Cityam 2011-11-30

MINI-BUDGET SPECIAL P 2,3,4, 21-29
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www.cityam.com FREE Issue 1,522 Wednesday 30 November 2011
Osborne forced
to borrow more due
to low growth and
high unemployment
Fitch warns UK
will lose triple-A
rating in event of
further shocks
Chancellor says it
will be hard to avoid a
recession if Eurozone
crisis deteriorates
GEORGE Osborne was forced to
announce two more years of austerity
measures yesterday, after official figures
showed the national debt spiralling out
of control due to rising unemployment
and flagging economic growth.
Just hours after the chancellor
pledged to do whatever it takes to pro-
tect Britain from the debt storm, the
Office for Budget Responsibility (OBR)
said it now expected public sector net
debt to peak at a staggering 78 per cent
of GDP in 2014.
Osborne responded to the worsening
fiscal position by announcing plans to
cut public spending in real terms by an
extra one per cent in both 2015 and 2016,
extending the era of austerity well into
the next parliament and stamping out
any hopes of tax cuts before the next
election.
Fitch, one of the big three ratings
agencies, warned that the UK was now
the most indebted triple-A country in
the world, with the exception of the US,
which was stripped of its gold-plated
credit rating by S&P earlier
this year.
Fitch added
that in the event of further financial
shocks such as a meltdown in the
Eurozone, Britain would be unable to
retain its triple-A rating without more
austerity measures.
Osborne admitted as much when he
delivered his Autumn Statement to the
House of Commons yesterday, warning
that if the rest of Europe heads into
recession, it may prove hard to avoid one
here in the UK.
The OBR slashed its growth forecast
for next year by 1.8 per cent to 0.7 per
cent. It then pencilled in growth of 2.1
per cent in 2013 and 2.7 per cent in 2014,
although independent economists
warned that these predictions were far
too optimistic.
The deterioration in the public
finances left the chancellor with little
room to announce new policies to boost
anaemic economic growth. He saved
1bn a year by scrapping plans to
increase child tax credits, while a freeze
in the working tax credit will save
around 275m a year.
Capping public sector pay
r i s e s
at one per cent in 2013 and 2014, after
the current freeze ends, will save
around 1.8bn over the course of
the parliament.
Osborne used the savings in
current spending to
announce 5bn of invest-
ment in infrastructure
projects and a raft of
mi cro- measures
designed to help
entrepreneurs
and small
businesses.
ALLISTER
HEATH:
P4
BY DAVID CROW
POLITICS
IN 2002 PUBLIC SECTOR NET

DEBT WAS 31.6% OF GDP
PUBLIC SECTOR NET
DEBT WILL HIT 78%
OF GDP IN 2014
News | Autumn Statement
2 CITYA.M. 30 NOVEMBER 2011
UK ECONOMIC
OUTLOOK
lThe Office for Budget Responsibility
(OBR) has slashed the growth forecasts
it made in March.
lIts central forecast for 2011 has been
revised down to 0.9 per cent from the 1.7
per cent March prediction. It expects 0.7
per cent year-on-year GDP growth in
2012, instead of 2.5 per cent.
lIt now forecasts UK GDP to grow by
2.1 per cent in 2013, 2.7 per cent in 2014
and three per cent in 2015 and 2016.
lHowever, this central forecast
assumes that the euro area finds a way
through the current crisis.
lThe OBR says that there are too many
ways that a failure to resolve the euro
crisis might play out to quantify the con-
sequences in a meaningful way. However,
it suggests that while it thinks there is an
equal chance that growth might be bet-
ter or worse than its central forecast,
growth is more likely to be drastically
worse than drastically better.
lThe UKs debt level as defined in the
Maastricht treaty is estimated at 93.9
per cent of GDP in 2014-15. On the gov-
ernments favourite net debt definition it
will hit 78 per cent of GDP.
l Public sector net borrowing will fall
from 8.4 per cent of GDP in 2011-12 to
1.2 per cent in 2016-17.
SPENDING CONTROLS
lThere will be two more years of cuts,
by 1.1 per cent in 2015-16 and 0.9 per
cent in 2016-17. The aim is now to cut
spending by a total of 5.3 per cent.
City A.M.s at-a-glance guide to the
key points of Osbornes mini-Budget
George Osborne and Danny Alexander leave Downing Street for the Commons, where the chancellor delivered his Autumn Statement Picture: REUTERS
lThe state pension age will be raised to
67 between April 2026 and April 2028.
This is expected to save around 60bn in
todays prices between 2026-2027 and
2035-2036.
lPublic sector pay rises will be set at an
average of one per cent for each of the
two years after the current pay freeze
ends (for most, in 2013). Health and edu-
cation departments will get to keep the
savings, other departments will have
their budgets cut accordingly.
lForeign aid spending will be 0.56 per
cent of gross national income in 2012
and 0.7 per cent from 2013.
TAX
lThe bank levy will be increased to
0.088 per cent from 1 January 2012 to
meet the governments target to raise at
least 2.5bn from this every year.
lEnergy-intensive firms will be com-
pensated for the higher costs of energy
imposed by government policy.
Beginning in 2013, it will be around
250m over the spending review period.
lThe 3.02p per litre fuel duty increase
planned for 1 January 2012 will be post-
poned to 1 August 2012. The fuel infla-
tion increase planned for 1 August 2012
(approx. 1.92ppl) will be scrapped.
lFor 2012, TfL and regulated rail fare
rises will be capped at RPI + 1 per cent.
lThe government will subsidise South
West Water to cut household bills by 50.
lThe government will freeze the annual
exempt amount for capital gains tax at
10,600 for 2012-13.
lAir Passenger Duty rises will go ahead
as planned, including on private jets.
lA tax credit will be introduced in 2013
to encourage research and development.
lSome enterprise zones will be granted
100 per cent capital allowances.
lFrom January 2012, the Enterprise
Finance Guarantee will be extended to
businesses with up to 44m turnover.
lThe small business rate relief holiday
will be extended for another six months.
BENEFITS & PENSIONS
lMost working age and disability bene-
fits will be uprated in line with the CPI
measure of inflation in 2012-13, an
increase of 5.2 per cent. The disability
elements of tax credits will be uprated
by CPI. The government will not uprate
the couple and lone parent elements of
the working tax credit in 2012-13.
lThe child element of child tax credit
will be uprated in line with CPI, and will
rise by 135 per year in 2012-13. The
110 above-inflation increase that was
planned for 2012-13 will not go ahead.
lAction will be taken to clamp down on
tax relief to employers making asset-
backed pension contributions.
lThe basic state pension will increase
by the triple guarantee, as announced in
June 2010. The standard minimum
income guarantee in pension credit will
increase by 3.9 per cent in April 2012.
CREDIT EASING
l21bn will be spent helping small and
medium-sized enterprises (SME) unable
to get credit from commercial lenders.
lA National Loan Guarantee Scheme
will make up to 20bn of state guaran-
tees for bank funding so banks lend to
businesses they consider too high risk.
lA Business Finance Partnership will
provide 1bn to small businesses
through non-bank channels.
INFRASTRUCTURE
lDespite the grim state of its finances,
the government believes it can plan out
a strategy for coordinating public and
private investment in UK infrastructure,
backing investment of 30bn.
l6.3bn of notional savings generated
over the Spending Review 2010 period
will now be spent on infrastructure
(1.3bn of this was announced earlier in
the autumn). A further 1bn of private
sector investment will be guaranteed by
the government. A commitment to 5bn
of capital projects in the next spending
review period is also being made. Some relief from the furnace of government-imposed energy costs Picture: REUTERS
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Acting Night Editor Marion Dakers
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Jo Simpson
Pictures Alice Hepple
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
News | Autumn Statement
Nick Clegg (left)
looked worried on
his way to the
Commons, but
George Osborne
and David
Cameron (right)
looked astonished
at any criticism.
Picture (L): REX
Picture (R):
REUTERS
lA memorandum of understanding has
been signed with two groups of UK pen-
sion funds to invest in infrastructure.
lThe government is working with the
Association of British Insurers to estab-
lish an Insurers Infrastructure
Investment Forum. These initiatives are
targeting 20bn of investment.
lThe Regional Growth Fund for England
is being increased by more than 1bn,
ironically to support the growth of the
private sector in areas currently depend-
ent on the public sector.
HOUSING
lA new build indemnity scheme will
back high loan-to-value mortgages on
new build houses, allowing buyers to put
down just five per cent deposits.
lA right to buy initiative on council
housing will offer discounts on state-
owned properties of up to 50 per cent.
lA 400m investment fund will back
firms with stalled development projects
that have planning permission.
lThe government will invite proposals
from developers and local authorities for
new developments, from modern garden
cities to urban and village extensions, but
only where there is clear local support.
lThe government is spending 200m
over 2012-13 and 2013-14 to encourage
early uptake of its Green Deal initiative
on energy efficient buildings.
lThe stamp duty land tax relief for
first-time buyers has not increased their
numbers and will end on 24 March 2012
as planned.
EDUCATION
l600m will be spent on 100 new free
schools by the end of this parliament.
l600m will be spent on local authori-
ties with high demographic pressures.
UNEMPLOYMENT
l940m will be spent to get the young
into work. The OBR warns this will dis-
place older workers, not lower joblessness.
lThere will be wage incentives for
160,000 employees, 40,000+ payments
to small firms that take on apprentices
and a work experience offer for every
unemployed 18-24 year-old after three
months on the jobseekers allowance.
l50m will be spent on 16-17 year-olds
in most need to get them into education,
apprenticeship or on-the-job training.
lBy 2014-2015, 380m a year will help
130,000 two-year-olds annually to get
free weekly education and care.
Marc Sidwell
DONT MISS
ALL THE
NEWS AND
ANALYSIS
IN OUR
AUTUMN
STATEMENT
SPECIAL
P4, 21-29
News | Autumn Statement Special
Osborne misses a great opportunity
DONT
FORGET
OUR
BUDGET
SPECIAL
ON
PAGE 21
ing between the lines of yesterdays
mini-Budget, it is clear that the UK is
out of money to an even more extreme
degree than the political establish-
ment had previously realised, which
means that jam may not materialise
for many a year. This horrible reality is
finally beginning to dawn on George
Osborne, though he is only half-acting
on it while still clinging to many of the
certainties of the boom years (Ed Balls,
needless to say, is on another planet,
where scarcity has been abolished and
the laws of economics repealed).
The problem is that we are now in a
vicious debt spiral: on the Maastricht
definition, the UKs national debt will
peak at 94 per cent of GDP in 2014-15, a
EDITORS LETTER
ALLISTER HEATH
AS ever, it was Lewis Carroll who put it
best in Alice Through the Looking
Glass: The rule is, jam tomorrow and
jam yesterday but never jam today.
Even that could be too optimistic: read-
dangerously high level that global
studies have shown has a crippling
effect on economic growth (it will hit
78 per cent on the governments
favourite measure). Britains national
debt will be worse than that of
Germany, France and the Eurozone; it
will remain better than Italys, but
that is no great achievement. Yet the
more debt we get, the less growth we
get and the more tax receipts disap-
point and therefore the national
debt grows again. The answer should
be to combine massive deregulation
and supply-side reforms of the econo-
my with radical spending cuts to
break out of the spiral of decline.
Tragically, while Osborne is clearly
increasingly aware of the hole he is in,
he decided to try and wing it, delaying
his new found radicalism so much
that it has lost most of its bite. He pre-
sumably didnt dare try and explain to
the public that we are all much poorer
than we thought, which means that
we simply cannot afford to spend so
much, especially on public services.
Yesterdays Budget from Osborne
was thus a weird mix of neo-Brownite
obfuscation, a shameless shifting of
the fiscal goal-posts, tinkering, over-
spun, not especially relevant projects,
robust free-market rhetoric
(unmatched by game-changing
reforms), lots of silly corporatism, a
few good but minor polices to incen-
tivise new firms and
(rightly) far more
spending cuts but
only after the next
election.
His plan to boost
youth jobs via subsi-
dies to firms was
superbly destroyed
by the OBR, which
rightly sees it as a
costly way of shifting
jobs to the youth at
the expense of older
workers while doing
nothing to create
extra jobs overall.
There was some
good stuff on dereg-
ulation; and the
chancellor is right to
seek to tap pension
funds to finance infrastructure
(though that will often mean money
being reallocated out of equities).
But if there is one man on earth
who can talk the austere talk while
blazing an almost Keynesian path, it is
Osborne. For all his righteous indigna-
tion at those who would seek to bor-
row the UK out of a debt crisis, he is
doing just that. The national debt will
increase by 61 per cent during this par-
liament, even more than the 60 per
cent that his predecessor Alistair
Darling was planning (and which
began to panic the markets at the start
of 2010). The governments net debt
will jump from 905.3bn last year to
1.515 trillion by 2016-17; the increase
is 112bn larger than predicted in
March. In just eight months, the situa-
tion has deteriorated disastrously;
another such slippage caused, for
example, by a crisis in the Eurozone
could be lethal for Britains prospects.
Osbornes target of eradicating the
structural deficit by 2015-16 will be
missed; his attempt at redefining his
target as a rolling one which would
mean that the balanced budget year
would always be five years away, and
therefore meaninglessly elastic
deserves to be laughed out of town. As
a result, the planned total fiscal tight-
ening during 2010-11 and 2011-12 has
fallen from 4.5 per cent of GDP to 3.5
per cent of GDP in the new forecast.
The Office for Budget Responsibility
expects GDP growth of 0.9 per cent
this year and 0.7 per cent in 2012.
These forecasts have the virtue of
being realistic, although it is evident
that the Eurozone crisis poses major
downside risks. GDP growth of 2.1 per
cent in 2013 looks just about achiev-
able but growth of 2.7 per cent in
2014 and 3.0 per cent in both 2015 and
2016? Forget it. These are ridiculously
over-optimistic numbers, with or with-
out a Eurozone implosion. There is far
too much private sector deleveraging
to do and the economy is too tied up
in red tape and incentive destroying
taxes. The OBR is wrong to believe that
the trend (sustainable) growth rate the
UK can aspire to will increase from a
depressed 1 per cent this year to 2 per
cent by 2012 and 2.3 per cent from
2014. This is unrealistic, partly because
productivity is bound to remain low in
the public sector, which means that
the economy in 5-6 years time is likely
to be smaller than what the OBR
hopes for, and the deficit even larger.
The best part of Osbornes budget
was his acceptance that cuts will have
to be much greater. Total expenditure
will be cut by 0.9 per cent a year in real
terms in 2011-12, 2012-13, 2013-14 and
2014-5, adding to 3.4 per cent, roughly
as previously planned. But there will
then be two more years of cuts, both
conveniently pushed back to after the
election: a 1.1 per cent drop in spend-
ing in 2015-16 and a further 0.9 per
cent drop in 2016-17. The new plan is to
cut spending by a total of 5.3 per cent,
in a partial and
belated realisation
that years of over-
spending have given
us an unaffordable
state sector and that
our knackered econ-
omy will require
more, not less aus-
terity but the
reductions are
spread over six years,
which is an eternity
in politics as well as
in real life. Will they
really ever happen?
It would have been
better to accelerate
them drastically,
take the sharp pain
and then move on.
Cynical investors
will also doubt whether Osborne real-
ly wants to cut that much or
whether, like Brown, he would rather
pass on a massive deficit black hole to
his successors.
Public sector job cuts will hit
710,000, far more than previously
expected; pay hikes will be capped for
state workers for another two years
(given that the 50p tax rate wont be
abolished until these pay restraints
end, that presumably means it will be
retained permanently). While it is
always sad when people lose their
jobs, many of these public sector cuts
will come through natural attrition
and crucially, it is necessary to reduce
the size of the government workforce,
which spiralled out of control under
the previous government. Even after
all the cuts, the state will directly
employ more people than it did under
John Major. If all goes according to
plan, total employment will rise by
around 1.7m between the start of 2011
and 2017, with the private sector creat-
ing 2.4m extra jobs. The problem, of
course, is that all these predictions are
based on pie in the sky economics: if
the Eurozone does go pop, and
implodes in a messy, uncontrolled
manner, all bets are off. It is because
this risk is so high that Osborne
should have had the guts to be more
radical. He didnt and so his fate and
ours is now in the hands of powerful
economic forces that nobody can pos-
sibly control.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
The national debt will
increase by 61 per
cent during the course
of this parliament,
even more than the
60 per cent his
Labour Party
predecessor Alistair
Darling was planning
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HUGO BOSS FORMAL SPECIALIST STORE 85-90 Queen Street London EC4A 2AS Phone 020 7213 9717
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SOME OF the worlds biggest banks
were hit with credit rating down-
grades from ratings agency Standard
& Poors yesterday after a sweeping
overhaul of the criteria it uses to
assess institutions financial strength.
S&P downgraded 15 banks after
reviewing the ratings of 37 major
institutions. It dropped seven of the
top US banks by one notch, including
the four biggest by assets: JP Morgan;
Bank of America, Citigroup and Wells
Fargo. The others were Goldman
Sachs, Morgan Stanley and BNY
Mellon, with only State Streets rating
left unchanged.
UK banks were also affected, with
RBS, Lloyds and HSBC each downgrad-
ed by one notch and some of Barclays
strategic subsidiaries downgraded by
one place as well.
Others in Europe such as Deutsche
Bank and Credit Suisse were moved
from a stable to a negative outlook.
But S&Ps review left scores of other
emerging markets and European
bank ratings untouched, such as
Banco Santander; Credit Agricole,
Commerzbank and Brazilian and
Argentinian names among others.
S&P said fears over capital adequa-
cy and banks sovereign debt holdings
dogged some institutions while mort-
gage lenders were under pressure in
the US. It also factored in the loss of
government guarantees.
S&P slaps downgrades
on 15 major global banks
BY ALISON LOCK
BANKING
News
THE EUROPEAN Central Bank (ECB)
accidentally performed 9.5bn
(8.1bn) of quantitative easing last
week because it was unable to per-
suade banks to deposit enough funds
with it to make up for its bond pur-
chases.
The incident is a stark signal that
the Bank could be reaching the tech-
nical limit of its ability to buy bonds
in order to keep a cap on sovereign
yields, says Raoul Ruparel, an econo-
mist for Open Europe.
Economists have in the past suggest-
ed there could be a limit on the capac-
ity of the bond-buying programme
due to a lack of available deposits the
Bank can take in to make up for the
impact of its spending on the
Eurozones money supply.
The ECB has now bought 203.5bn
of bonds issued by Eurozone govern-
ments, but is only holding an extra
194.2bn in deposits to make up for it.
Usually, the ECB sterilises its bond
purchases by bringing in more weekly
deposits from banks looking to store
cash somewhere safe.
But the fact that its sterilisation
failed last week suggests that banks
are unable or unwilling to increase
their deposits with the Bank, probably
because they want to hang onto the
extra liquidity as a cushion against
market shocks.
Economists will keenly watch next
weeks figures, released on Monday, to
see if the ECB is able to get the pro-
gramme back on course.
If not, it could precipitate a political
crisis. At that point it is likely that the
ECB and Germany will have to make a
fundamental decision over whether to
either continue the bond purchases,
abandoning their core monetary prin-
ciples, or stick to their guns and wind
down the purchase programme alto-
gether, says Open Europes Ruparel.
Meanwhile, Eurozone finance min-
isters last night agreed on the techni-
cal details of their bailout fund, the
European Financial Stability Facility
(EFSF), but the chief of the fund, Klaus
Regling, admitted that there would
not be significant investor interest in
the coming weeks.
We do not expect investors to com-
mit large amounts of money in the
next few days or weeks. Leverage is a
process over time, he said. In October,
Eurozone ministers had said its
250bn in available cash would be
leveraged to four or five times. That
now looks optimistic in the light of lit-
tle investor interest.
Eurogroup chairman Jean-Claude
Juncker also said the IMFs resources
would be beefed up so that it could
match the EFSFs firepower. And the
Eurozone agreed to pay out Greeces
11bn aid instalment.
ECB injects
9.5bn of QE
into Eurozone
Our Rate: Economy.
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BY JULIET SAMUEL
EUROZONE
THE BIG four accountancy firms will

face compulsory rotation every six
years and will be barred from offering
non-audit services to audit clients,
under proposals being brought for-
ward today by EU markets chief
Michel Barnier.
But Barnier has stopped short of
proposing joint auditing for all major
companies after opposition from the
Big Four firms and some member
states, such as Belgium, who said they
had a negative experience when the
principle was introduced into their
markets.
Barniers Green Paper has been
delayed by a week, while he has nego-
tiated last minute changes, especially
on the need for joint audits.
The proposals still have to be
agreed with member states and be
passed by the European Parliament.
Barnier moves forward with his
assault on Big Four accountants
ACCOUNTANCY
ITALIAN BOND YIELDS HIT EURO-ERA HIGH

ITALY, under new Prime Minister Mario Monti, had to offer a record 7.89 per cent yield to
sell three-year bonds yesterday, a stunning leap from the 4.93 per cent it paid in late October,
and above levels at which Greece, Ireland and Portugal were forced to apply for bailouts.
TRADERS who rushed to bet on
market swings caused by turmoil
in the Eurozone are set to help IG
Group increase first-half revenue
by nearly 25 per cent.
The spread betting firm yester-
day said revenue should rise 23 per
cent to more than 193m, marking
a swift turnaround after it issued a
profit warning in January.
IG has kept costs in line with
expectations and has benefited as
traders rediscovered their appetite
for risk amid the sovereign debt cri-
sis that has spooked markets.
Following on from a strong first
quarter, the group has continued
to experience high levels of client
activity during the second quarter
of its financial year, IG said yester-
day in an update on the six months
to 30 November.
Analysts at Numis said IG would
benefit from the collapse of broker
MF Global, which held about a
sixth of the Australian market.
These customers are probably
still trapped in the liquidation
process but should return to the
market next year, probably looking
for a safer place to trade, James
Hamilton and David McCann
wrote.
The MF Global collapse coupled
with increased regulation should
favour the larger financially
stronger groups like IG.
IG, which says it is the worlds
biggest spread-betting company by
revenue, competes with unlisted
rivals such as City Index and CMC
Markets.
Turmoil no trouble
for IG as sales soar
Rothschild trust looking for
deals amid Eurozone crisis
BY PETER EDWARDS
CAPITAL MARKETS
THE INVESTMENT trust run by Lord

