Cityam 2012-07-26

AMERICAN authorities did all they could
to warn British regulators over flaws in

the Libor system, as far back as 2008, the
defiant US Treasury secretary Timothy
Geithner told politicians in Washington
DC yesterday.
Geithner faced a grilling in front of the
House financial services committee, yet
insisted that US regulators warned the
Bank of England about Libor
manipulation, and said that the failures of
governance occurred on this side of the
pond.
I personally raised this with the
governor of the Bank of England, and I
sent him a very detailed memorandum
recommending a series of changes,
Geithner said, adding that the British
Bankers Association (BBA) was incapable
of policing the London inter-bank offered
rate, known as Libor.
We brought [our] concerns to their
attention. And we felt and I still believe
this that it was really going to be on
them to take responsibility for fixing this.
Geithner was responding to charges that
his response to the apparent manipulation
of Libor had been inadequate. It appears
that you treated it as almost a curiosity or
something akin to jay-walking instead of
highway robbery, said Congressman Jeb
Hensarling.
If this is the crime of the century, as so
many people are reporting today, never
once did you come [here] and mention it as
being a problem, fellow congressman
Scott Garrett added.
Critics have demanded that chancellor George Osborne looks to the supply-side to resolve the UKs economic woes
BUSINESS leaders, economists and
politicians demanded a new eco-
nomic strategy from the government
yesterday, claiming its approach had
been shown up as a failure after GDP
nose-dived in the second quarter.
In yet another blow to beleaguered
chancellor George Osborne, the
Office for National Statistics released
preliminary data that showed GDP
down 0.7 per cent, well below the 0.2
per cent consensus estimate, mean-
ing the UK is now in the longest dou-
ble-dip recession for more than 50
years. The economy is 0.3 per cent
smaller than when the chancellor
took office, according to the stats.
The contraction makes it virtually
impossible for GDP to grow in 2012
as a whole, barring an unlikely boom
during the remainder of the year.
The news added to fears that
Britains vaunted triple-A rating
could be at risk. Sterling sunk to a
two week low against the dollar after
the data was released, down at $1.55
compared to recent highs well above
$1.57. The pound was also down 0.8
per cent on the euro.
We need a plan B now to get the
economy moving again and radical
reforms to set Britain on a new
course for jobs, growth and long-
term prosperity, claimed shadow
chancellor Ed Balls. In an interview
with Channel 4 he went as far as sug-
gesting a grand coalition of all
three major parties might be the
only way to marshal agreement and
fix the economy.
Analysts and business groups
agreed that Osbornes policy had
failed, and called for the govern-
ment to make an about-turn. Many
backed supply-side policies and a pri-
vately-financed building drive.
New infrastructure projects
financed by our low interest rates,
proper relaxation of planning and
employment red tape, and action to
lower energy costs for manufactur-
ers would all show Britain means
business, said Corin Taylor at the
Institute of Directors.
The four key measures it could
take are a serious liberalisation of
planning law; deregulation of labour
markets; an end to the completely
incoherent green policies; and radi-
cal reform of the welfare state, said
the Institute of Economic Affairs
Professor Philip Booth.
Meanwhile Tim Morgan at City bro-
ker Tullett Prebon said that govern-
ment spending should be
rebalanced toward investment, and
BY JULIAN HARRIS
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OSBORNE URGED TO
ACT AS DIP DEEPENS
away from consumption. Morgan
said that if the government got
involved in shovel-ready infrastruc-
ture projects straight away then it
wouldnt be necessary to change the
overall position of the budget.
Tory MP Dominic Raab pointed out
that public sector spending was still
rising, meaning the problems
should not be blamed on too much
austerity. We should be looking at
further savings to deliver tax cuts for
businesses, and cut the swathes of
red-tape that deter employers from
hiring...to return the economy to
growth, he argued.
But Liberal Democrat peer Lord
Oakeshott claimed Osborne was a
work experience chancellor and
should stand down in favour of a
team led by Vince Cable.
Douglas Carswell, an outspoken
Tory MP, said: This contraction is
not a cyclical downturn but the
inevitable upshot of a failed 40 year
experiment with monetary manipu-
lation. Handing out candyfloss cred-
it to all comers led to numerous bad
investments that eventually had to
come home to roost.
John Cridland, CBI director-general,
said: When I talk to businesses on
the ground, the overwhelming view
is that the economy is flat rather
than negative.
US Treasury secretary: Libor fiasco is fault of the British
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Carnwath leaves Barclays
as Del Missier gets 8.8m
EMBATTLED bank Barclays suf-
fered another significant loss yes-
terday as a third board member
resigned in the wake of mounting
turmoil following the devastating
Libor scandal.
Non-executive director Alison
Carnwath left the bank after
almost two years on the board cit-
ing time pressures, as she holds
numerous other directorships
across the City.
Although she has not been impli-
cated in any Libor wrongdoing, it
is thought that the role became
increasingly hectic and pressured
following the scandal, which saw
chief executive Bob Diamond and
chairman Marcus Agius both ten-
der their resignations.
Carnwath resigned almost
immediately after being appoint-
ed to the committee which will
hear the report into Barclays cul-
ture and practices being compiled
over the next nine months by top
lawyer Anthony Salz.
The role came on top of her posi-
tions on the banks nominations
committee and remuneration
committee, leaving a gap in all
three groups.
But Barclays does not have a set
target number of non-executive
directors, so it is not yet known
Man Utd pauses US listing plans
Manchester United has temporarily
paused plans to launch its $300m initial
public offering in the US, where market
volatility has soared in recent days as
macroeconomic fears hit share prices. The
English football club had been looking to
begin its investor roadshow as early as
Monday of this week, with the aim of
pricing and listing its shares in early
August. But United and its bankers are to
reconsider when they will begin meeting
potential investors later this week, said
people familiar with the situation.
Pay-TV case legal funding concerns
The Premier League helped to fund the
public prosecution of a man accussed of
selling Albanian satellie decoder cards to
customers looking for a cheaper way of
watching English football matches, raising
questions about how UK prosecutors are
funded and the impartiality of their
decisions.
Pork and chicken to join luxury list
Pork and chicken will join beef on the
menu of expensive meats as drought and
US ethanol policy combine in a corn
disaster, the head of the worlds largest
pork producer has said.
We would not have taken on
Olympics, says Capita
The travails of G4S will not derail the
onward march of the outsourcing
industry, Capita said yesterday after
revealing a rise in profits.
Call for bailout fund banking licence
A hint that the European Central Bank
could agree to a banking licence for the
Eurozones permanent bailout fund
allowed markets to take a breather
yesterday.
Royal Bank of Scotland cuts interest
rates for small businesses
State-backed lender RBS said it will use an
emergency government scheme to cut the
interest rates it charges on loans to small
businesses.
Lord Green: I have no case to answer
over HSBC money laundering scandal
Lord Green has claimed he does not have
a case to answer over the HSBC money
laundering allegations that have emerged
from his time at the head of the bank.
United Technologies in $3.5bn deal
United Technologies yesterday agreed to
sell three units of its Hamilton Sundstrand
subsidiary to a private-equity group for
about $3.5bn (2.3bn), in a deal that will
help fund its purchase of aircraft-
components maker Goodrich Corp.
Risks at JP Morgan Spotted
More than a year before JP Morgan Chase
racked up billions of dollars in losses from
bad trades in its London investment
office, Bank of England officials raised
concerns internally about potential risks.
THE MAN who turned Citigroup
into a banking megalith said
yesterday he now thinks such large
institutions should be broken up in
order to regain the publics trust.
Sandy Weill, who steered
Citicorp into an $70bn merger with
Travelers in 1998, told CNBC: I
think what we should probably do
is go and split up investment
banking from banking.
Have banks make commercial
loans and real estate loans. And
have banks do something that is
not going to risk the taxpayer
dollars, that is not going to be too
big to fail.
His comments represent a
remarkable volte face, given his key
role in Citicorps merger, which
forced the US to repeal the Glass-
Steagall Act the law requiring
investment banks to be separate
from retail banks following the
1930s Depression. Weill, who
served as Citis chairman until
2006, said public opinion needs to
be addressed in the wake
of the financial crisis.
Citi received a $45bn
bailout in 2008.
Our world hates
bankers, he said.
Architect of Citi
calls for banks
to be broken up
2
NEWS
BY MARION DAKERS
BY TIM WALLACE
To contact the newsdesk email news@cityam.com
I
T was typically cunning of Ed Balls,
the shadow chancellor, to call for
a grand coalition on the economy
yesterday. Cunning but utterly
wrong. George Osborne has failed
lamentably but that doesnt mean
Ed Balls is right, or that we need to
ditch political debate in return for a
disastrous neo-Keynesian consensus.
The unfortunate, quasi-taboo reality
is that there is already too much unity
between the front benches on the
economy, despite all the bluster. The
coalition has failed to make a decisive
break with the failed policies of the
Gordon Brown era, and that is the sin-
gle biggest reason for the UKs
appalling economic performance. As
of Balls, he would borrow even more
but while this would send foreign
investors into a state of panic, it
wouldnt be that much worse than
the 140bn or so Osborne is on course
EDITORS
LETTER
ALLISTER HEATH
It is time for some genuine radicalism from George Osborne
THURSDAY 26 JULY 2012
to add to the national debt this year,
and would make very little difference
to aggregate demand.
We need far more radical policies to
liberate the supply-side of Britains
economy and to make it more prof-
itable and safer for firms to hire and
invest. Gordon Brown and his eco-
nomic eminence grise Balls relied far
too much on monetary policy when
they were in power: they assumed
that as long as interest rates were low
and the consumer price index meas-
ure of inflation wasnt rising too
much, all would be well. Osborne is
also relying too heavily on monetary
policy, albeit in a much more activist
way: he puts far too much faith in
quantitative easing and credit easing
to kick-start growth.
Both men got it wrong: monetary
policy can boost growth in an emer-
gency if used sparingly; but normally
it is at best neutral and at worst disas-
trous. Under Brown, the latter ended
up being true. Real growth only mate-
rialises when people invent new ways
of doing things more efficiently, work
harder or more productively and
invest in new IT and machinery, all
assuming a realistic cost of capital.
Permanently running monetary poli-
cy on an emergency footing eventual-
ly robs it of any potency and also
injects ever-greater distortions into
the economy.
capacity, starting as soon as possible.
It needs to allow the construction of
more homes. It needs to implement
in full the Beecroft report on the
labour market. Spending cuts so far
total only a little over one per cent in
real terms; spending has actually
started to go up again, demolishing
Balls claim that the double-dip is
being caused by excessive cuts.
An emergency Budget is required in
the Autumn. Future spending cuts
need to be brought forward, with
matching reductions to capital and
income taxes, focused on boosting
incentives to work and invest. Britain
needs less consensus economics,
greater radicalism and above all a
renewed sense of urgency from our
inexcusably complacent chancellor.
The 0.7 per cent contraction in the
second quarter left the economy
down 0.8 per cent year on year and 4.5
per cent below the pre-recession peak.
GDP is now 0.3 per cent below the
level seen during the second quarter
of 2010, when the coalition govern-
ment came to power. Some of the last
quarters woes were caused by the
extra holiday, and like many others, I
doubt the situation is quite as bad as
the official figures suggest. There is a
fundamental inconsistency between
labour market data which suggests
that the total amount of hours
worked in the economy is up strongly
and the atrocious output data. But
even if the economy were merely stag-
nating rather than collapsing it
would still be an appalling failure.
The coalition needs to make a dra-
matic U-turn. It needs to allow the pri-
vate sector to build more airport
when her vacancy on the board or
the committees will be filled.
Carnwath thanked her colleagues
on the board in her resignation
statement, and explained that
with regret I have concluded that I
am no longer able to devote suffi-
cient time to my role as a director of
Barclays given my other commit-
ments.
Those other commitments are
wide and varied Carnwath has
chaired FTSE 100 firm Land
Securities since 2008, been non-
executive director of Man Group
since 2001, and director of Zurich
insurance since March of this year.
In addition, she is a senior adviser
at Evercore Partners, non-executive
director at Isis Equity Partners and
board member of PACCAR.
Meanwhile Sky News reported out-
going chief operating officer Jerry
del Missier has been awarded an
8.75m severance package as part of
a long-term pay incentive, despite
resigning over his role in instruct-
ing traders to lower the banks Libor
submissions in 2008. Sandy Weill says the
world hates bankers
MEXICAN regulators yesterday
fined HSBC $27.5m (17.8m) for
poor money laundering controls,
following allegations the bank dealt
with rogue nations and drug gangs.
The countrys National Banking
and Securities Commission
highlighted 1,729 occasions where
there was late reporting of
suspicious transactions at the firm.
The US Department of Justice is
conducting its own investigation
into HSBC, with analysts saying it
could result in a fine of up to $1bn.
Mexico fines
HSBC $27.5m
BY JAMES WATERSON
UNION bosses have called off todays
planned strike action among UK
Border Agency workers, which would
have disrupted the busiest day in
Heathrows history.
The PCS union said it has secured
1,000 border jobs as part of a deal it
cut with the government to avoid a
walkout on the eve of the Olympics.
The Home Office was yesterday
preparing to apply for an injunction
to halt the strike when the PCS
announced the deal.
Further industrial action is
suspended while talks continue.
Union calls off
border strikes
BY MARION DAKERS
MORE LIBOR : Page 15

