Monday newspaper round-up: J Sainsbury, Queens's Speech, Royal Mail

16th Nov 2009 06:31

Customers are deserting J Sainsbury for its leading rivals for the first time in the recession, it was revealed yesterday. More than £11m of spending was switched directly to its main competitors in the 12 weeks to November, according to confidential industry "switching" data.Sainsbury's, led by Justin King, gained a mere net £700,000 from Asda and smaller gains against Netto and Farm Foods, according to TNS Worldpanel, the market researcher, The Times reports.President Barack Obama has promised Asia's creditor nations that Washington will not let US borrowing spiral out of control, vowing a major drive to cut the budget deficit and restore global confidence in the US dollar. The assurance comes amid growing doubts across the world over the wisdom of White House spending plans. The US Congressional Budget Office expects the deficit to remain around $1.8trn (£600bn) as far ahead as 2019 under current plans, pushing the US national debt into the danger zone, the Telegraph reports.But, the US Federal Reserve is fuelling "speculative investments" and endangering global recovery through loose monetary policy, a senior Chinese official warned on Sunday just hours before President Barack Obama arrived in China for his first visit. Liu Mingkang, China's chief banking regulator, said that the combination of a weak dollar and low interest rates had encouraged a "huge carry trade" that was having a "massive impact on global asset prices" the FT reports.House asking prices fell for the first time in three months in November as homesellers tried to shift properties before the psychological Christmas deadline. Rightmove said that asking prices had fallen by 1.6 % between October and November to an average of £226,440 and it predicted further monthly falls, with recovery not expected to resume until February, the Times reports.Labour will use the Queen's Speech to try to demonstrate that the banks have been tamed with a plan to outlaw the most controversial bonuses. The Queen's Speech and this week's Financial Services Bill will give the Financial Services Authority (FSA) the power to void any contracts that it believes promote inappropriate risk taking. But the legislation will not apply to bonuses for this year, which are expected to increase 50% to £6bn. Despite the financial downturn, many of the surviving banks have enjoyed a profitable year, the Times reports.Meanwhile, Britain's bankers have warned that tough new laws on pay and bonuses to be announced in Parliament this week could trigger an exodus of talented professionals and stifle economic growth. The British Bankers' Association (BBA) said the Financial Services Bill - which would require regulators to tear up existing contracts if pay packages were deemed to encourage excessive risk-taking - would threaten the UK's prominence as a global financial centre, the Telegraph adds.Royal Mail is facing another serious threat to its efforts to compete with private-sector rivals, just weeks after trades unions agreed to call a halt to a debilitating series of strikes during negotiations with the company. The postal operator has been told by HM Revenue & Customs (HMRC) that it will soon be forced to begin charging valued added tax (VAT) for many of its services, having previously been exempt. At a stroke, that would add 17.5% to the prices it charges businesses, rendering it at a serious competitive disadvantage, the Independent reports.Britain is set to plunder the lungs of the world to feed its growing hunger for wood to burn in power stations. A series of biomass-fired plants are being built in the UK that will trigger a 150% cent surge in timber imports from 20m tonnes today to 50m tonnes by 2015, according to the Forestry Commission. British power plants are already shipping wood from Canada, Brazil, Scandinavia and South Korea, the Times reports.Pearl Group, the closed life assurance fund business built by Hugh Osmond, has agreed to award shares worth €2.6m (£2.3m) to Ron Sandler, who became chairman in September after a debt restructuring, €600m capital injection and takeover. The 300,000 shares earmarked for Mr Sandler, the former Lloyd's of London chief executive who also chairs Northern Rock, will be worth more if the company's recovery and transfer to a primary listing in London are successful, the FT reports.An increasing number of small and medium-sized businesses say that they are finding it harder to gain critical loans to grow. They say that the availability of finance has become an even greater obstacle to growth in the past three months, despite the Government's plan to stimulate bank lending by pumping £200 billion into the economy, according to a new report by the British Chambers of Commerce (BCC), the Times reports.The world's top gold mining companies have warned that global production of the precious metal is likely to resume a long-term decline in coming years, in spite of a record-breaking surge in the price of gold to more than $1,100 an ounce.Much of gold's recent rise to an all-time high of $1,122.85 last week has been due to the weaker dollar and huge inflows into exchange-traded funds (ETFs), as investors have sought sanctuary from the financial crisis by buying physical asset, the FT reports.Workers hoping that they might be in line for pay rises if the UK finally escapes recession at the end of the year, as economists expect, are likely to be disappointed, research published by the CBI today suggests. The employers' organisation says just 4 per cent of companies plan to offer their staff a pay rise worth more than inflation for 2010, while half of all employees plan to freeze salary levels, the Independent reports.