean
Maguire from Waterford United on a
two-and-a-half-year contract.
Allardyce £2m
bid for Olsson
turned down
financial fair play in
Nikica Jelavic
began the
thrashing as
Everton swept
into round four
BARCELONA star Lionel Messi last night collected a record-breaking fourth consecutive
Ballon d’Or trophy, awarded for the world’s best footballer of last year. The Argentina
forward, who scored 91 for club and country in 2012, polled 41.6 per cent of votes from
journalists, national coaches and captains. Real Madrid’s Cristiano Ronaldo was second.
I really want to be in a final like that one day.
That’s my goal, what I’m working towards
BROADCASTER ESPN has apologised
after commentator Jon Champion
branded Liverpool striker Luis Suarez
a cheat.
Suarez controlled the ball with his
hand while scoring the second goal
in Sunday’s 2-1 FA Cup win over
Mansfield, prompting Champion to
describe it as “the work of a cheat”.
But after receiving complaints the
television channel yesterday
announced it had reprimanded the
veteran commentator.
“ESPN’s editorial policy is for
commentators to be unbiased and
honest, to call things as they see
them. Inevitably this can involve
treading a fine line on occasion,
especially in the heat of the
moment,” a spokesman said.
“Comments during the Mansfield
v Liverpool match caused offence
where none was intended and we
have spoken to our commentator
about this incident.”
Liverpool manager Brendan
Rogers has supported Suarez, saying
that it was the responsibility of the
officials to rule if the goal stood.
Suarez cheat
barb prompts
ESPN apology
Race hots up to host 2020 Games
TOKYO, Istanbul and Madrid
submitted their bids to host the
2020 Olympics to the International
Olympic Committee (IOC) yesterday.
The three cities will host an IOC
delegation led by British vice-
president Craig Reedie for four days
before the winning bid is revealed in
September. All three are due to
publish details of their submissions
to the public today.
Tokyo is thought to be favourite to
land the 32nd Olympiad, although
wild card Istanbul is known to be
popular among some IOC members.
The shortlist of three is smaller
than usual after Rome pulled out
last year, having failed to receive the
backing of the Italian government,
and Doha and Baku were rejected in
the first round by the IOC.
Watch Ryder Cup stars go at Majors in 2013
HAT an exciting year we
have ahead of us, after
perhaps the best ever 12
months for European golf in
2012, with Rory McIlroy confirming
his status as the world’s best player
and that magical Ryder Cup triumph.
My money would be on McIlroy
hanging onto his world No1 ranking
for some time now, and I’m also
extremely excited to see how he and
some of the other heroes of
Medinah fare at the Majors.
I’m particularly desperate to
follow McIlroy at the Masters – the
Ulsterman has unfinished business
there following his rollercoaster
2011 tournament, but we know how
well he can play at Augusta.
His change of club from Titleist to
Nike has got people wondering
whether he’ll need a period of
adjustment but I don’t think so.
Sand wedges and putters tend to be
the main difference – irons are
much the same – but he’s so good he
could play with a hockey stick.
I also fancy his Ryder Cup team-
mates Justin Rose and Ian Poulter to
be strong contenders at the big four.
Rose has stepped up a gear, his swing
has got even better and he’s become
a more accomplished all-round
player. The Masters looks the best fit
for him, while fellow Englishman
Poulter seems better suited to the
Open or US Open, which favour
We all eagerly wait to see whether
Tiger Woods can continue his
resurgence and return to the top,
because last year he looked at about
90 per cent of his best. Age is
certainly no barrier – he’s only 37
and I played my best golf at 43 – so
it’s a question of desire. If Woods
wants it enough, he can win another
Major and challenge McIlroy.
It was unfortunate to see Miguel
Angel Jimenez break his leg over
Christmas, and you have to wonder
how easy it’ll be for a more
experienced player like him to come
back from a five-month lay-off.
Time is also ticking for Lee
Westwood. The Englishman has been
so consistent but is still hunting that
elusive first Major. Is this his last year
as a serious contender? He must be
getting close.
Sam Torrance OBE is a multiple Ryder
Cup-winning golfer and media
commentator. Follow him on Twitter
EVERTON manager David Moyes
revelled in a rare goal spree last
night after his side swept
Cheltenham Town aside to set up
an FA Cup fourth round trip to
Sunderland or Bolton.
Nikica Jelavic, Leighton Baines,
Leon Osman, Seamus Coleman and
Marouane Fellaini all scored as the
Toffees hit five for only the second
time in almost two years.