The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
Carnwath was on the board for two years, Del Missier led the investment arm from January 2011
EUROPEAN fund firms could lose out
on revenues under new EU rules to
toughen up supervision of securities
lending published yesterday.
Securities lending is commonplace
in the mutual fund industry globally
as a means of boosting revenue as
well as reducing management fees.
Under European markets
watchdog ESMAs proposals, all
revenues generated by securities
lending will now have to be returned
to investors in the funds and there
will be stricter requirements about
the types of collateral posted.
These guidelines are a valuable
response to many of the issues
identified in the ongoing debate on
shadow banking, Steven Maijoor,
chair of ESMA said.
According to Markit Securities
Finance estimates, funds have more
than $12 trillion of lendable
inventory in lending programmes, of
which $1.7 trillion is currently out
on loan. Funds lend out securities to
outside investors -- hedge funds
betting on a fall in an equity index
by short selling shares, for example --
in exchange for collateral and a fee.
The practice is also becoming
more popular with ETFs as the $1.7
trillion industry grows in size, with
the extra revenue compensating for
slim profit margins as the race to
reduce costs for investors has
intensified.
EU regulators
get tough on
fund mangers
BY CITY A.M. REPORTER
THE GOVERMENT today announced
plans for the 8bn redevelopment of
Battersea Power Station by its new
Malaysian owners, with the revamp
due to kick-off as early as next year.
Europes largest brick building,
which has seen a string of developers
try and fail to revive it over the past
two decades, was recently rescued
from administration by a consor-
tium of developers for 400m.
The joint venture, comprising of
Malaysias SP Setia, industrial con-
glomerate Sime Darby and the coun-
trys Employees Pension Fund are
expected to take full ownership of the
39-acre site in September.
The collossal scheme, which will
include hotels, homes, shops as well
as two new Underground stations, is
expected to have a final development
value of 8bn.
More than 20,000 construction jobs
and 13,000 permanent posts will be
created, UK Trade & Investment
(UKTI) announced today as it
launched the Global Investment
Conference, taking place in central
London.
Power station
at Battersea in
8bn revamp
BY KASMIRA JEFFORD
It is the first in a series of summits
being held during the Olympics to
draw further investment into the UK.
The Mayor of London, Boris Johnson
said: It is brilliant that this historic
landmark that helped power London
for much of the 20th century will be
at the centre of this huge regenera-
tion project that will also help power
the capital to even greater economic
prosperity in the 21st.
The prospective owners will use the
existing planning consent granted in
2008, which allows for 3,500 homes
and 1.7m square feet of office space,
as well as for a hotel.
The Battersea Power Station
scheme makes an essential contribu-
tion to the Northern Line Extension
funding pot, Ravi Govindia, leader of
Wandsworth Council, told City A.M.
This Tube link is the key to creating
25,000 jobs and unlocking billions in
growth across the wider Nine Elms
area which is much bigger than just
the power station site alone.
A spokesperson for SP Setia, Sime
Darby and EPF, said they expected to
provide further details on the scheme
once they had finalised the acquisi-
tion later this year.
Investors hope users will rediscover their love of virtual agriculture and play more Farmville.
ONLINE gaming giant Zynga last
night said that it had badly missed
its financial targets, sending its
share price down more than 40 per
cent in after-hours trading.
The announcement from the
creator of the Farmville and
Cityville games dragged down
shares of social networking firm
Facebook, which relies on Zynga for
around 15 per cent of its income.
The timing could not have been
worse for Facebook, which is due to
announce its first quarterly results
as a public company later today.
Facebook hit hard as Farmville
creator Zynga misses targets
BY JAMES WATERSON
Zyngas results sent Facebooks
shares down seven per cent to $27
in after-hours trading, down from
mid-Mays IPO price of $38.
Zynga, founded by chief executive
Mark Pincus, reported a 19 per cent
increase in quarterly revenues to
$332.4m (214m) with a net loss of
$22.8m. This compares to a profit of
$1.4m for the same period last year.
The company blamed the poor
performance of its established,
money-making games on changes to
Facebooks algorithm, which it said
spurred users to discover new
games rather than repeatedly play
existing Zynga offerings.
3
NEWS
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THE UKS economy tanked in the sec-
ond quarter, worsening the countrys
double dip recession, according to
preliminary figures from the Office
for National Statistics (ONS) released
yesterday.
GDP fell 0.7 per cent over the quar-
ter, compared to a consensus expecta-
tion of 0.2 per cent, according to the
preliminary estimate, which com-
putes about 40 per cent of the total
survey responses.
This was driven by a sharp dive in
construction, of 5.2 per cent, which
follows from last quarters 4.8 per cent
plunge. But the economy appeared
weak across the board, with produc-
tion falling 1.3 per cent, and services
inching down 0.1 per cent.
Analysts were shocked by the result,
but also questioned whether the econ-
omy was in as bad a state as the esti-
mate suggested.
Its likely theres been mis-measure-
ment, said Andrew Goodwin at the
Ernst & Young Item club, Id take it
with a pinch of salt in fact Id go as
far as to say the figures arent worth
the paper theyre printed on.
BY BEN SOUTHWOOD
First of all, we expect that some 0.5
per cent of the decline is due to the
Queens Jubilee; secondly the cata-
strophic construction decline is unbe-
lievable; and thirdly the combination
of rapidly increasing employment and
sharply declining GDP implies highly
implausible shocks to productivity,
Goodwin argued.
The Confederation of British
Industrys quarterly industrial trends
survey, also released yesterday, adds
some weight to this challenge, suggest-
ing a generally positive outlook
though it looked at the three months
to July, not the three months to June.
On balance three per cent of firms
said orders were up in the quarter,
while a balance of eight per cent
reported output up. A full 13 per cent
said employment was up, and those
reporting under-utilisation of capacity
fell to 52 per cent, the lowest for a year.
On the other hand figures from the
British Retail Consortium (BRC) today
appeared to back the more gloomy pic-
ture. The BRC said that for the first
time since it started recording in 2008,
the number of retail stores fell, drop-
ping 0.5 per cent on the quarter.
It would be easy to get carried away ... but the reality is that the Diamond
Jubilee bank holidays have wreaked havoc with the data. The ONS has effec-
tively said that output fell by almost three per cent ... between May and June because
of the movement of the late-May bank holiday and the extra one in June.
ANALYST VIEWS
The big picture cannot be described as anything but bleak. Overall, out-
put has gone nowhere for the past two years and remains some four per cent
below its previous peak. And the economy is currently contracting, rather
than recovering. Plan B, anybody?
While part of the GDP contraction in the second quarter can be attributed to
lost activity from the extra days public holiday resulting from the Queens Diamond
Jubilee celebrations and to the very wet weather hitting retail sales and con-
struction output, the economys weakness clearly runs far deeper than that.
WHATS YOUR TAKE ON

THE GDP FIGURES?
Interviews by Ben Southwood
ANDREW GOODWIN ITEM CLUB
ANDREW SMITH KPMG
HOWARD ARCHER IHS GLOBAL INSIGHT

FORUM SPECIAL: Page 20-21

4
NEWS
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Cumulative GDP change from peak
0 6 12 18 24 30 36 42 48
-6%
-4%
-2%
0%
-8%
2%
Monthssincestartofrecession
Quarterly GDP growth
2012
Q2
2006
Q2
2000
Q2
1988
Q2
1982
Q2
1976
Q2
1970
Q2
1994
Q2
1964
Q2
1958
Q2
2
3
4
5
-2
-1
0
1
-3
6
0.7% in GDP
1.3%
in production
5.2%
in construction
0.1%
in services
1930Q1 1973Q2 1979Q2 1990Q1 2008Q1
Q
Why is there doubt at all?
A
The relatively sharp quarterly
tumble in GDP, of 0.7 per cent,
seems incongruous with the
reassuring jobs figures for the three
months to May, when employment
grew 181,000, and unemployment
dropped 65,000. If employment has
grown rapidly but output has fallen,
then productivity must have seen a
significant drop one that many
analysts find implausible.
Q
What explanation does the ONS give?
A
The Office for National Statistics
(ONS), which prepared both sets of
statistics, says we must wait for its
productivity report, but that wont
be released until September. A
spokesperson said unemployment
tends to lag output, but that
wouldnt explain how an increase in
hours worked could go hand in hand
with reduced value added.
Q
How reliable are these early GDP
statistics?
A
The figures released yesterday are
preliminary, and only use about
40 per cent of the eventual total
submissions for the survey. An ONS
spokesperson said that the long-term
average revision was about 0.2 per
cent, but it could go either way.
Q
Do the figures show we are back in a
deep recession?
A
The ONS says
that the impact of the Golden
Jubilee holiday skewed the figures,
but didnt speculate on the
underlying strength of the economy.
But analysts saw this as a reason to
take the GDP figures with a pinch of
salt, and downplayed the depth of
the recession.
Q
Are there other reasons to doubt the
figures?
A
The index of services showed
expansion in May, with output 1.3
per cent higher than a year earlier
jarring with yesterdays data, which
alleged a 2.2 per cent services dip in
June. And separate CBI data, also out
yesterday, was fairly positive.
Q
A
and
How can GDP be shrinking so fast when employment
numbers seem to be recovering ?
Estimates show
GDP down 0.7pc
in last quarter
The UK is in the longest double-dip recession for 50 years
GAS producers are set to receive a
500m tax break, while there will be
a 10 per cent cut in the subsidies
provided for onshore wind turbines,
the government announced
yesterday.
It is understood that the Treasury
was keen to cut wind turbine
subsidies by 25 per cent but Lib Dem
energy secretary Ed Davey
successfully argued that this would
severely affect private sector
investment in renewable energy.
Following a strong lobbying
campaign the government also
affirmed its commitment to gas
production, saying: We do not
expect the role of gas to be restricted
to providing back up to renewables.
As a result it will exempt the first
500m of income from new shallow
gas fields in UK waters from the
supplementary 32 per cent tax rate.
The support were setting out
today will unlock investment
decisions, help ensure that rapid
growth in renewable energy
continues and shows the key role of
renewables for our energy security,
Davey said.
Shares in Drax Group, which has
been planning to transfer its
flagship power station from coal-
fuelled to biomass, fell 16 per cent as
traders felt the proposed green
energy subsidies were not as
generous as expected.
Wind turbine
subsidy cut as
gas gets boost
BY JAMES WATERSON
BILLIONAIRE business magnate Li Ka
Shing grabbed another slice of the
UKs utility infrastructure network
yesterday by snapping up gas
distribution firm Wales & West
Utilities (WWU).
Li, estimated to be the richest
man in Hong Kong and ninth
richest in the world, will take
control of WWU through a
consortium owned by his holding
company, Cheung Kong, after
investors agreed to accept an offer of
645m.
It gives the 84 year old, who rose
from humble beginnings selling
plastic watch straps and is known as
Superman in his native Hong
Kong, control of gas pipelines
serving more than a quarter of the
UK population, having acquired
another major distributor Northern
Gas Networks in 2005.
WWU was owned by institutional
investors through a variety of funds,
including Macquarie Global
Infrastructure funds, AMP Capital,
Canada Pension Plan and IFM.
Billionaire Li Ka
Shing snaps up
Wales & West
BY MICHAEL BOW
AMP Capital managing director
Boe Pahari said it was in investors
long-term interests to sell the stake.
Lis Cheung Kong Infrastructure,
Power Assets and Hutchison
Whampoa outfits will each take a 30
per cent stake in the business with
the other 10 per cent taken by the Li
Ka Shing Foundation.
Cheung Kong Infrastructure
managing director Kam Hing-Lam
We are pleased to have the
opportunity to acquire another high-
quality asset, which is poised to
extend our growth momentum and
generate recurring profit
contributions similar to that of our
other infrastructure projects."
WWU chief executive Graham
Edwards added: Neither our
customers nor our consumers will
see any changes.
It comes hot on the heels of
another UK utility purchase by Li last
October, when subsidiaries of
Cheung Kong Holdings bought
Northumbrian Water Group for
2.4bn. Li now owns or has stakes in
six UK utility firms as well as
telecom provider 3.
Supermans utility stakes stretch across the country
7
NEWS
cityam.com
Cheung Kong Holdings chairman Li Ka Shing is Hong Kongs richest man with $25.5bn
W
A
T
E
R
G
A
S
P
O
W
E
R
Northumbrian Water Group
Stake
100 per cent
Area covered
12,260 sq km
People served
4.4m
Southern Water
Stake
4.75 per cent
Area covered
4,450 sq km
People served
2.3m
Northern Gas Networks
Stake
88 per cent
Area covered
25,000 sq km
People served
6.7m
Wales & West Utilities
Stake
100 per cent
Area covered
42,000 sq km
People served
7.4m
UK Power Networks
Stake
100 per cent
Area covered
29,000 sq km
People served
8m
Seabank Power
Stake
50 per cent
Area covered
110,000 sq km
People served
9.5m
2
.
4
b
n
1
.
4
b
n
5
.
8
b
n
6
4
5
m
2
1
2
m
8
2
m
*numbers refer to price paid for stake
IN BRIEF
Countrywide revenues grow
nCountrywide, the UKs largest estate
agency and property services group,
will today announce that it has grown
total revenues by 10 per cent in the last
12 months. The firm has made 20m
on a year-to-date basis before tax and
other factors are taken in account, on
total income of 257m. The company
expects the housing market will
remain flat for the rest of 2012.
FirstGroup speeds up disposals
nFirstGroup yesterday said it is
trading as expected, as it plans to
speed up its shake-up of its UK bus
operations. The transport group is
selling off parts of its bus business
to focus on faster-growing markets.
All resolutions passed at the firms
shareholder meeting yesterday, in
spite of analyst grumbles about
chairman Martin Gilberts workload
at his other role leading Aberdeen
Asset Management.
BRITAINS biggest mobile operator
Everything Everywhere saw income
fall in the first half of the year as the
Orange and T-Mobile owner invested
in retaining customers and
upgrading networks.
Adjusted earnings decreased
slightly to 673m, as revenues from
calls and other services fell 1.8 per
cent to 2.99bn due to an Ofcom-
ordered cap on charges. The firm,
which is trying to integrate the two
networks to cut costs, made a pre-
tax loss of 104m.
The operator said yesterday it had
signed up 150,000 new customers to
contract offerings in the last six
months, with 79 per cent of its
subscribers now on lucrative two-
year plans. It paid out more than
usual over the period as a large
number of 18-month deals ended.
Chief executive Olaf Swantee told
City A.M. Everything Everywhere
was making steady progress on our
key strategy as it tries to hold on to
customers and upgrade equipment
ahead of a planned launch of its
high-speed 4G network this year.
Income drops
at Everything
Everywhere
BY JAMES TITCOMB
ARM Holdings posted a jump in earn-
ings yesterday, as the British chip
designer continued to outperform
the rest of the industry.
The company beat forecasts for the
three months to July, reporting a 23
per cent rise in year-on-year profits in
the face of poor recent performances
from its rival Intel and chipmaker
Qualcomm, which uses Arm technol-
ogy in its processors.
Shares rose by over six per cent as
the firm reported 66.5m in profit
on a 12 per cent sales rise to 213m.
Arm, which designs low-power
processors used in phones and
tablets including Apples iPhone, has
been threatened by PC chipmaker
Intels entry into the mobile market.
Chief executive Warren East point-
ed to a number of exciting new
Arm defies the
chip slowdown
as profits leap
BY JAMES TITCOMB
products that will be launched using
Arm technology later this year,
including Microsofts upcoming
Surface tablet and a version of
Windows 8 designed for Arm chips.
He attributed Arms success to
technology engagements over many
years, and Arms long-term commit-
ment to invest in the development of
innovative technology.
BT rocked by fall in European
contracts as shares plummet
SHARES in BT slumped yesterday
as the extent of the telecoms
operators European woes were
laid bare, with the firm
announcing a six per cent drop in
revenues.
BTs lossmaking global services
arm, which provides phone and
internet services to
multinational corporations and
governments, saw contracts dry
up in the three months to July,
with sales falling nine per cent.
The news rocked investors,
sending shares down nearly
seven per cent in early trading,
the biggest drop in almost a year.
The firms chief executive Ian
Livingston said BT was focused
on cutting costs in the global
services division, telling
shareholders that relying on a
sudden upturn in European
markets would be unrealistic.
Despite revenue falling to
4.5bn, BT managed to increase
profits, as the firms deep cost-
cutting operation paid off.
Profit before tax rose 13 per
cent year-on-year to 584m
following a fall in operating
costs, and BT said it expected the
decline in revenue to slow down
in the next quarter.
The global services division has
troubled BT for several years,
BY JAMES TITCOMB
even forcing the company into a
2bn loss in 2008.
BT also said earnings will be hit
next year by a 738m investment
in Premier League football rights
for its BT Vision TV service.
Arm chief executive Warren East said Arm was working on exciting new products
BT Group PLC
25Jul 19Jul 20Jul 23Jul 24Jul
215
220
225
205
210
230
235 p
210.20
25Jul
We continue to see Arm as a standout tech holding, and see licence
growth in recent years catalysing royalty upgrades from next year. Despite the
negative stockmarket trends, we see material long term value in Arm. Buy.
ANALYST VIEWS
WHAT IS THE LONG-TERM