Rothschild is set to take advantage
of the firesale of Eurozone bank
assets.
RIT Capital Partners yesterday
posted a slump of nearly 10 per cent
in net asset value (NAV) but
Rothschild, its chairman, said they
wished to do more ventures of the
like of Renshaw Bay, an asset man-
agement and hedge fund business it
launched with former JP Morgan
executive Bill Winters.
We are exploring opportunities
in distressed assets; banks, especial-
ly in Europe, will be selling assets
possibly at much discounted levels,
Rothschild (pictured) said.
City A.M. understands this
could include real estate,
corporate credit and struc-
tured products.
Rothschild, the head of
the family banking
dynasty in Britain, also
gave a sober summary
of recent global tur-
moil: These have
been some of the
most torrid markets of my lifetime.
Europe has been lead violinist in a
discordant band.
Speaking fewer than two weeks
after David Cameron demanded
German Chancellor Angela Merkel
take robust action over the crisis,
Rothschild warned that Europes
problems had not been adequately
addressed.
RIT said NAV per share fell
9.6 per cent to 1,165.9p for the
six months to 30 September,
compared to a 13.5 per cent
decline in the FTSE All-Share
index over the same period.
BY PETER EDWARDS
FUND MANAGEMENT
News
SCHRODERS PREDICTS 2012 RECESSION
The UK is likely to be dragged into a recession by the Eurozone next year, accord-
ing to investment firm Schroders. At its Annual Crystal Ball event yesterday,
chief investment officer Alan Brown said: We are going to find out in the next
12 months whether the Eurozone holds up and whether the UK is going to go
into a double-dip recession. Picture: GETTY
ANALYSIS l IG Group Holdings
p
29Nov 23Nov 24Nov 25Nov 28Nov
480
470
450
460
440
430
420
474.00
29 Nov
MF GLOBAL UK administrator KPMG
said it had recovered about $500m
(320m) of client assets frozen at the
defunct broker, and planned to make
significant returns to customers
before a March 2012 deadline.
We have so far collected about a
half of the approximate $1bn out-
standing but it is hard to speculate on
the final amount given we are
dependent on third parties, said
KPMG partner Richard Heis yesterday.
Former MF Global UK clients will be
relieved their cash is starting to
return to the administrator, via
exchanges, clearing houses and
banks, as they prepare to start filing
their applications to claim back their
monies.
KPMG said on Monday clients will
be able to formally claim from early
next month and have to the end of
March next year to make submissions.
Heis said: While we have set a
deadline for client monies claims of
the end of March, we will evaluate all
claims made and, naturally, some
claims will be more difficult to agree.
KPMG recovers
$500m in MF
Global assets
FINANCIAL SERVICES
CONSUMER confidence in the US

climbed by the most in more than
eight years during November, fig-
ures showed yesterday, increasing to
56 from a revised 40.9 reading in
October.
The Conference Boards index
showed the biggest monthly gain
since April 2003, rebounding this
month from a to-and-a-half-year low,
but a fall in house prices in
September underscored the weak
foundations of the recovery.
This is a huge rise in consumer
confidence. It gets us back to second
quarter levels and further under-
scores the dramatic move that weve
seen in consumer spending, said
Lindsey Piegza, an economist at FTN
Financial in New York.
Generally when the consumer
becomes happier, more confident,
they're generally more likely to dip
their toes back into spending.
Earlier, data had showed that the
beleaguered housing market is still
struggling to get back on its feet.
The S&P/Case Shiller composite
index of 20 metropolitan areas fell
0.6 per cent from August on a sea-
sonally adjusted basis, falling short
of economists forecasts for no
change.
US consumers hopeful as
confidence figures soar
US President Barack Obama still faces hurdles in the US economic recovery
BY HARRY BANKS
US ECONOMY
News
NEWS | IN BRIEF
St Ives sales up 10pc on last year
St Ives has reported a sales increase of
around 10 per cent for the 13 weeks to
28 October, compared to the same peri-
od last year. The firm said the increase
is mostly from both acquisitive and
organic growth in its marketing serv-
ices segment, while sale across the
print businesses were broadly in line
with last year despite tough economic
times.
Gatwick turnover takes off
Gatwick posted a 15 per cent jump in
half-year turnover yesterday. Underlying
passenger numbers rose 3.3 per cent to
19.7m, and cost control and new landing
fees helped lift earnings before excep-
tionals 34.4 per cent to 164.4m. The
airport has scrapped landing fees during
winter to encourage airlines to land at
Gatwick during off-peak times of year,
while hiking its summer charges.
News
FACEBOOK is expected to go public
next year in one of the largest initial
public offerings ever.
It is thought that the social network-
ing site will aim to raise $10bn (6.4bn)
from an IPO, to launch between April
and June next year, resulting in a com-
pany valuation of more than $100bn.
Although Mark Zuckerberg has kept
Facebook private for longer than
expected, the company is likely to
reach the 500-shareholder limit by the
end of this year and will be required to
make its financial information public
come April as specified by the SEC.
Facebook, thought to have almost
$4bn in revenue, would be the fourth
US company to complete an IPO with a
greater value than $10bn, alongside
Visa, General Motors and AT&T
Wireless Services.
Groupon floated on 3 November at
$20 a share. Shares plunged 43 per
cent since last Monday and closed yes-
terday at $15.24.
Facebook IPO
is expected to
raise $10bn
TECHNOLOGY
AMERICAN Airlines and its parent

company AMR Corp filed for bank-
ruptcy yesterday after failing to win a
labour deal with pilots and suffering
from mounting fuel costs.
AMR had been the only major US
carrier to avoid bankruptcy in the
past decade. Its rivals used bankrupt-
cy to restructure their labour agree-
ments and cut costs.
That left AMR, the third-largest US
airline behind United Continental
Holdings and Delta, with the highest
labour costs in the industry and the
only major airline still funding work-
er pensions.
It completes the cycle, said
Helane Becker, an analyst with
Dahlman Rose & Co. Every major air-
line in the United States has filed for
Chapter 11.
In its bankruptcy filing, AMR said
its cost-cutting in recent years had
been insufficient and that it could
not continue without changing its
uncompetitive cost structure.
British Airway parent IAG said its
partnership with AMR, which is a
revenue sharing agreement, contin-
ues to operate as usual.
Shares of AMR, whose passenger
planes average 3,000 daily US depar-
tures, have tumbled 45 per cent since
the end of September.
The world changed around us,
incoming chief executive Tom Horton
told reporters on a conference call.
It became increasingly clear that
the cost gap between us and our com-
petitors was untenable.
Incumbent chief executive Gerard
Arpey yesterday announced his retire-
ment.
The airline said it and its regional
affiliate American Eagle would con-
tinue to operate as usual, fly their
normal schedules, honour reserva-
tions and make exchanges and
refunds.
Shares of rival airlines rallied on
expectations that fares could rise, as
AMR kept a lid on industrywide fares
in its effort to keep its airplanes full.
Under its Chapter 11 bankruptcy
filing in a New York court, the compa-
ny listed assets of $24.72bn and liabil-
ities of $29.55bn. The company has
$4.1bn in cash
American Airlines goes into Chapter
11 after deal with pilots falls through
MINING
JAMES Murdoch has survived as chair-

man of BSkyB although his mandate
for leading the group was dealt a blow
as 44 per cent of the companys inde-
pendent shareholders abstained or
voted against his re-election at yester-
days AGM.
Murdochs win is unsurprising as
News Corporation, headed by his
father Rupert, owns 39 per cent of the
satellite giants shares, but the large
protest vote will be seen as an embar-
rassing set-back.
Guy Jubb, head of governance and
stewardship at Standard Life
Investments, which owns 2.9 per cent
of BSkyB and opposed Murdochs re-
election, called for the independent
directors at BSkyB to reflect carefully
on not only the level of dissent
amongst independent shareholders
but also the tone of the comments
that accompany their votes.
The opposition to Murdochs re-elec-
tion comes as a result of his role at
News International, the group at the
centre of the phone-hacking scandal.
Nick Ferguson, BSkyBs deputy
chairman, recognised the views of the
shareholders but said: The entire
BSkyB board is now determined to
move forward to maintain BSkyBs
strong performance and create value
for all shareholders.
Murdoch gets
a bloody nose
BY LAUREN DAVIDSON
MEDIA
Murdoch was re-elected as BSkyB chairman despite the opposition Picture: REUTERS
ANALYSIS l British Sky Broadcasting
p
750
740
730
720
710
745.00
29 Nov
NEWS | IN BRIEF
BHP could sell off diamond mines
BHP Billiton, the worlds biggest miner, is
considering selling all or part of its dia-
mond assets, which include the EKATI
mine in northern Canada, as it focuses on
large, long-life, scalable assets.
BHP said yesterday it had begun a
review to examine whether a continued
presence in the diamond industry was
consistent with its strategy of investing
in expandable assets. The review is due
to be completed by the end of January
2012.
Olympus will review structure
Japans Olympus Corp has launched a
review of its business structure, according
to an internal memo, amid speculation the
92-year-old company may have to sell
assets in order to survive a massive
accounting scandal. The company is also
looking to reform its corporate governance,
and is setting up separate teams to super-
vise the two reviews, according to the 28
November memo, obtained by Reuters and
later confirmed by the company.
Tiffany sales lose their shine
Concerns about slowing sales momentum
took some of the lustre off Tiffany & Cos
stock yesterday amid signs that European
and US economic distress are weighing
on luxury consumers. The upscale jew-
eller, a stock market darling for how fast
its international business has grown,
reported third-quarter earnings that beat
analysts' estimates but gave a profit and
sales outlook for the holiday-quarter that
missed Wall Street expectations. Globally,
Tiffany's sales in the third quarter were
up 17 per cent, excluding the impact of
currency translation.
Resolution to return next 250m
Life insurance buyout group Resolution
yesterday said it had achieved the capi-
tal synergies it had targeted this year
and was on track to return 250m of
cash to investors next year as planned.
Resolution also said it had completed
the takeover of life assets from AXA UK
with the final purchase of Winterthur
Life UK.
EDITORS KNEW OF HACKING, SAYS EX-
NOTW JOURNALIST
A former senior journalist at the
News of the World told the Leveson
inquiry into press standards that for-
mer editors, including Piers Morgan,
Rebekah Brooks and Andy Coulson,
were all aware of unethical practices
used by the newspapers reporters.
Giving evidence under oath, Paul
McMullan, who was deputy features
editor, said Mr Coulson and Ms
Brooks were aware of phone hacking
there.
DIVISIONS DEEPEN AT UN TALKS ON
CLIMATE
Fresh divisions have opened up on
the second day of the UN climate
talks in Durban as China accused the
European Union of shifting the goal-
posts to make unfair demands on
developing countries over a new glob-
al climate pact.
WEALTHY CHINESE STILL EAGER TO
WEAR PRADA
If there were fears that Chinas vora-
cious appetite for luxury goods was
waning, they have yet to extend to
Prada. The Italian label said yesterday
that sales in the Asia-Pacific region
had soared by 44 per cent, boosting
both sales and profits. Luxury goods
makers have placed huge bets on
China in recent years, spurred on by
stellar growth.
BAE UNDER FIRE FROM MPS OVER
TANZANIA PAYMENT
BAE Systems has been harshly criti-
cised by a parliamentary committee
for dragging its heels over a 29.5m
compensation payment to the peo-
ple of Tanzania. MPs on the
International Development
Committee said they were
appalled that it had taken months
to make the payment.
News
PHARMACEUTICAL giant AstraZeneca
has won Europe-wide approval for its
diabetes drug Komboglyze.
The treatment, which was devel-
oped in a partnership with US peer
Bristol-Myers Squibb, helps glycaemic
control in adult patients with type
two diabetes.
The approval comes following a
study and series of tests involving
4,326 patients.
Type two diabetes accounts for
approximately 90 to 95 per cent of all
cases of diagnosed diabetes in adults.
In Europe alone there are around
50m people suffering with the condi-
tion.
AstraZeneca
diabetes drug
gets go-ahead
SAAB Great Britain, the UK arm of
Swedish car manufacturer Saab
Automobile, filed for administration
yesterday.
The company said that it had previ-
ously received a conditional funding
commitment from China Youngman
Automobile Group for the payment of
the wages of Saab Automobile
employees and for ongoing opera-
tions at Saab GB.
But the firm has not yet received
any money.
The board of Saab Great Britain is
of the opinion that administration
gives the company and creditors the
necessary legal protection until the
required funding for the company
has been secured, the firm said.
Saab GB has exclusive rights to dis-
tribute Saab cars and parts in the UK.
It employs 55 people in Milton Keynes
and distributes the cars and parts to a
58 strong dealer network across the
UK of which 20 are Saab-only sites.
Saab City, a wholly owned sub-
sidiary of Saab GB employing 65 peo-
ple, operates two Saab motor
dealerships, one in Wapping and a
smaller site in Fulham.
A statement said: The board of
Saab GB is of the opinion that admin-
istration gives the company and cred-
itors the necessary legal protection
until it has secured the required
funding for the company.
The company said it was searching
for a buyer.
Saab GB in bankruptcy
filing amid funding woes
AUTOMOTIVE
PHARMACEUTICAL
TOY licensing firm Character

Group yesterday reported a 20 per
cent rise in pre-tax profits to more
than 9m.
But the group, which makes tie-
in products for popular childrens
shows such as Peppa Pig, Fireman
Sam and Scooby-Doo, warned that
its annual sales were likely to come
in lower than previously forecast,
though it said profits would
remain steady.
Group sales for the year to 31
August rose 11.4 per cent to
94.95m, while profits before tax
were up 19.8 per cent to 9.05m.
Executive chairman Richard
King said: The groups strategy of
focusing on brands and licensed
products, where the business can
bring into play its expertise in
character licensing, product and
brand development and distribu-
tion, has enabled the business to
report solid growth in both rev-
enue and profitability.
Peppa Pig toy
maker profits
grow by 20pc
RETAIL
TOPPS TILES, the UKs largest tiling

retailer, has seen its sales deteriorate
in the past few months as squeezed
consumers continue to put off redeco-
rating their homes.
The group said the combined effect
of stagnation in the housing market
and falls in consumer spending power
had caused sales at stores open over a
year to fall by two per cent.
Like-for-like sales were down 6.9 per
cent in the first seven weeks of the
new financial year, which analysts
noted was an improvement after a 9.5
per cent slump in its fourth quarter.
Matthew Williams, chief executive,
said the group was broadening its
appeal beyond the traditional cus-
tomer base with more focus on attract-
ing high end customers.
With very challenging trading con-
ditions persisting throughout the sec-
ond half of our financial period, our
focus has been on strengthening our
market leading position, he said.
Topps runs 321 stores and plans to
open with five new outlets this finan-
cial year. It raised its market share by
one per cent to 26 per cent.
The firm, which issued a profit
warning in August, said pre-tax profits
for the year to October were 13.9m,
compared with 16.3m last year.
Shares fell two per cent to 23.5p.
Sales worsen
at Topps Tiles
BY KASMIRA JEFFORD
RETAIL
Peppa Pig toys have helped lift gains at Character Group

ANALYSIS l Topps Tiles PLC
p
23.25
23.00
23.50
22.75
22.50
22.25
22.00
21.75
23.50
29 Nov
WHAT THE OTHER PAPERS SAY THIS MORNING
OMEGA, the Bermuda-domiciled
London stock market-listed insurance
group, yesterday confirmed that the
tycoon bidding for 25 per cent of its
stock wants to lower his offer.
Omega made a stock exchange
announcement yesterday following
reports, including in City A.M. suggest-
ing that bidder Mark Byrne was about
to let his offer lapse.
Sources close to Byrne have told City
A.M. that his tender offer, which closes
today, will likely lapse as far as he is
concerned because certain regulatory
clearances have not been obtained.
But this view is disputed by
Omegas board, which said yesterday
that none of the conditions of the
offer had been breached and that, in
any case, Byrne had a further 21 days
in which to get the regulatory clear-
ances required.
One source said he expected all con-
ditions to be cleared within the allot-
ted time-frame. The Omega Board
knows of no reason why, if the mini-
mum level of tenders is achieved, the
offer would lapse, the group said yes-
terday.
One source said he thought Byrne
had been advised by Citi that he
would complete the tender auction at
a price averaging around 75p, but in
the event investors tendered at a high-
er price. With the two sides seeming-
ly at loggerheads, advisers would
normally look to the Citys Takeover
Panel to resolve differences. But
Omega is domiciled in Bermuda so is
outside its jurisdiction.
Omega in bid
wrangle as
Byrne wavers
QUINTAIN Estates has ended talks
with a potential joint venture fund-
ing partner to develop and run
its London Designer Outlet at its
2.5bn Wembley scheme.
In its half-year results, the regener-
ation specialist said talks had ended
after the partner failed to
deliver part of the proposed financ-
ing structure and will launch a
formal market process in the
new year.
Adrian Wyatt, chief executive,
said: We took the view that we
should cease the negotiations as the
letting programme was getting bet-
ter and stronger... and we felt that
we would be better served going to
the market.
Quintain said it has secured Nike
and Gap as its anchor tenants at
the mall. Meanwhile, at its
Greenwich project, the firm said it is
moving ahead with the building of
1,300 homes at Peninsula Quay.
The group swung back into
the black in the six months to
September posting a pre-tax profit of
3.7m compared with a 58.8m loss a
year ago.
Quintain seeks new partner for
Wembley designer mall project
Property firm Quintain is developing a designer outlet mall near Wembley
BY DAVID HELLIER
INSURANCE
PROPERTY
News
ANALYSIS l Omega Insurance Holdings
p
69
68
67
66
65
64
63
65.75
29 Nov
B
RITAINS blue chip index rose
yesterday, building on two
straight sessions of gains as
strong consumer confidence
data from the United States offset
renewed concerns about the
Eurozone debt crisis.
The FTSE 100 added 24.24 points, or
0.5 per cent, to close at 5,337 after
turning higher in the afternoon,
when data showed US consumer con-
fidence rose much more than expect-
ed in November.
The reading, which came on the
heels of encouraging sales data for
the Thanksgiving period, boosted
stocks with high exposure to the US,
such as Wolseley, the worlds biggest
building supplies maker, which
climbed 2.1 per cent.
On the other hand, stocks exposed
to UK consumer spending fell after
the British government cut its eco-
nomic growth forecasts and suggest-
ed tough austerity measures would
extend beyond the next election due
in 2015.
Home improvements retailer
Kingfisher fell 1.2 per cent with con-
sumer goods maker Reckitt Benckiser
down 0.3 per cent.
FTSE climbs
on US data
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www.cityam.com
cellors Tatton constituency, we can
only assume Osborne would be exclud-
ed from the mega discounts on offer
if he was unlucky enough to blow a
tyre near Billy Boys emporium...
IT BEGINS AT WORK
IF mobile phone donations and web
links hadnt made giving to charity
easy enough, Oxfam has now gone one
step further arranging pick-ups from
companies at Canary Wharf.
First past the post to boost its charity
credentials is the FSA, a partner of the
initiative. We encourage our staff to
reduce waste and to be resource- and
energy-efficient, both within the work-
place and as members of the
community, said the FSAs Claire
Harvey.
Get yourself to your nearest Oxfam
to see what employees at the City regu-
lator have going spare.
OSBORNES DIPLOMATIC EFFORTS
LOSE FRIENDS AT HOME AND ABROAD
SEEING as its barely a month since
French President Nicolas Sarkozy
unceremoniously told David
Cameron to shut up over the euro,
Sarkos finance minister Francois
Baroin is unlikely to have taken kindly
to chancellor George Osbornes latest
attack on the single currency yester-
day.
Going only very slightly off script in
his Autumn Statement to parliament
yesterday lunchtime, Osborne
claimed that the entire European
continent is pricing itself out of the
world economy and then promptly
flew off to Brussels for yesterdays lat-
est round of Eurozone wrangling.
Despite unseasonably warm weath-
er for the time of year as temperatures
in the EUs de facto capital reached
nine degrees Celsius, Osbornes com-
ments surely mean he guaranteed
himself a frosty welcome from his
European counterparts yesterday.
TYRE-D OF GEORGE
THE chancellor also seems to be losing
friends much closer to home, if a very
public attack by a Sheffield garage is
anything to go by.
As it launched a closing-down sale,
Billy Boy Tyres decided to go out with
a bang, emblazoning its forecourt
with a sign personally thanking
George Osborne for its bad fortune.
Located just 50 miles from the chan-
The chancellor is unlikely to be able to take advantage of this mega closing down sale
The Capitalist
EDITED BY
ELIZABETH FOURNIER
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
Call 0800 049 4448 or visit carphonewarehouse.com
All information is accurate at the time of going to print. Important: due to the fast moving nature of this market, all offers, prices and availability are subject to change. 1. Offer available until 31st December 2011. BlackBerry, RIM, Research In Motionand related trademarks, names and logos are the property of Research In Motion Limited and are registered and/or used in the U.S. andcountriesaround
the world. Used under license fromResearch In Motion Limited.
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1
BRITISH mortgage approvals edged
up more than expected to their
highest in nearly two years last
month, but the overall picture for
lending remained well below pre-cri-
sis levels and the outlook appears
set to darken.
The Bank of England said
approvals for home loans a gauge
of house prices in six months time
numbered 52,743 in October, up
from 51,193 in September.
This was the highest since
December 2009, and above econo-
mists forecasts of a reading of
51,500, but well below the long run
average before the financial crisis of
around 90,000.
The number of approvals
remained well below the average of
90,000 seen in the lead up to the
financial crisis, but todays data nev-
ertheless suggest that the outlook
for the housing market is one of at
least stable prices as we move into
the new year, though downside risks
clearly persist, said Chris
Williamson, chief economist at
Markit.
Mortgage lending rose by the
biggest amount since January 2011
at 1.28bn, but net unsecured con-
sumer credit was weak on the
month, edging up just 49bn, the
smallest increase since the start of
the year.
Bank figures showed the biggest
annual fall in M4 broad money sup-
ply since monthly records began in
1983.
The Banks preferred measure, M4
excluding intermediate other finan-
cial companies, showed a small
annual rise of 2.8 per cent.
Britains consumers have been
reluctant to take on more credit for
major purchases as bank lending
conditions are relatively tight and
uncertainty over jobs is weighing on
sentiment.
BoE figures showed that net cred-
it card borrowing was subdued at
just 93m in October.
UK mortgage
approvals are
on the rise
BY HARRY BANKS
ECONOMY
News
BEST OF THE BROKERS
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l Randgold Resources
7,500
6,750
7,000
7,250
6,500
6,250
6,000
Sep Oct Nov
p
6,600.00
29 Nov
RANDGOLD RESOURCES
Investec has upgraded the miner from
hold to buy with a reduced target
price of 73.32, down from 73.89. The
broker has trimmed its forecasts after
Randgold lowered its own outlook, but
believes the recent share price fall pres-
ents a buying opportunity. Investec also
thinks the recent problems at its mills are
manageable and should be resolved by
the end of the year.
ANALYSIS l ICAP
475
400
425
450
375
350
325
Sep Oct Nov
p
344.30
29 Nov
ICAP
Credit Suisse rates the interdealer broker
outperform and has cut its target price
from 510p to 420p. The broker notes that
ICAP faces headwinds from lower market
volumes, but it thinks this is already
priced into the firms shares. Credit Suisse
is slightly ahead of consensus forecasts,
predicting pre-tax profit of 354m next
year though this is still below manage-
ment expectations.
ANALYSIS l Thomas Cook
50
20
30
40
10
Sep Oct Nov
p
18.90
29 Nov
THOMAS COOK
Goldman Sachs rates the travel firm neu-
tral with a target price of 14p. Goldman
has cut its earnings per share forecasts for
the next two years by around 12 per cent,
to account for banking fees and the dilutive
effect of warrants under Thomas Cooks
new banking facility. Goldman sees the
main risks to the firm as higher cost infla-
tion and falling booking trends, while a rise
in consumer confidence would help.
NEWS | IN BRIEF
Nationwide says house prices up
House prices edged up in November, beat-
ing expectations despite a weak economy,
but activity remains subdued and prices
are more likely to dip in the next 12
months, Nationwide said yesterday. House
prices rose 0.4 per cent from October on a
seasonally adjusted basis, their third
straight monthly increase. Prices were 1.6
per cent higher than a year ago, but the
increase highlighted a lack of housing sup-
ply rather than any real pick-up in
demand, Nationwide said. The latest fig-
ures are in contrast to those released by
the Land Registry yesterday, which
showed prices are falling across the UK.
Slump in EC confidence levels
Worries about the Eurozones debt crisis
worsened in November and dragged the
ECs economic and consumer sentiment
index to a two-year low. Business man-
agers and consumers turned more pes-
simistic across almost all sectors of the
Eurozone's economy and the ECs monthly
economic sentiment index slipped to 93.7,
its lowest since late 2009.
Spanish retail sales keep falling
Spanish retail sales fell by seven per cent
year-on-year on a calendar-adjusted
basis in October, official data showed
yesterday, after a revised fall of 5.6 per
cent in September. The data from the
National Statistics Institute marked the
sixteenth month in a row of falling retail
sales data.
Dip in Japanese household spend
Japanese household spending fell 0.4 per
cent in October from a year earlier, gov-
ernment data showed yesterday, in a sign
worries about faltering global growth are
weighing on consumption.
News
Z^
Z^
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W&
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NEWS | IN BRIEF
Impax upbeat despite gloom
Environmental investment fund Impax
Asset Management has increased annual
revenue 36 per cent to 20.9m despite a
sharp deteroriation in market senti-
ment. Funds under management rose
four per cent to 1.9bn. Chief executive
Ian Simm said the fundamental drivers
behind Impaxs investment strategy had
improved in 2011 although environmen-
tal sector stocks underperformed.
Hedgies down again in November
Hedge funds slumped again this month
despite hopes a host of Eurozone support
deals will stabilise global markets. The
average hedge fund fell 1.3 per cent, pro-
visional figures for November show. The
industry is down 7.7 per cent for the year
to date, according to the HFRX Global
Hedge Fund Index. Hedge funds suffered
in August and September but have flat-
tened out over the autumn.
Thomas Cook takes hit but contagion avoided
L
AST weeks announcement by
Thomas Cook that it was seeking
an additional 100m in funding
created headline news and
caused its shares to drop by 75 per cent
on the day of the announcement. The
impact on the brands buzz in
YouGovs BrandIndex was immediate
and the decline has continued all
week. Having been at around 0 in
November, buzz is now at -41, reflect-
ing large numbers hearing negative
news. Not surprising considering the
circumstances, but what has been the
effect on perception measures?
There has certainly been an impact
but it has not been as dramatic as for
buzz. General Impression has fallen
from +13 last Monday to -10 this
Monday, while recommendation has
dropped from +8 to -2. Other measures
show similar falls and the overall
index score (a composite of 6 key meas-
ures) has dropped from +10 to -1.
Clearly any drop is not good news, but
these could have been much worse.
Thomas Cook now has new funding
and is advertising to reassure cus-
tomers. The stakes are high. Further
declines in public perception could be
very damaging but if this advertising
can halt the fall and eventually start to
reverse it, then Thomas Cook will feel
that the news did not lead to as much
a crisis of public perception as it could
have done.
Often problems for big brands can
cause views about the whole sector to
decline and it would have been this
worry that caused competitor
Thomson to move quickly last week
and launch its own advertising cam-
paign to reassure the public about its
financial strength. There has been a
slight decline for Thomson but it is
very slight (Index dropping from +9 to
+6) and it will, for now, be confident
that a contagion effect has been large-
ly avoided.
Stephan Shakespeare is the chief executive of
YouGov
ANALYSIS l Thomas Cook brand Buzz
Buzz
26/11/2011 01/11/2011 10/11/2011 18/11/2011
10.0
5.0
0.0
-5.0
-10.0
-15.0
-20.0
-25.0
-30.0
-35.0
-45.0
-40.0
ANALYSIS l Thomas Cook BrandIndex
Index Impression
Recommend
26/11/2011 01/11/2011 09/11/2011 18/11/2011
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
BRANDINDEX
STEPHAN SHAKESPEARE
3oston Cn|coo Co|otoJo /|ot|Jo Jetse (CI) London |os 4ne|es New\otk 1ennessee 1exos v|t|n|o vosn|nton 0C
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Starts February 2012
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News
NEWS | IN BRIEF
Balfour signs new credit facility
Balfour Beatty, the infrastructure firm,
has signed a five-year 850m syndicat-
ed revolving credit facility, refinancing a
number of bilateral agreements that
were due to expire in the next 12-15
months. [The facility] ensures Balfour
Beatty has secured access to committed
funding for the next five years and will
be used for general corporate purposes,
it said.
3Legs agrees licence changes
Exploration and development firm 3Legs
Resources has agreed changes to the
terms of its three licences in Southern
Poland with the Polish Ministry of
Environment. The changes enable the
company to acquire about 70 kilometres
(km) of two-dimensional (2D) and 50
square km of 3D seismic data, to be fol-
lowed by the drilling of an exploration
well.
Red Rock rises on big profits
Shares in miner Red Rock Resources
were up almost a third at one point yes-
terday after it announced full year prof-
its had almost tripled. The company
said pre-tax profits for the year ended
30 June were just under 14m, up from
4.75m the previous year. Earnings per
share rose from 0.65p per share to
1.78p. Shares in the firm closed up
26.4 per cent at 4.17p.
Barclays Wealth
The wealth manager has named
Deepak Malhotra as a managing
director and wealth adviser within
its wealth advisory business.
Malhotra joins from Grant Thornton.
Renaissance Capital
The emerging markets investment
bank has hired Damian Bunce as
managing director, global head of
electronic trading group. Bunce will
become a member of the markets
executive committee and report to
Nick Andrews, global co-head of
markets. Bunce joins from Barclays
Capital, where he was a director and
head of equities electronic sales and
trading at the firm.
Newedge
The brokerage has promoted Michael
Dann to global head of agricultural
business, from his current position of
head of cocoa, coffee and sugar.
Michael has been working in the bro-
kerage business for 30 years, spe-
cialising in agriculture and
commodities. He began his career
with Marshall French & Lucas in
1980 and has worked at Drexel
Burnham, Paine Webber and Brody
White, in New York and London.
Linklaters
The magic circle law firm has made
its first partner lateral hire in
Sweden, electing Roger Johnson as a
partner in the firms Stockholm
office from January 2012. Johnson
joins from Hannes Snellman, one of
the leading Nordic law firms, where
he has been a partner since
September 2009. Roger previously
worked at Linklaters Stockholm
office between 2002 and 2009.
CITY MOVES | WHOS SWITCHING JOBS Edited by Harriet Dennys
+44 (0)20 7092 0053
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
Brooks Macdonald Asset Management
The asset management firm has named Toby
Thompson as investment manager for its London
office. Thompson joins from New Star where he
worked for eight years, following roles at
Newton and Eagle Star Investment Managers.
Thompson brings with him twenty years experi-
ence in the investment industry, and is an associ-
ate of the CFA Society of the UK.
Confidence up in the
US but investors wary
T
HE Dow and S&P 500 advanced
for a second day yesterday as
stronger-than-expected con-
sumer confidence data and
hopes for further progress on a solu-
tion to Europes fiscal mess bolstered
sentiment.
However, in a sign investors are still
nervous about the European debt cri-
sis, defensive sectors such as utilities
and consumer staples were among
the best performers. The Nasdaq com-
posite index also closed lower.
Helping to lift the mood on Wall
Street, the Conference Board, an
industry group, said its index of con-
sumer confidence jumped to its high-
est level since July, handily topping
economists forecasts.
Financial shares limited the
advance, with the S&P financial
index down 0.6 per cent. Shares of
Bank of America dropped 3.2 per cent
to $5.08, its lowest closing level since
March 2009. FThe Dow Jones industri-
al average was up 32.62 points, or 0.28
per cent, at 11,555.63. The Standard &
Poors 500 Index was up 2.64 points,
or 0.22 per cent, at 1,195.19. The
Nasdaq composite index was down
11.83 points, or 0.47 per cent, at
2,515.51. In a positive move, Italian
bond yields fell from session highs.
THENEW YORK
REPORT
News| Autumn Statement Special
21
GEORGE Osborne hopes to stimulate
Britains flagging economic recovery
with yet more measures to encourage
wealthy individuals to back start-ups.
He will extend the Enterprise
Investment Scheme (EIS) to offer
income tax relief of 50 per cent to
individuals who invest up to 100,000
and to companies which provide
backing of up to 150,000.
The Seed EIS (SEIS), to be launched
in April, will also encourage re-invest-
ment by granting a capital gains tax
holiday to those who pour their SEIS
gains back into start-ups in 2012-13.
The moves won the support of busi-
ness angels although experts have
raised fears the means of paying for
it a freeze on capital gains tax
relief could be punitive if it is con-
tinued over the long-term.
Richard Anton, chairman of the
BVCA, said the measures would
encourage innovation, adding: This
is a rare case of a George coming to
the assistance of Dragons.
The decision to freeze the 2012-13
exemption for capital gains tax at
10,600 was criticised by tax experts,
however. Alison Smith from PwC said
it was unlikely to achieve much and
would not stimulate sales.
The chancellor is expecting this
freeze to continue so any one looking
to make a capital gain in the future
could be a loser... With higher infla-
tion, the cumulative effect could be
significant.
The Treasury cheered business
angels, however, by making it easier
for venture capital trusts to provide
backing through the abolition of the
1m investment limit per company.
Nations ailing
start-ups get
fresh support
BY PETER EDWARDS
ENTERPRISE
Flagging growth, particularly in the north, has hit official forecasts Picture: REUTERS
BRITAINS hard-pressed small busi-
nesses were thrown a 210m lifeline
when George Osborne extended a
key tax relief.
The small business rate relief
scheme, which had been due to
expire in October next year, will run
until April 2013.
Firms will also be given the chance
to defer 60 per cent of the increase in
2012-13 rates, which they were facing
as a result of the increase under the
RPI measure of inflation. They will
have to repay what is owed over the
next two years.
Patrick Harrison, partner at PKF,
said: Cash is king at the moment for
SMEs so any measure that helps cash-
flow should not be sniffed at. The
level of business rates that an organi-
sation has to pay is based on their
premises rather than their profitabil-
ity, so the tax holiday should be espe-
cially welcome at a time when
corporate profits are being squeezed.
John Walker, chairman of the
Federation of Small Businesses, said
policy must be translated into tangi-
ble actions on the ground.
210m relief
on rates for
small traders
SMALL BUSINESSES
THE TREASURY has responded to a

