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The UK government will have to raise taxes or rein in spending if it wants to avoid breaking its "golden rule", a report suggests. |
The rule states that the government can borrow cash only to invest, and not to finance its spending projects. The National Institute of Economic and Social Research (NIESR) claims that taxes need to rise by about £10bn if state finances are to be put in order. The Treasury said its plans were on track and funded until ... |
The report is the latest to call into question the viability of government spending projections. Earlier this month, accountancy firm Ernst & Young said that Chancellor of the Exchequer Gordon Brown's forecasts for tax revenues were too optimistic. |
It claimed revenues were likely to be £6bn below estimates by the end of the tax year despite the economy growing in line with forecasts. A Treasury spokesperson dismissed the latest claims, saying it was "on track to meeting spending rules and the golden rule in the current cycle and beyond". "Spending plans have been... |
It said the recent record-busting surge in oil prices would have a limited effect on worldwide expansion, saying that if anything the "world economy will continue to grow strongly". Global gross domestic product (GDP) is tipped to be 4.1% this year, dipping to 4% in 2005, before picking up again to 4.2% in 2006. The US... |
Growth in Britain also is set to accelerate, it forecast. "Despite weak growth in the third quarter, the forces sustaining the upswing remain intact and the economy will expand robustly in 2005 and 2006," NIESR said, adding that "the economy will become better balanced over the next two years as exports stage a recover... |
WorldCom director admits lying |
The former chief financial officer at US telecoms firm WorldCom has admitted before a New York court that he used to lie to fellow board members. |
Speaking at the trial of his former boss Bernard Ebbers, Scott Sullivan said he lied to the board to cover up the hole in WorldCom's finances. Mr Ebbers is on trial for fraud and conspiracy in relation to WorldCom's collapse in 2002. He pleads not guilty. The firm had been overstating its accounts by $11bn (£8.5bn). Mr... |
In the New York court on Wednesday, Mr Ebbers' lawyer Reid Weingarten asked Mr Sullivan: "If you believe something is in your interest, you are willing and able to lie to accomplish it, isn't that right?" |
"On that date, yes. I was lying," replied Mr Sullivan. Mr Weingarten has suggested that Mr Sullivan is implicating Mr Ebbers only to win a lighter sentence, something Mr Sullivan denies. Mr Sullivan also rejects a suggestion that he had once told fellow WorldCom board member Bert Roberts that Mr Ebbers was unaware of t... |
Under 23 hours of questioning from a federal prosecutor, Mr Sullivan has previously told the court that he repeatedly warned Mr Ebbers that falsifying the books would be the only way to meet Wall Street revenue and earnings expectations. Mr Sullivan claims that Mr Ebbers refused to stop the fraud. Mr Ebbers could face ... |
Call centre users 'lose patience' |
Customers trying to get through to call centres are getting impatient and quicker to hang up, a survey suggests. |
Once past the welcome message, callers on average hang up after just 65 seconds of listening to canned music. The drop in patience comes as the number of calls to call centres is growing at a rate of 20% every year. "Customers are getting used to the idea of an 'always available' society," says Cara Diemont of IT firm ... |
The surge in customers trying to get through to call centres is also a reflection of the centres' growing range of tasks. "Once a call centre may have looked after mortgages, now its agents may also be responsible for credit cards, insurance and current accounts," Ms Diemont says. Problems are occurring because increas... |
In what Dimension Data calls an "alarming development", the average induction time for a call centre worker fell last year from 36 to just 21 days, leaving "agents not equipped to deal with customers". This, Ms Diemont warns, is "scary" and not good for the bottom line either. Poor training frustrates both call centre ... |
Suggestions that "outsourcing" - relocating call centres to low-cost countries like India or South Africa - is to blame are wrong, Ms Diemont says. |
There are "no big differences in wait time and call resolution" between call centres based in Europe or North America and those in developing countries around the world. "You can make call centres perform anywhere if you have good management and the right processes in place," she says. However, companies that decide to... |
- call centre operations are part of their business "core function", |
- they are worried about the risk of going abroad, |
- they fear that they will damage their brand if they join the offshoring drive. The survey was conducted by Sunovate on behalf of Dimension Data, and is based on in-depth questionnaires of 166 call centres in 24 countries and five continents. What are your experiences with call centres? Are you happy to listen to Viv... |
Novartis hits acquisition trail |
Swiss drugmaker Novartis has announced 5.65bn euros ($7.4bn; £3.9bn) of purchases to make its Sandoz unit the world's biggest generic drug producer. |
Novartis, which last month forecast record sales for 2005, said it had bought all of Germany's Hexal. It also acquired 67.7% of Hexal's US affiliate Eon Labs, and offered to buy the remaining shares for $31 each. Novartis said that it would be able to make cost savings of about $200m a year following the acquisitions. ... |
The deal will see Novartis' Sandoz business overtake Israel's Teva Pharmaceuticals as the world's biggest maker of generics. Based on 2004 figures the newly merged producer would have sales of more than $5bn, the company estimated. Novartis said that it would merge a number of departments, adding that there may be job ... |
