Sunday newspaper round-up: Falling growth forecast, inflation, William Hill, BHP

16th Oct 2016 16:59

(ShareCast News) - The apparent recent success of the UK economy post Brexit is "deceptive" and the UK's economic growth will slump to just 0.8% next year, according to the respected EY Item Club. The falling pound is helping exporters, but is already seeing the beginning of surging inflation, which will squeeze household incomes and spending, while investment and hiring plans are also likely to be squeezed in the current environment, the Sunday Times and Mail on Sunday reported.Inflation is likely to accelerate as sharply as 1.3% in September from the 0.6% annual rise in August, according to Andrew Goodwin at Oxford Economics, as rising oil prices push up the costs year-on-year at the petrol pump for the first time since 2013. The Sunday Telegraph said shoppers would be further hit in the wallet over the coming months as the fall in the pound forces up the prices of imported goods, as illustrated by 'Marmitegate'.After the headlines were all grabbed last week by the Marmite spat between Unilever and Tesco last week, the the car industry has already been quietly adding hundreds of pounds to the list price of new vehicles for British drivers, the Mail on Sunday noticed. With some major car makers confirming they would make further rises in the months to follow, Vauxhall defended the increase by saying it faced higher costs even on vehicles made in the UK.The UK's car industry is likely to lose many more production deals to low-cost EU countries if the country loses access to the EU single market, according to the head of Germany's auto industry associations. "If there's a 'hard Brexit' then we will see a shift to central and south-eastern Europe," Matthias Wissmann said in the Financial Times.Theresa May has already begun offering sweetener deals to keep car manufacturers onside, the Sunday Times reported. Nissan has been offered Britain's roads as a test track for driverless cars in an effort to persuade the Japanese automotive giant not to quit the UK after Brexit, ahead of its decision in coming weeks whether to build its newest version of the best-selling Qashqai sports utility vehicle in Sunderland, or move it to the continent.Bookmaker William Hill plans to plough ahead with its agreed merger with Canadian online poker giant Amaya in defiance of objections raised by its largest shareholder, activist firm Parvus Asset Management. The bookmaker's other top shareholders have been consulted this weekend, the Sunday Times revealed, and were willing to wait for further details on the merger before deciding whether to side with Parvus, which owns 14.3%.Software giant Misys is also ploughing ahead with its initial public offer but its private equity owners have been forced to slice around 30% off its value due to uncertain markets since the Brexit vote. The planned £4.5bn flotation was due to be the largest in 2016 but is now understood, the Sunday Times said, to be below £3.5bn.Another effect of post-Brexit weakness in the pound has been to potentially derail JD Sports' talks to acquire Go Outdoors due to the rising cost of imports and the threat of duty tariffs. The deal that would cement JD's position as the UK's biggest sportswear retailer, is said to have stalled several times due to tense negotiations over price, the Sunday Telegraph reported.Meanwhile it remains uncertain whether BHP Billiton's Samarco iron ore mine in Brazil will be reopened, after the FTSE 100 miner warned that the restarting of operations was not guaranteed. BHP told the Sunday Telegraph the mine would need to be economically viable to justify a restart and therefore its future is "not assured".Hedge fund groups are hoping that rules which force them to reveal short positions could be relaxed or even scrapped when Britain leaves the EU, with proposals for a dual system where one is equivalent to the EU and another more similar to the US. A senior investment banker told the Mail on Sunday he expected larger investment banks to halve in size in the UK if they lost 'passporting' rights across the EU.While the price of British government bonds finally falls and leads to rising yields - the income paid by bonds relative to their price - financial experts say it is too early to tell whether this is the start of a sustained reversal that would see wider interest rates eventually starting to climb, noted the Sunday Telegraph. Previous attempts to identify such a seismic shift have proved wrong, though data shows $22bn has been taken out of cyclical companies and $17m put into defensive 'bond proxy' companies so far this year.The UK's video games sector is enjoying a boom thanks to the slumping pound, with the industry one of the world's leading games-producing nations. Jason Kingsley, co-founder of Rebellion and chairman of The Independent Games Developers Association (Tiga), told the Mail on Sunday: "The pound getting weaker has been good for us because our revenues are mostly in dollars."In the Chancellor's Autumn Statement the energy industry will learn whether the carbon tax, officially known as the carbon price floor, will be continued. Axing the levy, said the Sunday Telegraph, would also represent a major hit to the incomes for existing renewable and nuclear plant owners, who benefit from the higher power prices, which is the reason why most of the biggest UK energy generators are calling for the tax to be extended.Administrators to BHS are investigating whether the failed department store chain has the right to claim millions of pounds from Sir Philip Green's Arcadia Group over a legal case against the payments group Mastercard, the Sunday Times said. In July, Sainsbury's won £68.5m in a similar case against Mastercard.Mondelez, the American owner of Cadbury paid no corporation tax on its British business last year, despite enjoying sales of £1.7bn. The UK arm, which as part of Kraft Foods bought the chocolate maker in a unpopular deal in 2010, made a pre-tax profit of £177.3m that would under normal corporation tax rates require a bill of £36m.Britain has stepped up its landmark case against former Nigerian oil minister Diezani Alison-Madueke, who was allegedly involved in the disappearance of more than $20bn from her country's coffers, the Sunday Times reported. The 55-year-old had moved to London for cancer treatment but was arrested a year ago by the National Crime Agency's new international corruption unit on suspicion of bribery and money laundering.Distressed debt funds are circling the controversial hire-purchase electricals retailer BrightHouse, formerly known as Crazy George's, amid concerns it could face a crippling clampdown by watchdogs over alleged over-charging. BrightHouse's bonds have been snapped up at rates as low as 60p in the pound in recent weeks, in the clear hope of profits as a result of its potential restructuring due to tighter controls on who BrightHouse can provide credit to at interest rates of up to 100%.Roadside billboards could soon be consigned to history after one of the world's biggest media owners pulled spending on hundreds of giant posters in Britain. Clear Channel, the New York-listed outdoor advertising specialist, will not pay rent on 800 roadside sites this month, with a source saying the decision reflected a shift among advertisers towards spending on digital displays, as well as concerns about the economy.