year of criticism of its regional
growth strategy by devising more ini-
tiatives to boost local enterprise.
After swinging the axe at regional
development agencies in summer
2010, George Osborne yesterday pro-
vided a 1bn top-up for the 1.4bn
regional growth fund and offered 100
per cent capital allowance to enter-
prise zones in the Black Country, East
Yorkshire, Liverpool, the North-East,
Sheffield and the Tees Valley. The
zones, first used with mixed success
in the 1980s, were re-introduced in
the spring after the publication of
weak economic growth figures.
The chancellor will also extend the
enterprise finance guarantee from
January. Businesses with a turnover
of up to 44m will qualify and new
lenders will be added to the scheme.
We will do whatever it takes to
protect Britain from this debt storm
while doing all we can to build the
foundations of future growth,
Osborne said.
BY PETER EDWARDS
ECONOMY
Boost for local enterprise

THE GOVERNMENT cannot launch its
credit easing programme until it gets
permission from the European
Commission, chancellor George
Osborne revealed yesterday as he for-
mally announced the 21bn pro-
gramme to reduce the cost of
borrowing by small businesses (SMEs).
The scheme will work by guarantee-
ing the debt of those banks that lend
most to SMEs, on the condition that
they pass on the full benefit of lower
debt costs in the form of lower interest
on the loans they offer. The Treasury
has not yet determined which banks
will participate and on what scale.
Osborne said yesterday that the
treasury is now negotiating for [EU]
state aid approval so that the National
Loan Guarantee Scheme will be up
and running in the next few months.
He will hope that the approval
process is speedy the treasury is
keen to implement it quickly to
combat a credit crunch. However,
many European Commission ini-
tiatives have been hit by delays
recently due to it being over-
loaded by new regulatory
changes and the Eurozone
crisis.
The government will
also contribute 1bn to the Business
Finance Partnership, a fund for invest-
ing in SMEs, a cause close to business
secretary Vince Cable (pictured).
Despite the govern-
ment taking on billions
in risk, it will be kept
off-balance sheet in the
national accounts as a
contingent liabili-
ty, and will not
affect the
national debt,
the Office for
B u d g e t
Responsibility
said.
Take control
from the offset
THE GOVERNMENT is sitting on a
69bn loss from bailing out the banks
during the financial crisis, the Office
for Budget Responsibility (OBR)
revealed yesterday.
It means the last government paid
double what the shares of RBS and
Lloyds are worth today: their stock has
fallen 45 per cent and 51 per cent
respectively since their rescue in 2008,
for a current loss of 30.6bn.
This is significantly larger than the
implied 1.6bn loss reported in the
March [forecast], the OBR admits.
That comes in addition to losses
from guaranteeing the nationalised
banks most toxic assets in 2009 under
the Asset Protection Scheme. Far from
a gain of 3.4bn predicted in March,
the OBR now forecasts a 25.6bn loss
to the taxpayer from the scheme.
And the OBR has also published a
new figure giving the cost of raising
the money to finance the Treasurys
various interventions, which comes to
12.8bn over 39 months.
The total makes for a grim 69bn
loss from the bailouts at current valua-
tions.
The plunging value of bank assets
on the Treasurys books make privatis-
ing Lloyds and RBS a distant prospect,
despite hopes earlier in the year that
the government could sell down its
stakes over the next two to three years.
It will be reluctant to sell when doing
so would crystallise a huge loss for tax-
payers and add to the national debt.
Bank share prices have been hit
hard by the Eurozone crisis, with even
RBS chief Stephen Hester last week
admitting that most investors see
their stock as a dumb place to invest.
HMT is sitting
on 69bn loss
from bailouts
Banks face repeated levy
hikes over coming years
BANKS face the prospect of having to
repeatedly calculate the cost of the
governments bank levy after chancel-
lor George Osborne hiked it yesterday
and is likely to have to do so again.
Osborne put up the levy for the sec-
ond time this year, increasing from
0.075 to 0.088 per cent from January
onwards. He had already hit banks
with an immediate rise from 0.05 per
cent in February just a month after
the taxs introduction.
The treasury claims that the purpose
of the tax, which will cost the major
banks several hundred million pounds
each per year, is to push banks towards
less risky funding structures.
But as a result of Lloyds and RBS hav-
ing reduced their wholesale funding
exposure by more than expected, the
treasury is increasing the levy to get
the full 2.5bn for which it has budget-
ed, suggesting its main purpose was
revenue-raising.
Experts say the government will
have to do the same again next year
because its forecasts make the same
mistake of assuming that banks will
make little progress in cutting their
wholesale funding.
However, some of that will be offset
by high inflation reducing the real
value of the governments 2.5bn rev-
enue target.
BY JULIET SAMUEL
BANKING
POLITICS
BANKING
NEWS | IN BRIEF
Pension charge loophole is shut
Employers who make asset-backed pen-
sion contributions to their companys
pension scheme will receive less tax
relief, the government said yesterday,
closing a popular loophole used by a
growing numbers of firms. A new
Finance Bill 2012 was introduced with
immediate effect to ensure that any
payments now made will not allow busi-
nesses to claim excessive tax relief.
PwC partner Alex Henderson said some
sort of intervention was expected as the
chancellor was keen to raise money
from it, but it was positive to see that
the proposed changes only aimed to
restrict the scope of the tax relief, not
abolish it. Employers will be pleased to
have the additional certainty of specially
designed legislation, he said.
Tax breaks for artwork donors
Wealthy individuals who donate gifts of
valuable art to the nation will receive
tax breaks, in an estimated 15m per
year scheme announced yesterday.
Givers of pre-eminent objects will be
able to claim up to 25 per cent off their
income or capital gains tax, up to a limit
of 30m annually. The move combines
the current acceptance-in-lieu scheme
allowing inheritance tax to be paid with
artworks, and comes after a consulta-
tion since the Budget in March. Experts
welcomed the rise in the upper limit to
30m, from 20m previously proposed,
but cautioned that this may not be high
enough to sway some potential donors.
Treasury forced to negotiate
credit easing with Brussels
ANALYSIS l Royal Bank of Scotland Group PLC
p
Jan Mar May Jul Sept Nov
40
45
35
30
25
20
19.52
29 Nov
ANALYSIS l Lloyds Banking
p
Nov Jan Mar May Jul Sep
60
50
30
40
23.18
29 Nov
RBS chief executive Stephen Hester Lloyds absent boss Antoni Horta-Osrio
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0
WORKERS in the public sector are
bracing themselves for years of extra
pain, after the chancellor said he
would squeeze government expendi-
ture further as he seeks to balance the
nations books.
Osborne is planning to cap public
sector pay rises to one per cent in 2016
and 2017 two years beyond the cur-
rent pay freeze.
An extra 310,000 public sector job
losses are also expected as the
Treasury strives to make sure it hits its
target of eliminating the deficit with-
in five years, and cutting debt as a pro-
portion of GDP by 2015.
The chancellor also said that
national public sector pay deals could
be scrapped, depending on a consulta-
tion on allowing regions to set pay
rates that are more in line with the
local private sector market.
A report on the subject from
national pay bodies is due next July.
The Office for Budget Responsibility
expects yesterdays announcements to
involve a fiscal tightening of 8.3bn in
2015/16 and of 15.1bn in 2016/17.
As a result the ratio of debt to GDP
is projected to fall from 78 per cent in
2014 to 77.7 per cent in 2015.
The Trades Union Congress (TUC)
warned the measures mean we are
locked into permanent austerity.
Further cuts raise the prospects of
further strikes.
The government has alienated its
entire workforce who are coming
together in unprecedented unity to
take a stand against such unfair treat-
ment, said the TUCs Brendan Barber.
However, a report published today
from think-tank Policy Exchange
argues public sector workers are still
paid 8.9 more than their private sec-
tor counterparts, despite the pay
freeze.
These figures highlight that dis-
cussions on the public sector are
focussing on the wrong thing, said
Policy Exchanges Matthew Oakley.
Unions are striking despite gener-
ous pay and extraordinary pensions.
Public sector
faces further
years of cuts
Rise in child support shelved
THE COALITION has scrapped a
planned above-inflation rise in child
tax credits which had been unveiled
by George Osborne only last year.
The chancellor said he would not
go ahead with the plan to raise the
child element of the child tax credit
by 110 above the rate of inflation in
2012-13, saving nearly 1bn.
He will also freeze the couple and
lone parent elements of the working
tax credit, which goes to low earners,
saving around 275m a year.
The move will help pay for an
increase of 5.2 per cent matching
the CPI rate of inflation to the level
of most benefits received by people
below the retirement age or with a
disability.
Osborne said the welfare changes
would protect the most vulnerable
people in society, which was seen as
nod to the agenda pursued by work
and pensions secretary Iain Duncan
Smith and the Liberal Democrats.
The changes to child tax credits
will hit five-and-a-half million fami-
lies, with about two million of those
also suffering because of the working
tax credit freeze, according to charity
the Resolution Foundation.
Gavin Kelly, its chief executive,
said: Taking cash away from families
on low to middle incomes is precisely
the wrong thing to be doing it hits
households when they are down.
Every pound taken out of their pock-
ets is also likely to be a pound taken
out of consumption in the economy.
Anna Bird, acting chief executive of
the Fawcett Society, said women and
single parents would be hardest hit.
BY TIM WALLACE
UK ECONOMY
BY PETER EDWARDS
WELFARE
WORKERS retiring in or after 2028

will draw a state pension from the age
of 67 instead of 66, chancellor George
Osborne said yesterday, in a move that
will save up to 60bn in the decade
after it is implemented.
Osborne said the UKs average life
expectancy had risen by at least a year
and a half since the original timeta-
bles for state pensions were drawn up,
requiring a rise in the state pension
age by a year between April 2026 and
April 2028.
Forecasts from the Office of Budget
Responsibility showed that spending
on state pensions is expected to rise
from 5.5 per cent of the UKs GDP in
2015-16 to 7.9 per cent by 2060-61.
John Longworth, director general of
the British Chambers of Commerce,
said it was the right response to the
UKs demographic changes.
Pension age to rise to 67
by 2026 to save 60bn
UK ECONOMY

Further cuts raise the prospect of more strikes Picture: REUTERS
GEORGE Osborne has slashed more
than 1bn from the UKs aid budget
to prop up other balances for capital
spending.
Yesterday the chancellor
announced nearly 1.2bn will be
taken from the department for inter-
national development.
Planned increases in the depart-
ments budget will be trimmed by
380m this year, 265m next year
and 525m the following year.
Despite the cuts, the UK will still
spend 0.7 per cent of national
income on aid by 2013 because
national income is forecast to be
lower.
The spending plans of the depart-
ment for international development
meant that the UK was on course to
exceed 0.7 per cent of national
income in 2013, said Osborne yester-
day.
That I dont think can be justified
so we are adjusting those plans so we
dont overshoot the target.
The coalitions decision last year to
increase aid spending by 34 per cent
to 12bn over four years proved con-
troversial in a time of austerity.
Yesterday aid groups Save The
Children and Oxfam praised the gov-
ernment for at least sticking to its
0.7 per cent payment target.
International
aid budget is
slashed by 1bn
INTERNATIONAL AID
THE SQUEEZE on earnings will not

stop until 2013, which means con-
sumption will do little to help an eco-
nomic recovery, according to the
Office for Budget Responsibilitys fore-
casts published yesterday.
Once inflation is taken into
account, real earnings fell by 2.3 per
cent in 2011 a post-war record, said
OBR boss Robert Chote.
Consumption was squeezed as a
result, with average forecasts in the
three months to November putting it
one per cent lower over 2011, com-
pared to Marchs forecasts of con-
sumption rising by 0.8 per cent in the
year.
The crippling combination of high
inflation and low wage rises will only
begin to lift in 2013.
We do not expect earnings to out-
pace prices again by a significant mar-
gin until 2014, Chote announced yes-
terday.
Consumer price inflation is set to
plummet next year, from a high of 5.2
per cent in September 2011 to roughly
its target level of two per cent by late
2012.
Rising wages will eventually drive a
rise in house prices, the OBR believes.
We assume that house price infla-
tion recovers over 2013 and rises
broadly in line with the long-term
average rate of earnings.
Workers to suffer falling
real pay until late 2013
BY TIM WALLACE
UK ECONOMY
ANALYSIS l GDP is still well below its pre-recession peak

Index
2006=100
2006
Q1
2006
Q3
2007
Q1
2007
Q3
2008
Q1
2008
Q3
2009
Q1
2009
Q3
2010
Q1
2010
Q3
2011
Q1
2011
Q3
106
105
104
103
102
101
100
99
98
97
GDP after ONS revisions
GDP pre-ONS Blue Book revisions
2009 2010 2011 2012 2013 2014 2015
GDP GROWTH FORECASTS (%)
Nov-2010 -5 1.8 2.1 2.6 2.9 2.8 2.7
Mar-2011 -4.9 1.3 1.7 2.5 2.9 2.9 2.8
Nov-2011 NA 1.8 0.9 0.7 2.1 2.7 3.0
CPI INFLATION FORECASTS (%)
Nov-2010 2.1 3 2.8 1.9 2 2 2
Mar-2011 2.2 3.3 4.2 2.5 2 2 2
Nov-2011 NA 3.3 4.5 2.7 2.1 2 2
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
PUBLIC SECTOR NET BORROWING FORECASTS (% GDP)
Nov-2010 11.1 10 7.6 5.6 3.5 1.9 1
Mar-2011 11.1 9.9 7.9 6.2 4.1 2.5 1.5
Nov-2011 11.2 9.3 8.4 7.6 6.0 4.5 2.9
PUBLIC SECTOR NET DEBT FORECASTS (% GDP)
Nov-2010 53.5 60.8 66.3 69.1 69.7 68.8 67.2
Mar-2011 52.7 60.3 66.1 69.7 70.9 70.5 69.1
Nov-2011 52.9 60.5 67.5 73.3 76.6 78.0 77.7
PUBLIC sector job losses are unlikely
to cause higher unemployment
between now and 2017, the govern-
ment said yesterday, as it expects hir-
ing by businesses to outweigh cuts.
The private sector is expected to cre-
ate 1.7m new jobs by 2017, according
to the Office for Budget Responsibility
(OBR), enough to mop up the 710,000
job losses in public agencies.
Despite the rise in expected public
sector redundancies from the 400,000
previously forecast, the OBR expects
the labour market to stay steady.
The indicators suggest little evi-
dence of a permanent structural dete-
rioration in the labour market and we
have maintained our long-term...
assumption of 5.35 per cent, it said.
It said the unemployment rate
should peak at 8.7 per cent by the end
of next year, rising to 2.8m people
unemployed from 2.6m people today.
The Chartered Institute of
Personnel and Development backed
the OBRs view.
This is good news in that it sug-
gests that unemployment can fall
quite rapidly once the economy
returns to a strong rate of growth,
said CIPD chief economic adviser John
Philpott.
Hiring by business will
outweigh public cuts
UK ECONOMY
ANALYSIS l Real incomes will not grow until 2013

%Earnings
growth
Forecast
Marchs forecast
Novembers revised forecast
Source: ONSand OBR
2014 2015 2016 2017 2010 2011 2012 2013
5.0
4.0
2.0
-2.0
3.0
1.0
-1.0
0.0
-3.0
ANALYSIS l GDP growth should recover by 2015
%change on
a year earlier
November central forecast
Source: ONSand OBR
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2002 2003 2004 2005
6
4
0
2
-2
-4
-6
ANALYSIS l Budget deficits will be larger than previously expected
%
2009-10 2010-11 2011-12
November Forecast MarchForecast
2012-13 2013-14 2014-15 2015-16 2016-17
12
10
8
6
4
2
0
ANALYSIS l Inflation is forecast to fall sharply
%
Annual rate
Forecast
2005 2009 2013 2017 1989 1993 1997 2001
9
8
6
1
7
5
4
3
2
ANALYSIS l UK borrowing costs are at historic lows
May10 Sep10 Jan11 May11 Sep11 Jan09 May09 Sep09 Jan10
500
400
200
0
300
100
-100
US
1
0
-
Y
e
a
r

b
o
n
d

s
p
r
e
a
d

o
v
e
r

G
e
r
m
a
n
y

(
B
a
s
i s

p
o
i n
t
)
Italy
Spain
UK
France
FACT CHECKER | WITH TIM WALLACE
THE SAFE HAVEN DIVIDEND IS IT THANKS TO GEORGE?
Because of lower market interest
rates we have secured for Britain
debt interest payments are forecast
to be 22bn less than predicted,
said George Osborne yesterday a
safe haven dividend.
There are two key claims here
that low rates do save 22bn; and his
policies secured those low rates.
Firstly, the level of saving.
The Office for Budget
Responsibility (OBR) predicted sav-
ings from low rates will amount to
22.2bn over the next five years, as
Osborne said.
However, it also noted that there
are costs in terms of tax revenue
associated with low interest rates.
Savers will receive lower interest
payments and so pay less tax on that
income, for example. The state holds
assets, too, which will face declining
returns, lowering its income.
In fact, those losses in revenue
amount to 24.8bn by 2016, giving
the exchequer a net loss of 2.6bn.
A bad start.
The Treasury told City A.M. the fig-
ures are not directly comparable,
and losses may be slightly lower.
And did Osbornes policies actual-
ly achieve those low rates?
He claims his deficit reduction
strategy instilled confidence in the
markets, and he showed yesterday
that he would protect it, adjusting
spending to keep on track to wipe
out new borrowing by 2015.
This has certainly had an impact
if political commitment to the
deficit reduction plan were to waver,
gilts would be vulnerable, said
Barclays Capitals Simon Hayes.
The international situation has
had an impact, though investors
will flock to a large economy which
is just slightly less troubled.
Further, quantitative easing has
created something of a false market
in gilts.
THE VERDICT |ITS NO 22BN
THE SAVINGS JUST ARENT THERE
Osborne is right to say he has kept
rates low through his slow-but-
steady fiscal policy. However, inter-
est rates have wide ranging effects,
so his savings just wont appear.
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2011 borrowing total up
11bn on revised growth
THE UK will have to up its borrow-
ing targets this year on reduced
forecasts, Treasury figures out yes-
terday revealed.
Gilt issuance will now hit
178.9bn for 2011/12, up 11.4bn on
Aprils estimates.
More shorter-dated Treasury bills
will also be issued, with an extra
2.4bn taking the total to 63.2bn.
The proportion issued at each
maturity is set at the start of the
financial year.
In line with these pre-set levels,
an extra 3.2bn will be short-term
gilts (with maturities of up to seven
years); 5.1bn of the additional
issuance will be medium-term
bonds (seven to 15 years); and 2.1bn
will have longer maturities.
The final 1bn will be index-
linked gilts a class which is being
phased out for next year on the
basis that issuance in the near
term is unlikely to be cost-effective
and would involve a number of
risks.
Nonetheless, the government
does have a large amount of debt
issuance coming up in the next few
years, and will keep the case to
issue CPI-linked gilts under review.
UK ECONOMY
YOUNG jobseekers are to receive 1bn

of extra help over the next five years
from George Osbornes new youth
contract but the Office of Budget
Responsibility (OBR) believes the
measure will fail to bring down over-
all joblessness.
Those aged between 18 and 24 will
get more time with advisers at
Jobcentre Plus, will sign in weekly,
not fortnightly and receive a careers
interview after three months on ben-
efits.
Private sector work experience
placements are also intended to help
the unemployed back to work, while
160,000 wage incentives, worth
2,275 each, will be given to encour-
age firms to hire young workers.
However, the Office for Budget
Responsibility believes the schemes
will not cut overall unemployment.
Although the OBR report says
such a measure could help to reduce
unemployment amongst younger age
groups, the effect will merely be one
of displacement.
The targeted younger workers will
be employed at the expense of those
just outside the age group, said OBR
boss Robert Chote yesterday. There is
a possible trade off here, and we can-
not see any net change in employ-
ment.
Youth job plan may hit older workers
UK ECONOMY
ANALYSIS l Borrow and spend, tax and spend

bn
Current receipts (forecast)
Current spending (forecast)
2013/14 2014/15 2015/16 2016/17 2010/11 2011/12 2012/13
750
700
650
600
550
500
ANALYSIS l Debt will peak higher than was expected in March
% of GDP
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
80
75
70
65
60
55
50
March Forecast
November Forecast (ex.policy changes)
November Forecast (inc.policy changes)
ANALYSIS l Unemployment will get worse before it gets better
Thousands
Forecast
Claimant count
ILO unemployment
Source: ONSand OBR
2002 2005 2008 2011 2014 2017 1990 1993 1996 1999
3,500
3,000
2,000
500
2,500
1,500
1,000
0
GEORGE Osborne yesterday
announced plans to build a superfast
broadband network spanning 10
cities across the UK.
The chancellor said 100m in extra
funds will be made available to ensure
the UK is not left behind by rapidly
developing countries like Brazil and
China. London, Cardiff, Belfast and
Edinburgh will be included in the
plans to create a fibre broadband net-
work with speeds of between 80Mbps
and 100Mbps, with another six cities
competing for the remaining places.
The UK currently lags behind with
broadband speeds of just 6.8Mbps.
The plans also include creating a
nationwide superfast mobile broad-
band network.
Osborne said: See what countries
like China or Brazil are building, and
youll also see why we risk falling
behind the rest of the world.
Our great cities are at the heart of
our regional economies. And we will
help bring world leading, superfast
broadband and wi-fi connections to
10 of them including the capitals of
all four nations.
The announcement seems to repre-
sent a change of emphasis in the gov-
ernments digital plan, with
broadband provision for the final
third of the country mostly rural
areas previously taking priority.
UK gets broadband boost
BY STEVE DINNEEN
TELECOMS