"The strong growth outlook for Sandoz, which will create jobs, is expected to partially compensate for necessary reductions in the work force," the firm said in a statement. Generic drugs are chemically identical to their more expensive branded rivals. Producers such as Sandoz can copy the branded products usually afte... |
There are more than 150 generic drugmakers worldwide and analysts have predicted consolidation in a market that they call fragmented. However, not all analysts were initially convinced about the deal. "This is a very expensive acquisition," Birgit Kuhlhoff, from Sal Oppenheim investment bank, told Reuters. "I find it s... |
Economy 'strong' in election year |
UK businesses are set to prosper during the next few months - but this could trigger more interest rate rises, according to a report. |
Optimism is at its highest since 1997 and business will reap the benefits of a continuing rise in public spending, say researchers at BDO Stoy Hayward. The Bank of England is expected to keep rates on hold this week - but they could go up later in the year. Rates are likely to rise after the anticipated general electio... |
The only thing blighting business optimism this year will be uncertainties associated with the general election, BDO said. Its BDO's output index - which predicts GDP movements a quarter in advance - remained at 100.8 for January, implying GDP growth at 2.9% in the second quarter of 2005. However, the output index is b... |
Sluggish economy hits German jobs |
The number of people out of work in Europe's largest economy has risen for the tenth straight month as growth remains stubbornly slow. |
German unemployment rose 7,000 in November to 4.464 million people, or 10.8% of the workforce. The seasonally adjusted rise showed a smaller rise than expected, as government measures to encourage job creation began to take effect. But officials said stagnant growth was still stifling the job market. "There are clear s... |
With unemployment stuck above 4 million for years, the government of Chancellor Gerhard Schroeder has put job creation at the top of the agenda. A controversial package of measures to shake up incentives to get back to work, paid for by cutting some cherished benefits, has sparked anger among some German workers. Strik... |
Sales 'fail to boost High Street' |
The January sales have failed to help the UK High Street recover from a poor Christmas season, a survey has found. |
Stores received a boost from bargain hunters but trading then reverted to December levels, the British Retail Consortium and accountants KPMG said. Sales in what is traditionally a strong month rose by 0.5% on a like-for-like basis, compared with a year earlier. Consumers remain cautious over buying big-ticket items li... |
In the three-months to January, like-for-like sales showed a growth rate of -0.1%, the same as in the three months to December, the BRC said. "Following a relatively strong New Year's bank holiday, trading then took a downward turn," said Mr Hawkins. "Even extending some promotions and discounts and the pay-day boost l... |
Call to save manufacturing jobs |
The Trades Union Congress (TUC) is calling on the government to stem job losses in manufacturing firms by reviewing the help it gives companies. |
The TUC said in its submission before the Budget that action is needed because of 105,000 jobs lost from the sector over the last year. It calls for better pensions, child care provision and decent wages. The 36-page submission also urges the government to examine support other European countries provide to industry. T... |
"Greater investment in childcare strategies and the people delivering that childcare will increases the options available to working parents," he said. "A commitment to our public services and manufacturing sector ensures that we can continue to compete on a global level and deliver the frontline services that this cou... |
Bat spit drug firm goes to market |
A German firm whose main product is derived from the saliva of the vampire bat is looking to raise more than 70m euros ($91m; £49m) on the stock market. |
The firm, Paion, said that it hoped to sell 5 million shares - a third of the firm - for 11-14 euros a share. Its main drug, desmoteplase, is based on a protein in the bat's saliva. The protein stops blood from clotting - which helps the bat to drink from its victims, but could also be used to help stroke sufferers. Th... |
Firms pump billions into pensions |
Employers have spent billions of pounds propping up their final salary pensions over the past year, research suggests. |
A survey of 280 schemes by Incomes Data Services' (IDS) said employer contributions had increased from £5.5bn to £8.2bn a year, a rise of 49.7%. Companies facing the biggest deficits had raised their pension contributions by 100% or more, IDS said. Many firms are struggling to keep this type of scheme open, because of ... |
The rising cost of maintaining such schemes has led many employers to replace final salary schemes with money purchase, or defined contribution, schemes. These are less risky for employers. Under money purchase schemes, employees pay into a pension fund which is used to buy an annuity - a policy which pays out an incom... |
IDS said there were some schemes in good health. |
But, in many cases, firms had been forced to top up funds to tackle "yawning deficits". The level of contributions paid by employers has increased gradually since the late 1990s. In 1998/99, for example, contributions rose by 4.7% and in 2002/03 by 8.6%. In contrast, between 1996 and 1998, some employers cut their cont... |
UK homes hit £3.3 trillion total |
The value of the UK's housing stock reached the £3.3 trillion mark in 2004 - triple the value 10 years earlier, a report indicates. |
Research from Halifax, the country's biggest mortgage lender, suggests the value of private housing stock is continuing to rise steadily. All regions saw at least a doubling in their assets during the past decade. But Northern Ireland led the way with a 262% rise, while Scotland saw the smallest increase of just 112%. |
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