Wednesday newspaper round-up: UK debt, Barclays, Royal Bank of Scotland

22nd Jul 2009 06:19

The cash eaten up by interest payments on Government debt will more than double in the next four years as investors take fright at Britain's ballooning budget deficit, the country's leading independent forecaster has warned.Within four years, almost 9p in every pound of tax paid by British individuals and companies will be spent directly on servicing the Government's debt, rather than on services. The National Institute of Economic and Social Research said that costs of servicing government debt will rise from £25.6bn this fiscal year to £50.7bn in 2013/14, reports the Telegraph.Sir David Jones, the executive chairman of JJB Sports, held sensitive talks about company business with Mike Ashley, his rival, when his secret £1.5m personal loan from Mr Ashley could have been called in. Sir David met Mr Ashley, the Sports Direct founder, in late February to discuss the severance package of Chris Ronnie, JJB's suspended chief executive, who is a close friend and former employee of Mr Ashley, the Times has learnt.Barclays and Royal Bank of Scotland will have to find billions of pounds more capital if they are to continue growing their investment banks under new rules designed to protect against the higher risks of "casino" banking. According to JP Morgan, Barclays will need to find another £12.8bn and RBS £8.5bn to meet new capital rules under a reformed regulatory regime. Officials hope to implement the changes from the end of 2010, though Carla Antunes da Silva, banks analyst at JP Morgan, said the date may be delayed if the economy is not in recovery, the Telegraph reports.About 4.5m workers are owed hundreds of millions in tax because of incorrect codes handed out by HM Revenue & Customs. The scale of the problem could force HMRC to pay back £1.6bn to around 4.5 million people who unwittingly had too much tax deducted from their paypacket, the National Audit Office has estimated, reports the Times.The rate of pub closures is accelerating, with 52 going out of business every week at a cost of 24,000 jobs over the past year, figures show. Almost 2,400 pubs and bars have vanished from villages and towns in the past 12 months, according to research for the British Beer & Pub Association (BBPA). Local pubs serving small communities have been the worst hit, the association said, reports the Times.Sales of the new iPhone helped Apple to report expectation-beating third-quarter net earnings, up almost 15% to $1.2bn. The Californian technology company reported revenue of $8.3bn, up 11.8%, for the three months to June 27, the Times reports.The founders of Stagecoach, Ann Gloag and her brother Brian Souter, have won a £17.8m court case against a City grandee who undertook to buy shares on their behalf but apparently failed to return the money. A High Court judge has ordered Nicholas Levene, the former deputy chairman of Bramdean Asset Management, to pay Ms Gloag, 65, who is Scotland's richest woman, and Mr Souter, who is chief executive of Stagecoach, a total of £8.9m each plus over £12,000 in legal costs, the Telegraph reports.Scottish & Southern Energy is in final negotiations to acquire Uskmouth, a coal-fired plant owned by Welsh Power, in a move that could leave creditors of the plant nursing big losses. Scottish & Southern, which has 9m customers in the UK, is understood to be looking to purchase the plant for around £25m, according to two people with knowledge of the talks. Scottish & Southern Energy declined to comment, the FT reports.Yields on US Treasuries fell sharply on Tuesday as Ben Bernanke outlined the Federal Reserve's plan to extricate itself from its policy of near-zero interest rates but stressed the economy was too fragile to implement it soon. Following increasing ­pressure from investors and ­politicians, the Fed chairman set out the central bank's "exit strategy" for its policies, which have pumped huge amounts of liquidity into the economy and prompted fears about inflation, the FT reports. Beijing will use its foreign exchange reserves, the largest in the world, to support and accelerate overseas expansion and acquisitions by Chinese companies, Wen Jiabao, the country's premier, said in comments published on Tuesday. "We should hasten the implementation of our 'going out' strategy and combine the utilisation of foreign exchange reserves with the 'going out' of our enterprises," he told Chinese diplomats, the FT reports.Life assurance companies were subjected to stress tests earlier this year, the City watchdog confirmed for the first time on Tuesday, although analysts were underwhelmed by the amount of stress involved. The Financial Services Authority asked insurers to test the resilience of their capital bases against a drop in equity values of 20% over the course of 2009; a fall in property values of 15%; a rise in yields on corporate bonds of 0.5% and a move in interest rates of 0.5% in either direction, the FT reports.BSkyB believes restricting competition for broadcast rights could put "increased pressure" on sporting bodies investing in the elite and grassroots, in a last-minute submission to the independent body reviewing which events should remain freely available to the public. The deadline for submissions to the government-appointed panel reviewing the Free to Air Listed Events closed on Monday, the Independent reports.