THE TREASURY is to team up with
pension funds in an attempt to kick-
start the economy with a 30bn
investment in Britains infrastructure.
George Osborne said the govern-
ment is targeting 20bn of
investment from insurers, pension
funds and infrastructure fund man-
agers, and two groups have already
signed a memo of understanding.
The chancellor said a pipeline of
more than 500 projects worth 6.3bn
across the country will be supported
over the next ten years, of which
5bn-worth are new, to help counter-
act many years of under
investment.
The project focuses on rail, roads,
waste, water and technology.
Treasury minister Danny
Alexander, who will monitor the proj-
ects, said 5bn will be reallocated to
the infrastructure works over the life
of the parliament.
Access to finance from pension
funds heralds a new acceptability of
infrastructure as an acceptable asset
class I think more broadly, the
nation now gets what infrastructure
is all about and the importance it
plays in underpinning economic
growth, said Andrew Stevenson,
head of infrastructure at construction
consultancy Davis Langdon.
The National Association of Pension
Funds said the plan could be a real
win-win.
Around 1.4bn will be spent on rail-
way infrastructure, in conjunction
with Network Rail. This will include a
rail link between Oxford and Bedford,
supporting up to 12,000 jobs, working
with Network Rail to electrify the
Transpennine Express, and bringing
forward Highways Agency roadworks.
The Treasury also said it would
write down 150m of debt on the
Humber bridge, which will halve the
toll price.
And outside the extra spending, the
government backed a plan for a new
Thames crossing at Silvertown.
Our part of London is really badly
served for river crossings, and delays
caused by the Blackwall Tunnel are a
big problem, so new schemes are well
worth examining, said Nigel
Fletcher, deputy leader of Greenwich
Conservatives. No specific plan has
been put forward, but if it is in the
right place, a new crossing could do a
lot to ease traffic congestion across
Greenwich Borough.
COMMUTERS were given some relief
from looming price hikes, as the chan-
cellor pledged to cap fare rises at 6.2
per cent in January.
George Osborne said rail fares
would rise at one per cent above the
retail price index measure of infla-
tion, down from the three per cent
previously announced.
He said the government recognis-
es the pressures that businesses and
passengers are under as a result of
public transport fares.
The cap will apply to Tube and bus
fares as well as national rail services.
The Treasury has estimated that
the lower price rise will cost the gov-
ernment 105m next year.
The Association of Train
O p e r a t i n g
Companies said
it was a positive
step, adding
that train
companies are
working hard
to ensure that
the change can be implemented in
time for the new year.
The government also plans to con-
sult early next year on ways to make
it easier to compare ticket prices.
Cancelling this Januarys increase
in fuel duty and lowering the
increase in rail fares by two
percentage points will go a
long way in freeing up pur-
chasing power and ease pres-
sure on households squeezed
incomes, said Ernst & Young
ITEM Club chief economist
Peter Spencer.
Some relief for commuters after rail
fare hikes are scaled back for a year
MOTORISTS were one of the winning
groups in Osbornes speech, being told
that fuel duty will be frozen in January
and a planned rise pushed back to
August.
In a move intended to give relief to
households who have a car as a neces-
sity rather than a luxury, the chancel-
lor said a 3.02p hike has been
postponed until August, and the
smaller rise of 1.92p due in the sum-
mer has been scrapped altogether.
The Treasury said last night that the
tax break was not being paid for
directly by its North Sea profits charge,
which was hiked in March specifically
to pay for an earlier fuel duty holiday.
But air passengers were disappoint-
ed after Osborne stood firm over air
passenger duty, which is to rise at dou-
ble the rate of inflation from April.
Airlines had lobbied for the tax to be
scrapped and said yesterdays move
was another own goal for the British
economy.
Fuel tax break for drivers
but air passengers left out
A shot in the
arm for road
and rail work
BY MARION DAKERS
INFRASTRUCTURE
BY MARION DAKERS
TRANSPORT
INFRASTRUCTURE WORK AT A GLANCE

NORTHERN LINE EXTENSION
Plans to extend the Northern Line were
given a boost by the chancellor, who said
the government will support work to
extend the line to Battersea. Also, provid-
ing a developer can be found by April
2013, it will consider allowing the Mayor
of London to borrow against future tax
takings to fund the scheme. The Treasury
estimates that the plan could support up
to 25,000 jobs in the area and 16,000
new homes, alongside the redevelopment
of Battersea Power Station.
SOUTHERN RAIL CARRIAGES
Around 80m will be spent on 130 addi-
tional carriages for use on Southern rail
routes, helping to ease congestion on
some of Britains busiest routes.
M25 WORK
The government will speed up work on
the existing M25 junction 23 to 27
improvements, as well as work on the M1,
at a total cost of 100m.
OYSTER EXPANSION
The Oyster card system will be rolled out
to parts of the south east rail network, at
a cost of 45m.
NEW LONDON AIRPORT
Osborne repeated that there will be no
third runway at Heathrow but left open
the prospect of a new airport in the
Thames estuary.
DARTFORD CROSSING
The government is looking at three sites
for a new crossing for the Lower Thames,
for example at Dartford.
SILVERTOWN CROSSING
Pension funds will be encouraged to invest
in a possible extra Thames crossing, for
example at Silvertown in east London.
OXFORD - BEDFORD RAIL LINK
The chancellor unveiled plans for a rail link
connecting Oxford, Milton Keynes and
Bedford, which is expected to sustain
12,000 new jobs.
TECHNOLOGY
Plans to build a superfast broadband net-
work across ten cities, and work to con-
nect 99 per cent of the UK to the mobile
phone network.
BY MARION DAKERS
TRANSPORT
SCOTLAND
Rail, roads, local transport, water,
flood and waste powers all devolved
Edinburgh: Super-connected city
funding
NORTHERN IRELAND
Transport, energy, water, flood
and waste powers all devolved
Belfast: Super-connected city
funding
NORTH WEST
Mersey Gateway Bridge
Manchester Cross City Bus
Reinstating Todmorden Curve
WEST MIDLANDS
Evesham Bridge Maintenance
Tollbar End improvement scheme
WALES
Roads, local transport, water, flood
and waste powers all devolved
Cardiff: Super-connected
city funding
SOUTH WEST
Kingskerswell By-pass
SOUTH EAST
New rail link between
Oxford and Bedford
NORTH EAST
Electrification of the
Transpennine Express
Tees Multimodal
Bio-Freight Terminal
YORKSHIRE AND THE HUMBER
Supertram additional vehicles
Improved access to the Sheffield Gateway
EAST MIDLANDS
Lincoln Eastern Bypass
London Road Bridge
A43 Corby Link Road
EAST ENGLAND
New Lower Thames
Crossing
LONDON
Northern Line extension
to Battersea
Thames Tideway Tunnel
Super-connected city
funding
ANALYSIS l SOME OF THE PROJECTS
TheCityUK aims to promote the competitiveness of financial
services and to make the UK the best place in the world to
establish a financial services business
We are pleased that the chancellor high-
lighted that financial services will always
be important to the UK and we support
initiatives that broaden the sources of
finance available to business. We therefore
welcome the governments extension to
the Enterprise Finance Guarantee and this
directly reflects our members views
which we expressed to the Treasury. We
are pleased to hear the chancellors unam-
biguous statement on any Financial
Transaction Tax.
CHIEF EXECUTIVE
CHRIS CUMMINGS
UK DEBT MANAGEMENT OFFICE
We appear to be perceived relative-
ly favourably compared to other
[gilt] markets. That doesnt mean
were necessarily seen as the best.
Its more an issue that other markets
currently seem to be viewed as less
attractive. One factor which looks to
be supporting gilts right now is very
accommodative monetary policy. I
dont expect to see much in the way
of a change in monetary policy in the
near future.
CHIEF EXECUTIVE
ROBERT STHEEMAN
Management of the gilt market was transferred from the
Bank of England to the DMO in 1998. It makes decisions
on government debt and cash management
THE BRITISH BANKERS ASSOCIATION
The BBA is the leading trade association for
the UK banking and financial services sec-
tor, speaking for over 200 member banks
This Autumn Statement makes a seri-
ous addition to the large sums already
being lent to the business community by
the banks. With the Eurozone crisis put-
ting lack of confidence at the top of the
list of concerns, this makes it clear that
money is available for viable businesses.
DIRECTOR GENERAL
ANGELA KNIGHT
THE ENTREPRENEUR
The revised downward forecast for
growth comes as no
real surprise; like many
retailers were finding
sales slow to pick up
this quarter, and con-
sumers are particularly
price sensitive right
now. As a relatively
new brand launched in
March 2010, weve
only ever known reces-
sion, and despite that
weve achieved strong
growth. But like many
fledgling businesses in
todays economy, its
going to take longer
than anticipated to break even, and
well need to re-consider our funding
requirements. Ill be very interested to
see if the programme to underwrite
SME business loans
gives us some options
when I present our lat-
est business plan to my
bank manager in
January. Failing that,
Im still reasonably con-
fident there is an
appetite for investment
from the private sector;
the Enterprise
Investment Scheme
will hopefully help fuel
that interest in the UK,
otherwise well be look-
ing for investment
abroad.
CO-FOUNDER OF UPPER STREET LONDON
JULIA GRINHAM
OIL & GAS UK
Since the tax changes announced in
the last Budget, we have been
engaged in constructive dialogue with
the Treasury on the fiscal regime, par-
ticularly regarding ways to stimulate
investment in uncommercial fields and
to resolve the uncertainty around tax
relief on decommissioning costs by
Budget 2012. We consider it timely to
ECONOMICS AND COMMERCIAL DIRECTOR
MIKE THOLEN
Industry body that represents the inter-
ests of the offshore oil and gas industry in
the UK by working closely with compa-
nies across the entire sector, govern-
ments and other stakeholders to address
crucial issues such as taxation
DIRECTOR GENERAL
SIMON WALKER
Institute of Directors (IoD) provides sup-
port and information for business leaders
as well as political analysis
wait until the Budget to address these
matters and believe it would have
been premature to see an announce-
ment in the Autumn Statement. The
Treasury did indicate that it would
consult on measures to promote
research and development by larger
companies and on that we will look to
engage.
THE CBI
The UKs top business lobbying organisation. It
aims to influence government policy on a wide
range of business matters
This Autumn Statement works with
the realities of today and provides an
imaginative framework for UK business-
es as it strives to secure growth and
jobs. This is Plan A plus in all but name.
The downgraded forecasts and outlook
were no surprise, but the Eurozone crisis
is still hanging over us. The govern-
ments dogged commitment to budget
deficit reduction remains the only way
to maintain the UKs triple A credit rat-
ing and low interest rates on interna-
tional money markets. Given the
continued uncertainty in the Eurozone,
the downgrades to the UKs economic
forecasts reflect the current difficulties.
Investing in our infrastructure will act
as a stimulus to growth. The projects
announced will not just boost immedi-
ate activity and jobs, but a longer-term
infrastructure plan will support our con-
struction sector in the years to come.
DIRECTOR GENERAL
JOHN CRIDLAND
The chancellor stuck to his guns today,
and that was the right thing to do. No
one is pretending that its going to be
easy or painless, but theres no credible
alternative to the deficit reduction plan.
We wanted Plan A with more infra-
structure spending, and thats what we
got. I believe business confidence will
have been boosted by todays
announcements. The introduction of
credit easing will be welcomed by busi-
nesses up and down the country. This is
an imaginative scheme which should
helpfully reduce the cost of capital for
companies. It also provides an incentive
for banks to increase lending before the
scheme becomes operational, because
their subsequent allocation will be
determined by their existing loan book.
The new mid-size financing arrange-
ment is also welcomed as a further
attempt at creating alternative sources
of funding in the wake of the financial
crisis. However this may take time to
be fully implemented.
None of the chancellors post-election
assumptions have turned out to be true.
Growth has stalled, the Eurozone has crashed,
the structural deficit is bigger than previously
thought and unemployment continues to rise
as the private sector fails to take up the public
sector slack. The chancellors stubborn deter-
mination to stick to his plan A despite the evi-
dence that it is not working and wont work
means we are locked into permanent austeri-
ty. There were welcome moves in the state-
ment as the chancellor tries to reinvent
infrastructure spending, youth employment
and regional assistance programmes. But the
catch is they are being paid for by freezing tax
credits, holding back public sector pay and
increasing public sector job losses.
GENERAL SECRETARY
BRENDAN BARBER
The UKs national trade union body, representing
the vast majority of organised workers
Upper Street London is a luxury bespoke womens shoe retailer, where customers can design
their own footwear. It trades through the website UpperStreet.com
THE DIRECTORS VIEW
THECITYUK
THE GOVERNMENT is handing
250m of compensation to energy-
intensive companies, as it seeks to off-
set the impact of billions of pounds
worth of new green taxes, the chan-
cellor announced yesterday.
As first revealed in City A.M. last
month, George Osborne agreed to
hand the compensation to firms who
use lots of energy, after they warned
a tidal wave of new climate change
taxes could force them out of busi-
ness.
There will be 110m to compen-
sate firms hit by the EU emissions
trading scheme; 100m
for those hurt by the gov-
ernments carbon price
floor; and 40m for
firms who lose out
because of the climate
change levy.
John Cridland, the
CBI director-general,
said: The Government
has recognised that
the UKs energy-inten-
sive users need help.
We now need to
understand how this
money will be allo-
cated to those most
at risk.
But Ed Balls, the shadow
chancellor, claimed
Osborne had been
forced to announce a
rebate to correct the
chaos causes by his
botched carbon floor
price.
Osborne shocked
industry when he
unveiled plans to raise
3.2bn with a new car-
bon floor price, levied in
part to help pay for a cut
in fuel duty.
Left: how we revealed
the story in October
Chancellor gives industry 250m
to mitigate climate change taxes
BY DAVID CROW
INDUSTRY
THE CHANCELLOR was accused of

dealing a blow to first-time buyers
yesterday after announcing that the
government would not be extending
the stamp duty holiday beyond next
March.
In his Autumn Statement yester-
day, George Osborne said that duty
land tax relief has been ineffective
in increasing the number of first
time buyers entering the market.
Grenville Turner, chief executive of
Countrywide, the property services
firm, said the move was disappoint-
ing and has instead added another
barrier for first-time buyers to get
onto the property ladder.
The industry welcomed Osbornes
confirmation that the government
will underwrite mortgages for up to
100,000 buyers, meaning they will
only need to pay a five per cent
deposit for new-build homes.
Reaffirming announcements made
last week, Osborne also said the gov-
ernment would reinvigorate the
right-to-buy scheme giving social ten-
ants bigger discounts of up to 50 per
cent to buy their own home.
Osborne also plans to kick-start
development with the launch of a
400m Get Britain Building fund to
enable housebuilders to construct up
to 16,000 homes.
Government announces an
end to stamp duty holiday
UK ECONOMY
THE TUC
Industry to
get carbon
tax breaks
THE CHANCELLOR is set to unveil a
package of tax relief for energy-inten-
sive firms in his autumn statement,
after he was criticised for hitting
industry with a 3.2bn carbon stealth
tax in his last Budget. City A.M. understands the package
will help those firms that use large
amounts of energy, such as cement,
aluminium and steel makers. A
Treasury source confirmed the chan-
cellor was working on a package for
energy-intensive industries Joh C
S
W
FREE
C P31
BY DAVID CROW
EXCLUSIVE
Banks, businesses and unions give their views on the Autumn Statement
MICHAEL Gove, the education secre-
tary, was the biggest winner from yes-
terdays Autumn Statement, after he
received an extra 1.2bn for his schools
budget.
The chancellor announced 600m
to fund an extra 100 free schools,
which are run independently by pri-
vate groups or parents and do not have
to answer to the local authority.
Part of the money will be used to
fund a raft of new maths free schools
for 16 to 18-year-olds, in a bid to
address a chronic shortage of quali-
fied mathematicians in the UK.
These maths free schools [will] pro-
duce more of the engineering and sci-
ence graduates so important for our
longer term economic success,
Osborne said.
There will
also be a fur-
ther 600m for
local authori-
ties who
need to
b o o s t
t h e
n u m -
ber of
school places on offer. The spending
will be funded by savings at Andrew
Mitchells international aid depart-
ment.
Iain Duncan Smith, the welfare sec-
retary, was also a major winner, after
the chancellor announced that next
years increase in benefits would be
unusually generous.
It is standard practice to increase
benefits in line with Septembers con-
sumer prices inflation reading, which
was particularly high at 5.2 per cent
this year.
The Treasury is understood to have
considered saving cash by uprating
benefits at a lower rate, but aban-
doned the plan following a confronta-
tion with Duncan Smith
The fact that two reforming right-
wingers were the biggest beneficiaries
is significant. The leadership is mind-
ful that its backbenchers are growing
increasingly rebellious and
wants to highlight the
Tory reforms the coalition
is pursuing.
SHADOW chancellor Ed Balls yester-
day called George Osbornes plans for
the UK economy a truly colossal fail-
ure, and claimed the country will
have to borrow 158bn more than the
government planned a year ago.
Responding to the chancellors
Autumn Statement, Balls told a rau-
cous House of Commons: After 18
months in office the verdict is in: Plan
A has failed and it has failed colossal-
ly. He accused the government of hik-
ing borrowing costs and contributing
to rising unemployment, telling
Osborne that his economic strategy
was in tatters as the chancellor
downgraded the UKs growth fore-
casts.
The chancellors out-of-touch and
complacent hubris of a year ago now
seems such a distant memory. The
Prime Minister boasted that Britain
was out of the danger zone and the
chancellor claimed that the UK was a
safe haven, but we know the truth: cut-
ting too far and too fast has backfired
and all his claims of a year ago have
completely unravelled, Balls said.
He also called for a more measured
approach to reducing the deficit in the
coming months, and urged the chan-
cellor to withdraw the increase in VAT
that was introduced at the start of
2011.
The country either needs a new
chancellor or a new plan ... The chan-
cellor needs to change course and he
needs to do so now, Balls told parlia-
ment.
Balls: economy in tatters after growth
plans are proved a truly colossal failure
Schools win
extra 1.2bn
in new funds
BY DAVID CROW
POLITICS
BY ELIZABETH FOURNIER
POLITICS
Risking the wrath of the Royal Society for the Protection of Birds, the Tinkerer pushed on Picture: REUTERS
Trust in the Tinkerer of the Exchequer
I
T WAS a motley crew of beneficiar-
ies the Tinkerer of the Exchequer
ushered into the first class cabins
of HMS Treasury yesterday.
Satellites, waste facilities, broad-
band networks, supercomputers,
world-bleating (beating?) animal
health labs, the Kettering Bypass,
small shops, the A453 link
Theyre all going to be improved!
the Tinkerer brayed, as he furiously
rearranged the deckchairs for the ben-
efit of his new favourites.
But what about the throngs of stan-
dard-class passengers? The ones travel-
ling deep down in the keel of the ship,
close enough to see the waves rising as
the storm builds across the Channel.
Little joy for them.
We are doing what we can, the
Tinkerer crooned, vowing to protect
the dark satanic steel mills of the
North.
The Royal Society for the Protection
of Birds was having none of it. A
hideous act of hypocrisy, they
squawked as the Tinkerer promised to
consider a brand new airport in the
Thames Estuary.
The school children in the
Commons public gallery had had
enough: they know, after all, that mov-
ing beads back and forth across an aba-
cus does not create more of them.
Taking a cue from Bob Crow, they
staged a futile walk-out half way
through Osbornes statement.
The Tinkerer was unfazed: he will
lead Britain to safety, he declared,
guiding us through the storms, floods,
tidal waves of euro debt. Showing the
will to live, to lead. Acting, matching,
saving, lasting, gerund-ing for tough
times.
And as we emerge from the storm,
ready to drop anchor on the shores of
our safe haven the dove bearing its
olive leaf is nowhere to be seen.
It has been swallowed up by a jet
engine somewhere over the Thames
Estuary.
POLITICAL SKETCH
JULIET SAMUEL
Osborne gets an A for moving fiscal goalposts
I
T is a common joke that some
tests are impossible to fail the
driving theory exam, for instance,
or an A-Level in General Studies.
You would expect George Osbornes
fiscal mandate to be slightly more tax-
ing. But youd be wrong.
Because the chancellors two fiscal
targets test very little, save for his abil-
ity to move the goalposts by several
miles when things dont go his way.
The first, that the structural deficit
should be in balance in the final
year of the five-year forecast period,
is a rolling target. If he fails one year,
he can roll it over to the next when
the forecasting period shifts forward
by 12 months.
So yesterday the OBR said the gov-
ernment was on course to meet its
target by 2016-17, after Osborne
announced a further two years of
smallish public spending cuts. If it
becomes apparent next year that the
outlook has worsened, he can push
the target forward by yet another year,
and do the same the next, ad infini-
tum. Essentially, he can take as many
re-sits as he likes.
Second, the chancellor has commit-
ted that national debt as a proportion
of GDP should fall between 2014-15
and 2015-16, a target that is more
ridiculous than the first. It means he
can run up the national debt by as
much as he likes over the next four
years, as long as it falls in the fifth.
And that is exactly what he is doing.
Public sector net debt will now peak at
78 per cent of GDP in 2014-15, before
falling by a minuscule 0.3 per cent to
77.7 per cent in the following year.
Technically, he is on course to meet
the target.
But debt will be far higher than
expected at the March Budget just
eight months ago. Back then, the OBR
expected it to peak at 70.4 per cent in
2014-15, before falling to 69.1 per cent.
So public sector net debt will be a stag-
gering 8.6 per cent higher than
expected in 2015-16, even on the OBRs
ridiculously optimistic assumptions
but Osborne still doesnt flunk the
test. It must be the only exam in the
world that is easier to pass if you fail
your coursework.
In setting his fiscal mandate, as in
so much, Osborne has learned the
tricks of his trade from Gordon
Brown, who famously changed the
terms of his golden rule in 2005
before abandoning it altogether when
the financial crisis hit.
Like Brown, he had nothing to offer
yesterday save for a handful of micro-
measures, many of which solve prob-
lems of his own making. Take the
250m package of relief for firms hurt
by a tidal wave of green regulation a
drop in the ocean compared to the
3bn carbon stealth tax he hammered
them with at the last Budget.
Still, at least he can say he has
passed a test. Impossible to fail. And
written by himself. At least Gordon
would be proud.
david.crow@cityam.com
DAVID CROW
Left to right:
Andrew
Mitchell; Iain
Duncan
Smith; Michael
Gove
Reforms to employment
regulations will go ahead
GEORGE Osborne yesterday reiterated
the governments plans to reform
employment laws, including doubling
the time before an employee can
bring an unfair dismissal claim and
introducing fees for tribunals.
First announced in Aprils budget,
the Chancellor said the changes
would help firms that are afraid to
hire new staff because of their fear
about the costs involved if it doesnt
work out.
The government already confirmed
yesterday it planned to reduce the bur-
den on small firms caused by health
and safety legislation including
exempting more than a million self-
employed workers altogether.
The reforms are part of a package of
recommendations put together as
part of a review led by Kings College
London profressor Ragnar Lofstedt,
which also suggested employers
should not be liable for damages if
theyve done all they can to avoid
risks.
EMPLOYMENT
WHAT DOES THE CHANCELLORS BUDGET MEAN FOR YOU? by Tim Wallace and Harriet Dennys
CATHERINE GANNON, 49
MANAGING DIRECTOR OF
LAW FIRM GANNON
Catherine Gannon lives with
her children, aged nine and
11, in a home she owns with
a mortgage. She set up her
firm nine years ago and
worries about red tape and
taxes. When travelling to
meet clients, Catherine uses
the tube. She earns over
100,000, and has a share
portfolio, though not much
by way of pension plans.
PWCS BUDGET TEAM SAYS:
Michael will welcome the
restricted train fare increases
although they are still set to
rise by one per cent above infla-
tion.
The scrapping of the planned
3p fuel duty increase in January
and the reduction in the rate of
increase from 5p to 3p in
August 2012 may well not have
a dramatic effect on his car
usage.
However, the additional
funds to be provided to local
authorities in England who
freeze or reduce their council
tax from April 2012 will hope-
fully encourage his local council
not to increase council tax.
Martin will be relieved that the chancellor
did not announce any restriction of higher
rate tax relief on pension contributions. This
was a measure which had been rumoured to
be included in the Autumn Statement.
He may also be interested in investing in
the new Seed Enterprise Investment
Scheme (SEIS). This is to encourage invest-
ment in start-ups with income tax relief at
50 per cent. The annual investment limit is
100,000 with a cumulative limit of
150,000. There will also be a capital gains
tax holiday on gains realised on the disposal
of an asset in the 2012/13 tax year where
the proceeds are reinvested through a SEIS
in the same tax year.
Martins fears about youth unemployment
may have been eased by the announcement of
a 1bn investment in a "youth contract" to sub-
sidise six-month work placements for 410,000
young people. The government also introduced
flexibility into the Jobseekers Allowance
regime to help claimants after six months to be
referred to full-time training for up to eight
weeks whilst remaining on JSA.
** PwC comments provided by Claire Evans
MARTIN WINTER, 57,
SENIOR PARTNER,
TAYLOR WESSING
Martin Winter lives in
Wandworth with his
wife, in a home that they
own with no mortgage.
They have two children,
aged 19 and 21, and as a
result are concerned
about the level of youth
unemployment. Martin
runs to work but does
have an oyster card for
public transport. He uses
his car only at the week-
ends, and frequently
flies on business trips.
He saves, with a pension
and ISA, and the com-
pany recorded average
earnings per equity
partner of 537,000 in
2010-11.
MICHAEL HEWSON, 47
SENIOR MARKET ANALYST,
CMC MARKETS
Michael Hewson owns a
home, but rents it out,
choosing instead to live
with his girlfriend in
Croydon. Although he has a
car, he does not use it
much, finding public trans-
port cheaper. He gets the
train to London Bridge then
walks in to work at
Liverpool Street, where he
earns around 80,000 a
year. A keen saver, Michael
has invested in a pension,
holds shares and makes use
of ISAs. He has no children.
P
i
c
t
u
r
e
s
:

M
i
c
h
a

T
h
e
i
n
e
r
A couple of points of interest
have been announced which
may impact on Lauras travel-
ling. The rise in regulated rail
fares will be capped at 6.2 per
cent in January, down from the
intended 8.2 per cent.
In addition the government
will invest 45m to extend flexi-
ble smart ticketing across
London and the south east. She
will however be hit by the previ-
ously announced increase in air
passenger duty rates, which will
be introduced from 1 April 2012.
The basic state pension will
rise by 5.35 to 107.45 but
unfortunately Laura will now
have to wait until she is 67
before she is entitled to receive
it. The increase from 66 to 67
was due to have started gradual-
ly from 2034 but now this
process will start in 2026 and
end in 2028.
LAURA MUCHA, 29, NORTON
ROSE ASSOCIATE
Laura Mucha earns 75,000
to 85,000 per year, and is
about to go into her third
year in the firms disputes
practice. She has almost
paid off her student loan, but
is still sensitive to interest
rates because she recently
took out a mortgage to buy
a flat in central London.
Lauras commute is a 30-
minute cycle, though she
uses trains at weekends. An
enthusiastic traveller, she
flies frequently in a personal
capacity, though rather less
with work. She invests in the
companys pension scheme.
PARENTS have a better chance
of accessing free nursery
places for their toddlers after
chancellor George Osborne
almost doubled the scope of
the governments free child-
care scheme yesterday.
Free places at day care nurs-
eries, childrens centres, play-
groups or child minders for
15 hours per week will be
made available to 260,000
two-year-olds from disadvan-
taged families, equivalent to
about 40 per cent of the age
group. The government esti-
mates the cost of expanding
the programme to be 380m
per year by 2014-15 or 650m
over the spending period.
Osborne said the plans
intended to better educate
young children to help them
move out of poverty.
The government will take
action to tackle the causes of
child poverty rather than sim-
ply funding extra welfare pay-
ments, he said in the
Autumn Statement report.
The scheme currently cov-
ers 140,000 two-year olds and
offers up to 15 hours of free
care per week for all three
and four year olds.
Mark Jones, head of protec-
tion at insurer LV= said the
move was a welcome benefit
for the families struggling
most to meet the high costs of
childcare.
But Tim Knox, director of
the Centre for Policy Studies,
warned that many of the
measures announced today
amount to little more than
government meddling.
Free childcare
scheme gets
650m boost
BUDGET
VAT relief for

