Tuesday newspaper round-up: Greece, Gas, Glenstrata

7th Feb 2012 06:54

Shoppers reverted to a bunker mentality over the new year, according to gloomy sales figures that quash any hope of consumers pulling the economy clear of a double-dip recession. Till receipts in January were 2.1% higher than a year ago, according to the British Retail Consortium. However, it said that this was the second most feeble growth in January in the 17-year history of its survey. Excluding new stores, sales fell by 0.3%. Separate research by Liberum Capital showed that shoppers' confidence is faltering and that people still want to repay their debts, with 27% saying that they wanted to reduce borrowing compared with only 8% who expect to borrow more this year, The Times says.Greek politicians refused to yield to the austerity demands of their "troika" paymasters despite a stark warning from German chancellor Angela Merkel that the stand-off threatened the "entire Eurozone". The three main political parties in Greece's national unity government were reportedly given until 11am to respond to international demands on tougher spending cuts. But the deadline passed with no response - except for politicians claiming there was no deadline. Sources in Athens said the talks between Greece and its creditor banks were on hold while Lucas Papademos, the Greek prime minister, vacillated between negotiations with his own politicians and the "troika" officials from the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB), The Telegraph writes.Miner Xstrata and trading house Glencore will on Tuesday unveil details for their $90bn (£56.9bn) merger, which will see the new copper-to-commodities trading titan catapulted to seventh place in the UK's FTSE 100. Glencore, which owns 34% of Xstrata, is expected to offer just shy of 2.8 shares for each Xstrata share - implying an 18% to 20% premium to Xstrata's share price before rumours of the deal emerged. That premium - described by analysts as "skinny" - represents almost a 30% premium to the average 30-day share price of the two companies. However, Xstrata shareholders, who were made insiders on Monday, still complained the proposal represented a better deal for Glencore, whose 12 top executives own 31% of the company, according to The Telegraph.The big freeze gripping much of Europe has sent the price of gas rocketing to a six-year high amid concern over a supply shortage as homeowners and businesses crank up their heating. A fall in gas imports from Norway yesterday, on top of the critical situation on the Continent, sent shockwaves through British gas markets. The wholesale price, which had risen by a third in the past week, soared by more than a quarter at one point yesterday. Gas demand across Europe has surged because of an unusually long period of sub-zero temperatures. On Saturday the Russian state-controlled Gazprom acknowledged that it had cut exports to some countries by as much as 30%. The company claimed that countries had been importing more than their quotas and that it needed the gas to meet soaring demand at home, The Times says.BAE Systems is considering lowering the price of its Eurofighter Typhoon to win back an $11bn (£7bn) Indian contract from France's Dassault. Ian King, BAE's chief executive, said the company was considering a range of options to secure the deal to supply fighter jets, which could help prevent a major industrial setback for Britain. A source close to the company said BAE was consulting with its partners in Germany, Italy and Spain to see what was feasible in the coming days and weeks. India had previously changed its mind on defence contracts, the source said, adding there was "still some way to go" before any decisions by the country had been made. The insider insisted the contract was still up for grabs, with Dassault's Rafale only having been named as the lowest-priced compliant bidder rather than being awarded the contract.Authorities in the United States have levied a $22 million fine on Smith & Nephew over bribes paid to Greek doctors to induce sales of the company's medical devices. The London-based healthcare company, which specialises in surgical equipment, including artificial hips and knees, admitted yesterday that a distributor in Greece had made "improper payments" over a decade running up to 2008. According to charges laid by the US Department of Justice and the Securities and Exchange Commission, sums of $9.4m were paid by Smith & Nephew to an offshore shell company controlled by the Greek distributor. The US Government said that "some or all" of this money was passed on to physicians to "corruptly induce them" to favour the company's products, The Times says. The average family will owe nearly £8,000 by the end of the year thanks to personal loans, overdrafts and credit cards and despite three years of repaying more than they borrow. According to research by PriceWaterhouseCooper, even after families paid off an average of £355 of their unsecured debt last year, UK households remain 'among the most indebted in the world'. The report predicted UK consumers will continue to pay down their debts, but will still owe around £7,900 by 2013. Average incomes have fallen by nearly 3.5% in real terms over the past year, squeezing budgets even further as consumers have faced soaring bills. Worryingly, 25% of those in the 25-34 year old age bracket admitted to using a credit card to fund essential purchases in the last year. The report also stated that credit card use could fall into permanent decline, with the rise of digital technology and alternative methods of accessing credit, such as payday loans, The Daily Mail reports.The prices consumers pay for broadband and landline telephone services are expected to fall after Ofcom announced plans to reduce the amount BTcan charge rivals to rent lines. The communications regulator has proposed cuts of up to 19% in the amount that BT's wholesale network Openreach, which owns the majority of landlines in the country, will be able to charge from April, with further decreases the following year. This is the third time Ofcom has set the prices that Openreach charges other companies for using their lines and its proposals are expected to benefit BT's rivals such as TalkTalk and Sky, who may choose to pass on the lower costs to consumers, The Guardian says.AB