BANKING & INSURANCE
Eleventh-hour push to find buyer for FortisBELGIUM and Luxembourg were last night desperately searching for a buyer for troubled financial group Fortis before markets opened this morning (
Scotsman). The 11th-hour talks came as concerns grew over the future of rival Franco-Belgian bank Dexia. In a second weekend of crisis talks, Belgian prime minister Yves Leterme said yesterday that he hoped to keep the Belgian and Luxembourg operations of the group together after the Dutch nationalised most of Fortis units on Friday. Leterme said: "There are contacts with private groups, several private groups. We are not going to decide on this situation with our backs to the wall. We are going to send a clear and strong signal to the markets before they open." Last night, there were reports that French bank BNP Paribas was in talks to take up to 80 per cent of Fortis. Belgium and Luxembourg would keep a 20 per cent share in the Fortis banks in their countries. BNP declined to comment. Belgium and Luxembourg were left to deal with the remains of Fortis's banking and insurance operations after the Netherlands took over the Dutch activities for 16.8 billion (£13bn) at the end of a week of turmoil for European banks. The credit crisis has struck hard in Belgium, with bail-outs required for Fortis, the largest private sector employer, and Franco-Belgian Dexia.
Read all today's banking news from scotsman.comECONOMYDebt levels rising among over-60s Older people are in 25% more debt than four years ago, according to a report by Citizens Advice Scotland (CAS) (
BBC). A study of over 60s who sought help from CAS found debt levels had risen to £17,767 since 2004, but more than a quarter had a debt of over £25,000. The report found many of the older clients seeking advice had a low income from which to repay high debts. CAS called on the Scottish Government to ensure that measures to deal with debt were accessible to older people. The report, Growing Old Together: Older CAB Clients and Debt, claimed that average debt levels for this group were 29 times their monthly income. Clients with the lowest income had the highest relative debt, it said. It cited the example of one woman who had debts totalling £80,000 which she had accumulated on 15 store cards and nine credit cards. The client's only income was from her pension and CAS said anxiety about losing her home had made her borrow more to meet at least the minimum repayments. The research found that household bills, such as council tax and utility bills, created the most anxiety for older people and that they were using credit to pay them.
Economic crisis council to meet Gordon Brown's newly created National Economic Council is to hold its first meeting as MPs return to Westminster after their summer break (
BBC). The group was set up by the prime minister to help people and businesses tackle the economic crisis. Its 17 ministers will meet to co-ordinate efforts to help people deal with issues such as higher food and energy prices. The chancellor is also due to make a Commons statement on the credit crisis. The meeting comes as the UK Treasury seeks clarification of an apparent guarantee by Germany's Chancellor Angela Merkel to protect all private deposits in German banks. If that is the case, the UK government will come under pressure to follow suit. The National Economic Council was unveiled by Mr Brown last week as a key part of the government's strategy to deal with the present economic uncertainties. The council will discuss ways of helping people deal with higher food and energy prices, as well as looking at the financial markets, housing and planning needs.
Fed could cut US interest rates to boost economyFederal Reserve officials are considering a cut in US interest rates, possibly at the central bank's next meeting at the end of the month, in the face of a deteriorating economic outlook and severely strained conditions in financial markets (
Herald). The Fed's willingness to consider a reduction in the cost of credit marks a turnaround from the past few months, when soaring food and energy prices turned its attention to the risk of surging inflation. At the regular September meeting, after oil prices had receded, chairman Ben Bernanke and his colleagues on the Federal Open Market Committee decided it was still too early to shift the federal funds target rate down from 2%. A reduction in the fed funds is still far from certain, in part because inflation is still a problem. But in just the past few weeks, as the credit crisis pounded the financial system, economic data have become steadily worse, raising fears of a recession. Last week, motor vehicle manufacturers said they were hammered in September by tight credit conditions and lower consumer demand. Monthly car and light-truck sales were the worst since April 1992, with Toyota and Ford posting a drop in sales of more than 30% from a year ago. Manufacturing also dived in September. The Institute for Supply Management's (ISM) monthly gauge of the sector dropped to its lowest since October 2001. The index fell to 43.5 in September from 49.9 in August. Figures below 50 indicate a contraction for the sector, and the latest level generally corresponds to overall economic growth of about 0.8% a year, the ISM said.
Read all today's economics news from scotsman.comINDUSTRY
EDF chief vows East Kilbride has 'core role'THE head of Électricité de France (EDF) in Britain has promised British Energy's East Kilbride office will retain a core role in the future of a combined group Vincent de Rivaz, EDF's UK chief executive, below, has maintained that staff at BE's current headquarters will be central to the development of new nuclear plants (
Scotsman). As part of a £12 billion deal to buy British Energy announced last month, Paris-based EDF said it would maintain the East Kilbride office, without saying what role it would play. Opposition to the development of new nuclear power stations north of the Border from the Nationalist Scottish Government stoked fears that some of group's 1,400 Scottish staff might lose their jobs. While EDF has given no assurances on redundancies, de Rivaz said the "core competencies" British Energy has in Scotland would be essential for the huge development the firm planned in the UK over the next decade. He told The Scotsman: "The people working in East Kilbride that are already working with the existing plants in Scotland, and the rest of the (UK], will also be taking part in the new nuclear power station development in England over the next decade. "The people at East Kilbride are not only part of the present but also part of the future, absolutely so."
Read all today's industry news from scotsman.comTRANSPORTCutting travel time worth £40m to the economySPEEDING up journeys between Scotland's two largest cities by 15 minutes would boost the country's economy by more than £40 million a year, a new study shows (
Scotsman). Consultant Atkins claims the benefit to Scottish GDP would be achieved by businesses making Edinburgh-Glasgow journeys saving time and improving productivity. And the firm has warned the long-term focus for Scotland must be on economic expansion along such established transport corridors, rather than being dispersed more widely – a strategy that would help tackle climate change by cutting overall levels of travel. Atkins came to its conclusions after basing its work on Department for Transport guidance. The firm concluded that GDP would be boosted by £30m a year from productivity benefits, and by at least £10m a year from business time savings. Ministers have already said that cutting rail journeys would provide economic benefits of £60m a minute. However, Atkins claimed this was based on the wider impact, not just on businesses.
Read all today's transport news from scotsman.com
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