OUTLOOK FOR ARM?
Interviews by James Titcomb
JULIAN YATES INVESTEC
9
NEWS
cityam.com
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Big Ben will chime for
three minutes tomorrow
P
LANNING to bask in the
evening sunshine with a
few post-work drinks
tonight? You might want
to think twice before turning it
into a serious session as the
hungover will be in for the
mother of all rude
awakenings tomorrow
morning.
To mark the official start
of the London 2012
Olympics Big Ben wil ring
constantly for three min-
utes from 8:12am and
thousands more bells
across the capital and
beyond are set to join in
as loudly as possible for a
world record attempt.
Indeed, members of the
public are also being
encouraged to ring their
own bells bicycle, hand
bells and door bells all
acceptable for those three min-
utes, and can even download the
free London 2012 JoinIn smart-
phone app to do so.
Mayor Boris Johnson, no
stranger to embracing the
Olympic spirit with extra
gusto, the Archbishop of
Westminster and the
Whitechapel Bell Foundry
are among those to have reg-
istered their participation in
All The Bells, as the chim-
ing extravaganza is known
artist Martin Creeds
brainchild for the London
2012 Festival.
The racket will be a
sign of how special this
summer is, according to
House of Commons
speaker John Bercow.
Got A Story? Email thecapitalist@cityam.com
11
cityam.com
THECAPITALIST
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Moorgate
St Paul
St Pauls
Cathedral
Guildhall
St Bartholomews
Hospital
The Old Bailey
Cannon
Street
Blackfriars
Cannon
Street
Mansion
House
London Wall
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Basinghall Avenue
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Ludgate Hill
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B
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St Pauls Churchyard
Cheapside
H
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lb
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Carter Lane
Poultry
Queen Victoria Street
White Lion Hill
Millenium Bridge
Upper Tham
es Street
Upper Thames Street
N
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MAP KEY
Points of interest
Torch route
Evening celebrations
OLYMPIC TORCH
RELAY ROUTE
HE may have had a
whiter-than-white image
when he carried the nations
tennis hopes, but there was
more than a hint of mischief in
Tim Henmans eye when he
piped up at a press conference
for Adidas yesterday.
Team GB doubles pairing Colin
Fleming and Ross Hutchins were
being quizzed on just how vital
it is for a duo to get on away
from the court when former
British No1 Henman decided to
commandeer the microphone:
I played with Greg Rusedski for
10 years, so the relationship isn't
that important, said the 37-
year-old, the sportswear giant's
tennis ambassador.
Home Counties man Henman
and the comparatively flashy
Canada-born Rusedski were
known to have their differences
when they dominated British
tennis, without any rancour
emerging in public, so there was
some surprise and a touch of
nervous laughter when Tiger
Tim bared his claws.
THE Olympic torch will today weave its
way through the streets of the City of
London, passing many of the Square Miles
most iconic landmarks as it works its way
towards Hyde Park on the penultimate day of
the torch relay.
Setting off from Camden at 6.48am the torch
will reach Farringdon Road at around
8.50am, before taking a lengthy detour
through the City that will see it pop up on the
steps of St Pauls Cathedral, the entrance to
the Museum of London and the Guildhall,
before making its way across the Millennium
Bridge and onwards into Southwark.
Big Ben to ring
in Olympics for
record attempt
per cent ahead of last year.
Marstons shares closed 1.7 per
cent higher at 109.8p yesterday.
CREDIT and debit card network Visa
last night announced strong income
growth as increasing numbers of
people across the globe pay for goods
using plastic.
Adjusted net income rose 10 per
cent to $1.1bn (700m) for the third
quarter, ahead of Wall Street expecta-
tions. Shares in the firm were up 1.5
per cent in after-hours trading.
But although the adjusted earnings
pleased investors, the company post-
ed a net loss of $1.8bn after it set
aside $4.1bn to cover the costs of a
class-action case which has plagued
its US operation.
At the start of the month Visa,
along with rival Mastercard and sev-
eral banks, agreed to a settlement
with US retailers in a lawsuit over
the fixing of debit and credit card
fees.
We are pleased that we were able
to come to a resolution in the mer-
chant litigation which was accept-
able to most parties while ensuring
BY JAMES WATERSON the long-term health of the US pay-
ments industry, chief executive
Joseph Saunders said in a statement
yesterday.
But reports suggest that some retail-
ers are threatening to turn down the
settlement, posing the risk that Visa
could be hit with further costs.
Meanwhile the total value of pay-
ments handled by Visa in the three
months to the end of June rose six
per cent to $979bn, a sign of slowing
consumer spending. Payment vol-
umes have made double-digit gains
for the last nine quarters.
CATERPILLAR, the world's largest maker of construction equipment, raised its 2012
profit forecast yesterday and said the global economy was slowly improving amid
pockets of weakness. For the second quarter, Caterpillar reported a profit of $1.67bn, or
$2.54 per share, compared with $1.02bn, or $1.52 per share, a year earlier.
CATERPILLAR RAISES PROFIT FORECASTS
Marston's PLC
107
108
109
110
111 p
109.80
25Jul
Visa Inc
126
122
124
128
$
122.20
25Jul
12
NEWS
cityam.com
Marstons says Jubilee cheer
helped offset rain as sales rise
MARSTONS raised a glass to a
successful Diamond Jubilee
weekend as the pub and brewing
company posted a 2.2 per cent rise
in third-quarter sales at its managed
pubs.
The group, which has around
2,150 managed, tenanted and
franchised pubs, described its
performance in recent weeks as
satisfactory in spite of the wet
weather dampening sales.
Ralph Findlay, chief executive
said: In recent weeks we have
BY KASMIRA JEFFORD
achieved sales growth despite the
poor weather, helped by key trading
events including the Jubilee week-
end, Euro 2012 and Fathers Day.
By the end of this financial year
we will have built around 60 new
pub-restaurants in three years, and
we have a clear site pipeline for
future development, he added.
Marstons also runs five breweries
and said it continued to increase
market share with own-brewed beer
volumes up around two per cent on
last year. Operating profit at its ten-
anted and franchised pubs also
improved and is estimated to be 3.2
Visa boosted
by increase in
card spending
BRITISH LAND revealed yesterday
it has acquired the Clarges Estate
on Piccadilly for 130m from the
low profile Latvian Sebba family.
The group plans to develop the
entire site opposite the Ritz and
Green Park in Mayfair, into a
200,000 square feet scheme with
shops, offices and luxury flats.
The whole site will be worth
around 500m once finished.
In a statement for the three
months to 30 June, the firm said it
had enjoyed a strong operational
performance and made 205m of
investment in the period, of which
143m of acquisitions have
exchanged or completed.
It has also made 59m of sales at
1.1 per cent ahead of valuation.
Brit Land buys
Mayfair estate
BY KASMIRA JEFFORD
SHARES in British engineering
company Renishaw soared 16 per
cent yesterday as the firm reported
a five per cent rise in full-year
profit, helped by strong demand
for its precision measuring
products across its markets.
Renishaw, which makes
measuring and inspection
equipment for the metrology and
healthcare industries, reported
revenue of 103.1m for the fourth
quarter.
Pre-tax profit rose to 86m from
82.1m a year earlier.
The company, which said all its
divisions saw double-digit growth,
raised its final dividend 15 per
cent to 28.2p per share.
Renishaws FTSE 250-listed
shares closed at 14.78.
Demand soars
for Renishaw
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AIRPORT owner BAA said it was ready
for record-breaking traffic at
Heathrow expected today, while boss
Colin Matthews trumpeted the firms
investment in the hub as vital for the
British economy.
BAA spent close to 550m in improv-
ing Heathrow in the first half of the
year and the firm plans to spend a
further 3bn over the next five years.
This is possibly the biggest privately
funded investment project going on,
he told City A.M. And this [type of
investment] is recognised as possibly
the most important contributing fac-
tor for the UKs economic growth.
BY MARION DAKERS He added that he was delighted
that Border Agency staff have called
off a planned strike due today, though
he will be on the ground at Heathrow
regardless to ensure visitors to the
Games have a smooth arrival.
We wont be relaxing until the end
of September when the Paralympics
are over, he said.
BAA yesterday reported an 8.4 per
cent rise in revenues to 1.16bn for the
first half of the year, squeezing out
growth at close-to-capacity Heathrow
by hiking airline tariffs and raking in
more money from retail outlets at the
airport.
Britains biggest airport saw a 2.2 per
cent rise in passenger numbers to
Peugeot defends plans for cuts
after slumping to first-half loss
PEUGEOT yesterday promised to
press ahead with cost savings, as it
registered a huge loss for the first
half of the year.
An overall loss of 819m
(641.8m) was driven by a 662m
loss in the French giants car
making division, itself driven by
sales that fell 5.1 per cent to
29.55bn.
Chief executive Philippe Varin
defended plans to cut 10 per cent of
the firms French workforce, saying
the move will provide 1.5bn of cost
savings by 2015.
The depth and persistence of the
BY BEN SOUTHWOOD
crisis impacting our business in
Europe requires the launch of the
reorganisation, Varin argued.
But there has been a political
furore over the cuts, that President
Francois Hollande has described as
unacceptable, and Peugeot has had
to face up to significant union
opposition.
A deal with unions that aims to
keep Sevelnord plant open, which
produces small and medium vans, is
currently being negotiated, but
workers may find the terms
including job losses and a pay freeze
hard to stomach. Union members
yesterday gathered outside Peugeots
Paris headquarters to protest the cuts.
T
HE creation of 1,100 new jobs
in the West Midlands by
Jaguar Land Rover shows the
British car industry
continuing to accelerate. Its also
another reminder of just how far
JLR has come from the dark days
of 2009, when it instituted a four-
day week to avoid job cuts and
looked to the European
Investment Bank for an
emergency loan.
More recently, doubled
investment from JLRs Indian
owner Tata Motors and a focus on
growth in emerging markets have
helped to drive the record annual
profit of 1.51bn that was
announced this May.
JLR is operating in a higher gear
than Peugeot, which posted a
662m (518m) loss yesterday, but
at least Peugeot has the sort of
bold turnaround plan that took
Ferrovial SA
9.20
9.00
8.80
8.60
8.40
8.20
8.38
25Jul
EASYJET has raised its profit
forecast for the year after seeing a
rise in British tourists taking
European holidays and a drop in
fuel costs.
Revenues in the quarter to the end
of June rose 10.5 per cent to 1.03bn,
and EasyJet now predicts full year
pre-tax profit will rise to between
280m and 300m, compared to
analyst forecasts of 272m.
The firm has also gone against the
grain of the industry by boasting
that its fuel costs have fallen. It
reported strong demand on beach
BY MARION DAKERS
routes from the extended period of
inclement weather in northern
Europe.
Passenger numbers rose 10.9 per
cent to 16m in the quarter, while its
load factor rose 2.8 percentage
points to 89.1 per cent.
EasyJet has seen a fall in demand
for flights touching London during
the Olympic period, both from
inbound business travelers and
outbound leisure travelers, but
forward bookings show a recovery
once the games have concluded,
said chief executive Carolyn McCall.
Shares in the firm closed up 2.2 per
cent at 542.5p.
CAR manufacturer Jaguar Land
Rover, which is owned by India's
Tata Motors, yesterday announced
plans to create 1,100 jobs building
new luxury car models at its West
Midlands plant.
The new Jaguar XF Sportbrake
estate car will be built at the
firms plant in Castle Bromwich,
along with other models.
The company has hired 8,000
new workers in the UK over the
past two years as part of a major
recruitment scheme, a drive that
HR director Des Thurlby called
the most ambitious recruitment
Jaguar Land Rover will create
1,100 new jobs in West Midlands
campaign in the companys
history.
Business secretary Vince Cable,
said: This is fantastic news for
Castle Bromwich that Jaguar Land
Rover is creating more than 1,000
jobs to support the production of
new models at the plant. This
expansion is a clear demonstration
of Jaguar Land Rovers continuing
commitment and investment in
the UK.
Last week Jaguar Land Rover
reported sales growth of 19 per
cent in the first six months of the
year, compared to the same period
a year ago. It sold 29,000 vehicles
globally.
14
NEWS
cityam.com
EasyJet chief executive Carolyn McCall said bookings for after the Olympics are rising
BOTTOM
LINE
MARC SIDWELL
Sun-seeking British passengers
put a shine on EasyJet earnings
33.6m, breaking a record set in 2006.
Pre-tax losses at BAA, owned by
Spains Ferrovial, narrowed to 50.9m
in the half-year, down from 249m a
year ago despite the rise in operating
costs and a pensions charge.
The firm hopes to find out today
whether its latest appeal against an
order to sell Stansted is successful.
Traffic at Stansted fell 4.5 per cent to
8.2m in the period.
Public relations firm Portland has
taken over the mandate for BAA,
replacing RLM Finsbury. The new role
is a coup for Portlands newest consult-
ant, former Labour adviser Alistair
Campbell, who is said to have played a
key role in winning the work.
Heathrow is ready for
record Olympics traffic
Government slams the brakes
on Peugeots drive for change
JLR from the doldrums to its
current status as one of the few
bright spots in the UK economy.
Frances new socialist
government has other ideas, of
course. Rather than letting
Europes second-biggest carmaker
restructure, which might give the
firm a fighting chance of a
comeback, it proposes
protectionism against Asian rivals
and some unimpressive green
subsidies for electric cars.
Neither are serious suggestions.
350m for the invention of
tomorrows cars and 450m for
factory upgrades might look ok
on a press release, but Peugeot
lost 19m more than those two
figures combined in the first six
months of the year all on its own.
For a company in Peugeots
position, facing economic
meltdown in the Eurozone and a
French administration proudly
committed to increasing the
economic burden on employers,
radical surgery is the only sensible
solution.
Finding 1.5bn in savings now
by incurring 8,000 job cuts is the
sort of plan that makes future
growth possible. Francois
Hollande, like George Osborne,
will find that well-meaning half-
measures dont work.
Marc Sidwell is City A.M.s
managing editor
BRITAINS rail network is to get more
than 90 new trains over the next six
years, the department for transport
confirmed yesterday, after years of
delays on the 4.5bn deal.
Hitachi and John Laing have been
signed up to provide the intercity
trains, with around 900 jobs created
at a new factory in County Durham,
which will be fully operational by
2015. The firms, whose joint venture
Agility Trains was made preferred
bidder for the contract in 2009, said
the first carriages will join the Great
Western line in 2017 and the East
Coast line by 2018.
New trains for
intercity routes
BY MARION DAKERS
THE SLOWING global economy poses
a major threat to banks in the BRIC
nations, as asset quality worsens and
earnings drop, ratings agency
Standard and Poors warned
yesterday.
But the report also concluded that
the governments of the countries
will stand behind the banks,
supporting them financially as the
institutions are viewed as crucial to
further economic development.
Banks in China are set to see some
deterioration as the economy slows,
while Indian banks are in a more
vulnerable position because of the
sharper slowdown, high inflation
rate and the depreciation of the
rupee, Standard and Poors said.
Brazils banks are a little less
vulnerable because of the countrys
relatively low unemployment rate.
But despite the slowdowns, the
agency believes the banks will
probably be safe thanks to state aid.
State ownership and control of a
significant part of the banking
industry in BRIC countries is a
critical rating factor, said credit
analyst Geeta Chugh.
We expect governments to step in
to avoid any abrupt deterioration in
local banks financial condition.
Banks to suffer
as BRICs slow
BY TIM WALLACE
LIBOR manipulation will become a
crime across the European Union
under new plans unveiled yesterday
by commissioners Viviane Reding and
Michel Barnier.
The announcement comes after
Barclays was fined 290m by the
Financial Services Authority for enter-
ing false interest rates to the British
Bankers Association (BBA) who set
the key interbank lending rate.
That scandal led to chief exec-
utive Bob Diamond and chair-
man Marcus Agius resigning,
while several other banks in
the UK and US are under
investigation.
Commissioner Reding
argued that the introduc-
tion of criminal sanc-
tions against the
individuals responsi-
EC plans mean
Libor-fiddlers
could face jail
BY TIM WALLACE
ble represents the strongest deterrent
available, adding the requirement
that member states must outlaw
manipulation of such rates to the
Markets Abuse Directive (MAD).
Keeping Libor artificially high or
unusually low is a scam. Homeowners,
small businesses and students may
have paid higher interest rates because
of the activity of certain bankers, said
Reding. Market abuse is not a victim-
less offence. It is a major problem for
confidence in our financial system
and we need to address it.
She added that MAD will be
revisited in four years time to
check all members have imple-
mented its proposals, and judge
the most effective systems. It will
be down to member states to
decide the exact sanction
faced by criminals.
Treasury sources said
the UK is already plan-
ning to toughen up
controls, with a consul-
tation currently
underway.
EU LEADER Jose Manuel Barroso
demanded more cash from
member states yesterday, arguing
the budget increases they offered
are not generous enough.
The top-level bureaucrat wants a
6.8 per cent increase on the year for
the 2013 budget, but state leaders
voted for a 2.79 per cent rise.
I welcome the
courageous efforts that
many of you are making to
consolidate public
finances, he told the
leaders. But giving the EC
less than it wants would
Barroso demands more EU cash
from indebted member states
BY TIM WALLACE be a false economy. It would have
serious consequences for economic
recovery as these cuts would affect
regions, researchers or SMEs with
the risk that they would then be
starved of finance.
However, he is likely to make
little headway countries
including the UK voted against
even the lower rise, and insist there
is further room for savings to be
made within the existing budget.
INTERNATIONAL regulators
proposed new capital
requirements yesterday which
will see banks hold capital
against exposures to central
counterparties (CCPs) on
derivatives trades for the first
time.
Trade exposures will receive a
nominal risk-weight of two per
New capital requirements on
derivatives trades from 2013
BY TIM WALLACE cent from 1 January 2013, the
Basel Committee said in interim
rules published yesterday.
That will add to pressures on
banks which are already
pushing hard to raise capital
levels to meet Basel III
requirements.
But the Basel Committee
insists these latest additions are
modest compared with the
other requirements banks face.
CITY watchdog the FSA is looking
to alter the charges firms pay to
fund the financial services
compensation scheme.
The FSA will consult on splitting
the compensation fund along the
lines of its own planned break-up.
The Investment Management
Association said the change could
unfairly hike costs for some.
FSA considers
fund change
BY MARION DAKERS
Commission president Jose Manuel Barroso wants a 6.7 per cent increase in the budget
15
NEWS
cityam.com
WHATS ON... 27 July - 12 August
- ALL DAYS
FREE hotdogs / Viking Ship / Danish beer
pavilion / LEGO models and windmill /
Designer pop-up shops incl. Pandora / Tall
Ship docked in the marina (27 Jul-5 Aug) /
HolidayCottage/ VisitDenmark pavilion /
Entertainment, competitions andballoons
for the children
Special Event Days
- Opening ceremony 27 July
Opened byHRHPrince Consort of Denmark
- Food and Drink festival 27 - 29 July
Gastronomic delights andtasters
- H.C. Andersen 30 July - 3 August
Storytelling and entertainment
- LEGO special event 4 - 5 August
LEGO building and entertainment
- Viking days 6 - 8 August
Battles, food and games
- Performing arts 9 - 12 August
Showdance / hiphop / Rock 'n Roll
Come - Discover the Danish spirit at this FREE and fun-flled event
27 July - 12 August for families, couples and singles of all ages.
Perfect for a planned day out or pop-in after work to relax in a great
atmosphere with Tower of London as your neighbour.
WINyour favourite
breakfast - a year's
supplyof bacon.
Gotofacebookor scanme
Find us at St Katharine Docks
Tower Gateway5 minwalk
Tower Hill 7 minwalk
LondonBridge 15 minwalk
Thames Clippers - alight Tower Pier
Find us online
visitdenmark.com/imagination
search imagination
Go VisitDenmark
#imaginedenmark
Special Event Daysaresubject tochangesor cancellationwithout notice. Pleasecheckwebsite.
LEGOisatrademarkof theLEGOGroup, hereusedwithpermission. 2012TheLEGOGroup.
Eurozone stuck in doldrums
as demand for credit slumps
DEMAND for many types of
credit fell again in the second
quarter, European Central Bank
(ECB) figures showed yesterday,
hitting lending and spending in
the Eurozone.
And banks also found it
increasingly hard to fund
themselves, hitting the supply of
credit further and raising fears
that the economy will remain
weak into 2013.
A net balance of 25 per cent of
banks reported falling demand
for loans to businesses, slowing
slightly from the 30 per cent
reported in the previous three
quarters, as fixed capital
investment plummeted.
A balance of 27 per cent saw
demand for consumer credit
falling, up from 26 per cent in
the first quarter, while a net
balance of 21 per cent reported
falling mortgage demand, a
slower drop than the 43 per cent
recorded in the previous three-
month period.
Looking ahead, banks expect
further deteriorations through
the third quarter.
But tighter funding conditions
also represent a constraint on
supply, despite the ECBs efforts
to pump the system full of cash
with its long-term refinancing
operations at the start of the
year.
A net balance of 18 per cent of
Eurozone banks attributed a
deterioration of funding
conditions to the sovereign debt
crisis, up from 14 per cent in the
previous quarter, while a balance
of 24 per cent said the falling
value of sovereign collateral has
worsened conditions.
While the ECB interventions
have helped avoid another credit
crunch, we expect bank lending
to the private sector in the
Eurozone to remain subdued
into 2013, Moodys Analytics
warned.
Meanwhile German business
confidence fell for the third
consecutive month, according to
influential survey data from the
Ifo institute, further
undermining any hopes of an
economic recovery.
On past form, the indicator
points to broadly stagnant GDP,
said Capital Economics.
BY TIM WALLACE
EC deputy president
Viviane Reding
A lack of market access is hitting credit standards
2012Q2 2011 Q3 2010Q4
40
50
20
30
0
10 %
n
e
t
b
a
la
n
c
e
r
e
p
o
r
t
in
g
im
p
a
c
t
IN BRIEF
Capita boosted by acquisitions
nBritish outsourcing group Capita has
posted a 10 per cent rise in first half
profit, boosted by its acquisition spree,
and said a buoyant sales market gave it
confidence for a strong 2012 and
beyond. Capita said yesterday
underlying pre-tax profit for the six
months to 30 June was 190.7m.
Johnson Matthey disappoints
n Shares in Johnson Matthey fell
yesterday after the chemicals firm
posted a virtually flat first quarter,
prompting worries it may miss forecasts
for the first half. Johnson Matthey
posted a profit rise of less than two per
cent on a year earlier, and said the
second quarter would be similar.
Petropavlovsk to up output
n Russia-focused gold miner
Petropavlovsk aims to boost its gold
production during the second half of
2012 after its first half output rose 27 per
cent, the company said yesterday. Its
first half gold production was 279,100
troy ounces, up from 219,100 ounces,
year-on-year.
Better margins shore-up Informa
n British media group Informa posted a
three per cent rise in adjusted profits yes-
terday despite a fall in revenue. The com-
pany, which publishes shipping guide
Lloyds List and organises exhibitions,
said pre-tax profit increased to 142.8m.
However, with impairment costs related
to the disposal of its central European
operations, Informa fell to a 27.4m loss.
Nomura chief executive to resign
n Kenichi Watanabe, the head of
Japanese bank Nomura, will resign to
take responsibility for leaks of insider
information to clients of the companys
brokerage unit, the Nikkei newspaper
reported last night. Watanabe has already
seen his pay docked by the board follow-
ing the firms third insider trading scandal
since he took the helm four years ago.
Moodys threatens German banks
n Ratings agency Moodys last night
changed its outlook on 17 German bank-
ing groups to negative because their rat-
ings incorporate support from the
German state. The change follows
Moodys decision earlier in the week to
change the outlook on German sovereign
ratings to negative from stable.
Insurer MetLife names new CFO
n MetLife, the largest life insurer in the
United States, yesterday announced it has
appointed John Hele as its chief financial
officer. Hele, who joins MetLife from Arch
Capital Group, replaces Eric Steigerwalt
who held the position on an interim basis.
DAILY Mail & General Trust (DMGT)
reported a rise in turnover yesterday
as a 69 per cent increase in online ad
revenue made up for falling print
revenues.
The owner of the Daily Mail and
more than 100 regional titles posted
a three per cent rise in revenue to
509m in the three months to July,
mainly driven by the groups busi-
ness to business operations includ-
ing its stake in financial information
publisher Euromoney.
Associated Newspapers, the divi-
sion that runs the Mail papers and
Mail Online website, saw sales rise by
one per cent as a print advertising
decline was propped up by rising
internet advertising revenue and a
four per cent jump in circulation,
attributed to the Diamond Jubilee.
Mail Online is now the most-read
newspaper website in the world, hav-
ing overtaken the New York Times
with more than 5.6m people visiting
the website daily. It became prof-
itable for the first time last quarter.
DMGT sales rise
as Mail Online
reaches a profit
BY JAMES TITCOMB
Associated Newspapers also cut 105
staff over the period, bringing total
job losses to 533 during the last nine
months.
The groups regional division,
Northcliffe Media, continued to suf-
fer as advertising revenues fell 11 per
cent year-on-year.
Shares in DMGT rose slightly yester-
day, with the news better than
expected after a fall in sales in the
last quarter.
The bulk of the companys growth
was down to a nine per cent rise in
Euromoney and a 10 per cent boost to
DMGTs events business.
HAVE YOU SEEN THE OLYMPIC
TORCH? Interviews by Keval Dhokia
Yes I saw the ame pass through our local
high street a couple of weeks ago and was
delighted to see people making the effort to get out
and wave as it passed even in the pouring rain.
These views are those of the individuals above andnot necessarily those of their company
GRANT LOWDEN
PORTWARE LLC
British American Tobacco sales