“We’ve not scored a lot of goals
like that – we scored at different
times and from different
goalscorers and it’s something we
need to improve on,” said Moyes.
“They always had a chance – even
at 3-1 they had a sniff of one – and
the game can swing, but we scored
some good goals and played well
enough to win the game.”
Moyes named a strong team to
face the League Two high-fliers and
was rewarded as his team raced
into the lead after 12 minutes,
striker Jelavic reacting quickly after
Fellaini’s shot hit the post.
Fellaini was involved nine
minutes later when Cheltenham
captain Alan Bennett climbed on
the Belgium midfielder to concede
a penalty that Baines clinically
despatched low to the left.
The Premier League side looked
safe when Osman collected a Baines
cut-back, showed neat footwork
and fired the third past Scott
Brown just after half-time, but the
hosts instantly hit back through
Russell Penn.
Full-back Coleman lifted over
Brown for the fourth – his first
goal since March 2011 – just before
the hour and Fellaini capped the
rout by finishing Victor Anichebe’s
cross a minute from time.
Toffees smash
five to waltz
into round four
Blair calls time on Scotland career
n RUGBY UNION: Former Scotland
scrum-half Mike Blair has retired from
international rugby. Blair won 85 caps,
including 14 as captain, but opted to
end his Test career after deciding a
place in the squad for the 2015 World
Cup was unrealistic. Welsh flanker
Morgan Stoddart has also announced
his retirement from rugby, after failing
to recover from a broken leg.
Juve bid for ex-Blues star Drogba
n FOOTBALL: Juventus have made an
enquiry about signing former Chelsea
striker Didier Drogba from Shanghai
Shenhua during the January transfer
window. The Italian champions are
seeking forward cover and the 34-
year-old Ivory Coast star has been
linked with a move despite only
moving to China from Stamford
Bridge last summer.
n The bookies’ favourite, seen by many
as a safe option, with much of the
infrastructure already in place
n Tokyo has hosted the Olympics once
before, in 1964
nPromises a “compact Games” with
almost all competitions to be held within
a 10km radius
nThe IOC’s technical report called
Tokyo’s bid “a very strong application”
n Offers a new Olympic location, and
would be the first host with a majority
Muslim population
n The city has applied five times for the
Games, always unsuccessfully
n Bid received more national backing
after Turkey’s offer to host football’s
Euro 2020 failed
n Despite being the least prepared in
terms of infrastructure, the IOC said
Istanbul “offers good potential”
n Outsider for the Games, despite
coming third with its 2012 bid and
second for 2016
n Hindered by the economic troubles in
Spain, which have cast doubts over their
ability to put on the spectacle
n Madrid has never hosted the
Olympics, but Spain staged the 1992
Games in Barcelona
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o·J o·J, V Ke]s (USA) |t l S+f+ra1+ (O/e) o·Z o·¡, J
Z|erç (O|r) |t (6) S Stcsar (Aas) o·J o·ì (ì·9) o·4, (J) S
Crrari (lt+) |t K P||s|a1+ (O/e) o·¡ o·J, S Ka/retsa1+
(Ras) |t J Oaerçes (Oer) J·o o·J o·J, O Vas|a|ae1+ (K+/)
|t Y w|c|m+]er (Be|) J·o ì·o (ì·5) o·Z.
(ì.45pm ar|ess st+teá)
0ap|ta| 0ae 0ap Sem|-I|aa| ||rst |eq
Br+áfará O|t] 1 Astar V|||+ ...........................................................................
apewer |eaqae Twe
Varec+m|e 1 D+çer|+m & Reá|r|áçe ....................................................
Jehasteae's Pa|at Trephy Seathera Sect|ea
le]tar Or|ert 1 Yea1|| (ìpm)........................................................................
Otfará Utá 1 Saat|erá...................................................................................
B|ae Sqaare Bet Prem|er
Herefará 1 A|O Te|fará ...................................................................................
Saat|part 1 l|rca|r O|t] ................................................................................
latar 1 B+rraW ..................................................................................................
Br+|rtree Tr 1 V+cc|esf|e|á ..........................................................................
A|fretar Tr 1 wret|+m ..................................................................................
O+tes|e+á 1 Or|ms|] .......................................................................................
Tcar Hatcl. De||| 1 Erç|+rá (De|||, Oo.JO).
CHELTENHAM TOWN...................1
Laura Robson aims to emulate fellow Brit Andy Murray’s grand slam win

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