charities that
share costs
BUDGET
THIRD sector groups that

share back office functions
will be given tax relief on VAT
payments, a move that could
save organisations 125m a
year in tax by 2016-17.
The VAT cost-sharing
exemption will allow chari-
ties, universities and other
non-profit groups to share
costs without adding on VAT.
Experts welcomed the
announcement but said with
few details sketched out it
was unclear how generous the
plan would be in reality.
In a sector that is reported
to incur over 1bn a year in
irrecoverable VAT, exactly how
many charities will qualify for
the exemption remains to be
seen, said McGrigors Tax
partner Stuart Walsh.
The Charity Finance
Directors Group said it would
make a real, positive differ-
ence. We are really pleased
that government have heeded
calls to implement this
extremely important meas-
ure, said its chief executive
Caron Bradshaw.
The restricted rises in tube
fares will help Catherines
travel costs and so too will
the fuel duty increases being
less than expected.
The bank levy increase from
1 January 2012 may hit
Catherines clients in the
financial services sector
although they will be buoyed
by the chancellor George
Osborne's reluctance to intro-
duce an EU transaction tax.
As part of recently
announced employment law
"Red Tape Challenge" the gov-
ernment will look at ways to
reduce regulation on employ-
ment tribunals and the collec-
tive redundancy regulations.
T
HE Autumn Statement showed that
George Osborne has failed to grasp the
gravity of the economic crisis facing the
UK. Urgent action was needed to brace the
economy for double-dip recession and the fallout
from the euro crisis. Instead, the chancellor
announced a big increase in government bor-
rowing, together with a series of measures that,
while attractive to key groups of target voters,
will do little to encourage growth.
Worse still, collapsing growth means the gov-
ernments deficit reduction plan is now in tat-
ters. Government borrowing has been increased
by 110bn over the next four years, meaning a
staggering 350bn added to the national debt.
This may in fact be a best-case scenario. The
Office for Budget Responsibility predicts slow
growth of 0.7 per cent in 2012 but then assumes
a healthy recovery, with growth rising to 2.1 per
cent in 2013, 2.7 per cent in 2014 and a robust 3.0
per cent in 2015. But given the severity of the
euro crisis, high levels of public and private debt,
and the possibility of a downturn in overheated
emerging markets, it is equally plausible that
Britain will go into recession next year, followed
by several years of stagnation.
A wise chancellor would be preparing for such
a scenario. Vague talk of contingency plans does
not pass muster.
A double-dip recession would decimate tax
revenues while adding to welfare spending
through higher unemployment. If UK GDP were
just five per cent lower than predicted in 2015,
for example, this would reduce the annual tax
take by around 35bn.
Under such circumstances, with the budget
deficit remaining unsustainably high, the chan-
cellor cannot assume that the UK will retain
investor confidence and continue to pay very low
interest rates on its debt. With high debt and low
growth there may be little to separate Britain
from the struggling economies in the rest of
Europe, such as Spain and Italy.
Given the severity of the potential risks,
Osborne should have had the courage to
announce further cuts at least enough to
return the deficit reduction plan to its original
trajectory. He should also have taken far bolder
steps to encourage growth, through radical
deregulation and by rationalising the tax system.
He could, for example, have cut spending by
uprating benefits rates in line with average earn-
ings rather than inflation. Planned increases in
foreign aid deeply unpopular with a sceptical
public could have been abandoned at negligi-
ble political cost.
Instead, several new spending announce-
ments were made, using money that could have
been used to reduce government borrowing. Ill-
conceived credit easing policies will mean tax-
payers will guarantee risky loans to businesses
and first-time buyers. Additional enterprise
zones were announced, even though these sub-
sidise firms to relocate to sub-optimal locations.
An extra 1bn was found for the Regional
Growth Fund for England, despite five decades of
failure in regional policy and governments lam-
entable record at picking winners.
Much was also made of extra infrastructure
spending: 5bn extra over the next three years
plus significant additional investment from the
private sector. Unfortunately, a high proportion
of this expenditure is politically motivated and
the economic returns will be negative. Loss-mak-
ing public transport schemes will require ongo-
ing operating subsidies, creating significant
future liabilities for short-term political gain.
The counterproductive gimmicks were com-
bined with almost a complete absence of policies
to reduce burdens on businesses and thereby
encourage growth. Osborne made some wel-
come statements on the need to liberalise plan-
ning controls, reduce the cost of employment
law and simplify business taxes but few con-
crete measures were announced.
In fact, current government policies are likely
to work in direct opposition to many of the chan-
cellors announcements. For example, new regu-
lations forcing builders to produce expensive
zero-carbon homes will dwarf the impact of
special help for 100,000 first-time buyers. Indeed,
Osborne recognised the calamitous impact of
the governments green policies when he
announced subsidies for energy-intensive indus-
tries struggling to cope with spiralling costs.
The lack of action on deregulation is mirrored
in tax policy. Several tax rates are now so high
that they actually lower revenues by destroying
incentives to work and invest. The Autumn
Statement was a golden opportunity for Osborne
to signal his intention to rationalise the tax sys-
tem. In particular, a cut in the 50p rate of income
tax would have increased tax revenues and sent
a strong message to international investors that
the UK offers a pro-business climate.
On this and other issues the chancellor proved
too timid to step up to the challenge. He missed
his chance to prepare the country for economic
turmoil by cutting spending and removing key
impediments to growth. It now seems likely his
hand will be forced by events.
Dr Richard Wellings is deputy editorial director at
the Institute of Economic Affairs. www.iea.org.uk
30
The Forum
CITYA.M. 30 NOVEMBER 2011
A wise chancellor would be
preparing for the worst.
Vague talk is not enough
Pride before a fall: Osborne
looked to special interests,
not the UKs perilous state
cityam.com/forum
RICHARD WELLINGS
Agree? Disagree? Got a sharp comment?
The Forum wants you to join the debate.
COMMENT NOW ON
Twitter: @cityamforum;
on the web: cityam.com/forum;
or by email: theforum@cityam.com.
Top responses will be reprinted in The Forum.
31
New technology
makes revolution
in systems and
attitudes possible
The challenge to
banks: Who will
lead on service?
W
ITH Virgin Moneys purchase of
Northern Rock, hopes have been
raised of a customer service revolu-
tion in the UKs retail banking sec-
tor. Someone certainly needs to step up to the
plate. Who dares to be different for the cus-
tomer? That is the challenge waiting to be met.
And it can be.
The malaise is deep. Banks had it too good
for too long, since well before 2007. Despite
changes in ownership and a few new entrants,
investors still avoid the sector and customers
prefer to visit the dentist.
Theyre all the same is a great fillip to iner-
tia, it perpetuates the malaise. There is no
incentive to invest in service when many cus-
tomers are unprofitable and dont move any-
way. Lousy service; opaque charging;
mis-selling; packaged accounts; businesses
who have no choice but to borrow from their
suppliers; investors losing money; these are
some of the prices we pay.
The answer starts at the customer, not at the
balance sheet. The know-me-as-an-individual
service, the open-all-hours ease of use, and the
fair deal that customers rightly expect are per-
fectly possible, and profitable, with modern
systems, the right attitude and the will.
Yet existing banks find it hard to make the
change. Inflexible, costly IT and control sys-
tems paid for by back-book pricing rely on cus-
tomers inertia and are as bad for the banks
themselves. New banking regulations and cap-
ital requirements dont help; they make the
investment case harder to figure and offer lit-
tle benefit to customers: making switching eas-
ier is no benefit if there is nothing better to
switch to.
So why then are there so few new banks and
on such a small scale? Several reasons: back-
book pricing is as huge a barrier to entry as it is
an advantage to incumbents; access to pay-
ments and clearing systems is costly and has to
be via an incumbent bank sponsor; treasury
operations and regulatory complexities
demand scale and upfront costs that sap
investors returns. A typical three-year invest-
ment horizon makes a new current account
bank hard to justify kudos to Metro Banks
investors James Barclay would have found it
harder today than in 1736.
But there is hope. The sine qua non is to
have banks that earn the trust of the public
and investors. That requires a change in philos-
ophy, to one that truly puts customers and
their money first. Its about trust that the bank
will not use a customers money unwisely;
trust that the loyal customer will get the best
deal, not the worst. A new philosophy is not
just a project, but a new way of thinking, from
the boardroom to the call centre. Facilitated by
low-cost, browser-based operating and infor-
mation systems in branch, at home and on the
move, all this is perfectly viable.
We need new attitudes supported by new
systems. Together they can cause and enable a
change in behaviour, change that must hap-
pen before we can see the emergence of a
banking sector that earns and sustains respect.
So who dares to be different for the cus-
tomer? That is where the new bank challenge
must come from. More of the same isnt
enough.
Alan Hughes is the executive chair of Walton & Co
Bankers.
Management cuts
[Re: Theres one economic policy
the coalition has yet to try, yes-
terday] I definitely agree with
the comment about the NHS and
government bodies employing
too many more managers than
staff needed to actually get the
job done. It has happened in
many private sector areas too. I
work in architecture and espe-
cially when working for govern-
ment agencies we see so many
managers, from project man-
agers to contract mangers, all
doing jobs architects and engi-
neers who are needed to build
can do for better value and end
up doing anyway due to their
specialist knowledge and exten-
sive education. The client then
ends up having to skimp on
design and construction advice
in order to pay the inflated
wages of these managers who
10 years ago were not really
around and indeed in the rest of
Europe are not so necessary.
Alex H
Speak your mind
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take part. Got a sharp comment
on one of todays columns or
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have another subject relating to
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reprinted in The Forum.
RAPID RESPONSES
ALAN HUGHES
BY JAMIE WHYTE
CITYA.M. 30 NOVEMBER 2011
The Forum
E
MPLOYMENT min-
ister Chris Grayling
has announced
plans to streamline
workplace safety regula-
tions and put common
sense back at the heart of
health and safety.
As usual, common
sense is here an excuse for not thinking very hard. If
Grayling approached the matter in a principled way, he
would realise that, rather being streamlined, work-
place safety laws should be eliminated altogether.
How much workplace safety is the right amount?
This is the question that Grayling needs to answer. The
cost of safety measures all those building require-
ments, fastidious work practices and so on can be
estimated. More difficult is knowing the benefit.
The answer comes from noting that workplace
safety is not free to those who benefit from it. The
more dangerous a job, the fewer people will be willing
to do it and the higher the pay will be. If an employer
makes his workplace safer, the number of willing
workers will increase and the pay will decline.
So the cost of a safety improvement is borne (in
part, at least) by the workers it benefits. Only if the
extra safety is worth more to workers than it costs
them in reduced pay is it a net benefit to them.
So perhaps the optimal safety level could be deter-
mined by workers councils. Suppose a safety measure
at a firm with 100 employees will cost 100,000. Let
the employees vote. Do they prefer the status quo or
the new safety measure and a pay cut of 1,000? The
pay cut employees are willing to accept measures how
much they value the extra safety.
So it does. Nevertheless, a workers council will give
the wrong answer. Not everyone makes the same
trade-off between safety and pay. For example, people
who choose to work in dangerous jobs are likely to put
a lower monetary value on safety than people who do
not. By considering only current employees prefer-
ences, the workers council would underestimate the
value of safety measures to people who do not work in
these jobs but would if they were safer.
In other words, this approach is biased in favour of
insiders preferences and against outsiders. The same
thing explains why unions, who represent only the cur-
rently employed, drive wages above the market clear-
ing price and thereby increase unemployment.
Fortunately, employers suffer from no such bias.
Employers benefit from improving workplace safety
when it costs less than it saves on their wage bill
which depends on the preferences of both current and
potential employees. Because the saving on wages
measures the value workers place on the extra safety,
employers benefit from safety measures just when
they are worth more to workers than they cost.
Which means theres no need for workplace safety
laws. Self-serving employers will make the right trade-
off without any compulsion. Indeed, safety laws are
certain to impose the wrong trade-off. Legislators
cant know the preferences of workers, nor design a
system that adapts to their variety. Worse, those who
enforce the system, such as the Health and Safety
Executive, have no incentive to care about workers
preferred trade-offs. They are employed to make
employees safe, not prosperous.
Forget the fussy business of streamlining.
Grayling should eliminate all workplace safety laws
and the agencies that enforce them. He would be
doing workers a great service.
Jamie Whyte is a senior fellow of the Cobden
Centre and author of Crimes Against Logic
(McGraw Hill 2004).
Counting the costs of
health and safety laws
Email: theforum@cityam.com
Twitter: @cityamforum
In association with
32
Wealth Management | Foreign Exchange
A
S the Eurozone crisis rumbles on,
European policy makers are fast
running out of ideas. In recent
weeks, the calls for the central
bank to start printing have grown louder.
But is this a wise route to take?
Print your way out
ROGER NIGHTINGALE
Independent consultant
(Below, left)
If a motorist, driving along a hilly road,
were to want to maintain a roughly con-
stant speed, hed use the cars accelerator
to offset the effect of gradient. Hed open
the throttle in proportion to the steepness
of an ascent, and close it in proportion to
that of a descent. It isnt rocket science. It
doesnt need a genius to understand the
principle; it takes a buffoon not to.
Its much the same with eco-
nomics. If the authorities
were to want to keep
activity on an even keel,
avoiding recessionary
excesses in downturns
and inflationary ones
in upturns, theyd use
credit policies to offset
them. Theyd tighten
money in booms and
loosen it in slumps. Its
not an intellectually-
demanding proce-
dure: central
bankers dont need
multiple PhDs to
understand it;
they need only
not to be idiots.
Sadly, many
dont meet the
latter require-
Craig Drake asks two
experts for their
opposing views on
the direction that the
bank should take
U
NTIL recently, the single most boring job in the
currency business was to be a dollar-yen dealer.
With the exception of a few days when the
Bank of Japan (BoJ) would intervene in the
markets, spiking dollar-yen by a couple of hundred
points in a matter of minutes, the pair would remain
moribund, sometimes moving less than 20 points
throughout the global day. Trading dollar-yen was lit-
erally like watching paint dry, lulling both long and
shorts into a sense of false complacency. Not any
more.
This Monday, while most of the currency market
remained transfixed by the ongoing developments in
Eurozone credit markets, dollar-yen suddenly woke
up, racing higher by nearly 100 points in European
and North American sessions its biggest one day
gain in weeks. What happened to cause this change?
The sudden realisation by the market that the US
economic recovery may be stronger than originally
thought. Shopping results from retailers showed that
Black Friday sales reached a record high this year and
the reports on Cyber Monday were equally strong,
suggesting that a rebound in consumption could spur
US economic growth in the final quarter of this year.
Dollar-yen has always traded as a referendum on
the US economy, but over the past year or so flows in
the pair have been skewed by the Feds quantitative
easing (QE) efforts, which have artificially suppressed
US bond yields. However, with the Fed unlikely to
engage in any further QE efforts in an election year,
the pair could go back to trading on economic funda-
mentals. To that end, the news out of the US, while
not exemplary, has been relatively good.
Most importantly, the labour market situation
appears to have stabilised with weekly jobless claims
consistently below the key 400,000 barrier for the
past two months. Today, currency traders will get a
clue to Fridays non-farm payroll report when ADP
releases its numbers at 1.15pm. However, the key
driver of trade for dollar-yen will be Fridays job
report. If non-farm payroll prints 200,000 new jobs
or better dollar-yen could rally towards the psycho-
logically important 80 level.
DOLLAR-YEN IS
WAKING FROM
ITS SLUMBER
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT
This could become a reality Picture: REX
ment. Demonstrating the point, theres
been a tendency in recent years to raise
interest rates at the top of a cycle, and a
corresponding willingness to lower them
during an upturn. Downturns have there-
by been steepened, and inflationary
risks enhanced.
The ECB has been the
worst offender.
Exclusively concerned
with maintaining the
status of the euro, its
ignored the real econ-
omy; cycles havent
been dampened, but
exaggerated. In conse-
quence, peripheral coun-
tries are headed for
1930s-style depressions. A number of the
members of the inner core will probably
accompany them.
The financial markets, initially indul-
gent of the ECBs incompetence, are now
sceptical. Investors are convinced that
the euro will disintegrate. They
want to hold as little as possible
of the weak components of the
unit.
What should the ECB do?
Recognise reality abandon
the currency and focus on the
economy. Print money aggres-
sively; devalue the euro forceful-
ly. Additionally, all the Banks
current employees should
resign; and all previ-
ous ones revoke
their pensions
entitlements.
Atonement.
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To print or not to print:
33
FOREX STRATEGIST
JOEL KRUGER
My pick: Remain short Australian dollar-dollar
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week
FOREX STRATEGIST
ILYA SPIVAK
My pick: Remain short euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
As expected, the Eurozone debt crisis continues to spread and more of
the same appears likely ahead aggressive involvement from the ECB
to trim bond yields remain absent. Markets are also pricing in a rate
cut in December, bolstering the bearish bias. I re-entered short at
$1.3526 on 9 November, as prices completed a bearish head and
shoulders chart formation, aiming for targets at $1.3141 and $1.2836.
A stop-loss will be triggered on a daily close above $1.3882.
We have been short this market from $1.0550 and $1.0300 over the
past couple of weeks and have managed to build up some nice profits.
The latest break and close back below parity further solidifies our core
bearish outlook, and from here, we will look over the coming weeks for
a retest of the critical October lows at $0.9385. The latest rallies should
now be well capped below $1.0250 and selling on rallies towards or
back above parity is the preferred strategy.
FOREX STRATEGIST
JOHN KICKLIGHTER
My pick: Short kiwi-dollar; long euro-loonie; long dollar-Swissie
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week
The strong drive in risk trends through the historically quiet holiday peri-
od was remarkable. This is a clear sign of how troubled the European
and global financial markets are. From a risk perspective, I take this as a
sign that New Zealand dollar-dollars retest of a very prominent channel
bottom near $0.7600 sets new resistance. For more fundamental bal-
ance, I like playing the euro-Canadian dollar range (Ca$1.4050-
Ca$1.3750) and a genuine dollar-Swiss franc break above SFr0.94.
T
HE Eurozone crisis rumbles on with
daily reports. Good bond auctions
in Italy sent the euro sharply higher
and rumours of French downgrades
pushed it lower. Euro-sterling languishes
near its September and October lows of
0.8530 and looks vulnerable to further
weakness. But traders should keep in mind
that the euro rallied sharply against the
pound in December in three out of the last
four years, with the gains of 229 pips in
2010, 1,336 pips in 2008 and 239 pips in
2007. Although it lost 251 pips in 2009.
Spread Co offers a spread on euro-sterling
of 0.8538-0.8540.
Risk has returned to the financial mar-
kets and as a result riskier currencies are
attracting buyers. The Australian dollar is
back around parity level with the US dol-
lar and recently broke back above the
upper downward trend line, indicating
that the buyers are back. Capital Spreads
quotes $1.0000-$1.0001 for Australian
dollar-dollar.
Spread betters were pessimistic on the
pounds situation, despite sterling making
gains against the dollar on the back of a
successful Italian bond auction. But the
OECDs downgrade of UK economic
growth forecasts and chancellor George
Osbornes gloomy Autumn Statement
both point to the potential for more quan-
titative easing, which would again put
pressure on the pound. Spreadex quotes
sterling-dollar at $1.5642-$1.5645.
Yesterdays Autumn Statement didnt
contain too much in the way of surprises
for sterling, which has gained back quite a
lot of ground against the Swiss franc,
since hitting lows of SFr1.1465 in August.
Having broken above both its 55 and 200
day moving average it could well be set
for further gains. CMC Markets quotes
sterling-Swiss franc at SFr1.43385-
SFr1.43465.
Appetite for the riskier euro has
increased since the IMF indicated their
600bn package would cover any poten-
tial Italian default. Traders were further
encouraged as Italy sold 7.5bn worth of
government bonds. We should see this as
a bear market squeeze and gains are like-
ly to be limited to the short term. Capital
Spreads quotes euro-dollar at $1.3395-
$1.3396.
Philip Salter
THE TIPSTER
FOR RICHES ONCE, TWICE,
THREE TIMES A EURO RALLY
FOREX ANALYST PICKS
ECB policy debate
Hold the presses
NICK BEECROFT
Senior markets consultant,
Saxo Bank (Below, right)
If the power of persuasion, coercion or
even downright bribery (in the form, I
hasten to add, of solemn promises to
enact Eurozone-wide fiscal austerity
and probity) eventually wins the day
and the ECB drops the last of its princi-
ples to become lender of last resort to
the struggling Eurozone periphery,
then the debt crisis will surely have
claimed by far its most significant scalp
the ECBs reputation.
Wholesale purchases of sovereign
debt, their quantum only limited by
the total size of the issues available
because that is what would be required
may put a temporary end to the ago-
nising circle of collapsing debt prices,
leading to fears of bank collapses, lead-
ing to fears of more demands upon
Europes state coffers, etc, etc.
The sad point is that this exercise
would just be yet another pretend and
extend scheme, which would do noth-
ing to address the appalling underlying
debt mountains or lack of labour com-
petitiveness in these countries.
Following a brief, relief rally I think
the euro may well subsequently fall
rather precipitously, as a major bul-
wark underpinning the single currency
will have been removed.
Why is it ok for the US Federal
Reserve and the Bank of England to
indulge in quantitative easing if it isnt
for the ECB? The huge difference lies in
the field of possible unintended conse-
quences.
The main danger that would accom-
pany ECB quantitative easing is that of
moral hazard. Shorn of the tiresome
constraint of market discipline, it
seems highly likely that peripheral
countries may find ways to work round
the new, supposedly tight rules that
would have been the ECBs quid pro
quo for this momentous step.
The US and the UK both enjoy a very
different status as age-old, established
unions, bound by a common language
and cultures.
LON GD ONCE FIX AM...........1717.00 3.00
SILVER LDN FIX AM ..................31.94 -0.26
MAPLE LEAF 1 OZ ....................34.49 0.06
LON PLATINUM AM................1542.00 -15.00
LON PALLADIUM AM...............583.00 -10.00
ALUMINIUM CASH .................2006.00 20.00
COPPER CASH ......................7380.50 184.50
LEAD CASH...........................2003.00 28.50
NICKEL CASH......................17270.00 180.00
TIN CASH.............................20555.00 255.00
ZINC CASH ............................1927.00 47.50
BRENT SPOT INDEX................106.77 -1.07
SOYA .....................................1121.00 14.50
COCOA..................................2221.00 -17.00
COFFEE...................................224.70 -4.90
KRUG.....................................1773.90 -3.00
WHEAT ....................................144.38 1.65
AIR LIQUIDE........................................89.87 -0.28 100.65 80.90
ALLIANZ..............................................72.87 2.23 108.85 56.16
ANHEUS-BUSCH INBEV ....................44.00 0.20 44.28 33.85
ARCELORMITTAL...............................12.57 -0.11 28.55 10.47
AXA......................................................10.11 0.10 16.16 7.88
BANCO SANTANDER...........................5.49 -0.01 9.20 5.05
BASF SE..............................................50.56 1.03 70.22 42.19
BAYER.................................................45.79 0.20 59.44 35.36
BBVA......................................................5.93 -0.02 9.17 4.94
BMW ....................................................52.92 -0.02 73.85 43.49
BNP PARIBAS.....................................28.17 -0.36 59.93 22.72
CARREFOUR ......................................18.57 -0.33 32.25 14.66
CRH PLC .............................................13.43 0.25 17.40 10.28
DAIMLER.............................................31.88 -0.26 59.09 29.02
DANONE..............................................48.06 0.67 53.16 41.92
DEU.BOERSE OFFRE ........................43.40 0.15 55.75 35.46
DEUTSCHE BANK..............................26.95 0.37 48.70 20.79
DEUTSCHE TELEKOM.........................9.27 0.09 11.38 7.88
E.ON.....................................................17.58 0.21 25.54 12.50
ENEL......................................................3.02 0.04 4.86 2.78
ENI .......................................................15.12 -0.10 18.66 11.83
FRANCE TELECOM............................12.26 0.01 16.65 11.12
GDF SUEZ ...........................................19.64 0.11 30.05 17.65
GENERALI ASS...................................12.01 0.16 17.05 10.34
IBERDROLA..........................................4.80 0.01 6.50 4.29
INDITEX ...............................................60.29 -0.92 69.40 50.92
ING GROEP CVA...................................5.41 0.11 9.50 4.21
INTESA SANPAOLO.............................1.16 0.00 2.47 0.85
KON.PHILIPS ELECTR.......................14.43 0.42 25.45 12.01
L'OREAL..............................................77.28 -0.08 91.24 68.83
LVMH..................................................112.00 0.50 132.65 94.16
MUNICH RE.........................................89.45 2.04 126.00 77.80
NOKIA....................................................4.19 -0.06 8.49 3.33
REPSOL YPF.......................................21.21 0.10 24.90 17.31
RWE.....................................................29.26 -0.31 55.88 21.22
SAINT-GOBAIN...................................29.82 0.53 47.64 26.07
SANOFI ................................................50.42 0.09 56.82 42.85
SAP......................................................42.84 0.02 46.15 32.88
SCHNEIDER ELECTRIC.....................40.01 0.92 61.83 35.00
SIEMENS .............................................72.25 0.99 99.39 62.13
SOCIETE GENERALE.........................17.28 -0.07 52.70 14.32
TELECOM ITALIA..................................0.81 0.01 1.16 0.70
TELEFONICA ......................................13.50 -0.02 18.75 12.50
TOTAL..................................................37.26 0.25 44.55 29.40
UNIBAIL-RODAMCO SE...................132.80 -0.05 162.95 123.30
UNICREDIT............................................0.75 -0.01 2.03 0.64
UNILEVER CVA...................................24.63 0.29 25.13 20.90
VINCI ....................................................31.59 0.61 45.48 28.46
VIVENDI ...............................................16.51 0.28 22.07 14.10
VOLKSWAGEN VORZ.......................119.90 -0.20 152.20 86.40
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5337.00 24.24 0.46
FTSE 250 INDEX . . . . . . . 10031.58 123.12 1.24
FTSE UK ALL SHARE . . . . 2751.30 15.15 0.55
FTSE AIMALL SH . . . . . . . . 682.92 1.54 0.23
DOWJONES INDUS 30 . . 11555.63 32.62 0.28
S&P 500. . . . . . . . . . . . . . . . 1196.00 3.45 0.29
NASDAQ COMPOSITE . . . 2515.51 -11.83 -0.47
FTSEUROFIRST 300 . . . . . . 947.89 7.01 0.75
NIKKEI 225 AVERAGE. . . . 8477.82 190.33 2.30
DAX 30 PERFORMANCE. . 5799.91 54.58 0.95
CAC 40 . . . . . . . . . . . . . . . . 3026.76 13.83 0.46
SHANGHAI SE INDEX . . . . 2412.39 29.36 1.23
HANG SENG. . . . . . . . . . . 18256.20 218.39 1.21
S&P/ASX 20 INDEX . . . . . . 2465.30 0.00 0.00
ASX ALL ORDINARIES . . . 4167.30 0.00 0.00
BOVESPA SAO PAOLO. . 55299.76 -717.59 -1.28
ISEQ OVERALL INDEX . . . 2623.72 12.21 0.47
STI . . . . . . . . . . . . . . . . . . . . . . . 0.00 0.00 0.00
IGBM. . . . . . . . . . . . . . . . . . . 815.88 0.36 0.04
SWISS MARKET INDEX. . . 5531.24 8.58 0.16
Price Chg %chg
3M........................................................77.24 -0.48 98.19 68.63
ABBOTT LABS ...................................53.05 -0.15 55.61 45.07
ALCOA ..................................................9.31 -0.15 18.47 8.45
ALTRIA GROUP..................................27.95 0.35 28.20 23.20
AMAZON.COM..................................188.39 -5.76 246.71 160.59
AMERICAN EXPRESS........................45.55 -0.46 53.80 41.25
AMGEN INC.........................................56.14 0.24 61.53 47.66
APPLE...............................................373.20 -2.92 426.70 310.50
AT&T....................................................28.06 0.11 31.94 27.20
BANK OF AMERICA.............................5.08 -0.17 15.31 5.03
BERKSHIRE HATAW B.......................75.13 -0.35 87.65 65.35
BOEING CO.........................................65.26 0.27 80.65 56.01
BRISTOL MYERS SQUI ......................31.50 0.39 33.27 20.05
CATERPILLAR....................................90.54 -0.94 116.55 67.54
CHEVRON...........................................97.39 1.62 110.01 80.41
CISCO SYSTEMS................................17.68 -0.33 22.34 13.30
CITIGROUP.........................................25.24 0.19 51.50 21.40
COCA-COLA.......................................66.19 1.02 71.77 61.29
COLGATE PALMOLIVE......................89.70 1.42 94.89 74.86
CONOCOPHILLIPS.............................68.14 0.87 81.80 58.65
CVS/CAREMARK................................37.68 0.30 39.50 30.73
DU PONT(EI) DE NMR........................45.08 0.07 57.00 37.10
EXXON MOBIL....................................76.93 1.09 88.23 63.47
GENERAL ELECTRIC.........................14.92 0.12 21.65 14.02
GOOGLE A........................................582.93 -5.26 642.96 473.02
HEWLETT PACKARD.........................26.90 0.37 49.39 19.92
HOME DEPOT.....................................38.96 1.66 39.38 28.13
IBM.....................................................180.94 -1.27 190.53 141.28
INTEL CORP .......................................23.58 0.12 26.78 19.16
J.P.MORGAN CHASE.........................28.56 -0.60 48.36 27.85
JOHNSON & JOHNSON.....................62.78 0.41 68.05 57.50
KRAFT FOODS A................................35.33 0.44 36.30 24.30
MC DONALD'S CORP ........................93.46 -0.30 95.45 72.14
MERCK AND CO. NEW......................34.48 0.22 37.65 29.47
MICROSOFT........................................24.84 -0.03 29.46 23.65
OCCID. PETROLEUM.........................92.19 1.56 117.89 66.36
ORACLE CORP...................................29.74 -0.13 36.50 24.72
PEPSICO.............................................63.66 0.67 71.89 58.50
PFIZER ................................................19.40 0.31 21.45 16.25
PHILIP MORRIS INTL .........................74.46 1.37 75.45 55.85
PROCTER AND GAMBLE ..................62.53 0.29 67.72 56.57
QUALCOMM INC.................................53.11 -0.83 59.84 45.98
SCHLUMBERGER ..............................70.43 1.21 95.64 54.79