stunted by exchange rate woes
BRITISH American Tobacco (BAT)s
growth in emerging markets was
cancelled out by a strong pound, as
the cigarette maker saw a slight rise
in profits in the first half of the year.
The worlds second largest
tobacco firm, which makes Kent,
Dunhill, Lucky Strike and Pall Mall
cigarettes, said it expects continued
earnings growth in the second half
of the year as it makes inroads in
eastern Europe and Asia.
The group sold 344bn cigarettes,
flat on last year, although a price
hike saw sales remain constant
despite currency difficulties.
BY JAMES TITCOMB
Developing markets now account
for 60 per cent of BATs profits,
making it the most globally spread
of the big tobacco groups.
Revenue was 7.45bn, almost
unchanged from last year, while net
profit rose 3.2 per cent to 1.93bn.
Despite a seven per cent rise in
earnings per share, BAT dipped in
early trading, with the companys
exchange rate difficulties greater
than expected and cigarette
volumes in southern Europe down
around 10 per cent due to economic
woes and a weak euro.
Chairman Richard Burrows said:
Despite economic uncertainty and
the adverse impact of exchange
rates, BAT has delivered another
good set of results. The underlying
business continues to perform well
and we are confident of another
year of good earnings growth.
CITYVIEWS
Daily Mail and General Trust PLC
430
435
440
445
p
436.75
25Jul
THEO FENNELL, the eponymous
founder of the luxury jewellery
brand, said yesterday he remained
focused on bringing the company
back into the black this year after
reporting a pre-tax loss of 1.21m.
While sales were up nine per
cent in the first half of the year,
the company said a difficult
Christmas due to a squeeze in
consumer spending had dragged
sales down 11 per cent in the
second half of the year.
Overall, turnover amounted to
Theo Fennell plans to expand
overseas despite tough Xmas
BY KASMIRA JEFFORD
12.5m in the year to 31 March,
slightly down from last year.
The group said an in-depth
restructuring of its cost base had
helped reduce costs by 1m and it
said it is on track to significantly
reduce its losses at the half year.
The jeweller opened a store at
Bond Streets Burlington Arcade
earlier this month and it will now
focus on overseas growth, with
plans to open stores with
wholesale partners in Harvey
Nichols in Kuwait and the
Emporium department store in
Baku, Azerbaijan.
EUROPEAN newspaper group
Mecom has posted a 42m (33m)
pre-tax loss ahead of a likely break-
up of the business, a week after
announcing that chief executive
Tom Toumazis will leave.
Mecom, which owns papers in
the Netherlands, Denmark and
Poland, saw turnover fall by eight
per cent to 492m due to a 15 per
cent fall in advertising revenues in
the first half of the year.
The group announced a
strategic review last week when it
revealed that Toumazis would step
down in September.
Numis analyst Gareth Davie said
there is a high likelihood that
Mecoms Danish and Polish
operations will be sold.
Mecom rocked
by 42m loss
BY JAMES TITCOMB
16
NEWS
cityam.com
Theo Fennells eponymous founder said the group was focusing on expanding abroad
GlaxoSmithKline forced to cut
outlook as European crisis bites
GLAXOSMITHKLINE warned yester-
day that sales in 2012 would be flat
as pressure on drug prices intensi-
fies in Europe, due to government
austerity measures aimed at curb-
ing healthcare budgets.
The worsening situation in
Europe is a challenge for the UKs
biggest drugmaker, which had
previously set itself a goal of a
return to sales growth this year
after putting patent expiries and a
record-breaking mis-selling fine in
the US behind it.
Chief executive Andrew Witty
said he saw a delay in the
companys return to growth rather
than a change in the shape of its
future growth curve as it
overcomes past problems.
Its a question of timing two
or three quarters, if you will, being
muted by the macro-economic
effect of pricing in Europe, he
said.
Sales in Europe slumped eight
per cent in the quarter, reflecting
a one per cent volume decline and
an unprecedented seven per cent
fall in pricing. That year-on-year
price decline might be at its worst
point now, assuming there are no
further shock moves by
governments, Witty said.
Overall turnover was down four
per cent from the same period a
year ago at 6.46bn, generating
core earnings per share (EPS) down
five per cent at 26.4p.
GSK is taking further action to
reduce costs in the face of the
tough environment and said it
expected new manufacturing
process improvements to generate
annual cost savings of around
500m by the end of 2015.
No and I also think it is a pointless exercise
to send the ame around the St. Pauls
area, which is a business district, adding to an
already hot and congested City of London!
DORIAN
TRANQUILLE-DAY
ERNST & YOUNG
I have not seen it yet but I have followed

