Wednesday paper round-up: US rates, Shell, Honda

17th Mar 2010 06:38

The dollar fell yesterday after the Federal Reserve repeated its pledge to keep interest rates low for a long period and the White House warned that American unemployment was likely to remain high for some time. A statement from the central bank's rate-setting committee was generally more positive than that of last month, saying that the labour market was stabilising and business spending rising, the Times reports.Royal Dutch Shell has unveiled the most dramatic overhaul of its business in recent memory, outlining plans to exit more than a third of its 90 retail markets, slash refining capacity and return to growth after seven years of falling output. Peter Voser, chief executive, unveiled a further 1,000 jobs cuts in addition to the 6,000 already announced as he vowed to "sharpen up" Shell in the next three years by boosting output by 11%, the Telegraph reports.Honda is recalling 453,000 cars in the United States and other markets because of problems with their brakes in the latest blow to the Japanese car industry's reputation. Japan's second-biggest carmaker is recalling 344,000 Odyssey models and 68,000 Element vehicles in the US that were made between 2007 and 2008, the Telegraph reports.The EU has agreed to a rescue mechanism for Greece but only if the country is facing "imminent insolvency" or the stability of the eurozone is at risk, leaving markets as confused as ever over the terms of support. Wolgang Schäuble, Germany's finance minister, told the Bundestag that any new facility would be a "last resort" if Greece is near default, and that no firm deal had yet been reached, the Telegraph reports.The flagship scheme to persuade millions of low-paid employees to save for their retirement came under fire yesterday after the Government revealed that all contributions into the new fund would be subject to a surprise 2% fee. Outside experts said that the National Employment Savings Trust, could be an expensive way of saving for some people and that many would be deterred by upfront charges that might actually shrink their savings pots in the early years, the Times reports.Britain's biggest banks were yesterday given the green light to continue charging hugely controversial penalty fees after agreeing a deal with regulators that was branded "flaccid" and "weak" by consumer groups. The Office of Fair Trading said it did not now plan to introduce a maximum cap on the penalty charges incurred by customers who breach their overdraft limits, insisting instead that new commitments it had secured from the banking sector would protect consumers, the Independent reports.Sadeq Sayeed, Nomura's European boss and the architect of its daring swoop on Lehman Brothers' London operation in 2008, is stepping down. The unexpected move triggered speculation that Mr Sayeed had fallen out with his bosses in Japan over how the takeover of Lehman is bedding down, and raised questions about whether Tokyo was committed to continuing to invest in Europe, the Times reports.A controversial clampdown on European hedge funds and private equity was dropped from the agenda at a meeting of European finance ministers today after a direct intervention by Gordon Brown and Alistair Darling. Spain, which is the holder of the European Union presidency, abandoned the issue today as it became clear that Britain, France and Germany would not be able to resolve their differences over the proposed reforms, the Times reports.Social networking website Facebook has capped a year of phenomenal growth by overtaking Google's popularity among US internet users, with industry data showing it has scored more visits on its home page than the search engine. In a sign that the web is becoming more sociable than searchable, research firm Hitwise said that the two sites accounted for 14 per cent of all US internet visits last week. Facebook's home page recorded 7.07% of traffic and Google's 7.03%, the FT reports.Kraft Foods told MPs on Tuesday that its broken promise to save a former Cadbury factory from closure had been made in good faith. At a hearing of the House of Commons' business, innovation and skills committee, the US food multinational also made fresh pledges on the safeguarding of UK jobs, the FT reports.Chinese steel authorities attacked attempts by iron ore miners to increase annual prices by as much as 90% yesterday, echoing earlier comments made by a European trade body, which said that groups such as Rio Tinto and BHP Billiton were threatening the economic recovery, the Independent reports.A key witness in the damning inquiry into Lehman Brothers' collapse was laid off by the bank a month after raising concerns about the way it had accounted for $50 billion of risky loans. Matthew Lee, a senior vice-president in Lehman's accounting division, warned senior executives on May 16, 2008, that the bank was hiding huge risks from investors and regulators when it reported its quarterly figures, the Times reports.