TRAVELERS CIES..............................54.07 -0.15 64.17 45.97
UNION PACIFIC ..................................99.23 0.70 107.89 77.73
UNITED TECHNOLOGIE ....................72.98 -0.16 91.83 66.87
VERIZON COMMS ..............................36.63 0.38 38.95 31.60
WAL-MART STORES..........................58.17 0.92 59.40 48.31
WALT DISNEY CO ..............................34.00 -0.07 44.34 28.19
WELLS FARGO & CO.........................24.08 -0.07 34.25 22.58
COMMODITIES CREDIT & RATES
BoE IR Overnight ............................0.500 0.00
BoE IR 7 days.................................0.500 0.00
BoE IR 1 month ..............................0.500 0.00
BoE IR 3 months ............................0.500 0.00
BoE IR 6 months ............................0.500 0.00
LIBOR Euro - overnight ..................0.621 0.00
LIBOR Euro - 12 months ................2.019 0.00
LIBOR USD - overnight...................0.145 0.00
LIBOR USD - 12 months.................1.066 0.00
HaIifax mortgage rate .....................3.990 0.00
Euro Base Rate ...............................1.500 0.00
Finance house base rate................1.000 0.00
US Fed funds...................................0.250 0.00
US Iong bond yieId .........................2.920 -0.01
European repo rate.........................0.365 0.00
Euro Euribor ....................................0.905 0.00
The vix index ...................................31.11 -1.03
The baItic dry index ........................1.809 0.00
Markit iBoxx...................................240.25 1.22
Markit iTraxx..................................199.02 8.30
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
BAE Systems . . . . . .261.2 0.3 361.1 248.1
Chemring Group . . . .396.1 0.1 736.5 368.8
Cobham . . . . . . . . . . .171.4 1.5 236.5 165.9
Meggitt . . . . . . . . . . . .373.6 2.7 397.6 304.9
QinetiQ Group . . . . . .123.7 0.0 136.3 101.5
RoIIs-Royce Group . .705.0 6.5 738.0 557.5
Senior . . . . . . . . . . . . .175.2 10.4 190.6 132.6
UItra EIectronics . . .1434.0 -4.0 1830.0 1305.0
GKN . . . . . . . . . . . . . .184.5 7.4 245.0 157.0
BarcIays . . . . . . . . . . .169.0 1.2 333.6 138.9
HSBC HoIdings . . . . .486.6 -2.2 730.9 463.5
LIoyds Banking Gr . . .23.2 -0.5 69.6 21.8
RoyaI Bank of Sco . . .19.5 -0.2 49.0 17.3
Standard Chartere .1331.5 -8.5 1878.0 1169.5
AG Barr . . . . . . . . . .1148.0 -8.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .336.4 0.9 497.3 289.9
Diageo . . . . . . . . . . .1328.5 2.0 1344.0 1112.0
SABMiIIer . . . . . . . . .2193.5 6.0 2354.5 1979.0
AZ EIectronic Mat . . .244.0 -1.7 338.1 206.1
Croda Internation . .1757.0 7.0 2081.0 1433.0
EIementis . . . . . . . . . .141.3 2.2 187.4 107.5
Johnson Matthey . .1842.0 33.0 2119.0 1523.0
Victrex . . . . . . . . . . .1140.0 20.0 1590.0 1025.0
YuIe Catto & Co . . . . .157.0 4.3 253.0 148.0
C/$ 1.3325 0.0012
C/ 0.8537 0.0051
C/ 103.72 0.1981
/C 1.1712 0.0069
/$ 1.5608 0.0106
/ 121.49 0.4864
FTSE 100
5337.00
24.24
FTSE 250
10031.58
123.12
FTSE ALLSHARE
2751.30
15.15
DOW
11555.63
32.62
NASDAQ
2515.51
11.83
S&P 500
1195.19
2.64
RPC Group . . . . . . . .337.6 13.1 384.8 217.0
Smiths Group . . . . . .922.0 11.0 1429.0 869.5
Brown (N.) Group . . .253.0 0.0 311.2 242.3
Carpetright . . . . . . . . .386.1 11.1 835.5 374.5
Debenhams . . . . . . . . .60.0 0.7 75.7 51.2
Dignity . . . . . . . . . . . .789.0 -15.0 854.5 645.0
Dixons RetaiI . . . . . . .10.9 0.0 26.1 9.4
DuneImGroup . . . . . .438.3 -2.8 550.0 383.9
HaIfords Group . . . . .334.1 5.0 459.7 268.6
Home RetaiI Group . . .85.0 5.5 235.0 72.5
Inchcape . . . . . . . . . .308.6 1.3 425.4 268.1
JD Sports Fashion . .701.5 -6.5 1030.0 701.0
Kesa EIectricaIs . . . . .87.2 1.3 174.0 78.4
Kingfisher . . . . . . . . .250.1 -2.9 287.1 217.0
Marks & Spencer G . .318.2 0.4 402.2 301.8
Mothercare . . . . . . . .162.8 5.2 627.5 127.3
Next . . . . . . . . . . . . .2665.0 2.0 2810.0 1868.0
Sports Direct Int . . . .227.0 -0.9 266.2 127.0
WH Smith . . . . . . . . . .511.0 5.5 558.0 433.8
Smith & Nephew . . . .564.0 -1.0 742.0 521.0
Synergy HeaIth . . . . .880.0 -1.5 981.0 800.5
Barratt DeveIopme . .100.4 3.8 119.0 67.5
BeIIway . . . . . . . . . . . .729.0 20.5 753.5 514.0
BaIfour Beatty . . . . . .241.7 11.8 357.3 214.6
GaIIiford Try . . . . . . . .488.9 3.9 530.0 276.5
Kier Group . . . . . . . .1385.0 17.0 1448.0 1097.0
Drax Group . . . . . . . .562.0 2.5 581.5 353.6
SSE . . . . . . . . . . . . . .1293.0 6.0 1423.0 1111.0
Domino Printing S . .492.8 -3.3 705.0 434.3
HaIma . . . . . . . . . . . . .332.8 7.0 429.6 306.3
Laird . . . . . . . . . . . . . .149.1 8.8 207.0 127.9
Morgan CrucibIe C . .256.2 5.4 357.1 224.0
Oxford Instrument . .999.0 53.0 1010.0 581.0
Renishaw . . . . . . . . . .882.0 54.5 1886.0 800.0
Spectris . . . . . . . . . .1193.0 15.0 1679.0 1039.0
Aberforth SmaIIer . . .515.5 -5.5 714.0 507.0
AIIiance Trust . . . . . .333.0 1.0 392.7 310.2
Bankers Inv Trust . . .367.9 -2.7 428.0 346.5
BH GIobaI Ltd. GB .1198.0 -2.0 1211.0 1058.0
BH GIobaI Ltd. US . . . .11.8 0.0 12.2 10.4
BH Macro Ltd. EUR . . .20.1 -0.1 20.2 15.8
BH Macro Ltd. GBP 2077.0 7.0 2083.0 1630.0
BH Macro Ltd. USD . . .19.9 -0.2 20.2 15.8
BIackRock WorId M .609.5 3.5 815.5 574.5
BIueCrest AIIBIue . . .166.5 0.5 176.2 162.4
British Assets Tr . . . .116.5 0.1 140.5 109.0
British Empire Se . . .441.0 2.4 533.0 409.9
CaIedonia Investm .1413.0 -2.0 1928.0 1398.0
City of London In . . .274.8 2.2 306.9 257.0
Dexion AbsoIute L . .134.3 0.2 151.0 130.0
Edinburgh Dragon . .212.8 0.3 262.1 201.4
Edinburgh Inv Tru . . .462.2 2.6 492.2 414.9
EIectra Private E . . .1425.0 25.0 1755.0 1287.0
F&C Inv Trust . . . . . .283.4 1.4 327.9 261.5
FideIity China Sp . . . . .78.0 1.2 123.0 70.0
FideIity European . . .958.5 -11.5 1287.0 912.0
HeraId Inv Trust . . . . .445.5 7.5 545.5 419.0
HICL Infrastructu . . . .116.6 0.2 121.3 112.7
Impax Environment . .95.0 0.8 130.5 88.5
JPMorgan American .808.0 0.0 916.0 721.5
JPMorgan Asian In . .182.0 -1.9 250.8 170.1
JPMorgan Emerging .503.5 1.5 639.0 480.1
JPMorgan European .660.0 1.0 983.5 643.0
JPMorgan Indian I . . .332.0 -7.3 492.0 325.6
JPMorgan Russian .508.0 2.0 755.0 415.1
Law Debenture Cor . .340.0 1.9 385.0 315.0
MercantiIe Inv Tr . . . .846.0 3.0 1137.0 825.0
Merchants Trust . . . .354.6 -0.3 431.8 341.5
Monks Inv Trust . . . .310.0 -0.6 367.9 298.1
Murray Income Tru . .604.0 2.5 673.0 568.0
Murray Internatio . . .884.0 -2.0 991.5 818.5
PerpetuaI Income . . .248.0 -2.0 276.0 234.8
PersonaI Assets T .33490.0 70.0 33975.030210.0
PoIar Cap TechnoI . .325.0 -0.9 391.2 299.5
RIT CapitaI Partn . . .1260.0 -45.0 1360.0 1149.0
Scottish Inv Trus . . . .439.0 2.0 524.0 417.0
Scottish Mortgage . .601.5 3.0 781.0 573.5
SVG CapitaI . . . . . . . .190.0 6.0 279.8 182.1
TempIe Bar Inv Tr . . .849.0 11.0 952.0 791.0
TempIeton Emergin .536.5 1.5 689.5 497.0
TR Property Inv T . . .145.0 0.3 206.1 140.5
TR Property Inv T . . . .68.4 0.7 94.0 67.6
Witan Inv Trust . . . . .431.9 2.4 533.0 401.5
3i Group . . . . . . . . . . .185.9 1.5 340.0 176.9
3i Infrastructure . . . .120.1 0.1 125.2 113.1
Aberdeen Asset Ma .196.1 2.3 240.0 167.8
Ashmore Group . . . .323.7 -0.4 420.0 301.5
Brewin DoIphin Ho . .126.6 2.4 185.4 113.7
CameIIia . . . . . . . . . .9572.5 -22.510950.0 8800.0
CharIes TayIor Co . . .124.5 0.4 170.0 121.0
City of London Gr . . . .63.5 0.0 93.6 63.0
City of London In . . .333.0 -1.9 461.5 321.3
CIose Brothers Gr . . .633.0 -1.0 888.5 604.0
CoIIins Stewart H . . . .50.5 0.0 90.8 49.0
EvoIution Group . . . . .75.0 -2.0 94.0 62.3
F&C Asset Managem .67.1 0.6 92.9 56.1
Hargreaves Lansdo .455.5 5.5 646.5 402.5
HeIphire Group . . . . . . .1.6 -0.0 17.5 1.4
Henderson Group . . .109.4 -2.1 173.1 95.1
Highway CapitaI . . . . .13.0 0.0 21.0 6.5
ICAP . . . . . . . . . . . . . .344.3 5.8 570.5 311.6
IG Group HoIdings . .474.0 40.2 528.0 393.6
Intermediate Capi . . .233.7 3.7 360.3 197.9
InternationaI Per . . . .185.0 -2.2 388.8 170.1
InternationaI Pub . . . .118.3 0.5 119.5 108.6
Investec . . . . . . . . . . .339.1 -0.3 538.0 318.4
IP Group . . . . . . . . . . . .71.5 -0.5 76.5 29.9
Jupiter Fund Mana . .216.9 6.3 337.3 184.9
Liontrust Asset M . . . .76.0 0.0 90.5 57.9
LMS CapitaI . . . . . . . . .56.8 0.3 64.8 44.8
London Finance & . . .22.0 0.0 23.5 16.5
London Stock Exch .834.5 -0.5 1076.0 758.5
Lonrho . . . . . . . . . . . . . .8.9 -1.6 19.8 8.5
Man Group . . . . . . . . .138.0 5.7 311.0 123.6
Paragon Group Of . .183.0 2.9 206.1 134.6
Provident Financi . . .987.0 4.5 1124.0 802.0
Rathbone Brothers .1054.0 3.0 1257.0 977.0
Record . . . . . . . . . . . . .14.5 -0.3 41.0 13.5
RSM Tenon Group . . .17.3 0.3 66.3 16.0
Schroders . . . . . . . .1296.0 12.0 1922.0 1183.0
Schroders (Non-Vo .1097.0 5.0 1554.0 970.0
TuIIett Prebon . . . . . .295.4 7.4 428.6 286.1
WaIker Crips Grou . . .44.5 0.0 51.5 40.0
BT Group . . . . . . . . . .185.4 2.0 204.1 161.0
CabIe & WireIess . . . .36.2 -0.2 52.9 31.3
CabIe & WireIess . . . .16.3 0.5 76.9 14.2
COLT Group SA . . . . .94.5 8.3 156.2 83.9
KCOM Group . . . . . . . .74.0 1.3 84.0 51.3
TaIkTaIk TeIecom . . .137.0 6.4 168.3 119.8
TeIecomPIus . . . . . . .756.0 8.0 759.0 408.0
Booker Group . . . . . . .74.7 -0.2 80.0 54.5
Greggs . . . . . . . . . . . .495.2 0.9 550.5 435.3
Morrison (Wm) Sup .319.0 3.7 320.0 262.7
Ocado Group . . . . . . . .86.6 3.0 285.0 81.0
Sainsbury (J) . . . . . . .297.5 3.9 391.5 263.5
Tesco . . . . . . . . . . . . .398.3 2.1 439.0 356.3
Associated Britis . .1099.0 -1.0 1182.0 940.0
Cranswick . . . . . . . . .711.5 -1.0 883.5 588.5
Dairy Crest Group . . .339.3 1.8 424.9 318.8
Devro . . . . . . . . . . . . .260.0 5.0 296.9 223.5
Premier Foods . . . . . . . .5.3 0.5 35.1 3.3
Tate & LyIe . . . . . . . . .684.0 4.0 689.5 510.0
UniIever . . . . . . . . . .2086.0 21.0 2114.0 1777.0
Mondi . . . . . . . . . . . . .436.9 -2.0 664.0 413.5
Centrica . . . . . . . . . . .294.6 1.9 345.8 282.6
InternationaI Pow . . .325.4 2.5 448.6 279.4
NationaI Grid . . . . . . .641.0 2.0 649.5 530.0
Pennon Group . . . . . .697.5 -1.0 737.5 584.5
Severn Trent . . . . . .1536.0 7.0 1600.0 1368.0
United UtiIities . . . . .612.0 2.0 637.0 543.5
Cookson Group . . . . .490.1 10.8 724.5 395.8
DS Smith . . . . . . . . . .194.3 4.3 266.2 164.4
Rexam . . . . . . . . . . . .340.7 2.3 400.0 299.8
Price Chg High Low
BerkeIey Group Ho .1267.0 14.0 1299.0 807.5
Bovis Homes Group .464.4 8.4 485.5 326.5
Persimmon . . . . . . . .490.1 12.8 518.5 338.6
Reckitt Benckiser . .3200.0 -10.0 3648.0 3015.0
Redrow . . . . . . . . . . . .112.2 3.4 139.0 103.5
TayIor Wimpey . . . . . . .38.3 1.3 43.3 23.8
Bodycote . . . . . . . . . .266.1 4.4 397.7 225.6
Charter Internati . . . .931.0 -2.5 952.0 538.5
Fenner . . . . . . . . . . . .381.9 1.9 422.5 280.0
IMI . . . . . . . . . . . . . . . .762.5 14.5 1119.0 636.5
MeIrose . . . . . . . . . . .337.6 7.6 365.4 268.0
Northgate . . . . . . . . . .235.5 13.5 346.7 202.0
Rotork . . . . . . . . . . .1753.0 77.0 1858.0 1501.0
Spirax-Sarco Engi . .1824.0 12.0 2063.0 1649.0
Weir Group . . . . . . .1960.0 17.0 2218.0 1375.0
Ferrexpo . . . . . . . . . . .282.2 -9.3 499.0 238.7
TaIvivaara Mining . . .223.3 1.9 622.0 195.2
BBAAviation . . . . . . .173.6 5.2 240.8 156.0
Stobart Group Ltd . . .115.0 1.6 163.6 110.1
AdmiraI Group . . . . . .918.0 1.0 1754.0 800.5
AmIin . . . . . . . . . . . . .326.1 0.3 427.0 270.6
Huntsworth . . . . . . . . .36.5 -1.5 85.0 36.3
Informa . . . . . . . . . . . .353.2 7.9 461.1 313.9
ITE Group . . . . . . . . . .192.0 7.3 258.2 157.7
ITV . . . . . . . . . . . . . . . . .63.5 1.7 93.5 51.7
Johnston Press . . . . . . .4.6 0.0 12.8 4.1
MecomGroup . . . . . .175.5 4.5 310.0 134.5
Moneysupermarket. .102.0 -2.1 120.4 75.7
Pearson . . . . . . . . . .1127.0 23.0 1207.0 926.0
PerformGroup . . . . .200.0 0.0 234.5 150.0
Reed EIsevier . . . . . .512.0 1.0 590.5 461.3
Rightmove . . . . . . . .1247.0 30.0 1408.0 743.0
STV Group . . . . . . . . . .88.5 0.0 168.0 87.0
Tarsus Group . . . . . .132.0 0.0 165.0 114.0
Trinity Mirror . . . . . . . .47.5 0.8 93.0 37.5
UBM . . . . . . . . . . . . . .491.0 9.7 725.0 416.0
UTV Media . . . . . . . . .108.1 -0.1 150.0 101.0
WiImington Group . . .84.3 0.0 183.0 82.5
WPP . . . . . . . . . . . . . .649.0 6.0 846.5 578.0
YeII Group . . . . . . . . . . .5.2 -0.1 14.8 3.4
African Barrick G . . .493.9 2.1 618.5 393.5
AIIied GoId Minin . . .171.5 3.5 281.3 34.4
AngIo American . . .2308.5 -8.0 3437.0 2138.5
AngIo Pacific Gro . . .273.4 2.5 369.3 237.9
Antofagasta . . . . . . .1084.0 -10.0 1634.0 900.5
Aquarius PIatinum . .159.3 2.2 419.0 150.0
BeazIey . . . . . . . . . . . .132.1 0.1 139.2 109.6
CatIin Group Ltd. . . .398.7 3.1 421.4 331.5
Hiscox Ltd. . . . . . . . . .384.6 3.2 424.7 340.5
Jardine LIoyd Tho . . .655.5 -10.5 764.5 573.5
Lancashire HoIdin . . .702.5 3.5 774.5 529.0
RSA Insurance Gro . .107.8 1.7 143.5 102.2
Aviva . . . . . . . . . . . . . .302.8 4.3 477.9 275.3
LegaI & GeneraI G . . .103.0 1.7 123.8 89.8
OId MutuaI . . . . . . . . .109.3 -0.2 144.8 98.1
Phoenix Group HoI . .545.0 0.0 688.0 451.1
PrudentiaI . . . . . . . . .610.5 12.5 777.0 509.0
ResoIution Ltd. . . . . .240.5 0.9 316.1 211.3
St James's PIace . . . .321.8 1.9 376.0 236.2
Standard Life . . . . . . .196.9 2.5 244.7 172.0
4Imprint Group . . . . .223.0 1.0 295.0 200.0
Aegis Group . . . . . . .128.2 1.1 158.5 115.7
BIoomsbury PubIis . . .94.0 1.0 138.0 93.0
British Sky Broad . . .745.0 -0.5 850.0 618.5
Centaur Media . . . . . . .37.8 0.0 73.0 34.6
Chime Communicati .179.3 -5.5 298.5 173.0
Creston . . . . . . . . . . . .74.8 0.5 121.0 72.0
DaiIy MaiI and Ge . . .407.5 2.5 594.5 343.4
Euromoney Institu . .677.0 46.0 736.0 522.5
Future . . . . . . . . . . . . . . .9.0 0.3 30.0 8.8
Haynes PubIishing . .225.0 0.0 257.0 208.5
BHP BiIIiton . . . . . . .1836.0 -0.5 2631.5 1667.0
Centamin Egypt Lt . . .93.3 3.2 183.5 80.8
Eurasian NaturaI . . .633.0 0.0 1125.0 522.0
FresniIIo . . . . . . . . . .1639.0 18.0 2150.0 1296.0
GemDiamonds Ltd. .201.1 -2.1 306.0 179.8
GIencore Internat . . .380.1 -4.3 531.1 348.0
HochschiId Mining . .412.0 0.6 680.0 394.9
Kazakhmys . . . . . . . .868.5 11.0 1671.0 730.0
Kenmare Resources . .33.4 -0.7 59.9 25.2
Lonmin . . . . . . . . . . .1018.0 7.0 1983.0 963.0
New WorId Resourc .434.0 -0.9 1060.0 410.5
PetropavIovsk . . . . . .705.5 19.0 1165.0 543.5
RandgoId Resource 6600.0 360.0 7555.0 4425.0
Rio Tinto . . . . . . . . .3138.5 -25.5 4712.0 2712.5
Vedanta Resources .997.5 3.0 2559.0 928.0
Xstrata . . . . . . . . . . . .955.0 6.7 1550.0 764.0
Inmarsat . . . . . . . . . . .423.0 10.3 719.5 389.3
Vodafone Group . . . .169.8 1.3 182.8 155.1
Genesis Emerging . .441.0 3.0 568.0 424.0
Afren . . . . . . . . . . . . . . .82.0 2.5 171.2 73.6
BG Group . . . . . . . . .1310.0 11.5 1564.5 1144.0
BP . . . . . . . . . . . . . . . .438.8 1.0 509.0 363.2
Cairn Energy . . . . . . .275.0 2.5 469.7 261.4
EnQuest . . . . . . . . . . .101.2 10.2 158.5 85.7
Essar Energy . . . . . .225.0 -0.5 589.5 211.4
ExiIIon Energy . . . . . .263.6 -1.4 469.7 184.2
Heritage OiI . . . . . . . .179.9 13.0 486.0 160.0
Ophir Energy . . . . . . .254.3 11.4 299.0 184.5
Premier OiI . . . . . . . . .360.3 0.7 535.0 310.0
RoyaI Dutch SheII . .2141.0 1.5 2326.5 1883.5
RoyaI Dutch SheII . .2209.0 12.0 2336.0 1890.5
SaIamander Energy .200.5 -1.0 317.6 182.3
Soco Internationa . . .300.6 9.6 400.0 278.0
TuIIow OiI . . . . . . . . .1332.0 24.0 1493.0 945.5
Amec . . . . . . . . . . . . .866.5 4.5 1251.0 740.5
Hunting . . . . . . . . . . .662.0 11.5 817.0 530.0
Kentz Corporation . .480.0 8.4 508.0 275.5
LampreII . . . . . . . . . . .271.1 10.4 395.2 220.7
Petrofac Ltd. . . . . . .1366.0 15.0 1685.0 1108.0
Wood Group (John) .627.0 14.0 715.8 469.9
Burberry Group . . . .1198.0 1.0 1600.0 996.0
PZ Cussons . . . . . . . .349.1 -1.1 409.0 320.5
Supergroup . . . . . . . .451.0 3.1 1820.0 435.2
AstraZeneca . . . . . .2840.5 19.5 3194.0 2543.5
BTG . . . . . . . . . . . . . .293.5 6.6 309.7 210.1
Genus . . . . . . . . . . . .1042.0 17.0 1111.0 824.0
GIaxoSmithKIine . . .1367.0 7.5 1405.5 1127.5
Hikma Pharmaceuti .609.5 -7.5 900.0 555.5
Shire PIc . . . . . . . . . .2045.0 17.0 2136.0 1481.0
CapitaI & Countie . . .176.8 0.9 203.7 142.8
Daejan HoIdings . . .2580.0 57.0 2954.0 2282.0
F&C CommerciaI Pr .102.2 0.3 108.0 88.0
Grainger . . . . . . . . . . . .98.2 4.2 133.2 77.3
London & Stamford .119.9 3.5 140.0 111.6
SaviIIs . . . . . . . . . . . . .285.5 1.1 427.1 256.2
UK CommerciaI Pro . .70.2 -0.1 85.5 70.0
Unite Group . . . . . . . .165.7 4.9 224.1 152.9
Big YeIIow Group . . .248.4 -1.8 352.2 218.0
British Land Co . . . . .477.3 5.5 629.5 452.0
CapitaI Shopping . . .304.5 0.2 424.8 288.7
Derwent London . . .1592.0 19.0 1880.0 1400.0
Great PortIand Es . . .343.4 5.9 445.0 317.4
Hammerson . . . . . . . .377.2 3.6 490.9 352.0
Hansteen HoIdings . . .72.5 2.5 89.5 69.1
Land Securities G . . .669.0 8.0 885.0 616.0
SEGRO . . . . . . . . . . . .217.2 0.8 331.3 204.8
Shaftesbury . . . . . . . .482.0 -1.1 539.0 431.7
Aveva Group . . . . . .1511.0 43.0 1799.0 1298.0
Computacenter . . . . .348.9 -1.7 490.0 335.4
Fidessa Group . . . . .1550.0 0.0 2109.0 1409.0
Invensys . . . . . . . . . . .197.7 6.2 364.3 180.9
Logica . . . . . . . . . . . . .77.5 2.5 147.2 67.6
Micro Focus Inter . . .360.0 1.6 426.2 239.4
Misys . . . . . . . . . . . . .242.0 -0.8 420.2 214.9
Sage Group . . . . . . . .275.0 0.0 302.0 231.7
SDL . . . . . . . . . . . . . . .639.5 10.0 711.5 571.0
TeIecity Group . . . . . .599.0 8.5 620.5 430.0
Aggreko . . . . . . . . . .1841.0 65.0 2034.0 1394.5
Ashtead Group . . . . .177.0 3.5 207.9 99.4
Atkins (WS) . . . . . . . .625.0 6.5 820.0 490.2
Babcock Internati . . .689.0 4.0 733.0 520.0
Berendsen . . . . . . . . .430.5 0.5 568.0 391.3
BunzI . . . . . . . . . . . . .819.5 13.5 821.5 676.5
Cape . . . . . . . . . . . . . .316.0 5.3 591.5 295.0
Capita Group . . . . . . .638.0 2.0 786.5 614.5
CariIIion . . . . . . . . . . .299.7 4.3 403.2 281.0
De La Rue . . . . . . . . .930.0 25.5 936.0 552.5
DipIoma . . . . . . . . . . .312.9 1.4 414.3 263.3
EIectrocomponents .208.3 5.2 294.9 182.2
Experian . . . . . . . . . . .817.5 17.0 833.5 665.0
FiItrona PLC . . . . . . . .390.1 11.3 397.1 229.7
G4S . . . . . . . . . . . . . . .246.8 7.6 291.0 219.9
Hays . . . . . . . . . . . . . . .70.8 -0.1 133.6 66.6
Homeserve . . . . . . . .248.9 8.4 532.0 218.5
Howden Joinery Gr . .109.0 5.0 127.5 92.0
Interserve . . . . . . . . . .318.5 7.7 341.3 190.8
Intertek Group . . . . .1905.0 26.0 2148.0 1715.0
MichaeI Page Inte . . .371.3 7.6 567.0 338.7
Mitie Group . . . . . . . .254.5 5.4 259.0 195.9
Premier FarneII . . . . .174.7 4.0 308.8 144.5
Regus . . . . . . . . . . . . . .85.4 0.2 119.0 64.0
RentokiI InitiaI . . . . . . .64.1 1.5 104.9 61.0
RPS Group . . . . . . . . .185.0 5.9 253.0 156.6
Serco Group . . . . . . .480.0 5.7 618.5 467.4
Shanks Group . . . . . .106.0 -0.2 130.9 103.0
SIG . . . . . . . . . . . . . . . .81.6 1.2 153.5 77.7
SThree . . . . . . . . . . . .227.6 3.6 447.6 213.2
Travis Perkins . . . . . .807.5 16.0 1127.0 715.0
WoIseIey . . . . . . . . .1839.0 37.0 2261.0 1404.0
ARM HoIdings . . . . . .576.5 2.5 651.0 389.6
CSR . . . . . . . . . . . . . .170.0 3.2 447.0 154.1
Imagination Techn . .463.0 28.1 502.0 296.9
Pace . . . . . . . . . . . . . . .45.1 -0.2 231.8 44.0
Spirent Communica .125.3 3.1 160.3 109.5
British American . .2884.0 24.5 2949.5 2282.5
ImperiaI Tobacco . .2254.0 -12.0 2354.0 1784.0
Betfair Group . . . . . . .760.0 -3.5 1305.0 567.0
Bwin.party Digita . . .134.7 -1.7 257.6 100.6
CarnivaI . . . . . . . . . .2100.0 34.0 3153.0 1742.0
Compass Group . . . .571.0 11.0 612.0 512.5
Domino's Pizza UK . .419.2 18.6 586.0 377.0
easyJet . . . . . . . . . . . .371.1 4.1 474.0 301.0
FirstGroup . . . . . . . . .314.2 2.6 412.6 301.8
Go-Ahead Group . . .1190.0 -31.0 1598.0 1190.0
Greene King . . . . . . .462.7 3.2 518.0 410.0
InterContinentaI . . .1058.0 14.0 1435.0 955.0
InternationaI Con . . .145.2 0.6 305.0 132.0
JD Wetherspoon . . . .417.0 6.8 468.3 380.5
Ladbrokes . . . . . . . . .127.7 0.7 155.3 114.0
Marston's . . . . . . . . . . .93.5 1.6 117.1 84.6
MiIIennium& Copt . .398.0 6.6 600.5 371.2
MitcheIIs & ButIe . . . .225.5 1.6 361.0 215.6
NationaI Express . . .206.0 1.5 270.2 201.5
Rank Group . . . . . . . .144.5 2.3 153.7 109.5
Restaurant Group . . .292.5 3.7 335.0 254.9
Stagecoach Group . .245.0 -0.3 272.4 200.0
Thomas Cook Group .18.9 -2.8 204.8 10.2
TUI TraveI . . . . . . . . . .164.0 4.0 271.9 136.7
Whitbread . . . . . . . .1595.0 16.0 1887.0 1409.0
WiIIiamHiII . . . . . . . . .198.7 0.7 244.1 155.5
Abcam . . . . . . . . . . . .342.3 -3.3 460.0 307.0
AIbemarIe & Bond . .313.5 -1.5 400.1 272.0
Amerisur Resource . .13.8 -0.8 29.0 9.5
Andor TechnoIogy . .513.0 -33.0 685.0 371.0
ArchipeIago Resou . . .60.8 -0.3 79.0 49.0
ASOS . . . . . . . . . . . .1327.0 3.0 2468.0 1230.0
AureIian OiI & Ga . . . .18.5 -0.3 92.0 16.0
Avanti Communicat .276.8 6.8 735.0 248.5
Avocet Mining . . . . . .200.5 -4.5 286.8 177.5
BIinkx . . . . . . . . . . . . . .71.5 1.3 158.0 64.8
Borders & Souther . . .61.0 -0.5 72.3 43.5
BowLeven . . . . . . . . . .73.3 8.3 398.0 63.8
Brooks MacdonaId 1087.5 -20.0 1372.5 940.0
Cove Energy . . . . . . . .92.0 4.5 112.8 61.0
Daisy Group . . . . . . .103.0 -0.8 127.0 88.0
EMIS Group . . . . . . . .510.0 -21.8 580.0 406.0
Encore OiI . . . . . . . . . .74.8 0.5 151.5 40.8
Faroe PetroIeum . . . .145.0 2.5 218.3 130.0
GuIfsands PetroIe . . .200.3 0.8 401.5 142.5
GWPharmaceuticaI . .95.3 -0.3 130.0 87.0
H&T Group . . . . . . . . .315.0 9.4 395.0 277.0
Hamworthy . . . . . . . .827.0 -4.0 835.0 373.8
Hargreaves Servic . .1110.0 2.0 1180.0 694.0
HeaIthcare Locums . . . .3.1 0.4 3.7 2.8
Immunodiagnostic . .491.3 20.0 1218.0 468.0
ImpeIIamGroup . . . .262.5 2.5 387.5 180.5
James HaIstead . . . . .457.5 7.5 495.0 360.0
KaIahari MineraIs . . .228.0 -1.0 301.0 198.3
London Mining . . . . .299.0 4.0 436.5 278.5
Lupus CapitaI . . . . . .101.5 -2.5 150.0 86.0
M. P. Evans Group . .400.0 5.0 500.5 371.0
Majestic Wine . . . . . .365.0 -3.0 510.0 353.0
May Gurney Integr . .297.0 14.0 302.0 216.5
Monitise . . . . . . . . . . . .31.8 0.0 40.0 18.5
MuIberry Group . . . .1413.0 76.0 1920.0 700.0
Nanoco Group . . . . . . .55.0 4.0 108.5 38.0
NauticaI PetroIeu . . .281.0 -5.0 547.0 223.5
NichoIs . . . . . . . . . . . .531.0 -5.0 579.0 410.0
Numis Corporation . . .87.0 -1.0 137.8 85.0
Pan African Resou . . .14.8 1.0 15.8 9.5
Patagonia GoId . . . . . .52.0 2.8 70.0 37.3
Prezzo . . . . . . . . . . . . .55.3 0.0 71.5 53.3
Pursuit Dynamics . . .211.5 9.3 700.0 160.5
Rockhopper ExpIor .240.5 5.0 386.0 141.0
RWS HoIdings . . . . . .437.5 0.0 479.8 266.5
Songbird Estates . . .105.0 -0.5 160.3 105.0
VaIiant PetroIeum . . .421.0 6.0 672.0 400.0
Young & Co's Brew . .672.5 30.0 712.0 565.0
EnQuest . . . . . . . . . . .101.2 11.2
Premier Foods . . . . . . . .5.3 11.0
COLT Group SA . . . . .94.5 9.6
IG Group HoIdings . .474.0 9.3
Heritage OiI . . . . . . . .179.9 7.8
Euromoney Institut . .677.0 7.3
Home RetaiI Group . . .85.0 6.9
Renishaw . . . . . . . . . .882.0 6.6
Imagination Techno .463.0 6.5
Senior . . . . . . . . . . . . .175.2 6.3
Thomas Cook Group .18.9 -13.0
RIT CapitaI Partne . .1260.0 -3.5
Ferrexpo . . . . . . . . . .282.2 -3.2
Go-Ahead Group . . .1190.0 -2.5
JPMorgan Indian In . .332.0 -2.2
Kenmare Resources . .33.4 -2.1
LIoyds Banking Gro . .23.2 -2.1
Moneysupermarket.c 102.0 -2.0
Henderson Group . . .109.4 -1.9
Dignity . . . . . . . . . . . .789.0 -1.9
Risers FaIIers
MAIN CHANGES UK 350
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
Price Chg High Low Price Chg High Low
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NONEQUITY INVESTM. COMM.
Tsy 3.250 11 . . . . . .99.96 -0.04 102.8 100.0
Tsy 5.000 12 . . . .101.22 -0.04 105.5 101.2
Tsy 5.250 12 . . . .102.50 -0.03 106.9 102.3
Tsy 9.000 12 . . . .104.75 -1.04 113.5 104.8
Tsy 4.500 13 . . . .105.15 -0.03 108.1 105.1
Tsy 2.500 13 . . . .284.12 -0.06 287.7 277.6
Tsy 8.000 13 . . . . .113.72 -0.03 119.5 113.4
Tsy 5.000 14 . . . . .112.27 -0.04 112.9 109.2
Tsy 7.750 15 . . . .100.80 -0.34 107.9 100.4
Tsy 4.750 15 . . . . .114.85 -0.03 114.9 108.6
Tsy 8.000 15 . . . .128.38 -0.02 129.2 123.7
Tsy 2.500 16 . . . .340.52 -0.03 342.7 310.2
Tsy 4.000 16 . . . . .113.67 0.00 113.8 104.9
Tsy 12.000 17 . . .123.20 0.00 132.0 122.3
Tsy 1.250 17 . . . . .114.79 0.09 115.4 106.7
Tsy 8.750 17 . . . .140.27 -0.20 141.9 132.9
Tsy 5.000 18 . . . .120.97 0.08 121.5 109.7
Tsy 4.500 19 . . . . .118.66 0.11 119.6 105.4
Tsy 3.750 19 . . . . .113.41 0.11 114.3 99.4
Tsy 4.750 20 . . . .121.18 0.12 122.2 106.6
Tsy 2.500 20 . . . .359.17 0.13 360.1 312.4
Tsy 8.000 21 . . . .150.05 0.21 151.8 133.8
Tsy 4.000 22 . . . . .115.68 0.23 116.7 99.0
Tsy 1.875 22 . . . .125.18 0.28 125.8 111.3
Tsy 2.500 24 . . . .324.73 0.41 325.8 273.5
Tsy 5.000 25 . . . .128.07 0.33 128.7 107.4
Tsy 1.250 27 . . . .123.65 0.68 124.1 104.6
Tsy 4.250 27 . . . .120.78 0.54 121.0 97.9
Tsy 6.000 28 . . . .145.75 0.54 146.2 119.5
Tsy 4.125 30 . . . .315.96 0.80 316.3 261.2
Tsy 4.750 30 . . . .128.51 0.63 128.7 103.0
Tsy 4.250 32 . . . . .121.11 0.66 121.4 96.0
Tsy 4.250 36 . . . .122.19 0.74 122.6 95.0
Tsy 4.750 38 . . . .132.26 0.76 132.6 102.8
Tsy 4.500 42 . . . .129.23 0.81 129.6 98.9
% %
Wealth Management
Lifestyle | Motoring
SKODA IS SUPER-SAFE
Small cars can be safe too. kodas Citigo car has just been awarded five
stars in the Euro NCAP safety test and was praised for its protection for
adult passengers and pedestrians. The car scored particularly highly for
protecting infants and it even has an automatic emergency braking sys-
tem called City Safe Drive for city driving.
CAR TALK BY RYAN BORROFF
TOYOTAS HOTLY TIPPED SPORTS CAR DEBUTS
Its been a while since Toyota has created a car that has been as hotly
anticipated as this. Its new front-mounted, rear-wheel drive GT 86
sports car debuts today at the Tokyo motor show. Powered by a 197bhp,
2.0-litre flat-four free-revving boxer engine, the four-seater (2+2) will
go on sale next June and should cost around 28k.
FORD FOCUS IN THE SWEENEYS SPOTLIGHT
A movie remake of The Sweeney is exciting enough. But Jack Regan
will be played by Ray Winstone and he'll be driving the new 250PS
Ford Focus ST. We just wanted an excuse to show it because it looks
so good. The Sweeney is set in London after all, and they did always
drive Fords.
Audis Sportback is worth the price
I
TS early Sunday morning. Id rather
be asleep but my daughter has dis-
covered insomnia. After two hours of
trying everything to get her back to
sleep I succumb to the fail-safe car trip in
the hope of inducing her slumber.
Outside its raining sideways. Shes wail-
ing as I run to the car and wet by the time
I get there. But thankfully shes asleep
within minutes. Which leaves me at
5.30am, in Bristol, looking for a road
upon which to kill some time while my
daughter sleeps.
It could be worse. Suddenly the morn-
ing is awash with possibilities. Im driving
Audis RS3 Sportback hot hatch, as hot a
hatch as Ive driven in years, and quite a
treat on deserted South West roads: oh
rarest of pleasures. The car goes back
Monday. What I can I do? Its my job to
test drive the car. So test drive I do.
The RS3 is a distinctive-looking beast.
With a big gaping air intake at the front
and huge wide arches (made from carbon
fibre-reinforced plastic), it looks swollen
because the car has a wider track than the
regular A3 and thus a bigger, more stable
footprint. At almost 40k its not cheap.
At more than twice as much as an entry
level model, how good can it be?
Very, very good actually. The accelera-
tion is surprising. I had expected it to be
fast but not this fast: 0-62mph in a super-
car quick 4.6 seconds. Developed by quat-
tro GmbH, Audis race tech subsidiary, its
2.5-litre five-cylinder turbo engine pushes
out 335bhp. It also has Audis marvellous
Quattro four-wheel-drive system and a
seven-speed S tronic dual clutch transmis-
sion system. Top speed is a wholly unnec-
essary 155mph (restricted).
Sticking such an insane amount of
power in a modest family hatchback has
always been the raison dtre of hot
hatchbacks. Over the years, some have
been decidedly dodgy in the corners. But
not this RS3. The four-wheel-drive system
brings all of that power under control and
delivers it to the tarmac in well-mannered
fashion. The car is really, really grippy,
allowing you to go round corners at a
heart-quickening pace. And because the
Quattro system which whirrs and chugs
away underneath you can send all of the
power to the front or rear wheels, corner
exits are quicker too: as soon as you step
The purr of this
hatchback is capable
of soothing babies and
firing up parents
THE VERDICT:
DESIGN hhhhi
PERFORMANCE hhhhi
PRACTICALITY hhhhi
VALUE FOR MONEY hhhii
THE FACTS: AUDI RS3
SPORTBACK
PRICE: 39,900
0-62MPH: 4.6secs
TOP SPEED: 155mph
CO2 G/KM: 212g/km
MPG COMBINED: 31mpg
back on the gas, the car catapults off
again. The engine sounds brutal, with a
deep bassy note that bubbles and boils on
idle, though disappointingly makes less
of a howl under acceleration than youd
expect. Shifting gears is easy and quick
via the paddle shifters and a sport button
on the dash turns the exhaust note up to
eleven while also quickening the throttle
response. Steering feedback is not quite as
good as it could be its the only element
of the car that feels a little lifeless but
its no deal breaker. And, in any case, I
love the small, flat-bottomed racing steer-
ing wheel so much I almost dont mind.
Despite all of this ferocity, my daughter
dozes on as I throw the RS3 in and out of
the Somerset bends. Amid such high jinks
its easy to forget that this is a family car
with 1,100 litres of boot space. In the boot
I have a baby buggy plus a host of other
crapola. Also theres still plenty of leg
room in the back. The model were test-
ing has optional bucket seats which look
great and are considerably more com-
fortable than they appear. The ride is
firm even in the normal, non-sport func-
tion mode and there is some road noise
from those 19-inch alloy wheels.
Otherwise the RS3 has the kind of quali-
ty and refinement weve come to expect
from Audi.
Despite being such a bruiser of a car,
fuel economy is just good enough for
your heart to get it passed by your head.
So all in all, Audis RS3 is a thorough-
ly decent car, genuinely exciting and
practical enough to live with. It will put
a smile on your face, albeit at a price.
WORDS BY
RYAN BORROFF
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FILM2011 WITH CLAUDIA
WINKLEMAN BBC1, 11.15PM
Reviews of Martin Scorseses
adventure Hugo, sci-fi horror prequel
The Thing, comedy The Big Year and
animated sequel Happy Feet Two.
MASTERCHEF: THE
PROFESSIONALS BBC2, 8PM
The five contestants are challenged to
make a Swiss meringue, with the four
best cooking roasted pigeon with
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GRAND DESIGNS
CHANNEL4, 9PM
Kevin McCloud revisits a couple who
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BBC1
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9pmFILMI, Robot: Sci-fi thriller,
starring Will Smith. 2004.
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2.05amHow I Met Your Mother
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BBC2 ITV1 CHANNEL4 CHANNEL5
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6pmBBC News 6.30pmBBC
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8pmCHOICE MasterChef: The
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make a Swiss meringue.
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10pmMock the Week Again:
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10.30pmNewsnight; Weather
11.20pmFrontline Medicine
12.20amBBC News
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7pmEmmerdale: Amy goes
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10pmITV News at Ten
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10.35pmCops with Cameras
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12.30amThe Zone; ITV News
Headlines
2.35amFILMColumbo: Uneasy
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ITV Nightscreen
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pm4thought.tv 8pmKirsties
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12amMusic on 4: Live from Abbey
Road 12.50amThe Album Chart
Show Introduces: Emeli Sande
1.05am4Play: Charlene Soraia
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1.50amFILMHoly Smoke: Drama,
starring Kate Winslet. 1999.
3.45amMeeting Helen 4amAmelia
and Michael 4.10amHappy
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5.25am-6.10amCountdown
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7pm5 News at 7
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Command: Thriller with Jean-
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12.05amPoker: The Big Game
1.05amSuperCasino: Live
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Rescue Squad 4.15amWildlife SOS
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Wild Challenge
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43
7
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16
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.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to nd 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.
SUDOKU
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.
SUDOKU
QUICK CROSSWORD
ACROSS
1 Saline (5)
3 Desert garden (5)
7 Dance party that
lasts all night (4)
9 Wax drawing
implement (6)
10 Against (4)
11 ___ Lang Syne,
Scottish song (4)
12 Literary composition (5)
15 Attack on all sides (5)
17 Couch (4)
19 Advance slowly (4)
20 Any leafy plants eaten
as vegetables (6)
21 Sudden attack (4)
22 Conduit for carrying
of waste products (5)
23 Boat used to transport
people and cars (5)
DOWN
1 Stripe (6)
2 General line of
orientation (5)
4 Accumulate (5)
5 Produced tones
with the voice (4)
6 Chemist or physicist,
for example (9)
8 Device used to
control a ow (5)
13 Hawaiian greeting (5)
14 Almost not (6)
16 Root vegetable (5)
17 Sloping mass of
loose rocks at the
base of a clif (5)
18 Becomes older (4)
C
A
E
D
L O
A
N
T

