Wednesday newspaper round-up: Mervyn King, Cadbury, Google

20th Jan 2010 06:32

The Governor of the Bank of England piled pressure on the Chancellor to specify sharp spending cuts in his March Budget or risk a damaging backlash from the markets.Mervyn King said that the patience of Britons was likely to be "sorely tried" over the coming years, with pay stagnating and inflation threatening to rise above 3%. Britain's economic health hinges on Alistair Darling being open about how he intends to slash the £178bn deficit, he said, the Times reports. King also advocates that the G20 should effectively merge with the International Monetary Fund, under a radical proposal to overhaul management of the international economy. Mervyn King said that unless politicians act to create an international body with the authority to reform the monetary system, the world would be consigned to another crisis in a matter of years, the Telegraph adds.Senior UK investment bankers at Credit Suisse will bear the brunt of the Chancellor's controversial bonus tax this year. The bank's 400 managing directors in London will be affected, as their bonuses will be slashed by 30%. In addition, the bank is cutting its total compensation pool for 2009 by 5%, the Times reports.Meanwhile, a global clampdown on bankers' bonuses is piling pressure on the Government to curb a £1.5billion bonanza at Royal Bank of Scotland. A public outcry over fat-cat pay is forcing international banks and some countries to reconsider the end-of-year bonuses which are due in the next few weeks. RBS, which is 84 per cent owned by the taxpayer, is expected to pay up to £85,000 to each of its 17,500 staff at its investment bank after profits at the division soared last year, the Mail reports.UK inflation jumped the most on record in December, fuelling fears that interest rates will have to rise sooner rather than later to keep prices in check. The sharp rise in the annual rate of consumer price inflation from 1.9% to 2.9% was driven by exceptional events in December 2008, as the VAT cut and high street discounting at that point were not repeated last month, the Telegraph reports.Contactless debit cards will become commonplace in Britain this year as banks double the number in circulation to about 10m, according to Visa. Speaking as the payments group unveiled its annual results, Peter Ayliffe, chief executive of Visa Europe, said 2010 would be "the tipping point" when the British consumer finally adopts the new technology, which it hopes will replace cash for small purchases, the Telegraph reports.Google has taken its first concrete step out of China, postponing the launch of two mobile phones produced specifically for the Chinese market. The two handsets had been developed in partnership with the manufacturers Samsung Electronics and Motorola and were due to be unveiled tomorrow in a deal with the Chinese mobile phone carrier China Unicom. The postponement follows the internet giant's threats to close its Google.cn search engine in China unless the Government eases censorship rules, the Times reports. Legal & General, the largest UK shareholder in Cadbury, accused the confectioner last night of selling out too cheaply to Kraft, the US food group. The two food manufacturers, which combined will be the world's No 1 chocolate maker and No 2 gum maker, announced an £11.9bn agreed deal yesterday that was clinched in the early hours, the Times reports.Meanwhile, the chairman of Cadbury has admitted that job cuts at the 186-year-old chocolate maker are an "inevitability" following its £11.9bn takeover by Kraft Foods.Roger Carr confirmed that job losses were likely at the company's head office in Uxbridge, west London, adding that the decision to accept Kraft's improved offer had been a "bittersweet moment". Kraft likewise hinted at redundancies, saying the takeover had the potential to bring "substantial further cost savings", the Independent reports.