Thursday newspaper round-up: Oil price, food prices, euro

13th Jan 2011 06:07

Business leaders expressed alarm last night after the price of oil leapt to its highest level in more than two years, trading within a whisker of $100 per barrel. The chief executive of Sainsbury's added his voice to concerns that the soaring price could derail the economic recovery. Justin King said that higher petrol costs "would come straight out of household budgets" and would compound inflationary pressures, the Times reports.The world has moved a step closer to a food price shock after the US government surprised traders by cutting stock forecasts for key crops, sending corn and soyabean prices to their highest level in 30 months. The price jump comes after the UN's Food and Agriculture Organisation warned last week that the world could see repetition of the 2008 food crisis if prices rose further. The trend is becoming a major concern in developing countries, according to the Financial Times.France will urge Britain today to back deeper European integration in order to save the euro, or face catastrophe for its own economy if the currency fails. François Fillon, the Prime Minister, told The Times that he is taking his message to David Cameron at talks in London that come after a day of respite for the embattled currency. Meanwhile, the Telegraph reports that Germany and France have rejected calls by Brussels for a rapid increase in the size and powers of the EU's rescue machinery, once again exposing serious differences at the heart of monetary union. Jose Barroso, head of the European Commission, called on EU leaders to boost the firepower of the EU's €440bn (£366bn) bail-out fund and beef up its role, allowing it to intervene with pre-emptive bond purchases to help states under threat, the paper said.Rob Holden, the chief executive of Crossrail, is to leave the company. Mr Holden joined Crossrail in April 2009, having been responsible for steering through the high speed link from St Pancras to the Channel Tunnel. His departure from Crossrail is a surprise, given that the project is some way away from completion, the Telegraph says.The Liberal Democrat business secretary, Vince Cable, and the Treasury's chief secretary, Danny Alexander, stepped into the bankers' bonuses row, saying banks will have to show restraint, as David Cameron promised he will deliver a deal that includes lower bonuses, higher lending and higher taxes. Lord Oakeshott, a Lib Dem Treasury spokesman, also insisted his party had not given up the fight with the banks, and negotiations were continuing, according to the Guardian.The government will announce today that it is to scrap the default retirement age of 65 this year, against the wishes of businesses, who fear it will cause legal confusion and lead to a rise in cases taken to employment tribunals. The move will come into effect in April. The retirement age of 65 was first introduced only in 2006, with the intention of protecting people from being forced to retire early, the Independent reports.