4
4

C A V E S M A Y B E
O I P S O
M U R M U R S A W N
P G M E N U E
A D O R E S M A L L
S I P E I
S T O P I N D I G O
I O G R E D N
D A Y S E X C I S E
R T U O S
B A B E L S E M I S
3 1 2 9 6 8
5 9 3 6 8 4 1 7 2
8 7 5 1 2 4 3
9 8 3 1 6 1
7 6 5 8 9 3 9 4
1 2 2 8
1 8 7 9 5 6 4 8
7 9 6 1 2 4
2 6 1 3 4 3 9
4 5 2 6 8 9 3 1 7
7 4 9 8 9 7
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
POSTERITY
Lifestyle | TV&Games
CITYA.M. 30 NOVEMBER 2011 36
FORMER world champion Kimi
Raikkonen admits his decision to
return to Formula One was driven by
a longing to get back in the cockpit
that he could no longer ignore.
Raikkonen ended months of specu-
lation yesterday by announcing he
has signed a two-year contract with
Lotus Renault, starting next season.
The 32-year-old Finn won the driv-
ers championship with Ferrari in
2007 but was discarded by the
Italians just two years later in favour
of new signing Fernando Alonso.
After rejecting other offers to stay
in F1, Raikkonen known as the
Iceman turned his hand to rallying
with mixed results, but has now
given in to the urge to return to the
track.
Im delighted to be coming back
to Formula One after a two-year
break, and Im grateful to Lotus
Renault GP for offering me this
opportunity, he said. My time in the
World Rally Championship has been
a useful stage in my career as a driver,
but I cant deny the fact that my
hunger for F1 has recently become
overwhelming.
Raikkonen also held talks with
Williams before plumping for
Renault, who will adopt the Lotus
name next year. It was an easy
choice to return with Lotus Renault
GP as I have been impressed by the
teams ambition, he added. Im
looking forward to pushing the team
to the very front of the grid.
The Iceman cometh again:
Raikkonen makes F1 return
BY FRANK DALLERES
FORMULA ONE
Sport
FORMER England captain Mike
Tindall remains deeply dissatisfied
with the Rugby Football Union for
making him a scapegoat following
the infamous alcohol-fuelled night
out in Queenstown that nearly cost
him his Test career.
Tindall on Monday successfully
appealed against his expulsion from
the elite squad, thus opening the door
to an international return, while he
also saw his 25,000 fine reduced to
15,000.
Far from being appeased, however,
the 33-year-old Gloucester centre, a
World Cup winner and 75-cap Test vet-
eran, believes the whole situation was
chronically mismanaged.
I am deeply disappointed by the
way the RFU has chosen to handle the
situation and I have felt throughout
the disciplinary process that my case
was made unnecessarily political and
public by the RFU and that I ended up
being made a scapegoat, he said in a
statement released by the Rugby
Players Association.
Yesterdays decision goes some way
to reflect a fairer assessment of what
actually happened during the World
Cup. It had been suggested that I
intentionally misled people in rela-
tion to the events in Queenstown.
I am pleased following this appeal
process that it has been made clear
that I did not do so. I feel somewhat
vindicated by the decision to reinstate
me back into the Elite Player Squad.
Meanwhile, the upheaval at the
beleaguered RFU gathered pace yester-
day when acting chief executive
Martyn Thomas stepped down with
immediate effect and was replaced by
Stephen Brown.
Thomas, who is also leaving as
chairman of the organising commit-
tee for the 2015 World Cup in
England, survived a vote of no confi-
dence in September after threatening
legal action should a report by judge
and RFU disciplinary officer Jeff
Blackett into the exit of predecessor
John Steele be made public.
Tindall: RFU made me
World Cup scapegoat
BY JAMES GOLDMAN
RUGBY UNION
l As well as F1 and rallying, Kimi has

turned his hand to NASCAR, snowmo-
bile racing (winning a 24 km event in
2007) and powerboating while
dressed as a gorilla (yes, really).
l His last contract in F1, with Ferrari,
earned him a salary of $51m (between
26m and 0, depending on exchange
rates at the time) and saw him ranked
the second highest-paid sportsman in
the world in 2009, after Tiger Woods.
l He has his nickname, Iceman (for his
ultra-cool temperament as well as his
Scandinavian roots), tattooed on his
left arm.
DID YOU KNOW? | KIMI RAIKKONEN
Auld enemies bring
Scottish Varsity
battle to London
The annual collision between Edinburgh
and St Andrews takes place tonight and
its in Richmond for the rst time. City
A.M. asked two star alumni to explain
why its an occasion not to be missed
RORY LAWSON
GLOUCESTER AND EX-EDINBURGH
Q.
WHAT MAKES THE SCOTTISH VARSITY MATCH SUCH A
SPECIAL OCCASION?
A.
While at Edinburgh University,
club commitments meant I was-
nt ever lucky enough to play in the
Varsity matches but I attended a
number of them as a supporter of
mates playing. The passion and
intensity was right up there with the
best that Ive experienced.
A.
The game is as close as
it gets to a cup final in
rugby. Competing is a given,
performance is preferable but the
result is everything. University rugby
is serious but fun and the Varsity
match is an occasion that binds you
together for the rest of your lives.
Q.
HOW DOES THE SCOTTISH VARSITY RIVALRY COMPARE TO THE OTHERS
YOU'VE EXPERIENCED IN YOUR PLAYING CAREERS?
A.
At Gloucester Ive experienced
the West Country derby against
Bath and at Test level, the battle
between Scotland and England for
the Calcutta Cup. Like those, the
Varsity match is special. Without fail,
the atmosphere is electric and the
fans really are a part of the game.
A.
Having gone on to play in the
Oxford v Cambridge Varsity
match, I think the Scottish rivalry is
a lot more civilised! Although my
mind could be playing tricks on me
as it was a long time ago Im sure
we were just as competitive as the
players are now.
Q.
THE VARSITY MATCH IS BEING PLAYED IN LONDON THIS TIME. WHAT
EFFECT DO YOU THINK THAT WILL HAVE?
A.
Many alumni of both universi-
ties are now based in and
around London, and the chance to
go to a Scottish ground and support
their old team makes this a special
event. For the players, playing under
the lights down here is an experi-
ence they will treasure.
A.
The main thing is that it will lift
the profile of the game and give
a huge number of people an oppor-
tunity to go along and support. I
think it is a fantastic way of renew-
ing and maintaining old friendships
and that is exactly what rugby is all
about.
Q.
TELL US A PARTICULARLY FOND OR FUNNY STORY FROM YOUR DAYS IN
THE VARSITY MATCH, OR AS PART OF YOUR UNIVERSITY TEAM.
A.
At Edinburgh I played for a sev-
ens team with pros Chris Cusiter
and Colin Gregor, as well as hard-
working London residents, Richard
Ebdy, Keith Scott, Mark Best and
Colin McAndrew, to name a few. We
enjoyed a bit of success and the
nights out were legendary!
A.
I can remember sing-songs in
the Students Union and a horri-
ble drinking game called Shoot the
Boot, where you had to drink a pint
out of a smelly, dirty rugby boot that
had been worn that afternoon. For a
winger like me, that was a serious
shock to the system.
Q.
WHAT SHOULD WE EXPECT FROM YOUR ALMA MATER? WILL THEY WIN,
AND WHICH PLAYERS SHOULD FANS LOOK OUT FOR?
A.
Fireworks! This match is unique.
Its on neutral ground, so will
have been on the minds of the play-
ers for a long time already. Everyone
will be fizzing and from kick-off the
players will want to get a shot on
their opposite man to show what to
expect for the rest of the game.
A.
St Andrews will be hugely com-
petitive. It is all about rising to
the occasion and doing the basics
really well. Under the spotlight and
pressure, often someone really sur-
prises you by playing an absolute
blinder, but generally, Varsity match-
es are tight edgy affairs.
Q A
&
The Scottish Varsity match takes place at Richmond Athletic Ground, home
of London Scottish, tonight. Kick-off 8pm, gates open 6pm, with food and
drink and live music. Tickets are free, register at www.londonscottish.com
TYRONE HOWE
EX-BRITISH LIONS AND ST ANDREWS
CAPITAL GAINS | Top awards come to London
SPORTS biggest names will gather in London months before next summers Olympics after
the capital was named as host city for the 2012 Laureus Sports Awards. The prestigious
prizes, which last year went to stars such as Rafael Nadal (above), will be presented at a
glitzy ceremony at Central Hall in Westminster on 6 February. Proceeds will go towards 89
community projects supported by the Laureus Sport For Good Foundation. Picture: GETTY
Sport
38
AN INQUEST into the death of Wales
manager Gary speed was told that the
body of the 42-year-old was found
hanged at his home in Cheshire by his
wife.
Detective Inspector Peter Lawless, of
Cheshire Police, told Cheshire coroner
Nicholas Rheinber there appeared to
be no suspicious circumstances and a
post mortem examination found
Speeds death was caused by hanging.
Mr Rheinberg said: I adjourn this
inquest until January 30, 2012. The
inquest will be heard in Warrington
and will commence at 2pm.
Tributes continue to pour in for the
former Leeds, Everton and Bolton mid-
fielder (inset), while the Premier
League confirmed yesterday that
the weekends Premier League
matches will be preceded by
a minutes silence.
Gary will be remem-
bered as an iconic player
of the Premier League
era, a League statement
said. This will give clubs
and fans the opportunity to
show their appreciation for
Garys career.
Meanwhile, the Football
Association of Wales (FAW)
announced they would not embark
on the painful search for Speeds suc-
cessor until late next month.
The FAW are due to meet tomorrow,
but it is understood that the board
consider any discussions of such
a nature to be highly inap-
propriate.
In the wake of Speeds
death, Professional
Footballers Association
chief executive Gordon
Taylor has urged players
to ask for help with any
issues which concern
them.
He said: I want people to
know there is a support and coun-
selling system there because we want
to do all we can to prevent things like
this happening again.
Inquest told Speeds wife
found him hanged at home
CRYSTAL PALACE manager Dougie
Freedman admits his attempts to
steer the club to a first cup semi-final
for 10 years have been compromised
by fixture congestion.
Tonights Carling Cup quarter-final
against Manchester United at Old
Trafford takes place just 48 hours
before Palace entertain Derby County.
Freedman is looking forward to
locking managerial horns with Sir
Alex Ferguson for the first time, but
with his side just two points off the
Championship play-off pace, the ex-
Scotland forward revealed tonights
team selection will be heavily influ-
enced by Fridays fixture against their
fellow promotion hopefuls.
Weve got to take into account that
48 hours later we are playing Derby, so
weve got to make sure we are also pre-
pared, said Freedman, who was a
Palace player the last time they
reached the last four of this competi-
tion back in 2001.
I will be mixing both teams
around to give me the best opportuni-
ty to win both games. Ill pick a team
that can hold on for as long as possi-
ble against Manchester United and
then pick a team that can beat Derby.
Freedman will rotate his
squad for Old Trafford test
BY JAMES GOLDMAN
FOOTBALL
BY JAMES GOLDMAN
FOOTBALL
MANCHESTER UNITED
CRYSTAL PALACE
ARSENAL midfielder Emmanuel Frimpong
and former Gunner Samir Nasri were
involved in a stormy verbal bust-up in the
players tunnel after Manchester City dumped
the north Londoners out of the Carling Cup.
A clinical late counter-attack finished by
Sergio Aguero sent the Premier League lead-
ers into the last four and punished an Arsenal
side that promised much but
failed to capitalise on the
attacking verve of Alex
Oxlade-Chamberlain.
And the action contin-
ued after the final
whistle with
y o ung s t e r
F r i mpong
and Nasri,
who was
booed relentlessly
on his first match
back at Emirates
Stadium, carrying
on a niggly duel
that had flickered throughout the match.
Arsenal manager Arsene Wenger insisted he
had not been aware of the row, but a senior
club source confirmed there had been a heat-
ed exchange involving Frimpong, who criti-
cised Nasri when he left the Gunners in the
summer, and the France playmaker.
Wenger praised the efforts of his side,
whose combined cost was less than that of
City matchwinner Aguero, and in particular
Oxlade-Chamberlain, but blamed their defeat
on naive defending.
I dont believe in luck, he said. I believe
we had to stop the counter-attack and when
you are on a corner, that is your job when you
are a defender. You have to stop that. I felt we
made it easy for them. They had a clear-cut
chance and you couldnt see them missing.
England under-21 midfielder Oxlade-
Chamberlain was Arsenals biggest threat
with repeated raids down the right, and
Wenger added: He looked the whole
night like he could deliver some-
thing special. He has improved a lot
already.
Aguero, brought on after just half
an hour for Aleksandar Kolarov,
sealed Citys win after strike partner
Edin Dzeko picked out Adam
Johnsons run,
and he deftly
laid off to the
3 8 m
Argentina star.
BY FRANK DALLERES AT EMIRATES STADIUM
FOOTBALL
0
1
ARSENAL
MANCHESTER CITY
Boom and
bust-up for
villain Nasri
Aguero helped
City to their first
win at Arsenal
for 36 years
Picture: PA
City midelder involved in tunnel incident with former
team-mate Frimpong after helping seal semi-nal spot
39
WHO WILL TAKE
NADALS TITLE?
2012 LAUREUS SPORTS
AWARDS COME TO LONDON: P37
Results
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email sport@cityam.com
TOTTENHAM manager Harry
Redknapp has confessed he is strug-
gling to find a solution to keeping the
fringe members of his squad content.
The likes of Vedran Corluka,
Heurelho Gomes, Sebastien Bassong
and Roman Pavlyuchenko, who are in
contention to start against PAOK
Salonika tonight, have all recently
voiced their discontent at being limit-
ed to Europa League action. The
scramble for first team places is only
likely to intensify once long-term
injury victims Tom Huddlestone and
Michael Dawson return to action in
January, but Redknapp insists main-
taining a large squad is the only way
he will be able to mount a challenge
both at home and in Europe.
Its difficult because the players
want to play. You wont keep them
happy [if theyre not]. You just hope
you can convince them [to stay], said
Redknapp, whose side slipped to third
in Group A following defeat against
Rubin Kazan earlier this month .
We need them. Were going to
need a big squad and unless you can
get a replacement, you cant afford to
let people go. We need that strength
in depth, especially if we stay in the
Europa League.
Redknapp struggling to
keep everyone content
SPORT | IN BRIEF
Dates set for 2014 Ryder Cup
GOLF: The 2014 Ryder Cup at Gleneagles
will take place from 26-28 September, it
was announced yesterday. The 40th stag-
ing of the contest will be only the second
to be held in Scotland after Muirfield
played host in 1973.
Trap signs new Ireland deal
FOOTBALL: Republic of Ireland manager
Giovanni Trapattoni has ended specula-
tion surrounding his future by signing a
new deal that will see him stay on after
next summers European Championships.
The 72-year-old, who helped Ireland
reach their first major tournament since
2002, will lead the team through their
2014 World Cup qualifying campaign.
Injuries scupper Gatland plans
RUGBY UNION: Wales boss Warren
Gatland fears second-rowers Alun Wyn
Jones and Luke Charteris could miss the
Six Nations because of injury. Jones has
had an operation on a dislocated toe,
while Charteris may need surgery on a
wrist problem.
BY JAMES GOLDMAN
FOOTBALL
TOTTENHAM
PAOK SALONIKA
UNDER-FIRE Chelsea manager Andre
Villas-Boas admits theres no quick
remedy to his sides alarming slump
which gathered unwanted momen-
tum following last nights Carling
Cup defeat against Liverpool
Second half goals from Maxi
Rodriguez and Martin Kelly inflicted
on Chelsea a third defeat in their last
four games at Stamford Bridge, a
result which prompted their
Portuguese manager to concede Im
not a wizard.
Already 12 points off the pace set by
Premier League leaders Manchester
City, Chelsea will crash out of the
Champions League should they lose
against Valencia next Tuesday.
This standard wont be enough
we need to up the tempo and play that
game with the ultimate desire, said
Villas-Boas. At the moment, at home
weve just not been good enough. I
think we need to get our fans behind
us at home and we need to get the
emotions right.
I know, and you can feel, Stamford
Bridge has become anxious about
Chelsea playing at home, but we need
their full support. Thats the only way
you can build the atmosphere to take
us through this period.
Andy Carroll missed the best
chance of the first half when his
penalty was blocked by Ross Turnbull,
but Liverpool took a deserved lead in
the 58th minute when Maxi
Rodriguez finished off a slick passing
move. And the visitors moved to with-
in 180 minutes of their first trip to
Wembley since 1996 when Martin
Kelly headed home Craig Bellamys
free-kick five minutes later.
Chelsea need an anxiety
cure, admits Villas-Boas
Maxis goal helped Liverpool to a third win at Stamford Bridge in 2011 Picture: PA
MATCH ANALYSIS
MATCH
ANALYSIS
BY JAMES GOLDMAN
BY FRANK DALLERES
KEY MOMENT
Phil Dowds failure to spot the most bla-
tant of trips by Sebastian Coates on
David Luiz inside the penalty area was
an astonishing error. Had Chelsea gone
ahead from the penalty they should have
received, it may have all been different.
KEY MOMENT
Costel Pantilimons superb reflex save
from Ju-Young Park prevented Arsenal
from taking an 11th-minute lead, and
changed the complexion of the game.
The Romanian looks a capable deputy
for Citys England goalkeeper Joe Hart.
TALKING POINT
If Marouane Chamakhs latest anaemic
performance does not prompt Wenger
to consider signing better back-up for
Robin van Persie in January, then what,
if anything, will? The Moroccan ambled
about up front to little effect, and did
nothing to dispel the notion that his
confidence is shot to pieces following a
dire 2011. Ju-Young Park did little more
and is too slight to lead the line.
Wenger has 50m in the bank; surely
its now time to invest in a reliable
deputy for the prolific Dutchman.
TALKING POINT
Defeat in the Carling Cup is unlikely to rep-
resent the straw that broke the camels
back, but upcoming matches against
Valencia, Manchester City and Spurs could
be make or break for Andre Villas-Boas.
GAME STATS
ARSENAL 0 - 1 MAN CITY
7 ATTEMPTS ON TARGET 2
3 ATTEMPTS OFF TARGET 7
7 CORNERS 3
49% POSSESSION 51%
0 YELLOW CARDS 1
0 RED CARDS 0
0 OFFSIDES 5
12 FOULS AGAINST 9
9 FOULS CONCEDED 12
DUGOUT VIEW
Unfortunately, Lucas has damaged
his knee, we dont know what the
problem is. Well get it looked at and
take it from there.
Liverpool manager, Kenny Dalglish
DUGOUT VIEW
Nasri can play better. This was the
first time he came back to Arsenal
and maybe he was a bit nervous. Its
not easy for a player to play here for a
few years and come back. I think he
can improve a lot. But i think it was
the same situation with players who
arrived last year, like Edin [Dzeko].
Samir is a champion. Im sure he will
improve. December and January will
be crucial months. We play ever three
days at the moment.
Man City manager, Roberto Mancini
GAME STATS
CHELSEA 0 - 2 LIVERPOOL
5 ATTEMPTS ON TARGET 5
5 ATTEMPTS OFF TARGET 2
5 CORNERS 1
53% POSSESSION 47%
5 YELLOW CARDS 1
3 RED CARDS 0
3 OFFSIDES 4
7 FOULS AGAINST 9
9 FOULS CONCEDED 7
PORTSMOUTH are back in financial
turmoil after their chairman,
Vladimir Antonov, resigned and the
clubs parent company, Convers
Sports Initiatives, went into adminis-
tration.
The blow does not plunge the
Championship side back into admin-
istration 19 months after they first
were but could lead to a points
deduction of between 10 and 25
points. Pompey chief executive David
Lampitt said: After the extraordinary
amount of work put in by so many
people over the last 18 months it is
incredibly disappointing for the club
to find itself in this position.
FOOTBALL
Administration
woe returns to
haunt Pompey
BY JAMES GOLDMAN
FOOTBALL
0
2
CHELSEA
LIVERPOOL

Cityam 2011-11-30

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