Friday newspaper round-up: Euro crisis, Standard Chartered, Retail sales...

26th Nov 2010 06:36

The eurozone's emergency bailout fund may have to be boosted further if it fails to reassure financial markets, a member of the European Central Bank's governing council has said.Axel Weber, who is President of the Bundesbank, said that EU governments' €750bn (£640bn) facility ought to be adequate, but if not, "it will have to be increased". Mr Weber was speaking as the turmoil threatened to engulf Spain, which suffered a surge in government borrowing costs for the eighth consecutive day, the Times reports.The cost of borrowing for the eurozone's peripheral economies rose to record highs on Thursday amid signs the debt crisis that forced Ireland into a multibillion-euro bail-out was spreading. Irish, Portuguese and Spanish bond yields surged to their highest points since the launch of the euro, as traders said even some of the bigger eurozone countries could soon be affected, the FT adds.The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union. Credit default swaps (CDS) measuring risk on German, French and Dutch bonds have surged over recent days, rising significantly above the levels of non-EMU states in Scandinavia, the Telegraph reports.Britain's biggest care homes operator is in rescue talks with private equity groups after negotiations with a potential suitor ended yesterday. Within minutes of the disclosure that TowerBrook Capital had pulled out of talks that had started in August, Southern Cross said that it was in preliminary discussions with other potential bidders. The care homes group is understood to be in danger of breaching its banking covenants in the first half of next year. It was once valued at more than £1 billion but its market value is now just £31.5m, the Times reports.Attempts by British banks to agree a collective pledge to rein in bonuses have been undermined by a decision by Standard Chartered to pull out of the negotiations. The bank, which is listed in London but makes 90% of its profits in developing markets, said yesterday that it would not sign up to a pact on pay. Senior management at Barclays, Lloyds, Royal Bank of Scotland, HSBC and Santander are trying to agree a statement that they could all sign on bonuses, lending to small businesses and how much tax they pay, the Times reports.The head of London's influential fund management trade body has lambasted the UK's efforts in Brussels, claiming the introduction of the hedge fund directive "can only be described as a failure of British foreign policy". Richard Saunders, chief executive of the Investment Management Association (IMA), accused ministers of being "oblivious" to the "blatantly protectionist" motivations of other countries when the controversial Alternative Investment Fund Managers (AIFM) directive was introduced, the Telegraph reports.Home buyers will see their mortgages increase when their initial deal comes to an end, Britain's biggest lender has warned. Halifax, part of Lloyds Banking Group which is 41% state-owned following a bailout during the financial crisis, is introducing a new standard variable rate of 3.99% for all customers taking out a home loan from the beginning of the New Year, the Telegraph reports.Rising sales are boosting retailers' hopes for a strong Christmas on the high street, but the longer-term outlook remains fragile and unpredictable. Britain's retail climate improved for a fifth consecutive month in November, with 55% of retailers reporting improvements in the first two weeks of the month, compared with just 13% seeing falls, the closely watched Confederation of British Industry (CBI) Distributive Trades survey revealed yesterday, the Independent reports.The governor of the Bank of England, Mervyn King, has been publicly accused by one of his own senior policymakers of prejudicing the impartiality of the Bank. Adam Posen, an American academic who serves on the Bank's Monetary Policy Committee, appeared with Mr King before the Treasury Select Committee, the Independent reports.Defence chiefs are insisting that the Treasury must next year "guarantee" that UK military spending will rise annually by about 2 per cent in real terms from 2015, warning that otherwise they will be unable to implement the defence review on time. David Cameron, in last month's strategic defence and security review, unveiled the planned structure of the armed forces in 2020, which included a new carrier strike capability and the resources to sustain 6,500 troops in a stabilisation operation, the FT reports.