the progress of the route. I think it is a
great tradition that does much to garner communal
spirit at a time when people need togetherness.
DAVID PURCELL
BARCLAYS
British American Tobacco PLC

3,250
3,300
3,350
3,400
3,450 p
3,280.50
25Jul
IBERDROLA posted a two per cent
rise in first-half core profit yesterday
thanks to diversification away from
its energy business in Spain into new
markets like Brazil, the US and
Britain.
Its underlying earnings before
interest, taxes, depreciation and
amortisation reached 4.1bn
(3.2bn), driven by a 12.2 per cent
rise in its renewables business.
The companys chairman Ignacio
Galan also reiterated that Iberdrola
is considering buying back the
shares held by state-rescued lender
Bankia, which controls 5.3 per cent
of the firm.
New markets
help Iberdrola
AFRICA-FOCUSED Tullow Oil is set-
ting its sights on boosting production
at its Jubilee field in Ghana and suc-
cess from a busy drilling programme,
putting to use $2.9bn (1.8bn) of
funds from partners which bought
into its Uganda project.
Reporting a 48 per cent increase in
first-half pre-tax profit to $829m and
an unchanged dividend of 4p a share,
the company yesterday confirmed a
target set earlier this month to bring
output at the Jubilee field up to
90,000 barrels a day by the end of the
year. It said its financial flexibility had
been fundamentally transformed
by bringing international oil compa-
nies Total and CNOOC into its produc-
tion and export pipeline project in
Ugandas Lake Albert Rift Basin.
First oil from the Uganda project is
still more than three years away,
Tullow said, predicting a total project
cost of between $8bn and $12bn, and
saying the partners and the Ugandan
government were still reviewing the
Tullow will use
Ugandan funds
to boost output
BY HARRY BANKS plans, along with the governments
own proposal for a refinery.
The operators have shared these
development plans with the govern-
ment and are now about to embark on
a joint detailed review of this plan,
Tullow said.
The government of Uganda is in the
process of establishing a multi-discipli-
nary and cross-ministerial committee
to oversee the review of these develop-
ment plans. Following government
approval of the plans, it is expected
that first production will follow
around 36 months later.
Providence reveals more
oil off the coast of Ireland
DUBLIN-BASED oil explorer
Providence Resources yesterday
said estimates of oil found off the
coast of southern Ireland have
more than trebled, slightly higher
than analysts had expected, as it
eyes investment from larger
players.
Providence said oil in place at
the wells stood in a range of 1bn
to 1.6bn barrels of oil, against a
range of 373m to 893m in
previous estimates provided by
third-party specialists.
Providence will have to partner
with a larger player at some stage
to fund further developments at
Barryroe, one of its six drilling
programmes.
Putting out this new oil in
place figure... is really the starting
point for future discussions, chief
executive Tony OReilly said.
By the end of the year well be
actively going out into the market,
if the market hasnt already come
to us, he said, citing Premier Oil's
$1bn deal with Rockhopper a
fortnight ago as encouraging.
Tullow chief executive Aidan Heavey announced a 48 per cent rise in pre-tax profit
Tullow Oil PLC
1,500
1,450
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1,350
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p
1,284.00
25Jul
17
NEWS
cityam.com
COOKSON Group said yesterday its
first-half profit was dragged down
by a loss at its fused silica business,
and that it expected demand from
the steel industry to soften as a
result of slowing industrial
production, particularly in Europe.
Cookson, which receives about
half of its revenue from supplying
ceramic products to the steel and
foundry casting markets, expects
these industries to be weaker in the
second half as steel demand takes a
hit from weaker economic growth
in China and Europes protracted
debt woes.
There have been more recent
Cookson plummets as profits
are pulled down by silica arm
signs of general weakening in the
global economy and slowing
industrial production, most
notably in Europe, the company
said.
Cookson said pre-tax profit for
the first half fell to 127.6m,
excluding certain items, from
132.1m a year earlier. The fused
silica business posted a loss of
5m. Revenue fell four per cent
on an underlying basis to 1.3bn.
Cookson also said it expected
to update shareholders about its
ongoing strategic review before
the end of this year.
Shares in Cookson closed down
more than 10 per cent yesterday,
extending recent losses.
18
cityam.com
Tullow Oil
Anne Drinkwater has been
appointed non-executive
director at the oil and gas
exploration group. She joins
after a long career at BP, where
she was most recently president
and chief executive of BP
Canada.
Akbank
Josef Ackermann has been appointed to the international
advisory board of the Turkish bank. He will work alongside
Lord Nicholas Stern. Ackermann is also currently chairman
of Zurich Insurance Group.
RBC Wealth Management
Simon Smales and Sean Costello have been appointed as
directors in the UK private client wealth management team
at Royal Bank of Canada. Smales joins after 11 years at HSBC
Private Bank, where he was director responsible for UK
clients. Costello joins from Barclays, where he was vice
president in its ultra high net worth and family office.
Axway
The business network software company has appointed
Dave Robinson as senior vice president for sales, northern
Europe, Middle East and Africa. He is a former senior vice
president for sales and marketing at Sterling Commerce,
which is now part of IBM.
Linklaters
The law firm has appointed Charles-Antoine Leunen as a
partner in its Belgian banking and capital markets practice.
He joins from Freshfields Bruckhaus Deringer, where he was
a partner in its finance and corporate group.
Heartwood
Sapna Kandukuri has been appointed as a marketing
manager at the investment and wealth management firm.
She joins from Coutts, where she was responsible for rolling
out positions for its entrepreneur and female clients.
LONDONREPORT
Rare miss by
Apple pushes
Nasdaq lower
T
HE S&P 500 fell for a fourth day
and the Nasdaq dropped
yesterday after a rare earnings
stumble from Apple, while
strong results from Boeing and
Caterpillar lifted the Dow.
Apple, the most valuable US
company by market capitalisation,
reported sales late on Tuesday that
fell short of Wall Streets
expectations as the European
economy sagged and consumers held
off buying iPhones before a new
version expected in the autumn.
Shares fell 4.3 per cent to $574.97.
Without Apples losses, the S&P
would have ended higher.
The price-weighted Dow industrials
managed gains thanks to Caterpillar
and Boeing. Caterpillar rose 1.4 pe
rcent to $82.60 after its quarterly
profit easily beat Wall Streets
expectations.
Hope that the Federal Reserve will
act soon to provide more stimulus to
the economy also supported stocks. A
report in The Wall Street Journal on
Tuesday said Fed officials may be
moving clos er to taking more steps
to aid the flagging economy.
Because of those expectations
bank stocks are performing
relatively well, said Thomas
Villalta, portfolio manager for Jones
Villalta Asset Management in
Austin, Texas.
The Dow Jones industrial average
rose 58.73 points, or 0.47 per cent,
at 12,676.05. The Standard & Poors
500 Index was down 0.42 point, or
0.03 percent, at 1,337.89. The Nasdaq
Composite Index was down 8.75
points, or 0.31 per cent, at 2,854.24.
Boeing also helped the Dow when
it reported a larger-than-expected
increase in second-quarter profit
and raised its full-year earnings.
B
RITAINS top share index steadied
yesterday, pausing after three days
of falls thanks to a mixed batch of
corporate results that pitted a
weak showing in Europe for
GlaxoSmithKline and BT against a
sterling performance for chipmaker
Arm.
The international backdrop also offered
conflicting signals, with weak US data on
the one hand and growing hopes of fresh
steps to combat the Eurozone crisis on the
other.
At the close, the FTSE 100 index was
broadly flat at 5,498.32 points, taking a
breather after a three-session losing
streak. Volume was once again weak, at
two-thirds of its 90-day daily average.
GlaxoSmithKline, down 1.3 per cent,
was the biggest drag on the index, as the
group warned that sales in 2012 will be
flat and posted below-forecast second-
quarter results due to weakness in the
European markets.
A lacklustre showing in crisis-hit Europe
also hurt performance at telecom group
BT, down 3.3 per cent as its quarterly
results came in below analysts' forecasts.
Results were not always the top focus,
though. Tullow Oil shed 6.3 per cent in
heavy volumes, as investors focused on
risks and costs associated with its pro-
posed Uganda development, shrugging
off an in-line rise in first half profits.
On the upside, ARM Holdings, up 8.6
per cent, was the top gainer trading in
high volume of almost twice its 90-day
daily average, with the chip designer's
results beating market expectations as
demand for its low power chips in smart-
phones and tablets outstripped the indus-
try. Banks were also among the gainers.
FTSE ends flat as patchy earnings
steal focus away from Eurozone
BESTof theBROKERS
Julius Baer Gruppe AG
35.80
35.60
35.40
35.20
35.00
34.80
34.60
34.40
CHF
35.26
25Jul
JULIUS BAER
UBS has downgraded the
Swiss bank from buy to
neutral with a target
price of SwFr36 after
decent first half results,
and lifted its earnings per
share forecast by five per
cent for 2012.
DASHBOARD CITY
NEW YORK
REPORT
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
FTSE
5,550
5,500
5,600
5,650
5,700
5,750
5,498.32
25Jul
Lancashire Holdings Ltd
770
765
760
775
780
785
790 p
783.00
25Jul
LANCASHIRE
HOLDINGS
Numis has moved the
insurer from hold to
add after second quarter
profits came in ahead of
expectations, despite a
further charge of $25m for
Costa Concordia.
CSR PLC
290
285
295
300
305
310 p
308.10
25Jul
CSR
Liberum Capital has
increased its target price
on the semiconductor
firm from 3.15 to 4
following the sale of its
handset business to
Samsung, saying the dal
has transformed the
business.
WHOS SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
in association with
PLANE-MAKING giant
Boeing weathered cuts in
US defence spending and
higher pension costs as it
said yesterday that rev-
enue rose 21 per cent and
quarterly profits were up
three per cent.
Commercial unit sales
that rose 34 per cent to
$11.8bn and defence sales
that rose seven per cent
buoyed profits as pension
costs rocketed 52 per
cent to $593m. Boeing
delivered a massive 150
commercial planes com-
pared to 118 this time
last year.
Boeing
revenues up
US corporate results round-up
OIL and gas producer
ConocoPhillips report-
ed a 32 per cent decline
in second quarter prof-
it yesterday, hit by
lower energy prices
and a drop in oil and
gas output.
Output fell for the
quarter to 1.54m barrels
of oil equivalent (BOE) a
day from 1.64m BOE a
day a year ago, bringing
profit down to $2.3bn
from $3.4bn a year earli-
er.Conoco said it would
spend $16bn this year, up
from an earlier projec-
tion of $15bn.
Conoco
profits drop
C
o
n
o
c
o
P
h
i
l
l
i
p
s
WEB services firm
AOLs profits swung into
positive territory this
quarter to $970.8m fol-
lowing net losses of
$11.8m this quarter last
year, it said yesterday.
Earnings were swung
up by the sale of 800
patents to Microsoft in
April this year, bringing
gross operating income
growth for the first time
in four years. Ad revenue
also grew six per cent but
the firm remains plagued
by a lack of traction in its
key display advertising
business.
AOL back
in the black
CAR manufacturer
Ford reported a better
than expected second
quarter profit yesterday,
but doubled its forecast
for losses in Europe to
$1bn.
The deepening eco-
nomic crisis that has
pushed overall auto sales
to their lowest level in
nearly 20 years pulled
quarterly revenue at the
firm down 6.2 per cent.
Second-quarter net
income was $1bn, or 26
cents per share, down
from $2.4bn, or 59 cents
per share, a year ago.
Ford beats
forecasts
DRINKS MAKER Pepsi
reported quarterly rev-
enues of $16.5bn yester-
day as its performance
indicators fell in line with
full-year growth targets.
Net income fell to
$1.49bn from the $1.89bn
of last year due to the loss
of revenue from its sale of
bottling operations in
China and Mexico.
The company said it
sees 2012 as a transition
year as it ramps up its
marketing campaigns
and cuts thousands of
jobs in an effort to bol-
ster performance.
US AIRWAYS yesterday
cited strong passenger
demand as the driver of
the highest quarterly
profit in company histo-
ry in the second quarter.
Operating revenue rose
seven per cent to $3.75bn
outpacing a rise of just
0.7 per cent in total oper-
ating expenses as tax
costs fell four per cent.
Meanwhile Delta report-
ed a net loss after it took
charges for fuel hedge
contracts and staff buy-
outs, but said it expected
a profit for the third
quarter.
Pepsi on
track for 2012
US Airways
hits a record
Edited by Keval Dhokia
M
ITT Romneys overseas
schedule this week is not
just about creating the
optics of a statesman. In
Britain, Poland and Israel,
the Republican presidential
nominee will seek to showcase what
he says is the damage caused by
Barack Obama to Americas
principles and three of her most
important strategic allies.
As a marked contrast to the last
occasion a President sought re-
election, foreign affairs and
national security have largely taken
a peripheral role in 2012. Just 3 per
cent of voters cite foreign affairs as
the most important matter facing
the nation. But Romneys visit
certainly has a domestic play.
T
HE statisticians will be arguing
about the last quarters growth
figures for years. Was it really a
0.7 per cent fall in national
income, a 0.9 per cent fall or a
0.5 per cent fall? If it were not for the
soggy weather and extra Bank
Holidays, might we have managed just
a 0.2 per cent fall? These issues are, by
and large, irrelevant. The big question
is whether stagnation has become the
new normal. My fear is that it has.
Ironically, on the face of it, we seem
to have a well-functioning labour mar-
ket. The private sector is creating jobs
faster than the public sector is shed-
ding them. Also, real wages are falling
so we are not falling into the trap that
Keynes described of rigid wages pre-
venting economic adjustment.
But the labour market is responding
well to a dire situation. Real wages are
falling because productivity is falling.
Falling productivity plus stable employ-
ment equals economic stagnation.
We cannot get out of this position by
deficit financing or more government
spending. The government is already
borrowing over 8 per cent of national
in association with category sponsors venue sponsor champagne reception sponsor
City A.M. Awards 2012
Wednesday 17 October
Grange St. Pauls Hotel, London.
Visit: www.cityamawards.com to book your place.
cityam.com/forum
Tax increases have
served to undermine
our economic growth
and productivity
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
20
PHILIP BOOTH
Stagnation Britain: Osborne has
played his hand extremely badly
income. There is no hole in aggregate
demand caused by a lack of govern-
ment borrowing. The government is
also already spending around 50 per
cent of national income.
And this is the first part of the
growth puzzle. Evidence suggests that
a ten per cent increase in government
spending as a proportion of national
income reduces the growth rate by
about 1 per cent per annum. If we
could add 1 per cent to the growth
rates we have been achieving recently,
there would have been a quite differ-
ent growth trajectory though not
transformational. We need to look fur-
ther.
The government did have a very bad
inheritance. Nevertheless, George
Osborne is responsible for playing his
hand badly. Rule number one in the
fiscal consolidation handbook is that a
government should not raise taxes by a
huge amount and then over a period
of many years reduce government
spending to sustainable levels.
Spending cuts should come first. The
private sector of the economy is proba-
bly incapable of supporting current
levels of government spending and so
tax increases have been futile. They
have raised little extra revenue but
