Thursday newspaper round-up: Portugal, interest rates, gold

7th Apr 2011 06:01

Portugal has said that it needs to ask for financial aid from the European Union. In a televised evening address to the nation, Prime Minister Jose Socrates said: "I want to inform the Portuguese that the government decided today to ask...for financial help, to ensure financing for our country, for our financial system and for our economy," the Telegraph reports.Despite never having joined the eurozone and after an explicit guarantee by the chancellor, George Osborne, of no further aid to the eurozone after a loan to Ireland last year, the UK will be liable for at least £3bn to help fund the Portuguese rescue. Part of that comes from an obscure and dwindling EU Commission fund that the UK is still signed up to, designed to help member states out of balance of payments difficulties - long before the present crisis engulfed the continent, says the Independent.The British economy remains weak despite growing by an estimated 0.7% in the first quarter of this year, the National Institute of Economic and Social Research has warned. In the latest prediction that Britain's recovery from recession is faltering, the NIESR said the UK had probably only achieved "weak" average quarterly growth of 0.1% over the last six months. The thinktank said the fragile situation made it almost certain that the Bank of England's monetary policy committee will leave interest rates unchanged at noon on Thursday, according to the Guardian.Gold prices hit a new high of $1,462.93 an ounce on Wednesday, setting a record for a second-consecutive day on inflation fears and a falling US dollar. Concerns over the continuing turmoil in the Middle East and North Africa also boosted safe haven demand for precious metals, with the silver price rising to a 31-year high of $39.77 an ounce.Honda is halving production at its Swindon car factory because of a parts shortages caused by the Japanese earthquake and tsunami. Honda is the first car maker to cut production in the UK as a result of the quake. The majority of parts used at Honda's Swindon factory are sourced in Europe, reports the Independent.A trader accused of a $31.6m (£19.4m) insider dealing scam allegedly told his co-conspirator he should take $175,000 they had just made and "burn it in a fire", according to US federal prosecutors. US authorities have arrested Garrett Bauer, a trader, and Matthew Kluger, a lawyer, and accused them of operating a decades-long scheme to profit from inside knowledge about forthcoming mergers and acquisitions, the Guardian reports.Two European banks announced plans to raise a combined €13.25bn ($19bn) of fresh equity on Wednesday, taking to nearly €25bn the total capital raisings unveiled since the start of the year by institutions across the continent. Commerzbank, Germany's second-largest bank by assets, plans to raise €8.25bn from investors through a placement of securities followed by a rights issue. At the same time, Intesa Sanpaolo, Italy's largest retail bank by assets, will undertake a rights issue of as much as €5bn as it seeks to shore up its core tier one ratio ahead of stress tests, the Financial Times reports.Britain's property market was compared to the Premier League transfer window today as homeowners scrambled to complete on deals before the top rate of stamp duty soars to five per cent. Hundreds of millions of pounds changed hands with scores of seven-figure deals being pushed through before the deadline at midnight last night, when the duty on properties over £1million rises to five per cent, according to the Daily Mail.Rolls-Royce and car giant Daimler yesterday refused to sweeten a €3.2billion (£2.8billion) offer for Tognum as they formally launched their takeover bid for the German engineer. The two firms insisted their €24 a share bid was "highly attractive", representing a 30 per cent premium to the undisturbed share price, with the deal safeguarding jobs and providing a launchpad for growth, the Daily Express reports.---RG