serve to undermine economic growth
and productivity.
The government may feel it is
plagued with bad luck. The current
government was neither the cause of
the financial crash nor of the cata-
strophic state of the public finances. In
addition, there is no question that
Eurozone uncertainty is providing a
brake on private sector investment.
But, the key to success in any walk of
life is playing a bad hand well.
Whether you are a government with a
rotten inheritance or a football manag-
er with a horrendous injury list, how
you perform when you are up against
the wall is crucial. Just as the govern-
ment has no excuse for its back-to-front
approach to dealing with public
finances, it has no excuse for increas-
ing regulation.
The coalition chose to impose new
burdens on employers by increasing
the minimum wage; extending the
minimum wage to younger people and
apprentices; immediately imposing
the EU temporary workers directive;
bringing in pensions auto-enrolment
and compulsory employer contribu-
tions; and so on. There is some sign
that the government realises the
errors of its ways with regard to
employment regulation, but it has a
lot of work to do.
The government is especially ham-
pering the financial sector with more
and more regulation. Whatever ones
view on the long-term regulatory envi-
ronment for banks and other financial
institutions, the timing is woeful.
In addition, the energy sector is con-
strained by the governments incoher-
ent green policies. The UK government
seems determined to get the mini-
mum possible reduction in carbon
dioxide emissions for the maximum
possible cost.
A recent article by the Bank of
England highlighted the financial and
energy sectors as the two sectors where
productivity performance is especially
poor. It is no surprise.
Current policy is a recipe for stagna-
tion. In one area alone land-use plan-
ning the government is moving
tentatively in the right direction. But,
there is simply no possibility of rising
growth and real incomes without a
smaller state. It must be smaller in
terms of how much it spends and
smaller in terms of the way in which it
regulates the private sector.
Philip Booth is editorial and programme
director at the Institute of Economic Affairs.
Obamas uneasy relationship with
Israel, culminating in Israeli Prime
Minister Benjamin Netanyahu
lecturing the President in the White
House, has been partly attributed to
the loss of a Democratic
Congressional seat in New York and
plummeting support amongst
Jewish voters. Few are predicting a
massive shift of Jewish voters to the
Republican Party. But only a small
one might be needed.
After growing much closer to the
US under the Bush administration,
the Poles feel largely abandoned by
Obama over the cancellation of a US
missile defence shield in Eastern
Europe. The President dubbing
Auschwitz a Polish death camp
did little to close the diplomatic
fissure. The US-Polish alliance
endears itself to the American sense
of fair play a support for the
underdog, perennially harassed by
the Russian bear. One Republican
political operative noted how ever
since Nixon lost to Kennedy, we
have been looking to find a way to
mobilise the millions of Polish-
Americans as an electoral asset. The
fact that a lot of them are faith
voters and based in battleground
states makes this an important visit
for Romney. A domestic Polish
play? It looks likely.
Whereas Britain certainly feels a
little burned by Obama, Romneys
visit to London is just as much
about raising campaign funds at
two events this evening as it is
about assuaging the concerns of an
ally. Both the President and Romney
have brought in approximately $5m
(3.2m) from Americans overseas
and, with the Obama campaign
spending $12m more than it took in
last month, fundraising will only
become more aggressive. In
addition, with London being the
site for the Olympics, its also an
opportunity for Romney to remind
voters of the integral role he played
in turning around the Winter
Games in Salt Lake City. Democrats
have already produced Olympic-
themed attacks.
Although Romneys visit certainly
makes for a political opportunity, it
bears some risk. Romneys message
will have to stress the crucial roles
played by Americas allies rather
than just the shortcomings of
Obama. Americans hold a deep
aversion to their fellow countrymen
going overseas and criticising any
President. Even amid fierce partisan
bickering, politics is still expected to
stop at the waters edge.
Ewan Watt is a Washington, DC-based
consultant. You can follow him on
@ewancwatt
THE WHITE
HOUSE RACE
EWAN WATT
Romneys trip to Europe draws attention to Obamas diplomatic blunders
General enquires: 020 8267 4043 | jo.pead@cityamawards.com
21
Green fiasco
[Re: UK energy policies are sabotaging
industrys global competitiveness, Tuesday]
Tony Lodge gets right to the core of why we
cant climb out of recession. The Climate
Change Act, passed as the economy tipped
off a cliff, stands as one of the greatest acts
of stupidity in living memory. Britain wont
grow if its latched to policies that make it
exorbitantly expensive to produce anything.
Paul Hannah
What is not mentioned in this article is the
fact that, by pushing energy-intensive
production overseas, we arent ending
carbon emissions. Were simply forcing
them elsewhere to places with less
concern for the physical environment.
SamField
Crisis management
[Re: Manufacturing output to drop during
2012 on trade problems, Monday]
UK manufacturers are facing a challenging
time, but many could do more to ensure
their businesses can cope with global
economic crises. Zurich research shows that
most fail to implement basic safeguards to
prevent disruptions to their supply chains.
UK manufacturers are at the mercy of global
economic crises, but neglecting simple,
fundamental measures means they increase
the severity of disruptions and the
subsequent impact on their bottom line. UK
manufacturers can help themselves. They
should map out their key suppliers and plan
ahead to avoid unnecessary cost burdens.
DavidCarey, headof corporateinsuranceat
ZurichInsurance
B
Y THE time you read this, I
will have been to see a play,
The Doctors Dilemma. To
enter into the atmosphere,
Ill have to embrace a willing
suspension of disbelief. Inevitably,
the fiction of the play will conflict
with the reality of what I know or,
more precisely, of what I think I
know but a little mental agility
should allow me to submerse myself
in the story. But, to be honest, many
plays test beyond reasonableness my
willingness to do this.
Moving onto rather more prosaic
matters, what we seem to know
about the economy is that it has been
shrinking. Factual support for this
comes from the GDP data. With the
publication of the dire numbers for
the three months to June 2012, the
Office for National Statistics (ONS) is
suggesting that output contracted
for three consecutive quarters.
We tend to be more convinced by
the seemingly hard facts that are rep-
resented by trends in economic out-
put than by some of the softer
economic numbers, such as employ-
ment. This is understandable, per-
haps, as economic output would
appear to be the bottom line. But
most data are collected by survey,
and most are subject to revision. Look
back at GDP data during the first
decade of this century, for instance.
The average revision to the first-pub-
lished quarterly estimate of the year-
on-year growth rate has been +0.4 per
cent. The reliability of first-published
growth estimates should be severely
questioned.
Another angle to current economic
developments is provided by labour
market data. Think about the impli-
cations of the following:
employment in the private sector
rose by 254,000 (during the final
quarter of 2011 and the first quarter
of 2012);
TOP TWEETS
The real surprise about the GDP figures is
that we accept them as fact. Their credibility
should be under review.
@suttongers
The worse thing to come out of the GDP
figures is Ed Balls proclaiming hes right
just because George Osborne is failing.
@FractalEcho
A 0.7 per cent contraction is bad, but
London still seems bullish. If thats true, then
the rest of the UK must be terrible.
@John_Drover
I wonder why the Border Force is not under
the same no-strike rules as the police. Still,
calling off the strike is good news.
@cogitodexter
As Britain falls further in recession, does
the Treasury need a change of direction?
YES
With yesterdays news that the economy shrunk by 0.7 per cent in
the last quarter, George Osbornes economic credibility is waning.
But not for the reasons produced by Ed Balls. Austerity hasnt
failed because it hasnt been tried. State spending has risen during
this Parliament. The chancellor oversold a small cuts package as a
large one, and assumed that private sector growth would come
without deregulation or tax cuts. This approach has failed. What is
needed is a change in mindset in favour of radical cuts to business
regulation. The government should liberalise employment
regulation, radically reform planning law to allow more homes to be
built, and scrap employers national insurance contributions to
reduce the costs of employment. To allow the private sector to grow,
government spending, taxes and regulation all need to be cut. Give
austerity a chance.
Sam Bowman is head of research at the Adam Smith Institute.
Sam Bowman
NO
Sam Gyimah
To get our economy back on track, businesses must have confidence
to take bold decisions. Disappointing GDP figures, together with the
ongoing Eurozone crisis, risk undermining fragile confidence. But
gloom that leads to extreme caution is the last thing our economy
needs. The latest employment figures are positive (total employment
is up 180,000 in the last quarter) and the deficit has already been cut
by 25 per cent. Like the vast majority of economic statistics, GDP
figures are based on survey data. That is why we shouldnt get too
carried away. Labour may like to play Cassandra and talk down our
economic prospects, but the reality is that businesses are sitting on
record amounts of cash that could be invested. By making it easier for
infrastructure projects to go ahead and improving access to credit,
the government is helping get money into the economy. That is the
right approach, and the only way out of this economic mess.
Sam Gyimah is Conservative MP for East Surrey.
RAPIDresponses
the employment rate for all peo-
ple over the age of 16 edged up from
57.8 per cent at the end of the third
quarter of last year to 58.1 per cent in
the three months ended May;
the number of private sector job
vacancies seems to have been stable
at around 370,000 since September;
total hours worked in the UK rose
2.6 per cent between the three
months to September 2011 and the
three months to May 2012 (hours
worked per person increased 1.6 per
cent over the period);
the total domestic expenditure
increased 0.4 per cent in the fourth
quarter of 2011 compared to the
third and rose another 0.7 per cent in
the first quarter of 2012; and,
market sector productivity is esti-
mated by the ONS to have dropped
1.1 per cent in both the final quarter
of last year and the opening quarter
of this year.
If you only had access to the num-
bers above (excluding those for pro-
ductivity), what conclusions about
the state of the economy would you
draw? Almost certainly, you would
surmise that the economy is growing
gently, but consistently.
One set of numbers never tells the
full story. You have to look at the
whole range of published data (and
even then, the mists of uncertainty
can be quite dense). So, should I sus-
pend disbelief, or should I jump to
my feet and rebuff the story being
told by ONS statisticians?
Richard Jeffrey is chief investment officer
at Cazenove Capital.
RICHARD JEFFREY
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The Forum is open for you to take part. Got a sharp comment on
one of todays columns? Do you have another subject you want
to share your opinion on? We want to hear your views.
Email theforum@cityam.com or comment at cityam.com/forum
Be mistrustful of
the ONS data on
economic growth
cityam.com
22
LIFE&STYLE
WORDS BY
STEVE DINNEEN
BLUE SKiPHONE THINKING
SOME iPHONE 5 DESIGNS WED LOVE TO SEE
The ultra-slim iPhone
This beautiful concept by Antonio De Rosa of ADR Studio
looks like a conceivable iPhone of the future (although
not one slated for a September launch). It even comes in a
variety of colours. adr-studio.it
The wearable iPhone
This bizarre device is a kind of clip-on iPhone designed
by Federico Ciccarese at CiccareseDesign. It looks like it
might get a bit uncomfortable after a while but youre
certainly not going to drop it. ciccaresedesign.com
The transparent screen
This incredible concept phone was created by US teen
whizz-kid Dakota Adney. Images are beamed onto the
phones transparent screen. It isnt very practical but it is
very cool.
TECHNOLOGY
Heres what you could have won
As the new iPhone draws closer, we speculate about what it may hold in store, and what we wish it would
nLARGER SCREEN
The iPhone 5 is expected to break ranks
and deliver a bigger screen: something
Apple has resisted. The screen is now
expected to be between 4 and 4.5 inches,
a considerable increase on the current 3.5
inches. This will move the iPhone 5 closer
to rivals like the Samsung Galaxy S3, with
its 4.8 inch screen.
nNANO SIM
As Apple scours the innards of the iPhone
to try and find more space, it looks like its
sim cards could once again be getting the
chop. The iPhone 4 already shrunk the
sim size by half to create the micro sim.
Now we are expecting the first nano
sim. Switching sim sizes is fairly painless
so dont worry about the change over.
A
pple has said the feverish rumour mill surrounding the
impending launch of its next iPhone has dented the
growth in sales of its current product, with customers
holding off for the next generation. So what exactly has
got consumers in such a spin? We take a look at some of the
gossip surrounding Apples next big thing, and some excellent
unofficial concept designs.
nNFC
Another likely addition to the iPhone
arsenal is Near Field Communication. This
essentially means youll be able to pay for
stuff by swiping your phone at the till
instead of putting your card and PIN into
the reader. Apple was believed to be
waiting for the technology to grow in
popularity before backing it.
nNEW CONNECTOR
This change is almost certain. The 30 pin
connector that has come with all previous
iterations of the phone will be ditched in
favour of something much smaller, in order
to free-up space inside for the new
hardware. This is bad news for anyone with
a speaker dock, as they will probably have
to buy an adaptor.
n4G CAPABILITY
This is a racing certainty. The iPhone 4S
was criticised for not being compatible
with the superfast mobile broadband
network and Apple isnt going to keep its
fans waiting any longer. Of course, this
wont make much difference in the UK,
where the 4G auction has once again
been delayed. At least it will be there
when we finally catch up.
nNEW CASE
As part of an expected design overhaul, the
new iPhone 5 is heavily rumoured to come with
a liquidmetal case the same ultra-durable,
ultra-light material used to make golf clubs. It
is very resistant to corrosion and is also very
flexible. Apple already uses the material for its
SIM ejector tools and a larger adoption is within
the realms of possibility.
nTHINNER
Apple wont sacrifice functionality in the
quest for thinness its latest iPad is actually
thicker than the one before it. But every
rumour points to a reduction in the depth of
the device. The battle will be finding space
for a bigger battery to support all the extra
hardware. The smaller sim and connector
will go some way to achieve this.
Goggle-phone
OK, so this one isnt actually a design for an iPhone, its a
concept design by Ciccarese for Googles augmented reali-
ty hardware. With a bit of tweaking, though, this could be
an awesome iPhone concept. ciccaresedesign.com
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1
TBR Report "IBM System x
x86 servers: Meeting the demands of todays enterprises by combining value and support," January 2012.
2
Source: Intel
Performance comparison using SPECfp*_rate_base2006 benchmark. Baseline score of 267 on prior generation 2S Intel
Xeon
processor X5690 (3.46GHz, 6-core, 12MB L3, 6.4 GT/s, 130W)

based platform published at www.spec.org as of 6 Sept 2011. Estimated new score of 486 on 2S Intel
Xeon
processor E5-2690 (2.90GHz, 8-core, 20MB L3, 8.0 GT/s, 135W) is based on Intel
internal
measured estimates as of 6 Sept 2011 using two Intel
Xeon
processor E5-2690, Turbo Enabled, EIST Enabled, Hyper-Threading Enabled, 64GB memory (8x8GB DDR3-1600), Red Hat
Enterprise Linux Server

6.1 beta for x86_6, Intel
Compiler 12.1.
3
x3500 M4 supports up to 768GB of memory using 32GB LRDIMMs in its 24 memory slots. Previous generation x3500 M3 supports up to 192GB of memory.
4
Ships with 4 1Gb Ethernet ports standard and supports integrated slot-less 10Gb Ethernet with Virtual Fabric. Previous generation server includes two 1Gb Ethernet slots and requires use of a PCI Express slot
to support 10Gb Ethernet.
5
x3500 M4 supports up to 32 internal 2.5" HDD. Previous generation x3500 M3 supports up to twenty four 2.5" HDD.
6
Quarterly price quoted is based on IBMs 0% System x Solution Finance offering (FMV lease). Terms & Conditions Apply: Offering availability subject to credit approval; for more details and full Terms and
Conditions please visit: http://www.ibm.com/financing/uk/lifecycle/acquire/xsolutionfinancing.html.
Rates and offerings are subject to change, extension or withdrawal without notice. Prices include VAT at a rate of 20%.
IBM hardware products are manufactured from new parts or new and serviceable used parts. Regardless, our warranty terms apply. For a copy of applicable product warranties, visit
http://www.ibm.com/servers/support/machine_warranties. IBM makes no representation or warranty regarding third-party products or services. IBM, the IBM logo, System Storage and System x are registered
trademarks of International Business Machines Corporation registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. For a current list of IBM
trademarks, see www.ibm.com/legal/copytrade.shtml. Intel, the Intel logo, Xeon and Xeon Inside are trademarks of Intel Corporation in the U.S. and other countries. All prices and savings estimates are subject
to change without notice, may vary according to configuration, are based upon IBMs estimated retail selling prices as of 01/04/2012 and may not include storage, hard drive, operating system or other features.
Reseller prices and savings to end users may vary. Products are subject to availability. This document was developed for offerings in the United Kingdom. IBM may not offer the products, features, or services
discussed in this document in other countries. Contact your IBM representative or IBM Business Partner for the most current pricing in your geographic area. 2012 IBM Corporation. All rights reserved.
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Intel
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RAID disk controller
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External disk storage with 6Gb/s Serial Attach SCSI (SAS)
interface technology
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Support for 96 drives with combination of EXP3512 or
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Field upgradeable with FC or ISCSI host interface cards
Self encrypting drive options available for secure data at rest
DS3512 also available with 3.5" drive support
life
Living the
These bracelet charms are the ideal gift, says Steve Dinneen
24
cityam.com
LIFE&STYLE FASHION
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FOR FURTHER I NFORMATI ON VI SI T THEROYALEXCHANGE.COM
Pandora Union Jack London Bus charm 40
pandora.net
Pandora Murano glass charm
40 pandora.net
Pandora British Rose charm 40
pandora.net (6 goes to ABF The Soldiers Charity)
Links 18ct Rose Gold Thumbprint Star Charm
310 linksoflondon.com
Old Bond Street W1 charm
120 tiffany.co.uk
Pink Piggy bracelet charm
205 tiffany.co.uk
Wimbledon Hat Charm
48 linksoflondon.com
Retro convertible charm
205 tiffany.co.uk
25
TV & GAMES
cityam.com
T
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BBC1
SKY SPORTS 1
7pmLive Darts 12amRingside
1amSporting Greats 2am-6am
Darts
SKY SPORTS 2
7pmIAAF Athletix 7.30pm
Daring to Dream8pmSporting
Greats 9pmRingside 10pm
WWE: Late Night Raw12am
WWE: NXT 1amTime of Our
Lives 2amDaring to Dream
2.30amNRL Fulltime 3amSuper
Leagues Supermen 4amIAAF
Athletix 5am-5.30amDaring to
Dream
SKY SPORTS 3
7pmSuper Leagues Supermen
8pmLive PGA Tour Golf 11pm
Golf 1.30am-4.30amPGA Tour
Golf
BRITISH EUROSPORT
12pmLive Olympic Football
10pmOlympic Games: Together
to London 10.30pmOlympic
Football 11.30pmOlympic
Games: Together to London
12am-12.30amCountdown to
London 2012
ESPN
7pmESPN Kicks: Extra 7.15pm
Live Premiership Rugby Sevens
Series 10.15pmI Won Gold
10.30pmOlympia 11.30pmPress
Pass 2012 12amFootball 1.30am
Live American Football
4.30am-6amWorld Series by
Renault
SKY LIVING
7pmCriminal Minds 8pmTeen
Wolf 9pmFour Weddings US
10pmCriminal Minds 11pm
Greys Anatomy 12amBones
1amCriminal Minds 1.50am
Supernatural 2.40amMedium
3.30amBones 4.20am
Americas Next Top Model
5.10am-6amPassport Patrol
BBC THREE
7pmTop Gear USA 8.30pm
Snog, Marry, Avoid? 9pmFILM
Adventureland 2009. 10.40pm
Family Guy 11.25pmAmerican
Dad! 12.10amCan Anyone Beat
Bolt? 1.10amOlympics Most
Amazing Moments 3.10amCan
Anyone Beat Bolt? 4.10amGreat
Movie Mistakes 2011: Not in 3D
4.15amCherry Healey: How to
Get a Life 5.15amThe Real
Hustle: Celebrity Chancers
5.45am-6.45amTotal Wipeout
E4
7pmHollyoaks 7.30pmHow I
Met Your Mother 8pmThe Big
Bang Theory 8.30pmHow I Met
Your Mother 9pm2 Broke Girls
9.30pmNew Girl 10pmThe
Midnight Beast 10.30pm
Facejacker 11pm8 Out of 10
Cats: Uncut 11.55pmThe Big
Bang Theory 12.50am Scrubs
1.25amHow I Met Your Mother
1.50am Rules of Engagement
2.15amDesperate Housewives
2.55am90210 3.40amGreek
4.20am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmIce Road Truckers
9pmAx Men 10pmStorage
Wars 11.30pmPawn Stars 12am
American Pickers 1amStorage
Wars 2amIce Road Truckers
3amSwamp People 4amThe
Last Days of World War Two
5amPawn Stars 5.30am-6am
American Restoration
DISCOVERY
7pmAmerican Guns 8pmGold
Rush 9pmHow the Universe
Works 10pmSport Under Threat
11pmDeadliest Catch 12amHow
the Universe Works 1amAuction
Hunters 2amAuction Kings 3am
American Chopper 3.50am
Flying Wild Alaska 4.40amBear
Grylls: Born Survivor
5.30am-6amDestroyed in
Seconds
DISCOVERY HOME &
HEALTH
8pmI Didnt Know I Was
Pregnant 9pmUntold Stories of
the ER 10pmObese and
Expecting 11pmSecretly
Pregnant 12amUntold Stories of
the ER 1amObese and Expecting
2amSecretly Pregnant 3am
Wife Swap 4amBirth Stories
5am-6amSpecial Delivery: Baby
ER
SKY1
7pmThe Simpsons 8pmSinbad:
Adventure, starring Elliot Knight.
9pmMount Pleasant 10pmBrit
Cops: War on Crime 12amUK
Border Force 1.55amDom Jolys
Happy Hour 2.55amThe Chicago
Code 3.45amIts Me or the Dog
4.35amAirline 5.05am-6am
Sell Me the Answer
BBC2 ITV1 CHANNEL4 CHANNEL5
S
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6pmBBC News
6.30pmBBC London News
7pmCHOICE Olympics 2012
10pmBBC News
10.25pmRegional News
10.35pmAbsolutely Fabulous
11.05pmA Question of Sport
Olympic Special
11.35pmFILMMillions:
Comedy drama, starring Alex
Etel. 2004.
1.10am Holiday Weatherview
1.15amSign Zone: Bert and Dickie.
Fact-based OIympic rowing drama,
starring Matt Smith. 2.45amSign
Zone: Countryfile 3.35amSign
Zone: Britains Heritage Heroes
4.05am-6amBBC News
2.30pmOlympics 2012: Spain
v Japan (Kick-off 2.45pm) and
United Arab Emirates v
Uruguay (Kick-off 5.00pm).
7pmCoast
8pmNatural World: Tiger
Island
9pmThe Night Watch
10.30pmNewsnight: Weather
11.20pmFILMA Running
Jump: Short comedy, starring
Eddie Marsan. 2012.
11.55pmEngineering Giants:
Gas Rig Strip-Down
12.55amThe Culture Show
1.25amBBC News 4.05am-6am
Close
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmWhat Are Your Kids
Up To?: Tonight
8pmEmmerdale
8.30pmCoronation Street
9pmCHOICE The Big Sports
Quiz Boys v Girls
10pmITV News at Ten 10.30pm
London News 10.35pmThe Talent
Show Story 11.35pmBritains
Greatest Gold Medallists 12.30am
Jackpot247; ITV News Headlines
3amWhat Are Your Kids Up
To?: Tonight 3.25amITV
Nightscreen 4.35am-5.30am
The Jeremy Kyle Show
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pm4thought.tv 8pmThe
Churchills 9pmObsessive
Compulsive Hoarder: The Big Clear
Out 10pm24 Hours in A&E
11.05pmUndercover Boss
12.05amRandom Acts 12.10am
Party Paramedics 1.10amKnock-
Out Scousers: True Stories
2.20amA Short History of
Everything Else 2.50am Channel 4
Presents London 2012: Jody
Cundy Part III 2.55amCan
You Trust Your Bank? C4
Dispatches with Jon Snow
3.25amTime Team4.20amA
Short History of Everything Else
5.15am-6amCountdown
6pmHome and Away
6.30pm5 News at 6.30
7pmHalf Built House: A
botched house renovation in
Eastbourne; 5 News Update
8pmFred West: Born to Kill? 5
News at 9
9pmCHOICE The Hotel
Inspector
10pmBig Brother
11pmBig Brothers Bit on the
Side
12amSuperCasino 3.55amNicks
Quest 4.20amMichaelas Wild
Challenge 4.45amMichaelas Wild
Challenge 5.10amHouse Doctor
5.35am-6amHouse Doctor
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
digits1-9 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
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.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5
6 7
8 9
10
11 12 13 14
15 16 17 18 19
20
21 22
23
24 6
13 27
9 6 5
17 24
45
12 11
45
28 16
8 17 13
29 10
8 26
8
14
12
31
9
23
30
14
3
44
22
13
41
11
7
28
21
7
28
13
16
4
ACROSS
1 Group delegated
to consider some
matter (9)
8 Fashion reminiscent
of the past (5)
9 Periods of play
in cricket (5)
10 Common type
of rodent (3)
11 Items of footwear (5)
13 Forest god (5)
15 Bedtime drink (5)
18 Clear (5)
20 Glide over snow (3)
21 Jewish sacred
writings and
tradition (5)
22 Cardinal number (5)
23 Social unit living
together (9)
DOWN
2 Get the better of (5)
3 Berths, ties up (5)
4 Runs at a moderately
swift pace (5)
5 Force out (5)
6 Institute legal
proceedings
against (9)
7 Alienated (9)
12 Inated feeling of
self-worth (3)
14 Each and every (3)
16 Consignment (5)
17 Cinders (5)
18 Property of sound
with variation in
the frequency of
vibration (5)
19 Month with 30
days (5)
A
S
M
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C B
D
R
L

4

4

4
C U R I O S P A S M
E A B O P B E
L I F T S E S A T
L O O Z E E R
S W I R L D I N G O
M E C C
C O I N S A G E N T
R T C O M E H
A B A E E L A T E
V T N O R R I
E V E R T A L T A R
1 3 8 9 1 2 3
2 4 1 6 3 6 9 8
5 8 2 9 2 5 8 7
4 7 7 8 5 4 6 9
7 9 8 7 3 2
3 6 5 2 9 1 8 7 4
3 1 4 9 8 6
4 1 7 3 6 8 5 1
8 4 9 7 9 8 6 3
2 3 6 4 5 1 3 2
1 2 4 1 7 9 5
4
4
4
4
4
4
4
4
4
The nine-letter word was
OLFACTORY
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
OLYMPICS 2012
BBC1, 7PM
Great Britain v Senegal (Kick-off
8.00pm). Gary Lineker introduces
coverage of the mens football Group
A match at Old Trafford, Manchester.
THE BIG SPORTS QUIZ BOYS V
GIRLS ITV1, 9PM
Stephen Mulhern hosts, with team
captains Paddy McGuinness and
Charlotte Jackson joined by Joe Hart,
Kriss Akabusi and Mark Foster.
THE HOTEL INSPECTOR
CHANNEL5, 9PM
Alex Polizzi visits the Bellingham, a
33-bedroom Victorian hotel in Wigan
whose inexperienced manager
appears to be badly out of his depth.
TVPICK
Gareth Bale scored for
Tottenham on Tuesday
TOTTENHAM winger Gareth Bale
could be suspended from the clubs
pre-season friendlies throughout the
Olympic Games should the Football
Association lodge an official
complaint, according to Fifa
president Sepp Blatter.
Bale was withdrawn from Team
GBs football squad due to injury yet
on Tuesday played and scored during
Spurs friendly against Los Angeles
Galaxy, and the chief of world foot-
balls governing body revealed that
should the FA decide to take
action, the Wales winger could
remain unavailable until
12 August.
The principle is that if a club
does not release a player
then this associa-
tion can come
to Fifa and we
will then ban
this player dur-
ing the dura-
tion of the
Ol y mpi c s ,
said Blatter.
So far
n o b o d y
came to Fifa
to say we
should, but
it is a possi-
bility we
Bale faces ban
over Olympics
injury farce
could ban these players if they
are not at the disposal of the
national team.
They [the association] complain
and then we say let this player go or
he cannot play for the club. Fifas
position has never been so clear than
it is now for the Olympics 2012
and 2016.
Should any complaint be made,
Fifa would then have to judge that
Spurs had not released Bale. The
clubs likely response would be to
argue that the winger only this week
returned to fitness but though it
remains unclear as to how far
his true influence extends,
the priority of Team GB
manager Stuart Pearce is to
focus on todays fixture
their first of
the tournament
against Senegal.
Before Blatters comments,
Bale had revealed his
pleasure at
rapidly recovering
from his injury. He
said: After about
65 minutes my
calf started to
cramp up a bit but
it was a good work-
out. It was one that I
needed and it was
good to get a goal.
My rehabs gone
very well at the club
we are well ahead of
schedule.
TEAM GB KICK OFF LONDON OLYMPICS WITH VICTORY
LONDON 2012 began yesterday as Team GBs womens football team defeated New
Zealand 1-0 in front of 24,549 fans at the Millennium Stadium in Cardiff. Arsenal full-
back Steph Houghton (centre) scored with a curling free kick in the 64th-minute.
Tottenham winger could be unavailable
until 12 August if the FA opt to complain
UK Athletics head coach Charles
van Commenee has admitted
nobody knows if Phillips Idowu
will be fit to participate at
London 2012.
The triple jumper has this year
competed on just three occasions
because of myriad injury problems
but though the British Olympic
Association on Tuesday requested
to see Idowus medical records,
Van Commenee remains uncertain
over whether he will compete.
I have no details about his
physical state but there is very
little I can do about it, said Van
Commenee. We have about 15
athletes in what I call the medal
zone. Phillips is one of them,
but were not dependent on
one athlete.
Statistically you dont get 15
athletes healthy and fit and in top
shape at the same time, on the
start line. I always knew there
would be one or two. But there is
still time to go maybe hes in
great shape nobody knows.
Greater clarity exists over Team
GB marathon runner Dave Webb,
who has withdrawn from the
athletics squad after failing to
recover from a stress fracture. The
BOA will not be nominating a
replacement.
BOA uncertain
about Idowus
Games fitness
26
SPORT
cityam.com/sport
BY DECLAN WARRINGTON
@cityam_sport
Phillips Idowus fitness is a mystery
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27
In terms of achievement, I think winning a
gold medal is the pinnacle in any sport
cityam.com
IN BRIEF
Kagawa scores in United victory
n FOOTBALL: New signing Shinji Kagawa
yesterday scored his first Manchester United
goal in a 1-0 victory over Shanghai Shenhua.
Allen approach angers Swansea
n FOOTBALL: Swansea admit Liverpools
pursuit of midfielder Joe Allen has angered
them. Swansea can confirm that Liverpool
have expressed an interest in Joe Allen,
despite a written agreement with Liverpool
not to approach any players within the 12-
month period of former manager Brendan
Rodgers leaving, said a club spokesman.
Ashton confident about Sarries switch
n RUGBY UNION: England wing Chris
Ashton believes he will thrive in his new
surroundings at Saracens. One of the
reasons I came here was to help my rugby
and push myself again, he said.
South Africa to rest Kallis
n CRICKET: South Africa will rest all-
rounder Jacques Kallis for the one-day
series against England.
NORTH Koreas womens football
team were last night involved in
the first major blunder of London
2012 when they walked off of the
pitch after the South Korean flag
was instead incorrectly displayed.
The fixture, against Colombia,
was scheduled to begin at 7.45pm
at Hampden Park, Glasgow, and
eventually began over an hour
later after the images of the South
Korean flag were presented
alongside the names of the players
during a video played on the
stadiums big screen.
A statement from London 2012
organisers said: Ahead of the
womens football match at
Hampden Park, the South Korean
flag was shown on a big screen
video package instead of the North
Korean flag.
Clearly that is a mistake, we
will apologise to the team and
the National Olympic
Committee and steps will be taken
to ensure this does not happen
again.
BY SPORTS DESK STAFF
CHELSEA yesterday confirmed the
signing of Brazil playmaker Oscar
from Internacional for a fee of
25m as their bid to return to
Premier League title contention
gathers pace.
This summers resolute
reshaping of the Chelsea squad is
the most significant seen at the
club since Jose Mourinhos
appointment as manager in 2004, a
year after billionaire owner
Roman Abramovichs
arrival, and represents
a continuation of the
intention to recruit
some of the
worlds brightest
young footballers.
Striker Didier Drogba
imminently followed
Mourinho to
Stamford Bridge
but this
summer
departed for
Shanghai
Shenhua in
China and
25m Oscar signs for Chelsea
as spending spree continues
along with Oscar, Marko Marin
and brothers Eden and Thorgan
Hazard, the arrival of both a
striker and a defender could yet
come to fruition.
Oscar, who has been compared
to compatriot Kaka and began his
career with Sao Paulo before
joining Internacional, is already in
London as part of Brazils squad
for London 2012.
Though his arrival adds further
competition for places in a
midfield where Frank Lampard,
Jon Obi Mikel, Raul Meireles, Oriol
Romeu and fellow Brazilian
Ramires already compete, the
former is adamant it is that
element that will benefit Chelseas
pursuit of honours. He said: We
have to perform at a high level to
stay in the team because of the
quality we have.
Marseilles Spanish
full-back Cesar
Azpilicueta has said
Chelsea also wish to
sign him.
North Korea footballers rebel
after use of South Korean flag
Oscar has been
compared to Kaka
GREEK triple jumper Voula
Papachristou has been expelled
from competing at London 2012
after posting comments on
Twitter that were considered to
be racist.
The Greek Olympic
Committee deemed
Papachristou to have
undermined the spirit of the
Games in tweets mocking
African immigrants and in
support of a far-right political
party and, despite her
subsequent attempts to
apologise for what she described
as an unfortunate and tasteless
joke, consequently chose to ban
her from participating.
Having also re-tweeted a
comment from a politician
criticising the Greek Prime
Ministers views on immigration,
Papachristou had written: With
so many Africans in Greece... At
least the West Nile mosquitoes
will eat home made food!!!.
Her comments were in
reference to the appearance of
Nile-virus carrying mosquitoes
in Athens and were later deleted,
but by then a furious Twitter
reaction had already built.
Voula Papachristou is a triple jumper
Results
Greece dismiss Olympian
following Twitter race row
WORLD heavyweight champion
Wladimir Klitschko has revealed he
he and his brother Vitali are
considering a fight with Britains
David Haye.
The two-weight world champion
last summer lost to Wladimir but
after returning from a shortlived
retirement to stop Dereck Chisora in
just five rounds earlier this month
after the latter had gone the
distance with Vitali in February, his
hopes of another world title fight
have significantly improved.
Its very difficult to follow what
David Haye wants retirement, not
retirement fighting or not fighting
Vitali or me, fighting someone else,
said Klitschko. Eventually he was
fighting me which was great
following all the talk, and I think the
chances are there [for another].
Klitschko ready
to make Haye
with title fight
British No1 Andy Murray on his hopes of winning a medal at London 2012

Cityam 2012-07-26

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