Housing prices in the UK rose by just 0.2% in August
On Monday it was reported that the International Airlines Group (IAG)
, formed by the merger of British Airways (BA) and Spanish carrier Iberia, had drawn up a shortlist of 12 airlines for merger or acquisition.
BA Chief Executive, Willie Walsh, declined to name any of the airlines on the shortlist, but was quoted on the BBC website saying, "We have had a number of meetings where we have looked at airlines around the world and identified those that would be attractive to us. We have not had any discussions with any airlines. There is nothing going on at the moment. We want to create a platform for like-minded airlines - those who believe that consolidation is part of the answer for the industry."
Mr. Walsh was speaking in Mumbai as he unveiled a "code share" deal between BA and Indian carrier Kingfisher that will allows BA passengers to book onward journeys to Kingfisher destinations and vice versa. Mr. Walsh added that the shortlist included carriers from emerging markets, such as India and China, but not all 12 airlines on the list (whittled down from a total of 40) would be pursued.
Elsewhere, it was reported that the Equitable Members Action Group (EMAG) was to send proposals to MPs and the Treasury in an effort to receive full compensation for losses estimated at nearly 5 billion caused by the near collapse of Equitable Life in 2000. The argument over compensation has rumbled on for a decade and the 1.5 million investors involved are afraid that, when the coalition government announces its proposals in October, they will be offered just 10% of what they are owed. Parliamentary Ombudsman, Ann Abraham, conducted a lengthy investigation into the affair and said last January that she was "astonished" at the "unsatisfactory" response of the then Labour government to her report; the coalition government has promised an "enhanced" compensation scheme in line with her recommendations.
In other news, the Society of Motor Manufacturers and Traders (SMMT) reported that the number of new cars registered fell for the second month in a row in August. The year-on-year figure fell 17.5% to 55,305 new car registrations during the month and, although the SMMT warned that market conditions would remain challenging for the rest of the year, the fall was widely expected after the end of the vehicle discount or scrappage scheme. SMMT Chief Executive Paul Everitt was quoted on the BBC website saying, "The industry enjoyed a better-than-expected first half of the year and, despite the difficulties, the SMMT is forecasting that new car registrations will close just ahead of 2009 figures."
On Tuesday, it was revealed that American investment banker Bob Diamond is to become Chief Executive of Barclays, replacing John Varley next year. Mr. Diamond once described by Lord Mandelson as the "unacceptable face of banking" earned about 100 million as the President of Barclay's investment arm, Barclays Capital. In related news, Stephen Green, who has spent four years as Chairman and three years as Chief Executive of HSBC, was reportedly leaving the bank to become a government trade minister.
On Wednesday, property services company Connaught, which specialises in social housing, was formally expected to enter administration after saying late on Tuesday that it was "in the process of appointing administrators", according to the BBC website. Connaught said that it had been unable to secure funding for 220 million of debt and its shares were suspended on Tuesday. The failure of Connaught could place thousands of jobs at risk and would represent the biggest corporate bankruptcy since Woolworths two years ago. Indeed, the appointment of KPMG was confirmed as administrator to Connaught later in the day and a spokesman was quoted on the Telegraph website saying, "Notwithstanding the group's bankers providing an additional 15m overdraft, it became clear that the Partnership's business was no longer sustainable and had a substantial cash requirement significantly beyond its available lending facilities."
Elsewhere, the Halifax reported that housing prices in the UK rose by just 0.2% in August taking the cost of the average home to just under 168,000. This represented a slight fall in the cost of the average home compared with the start of the year and was still 16% lower than at the peak of the housing boom in August 2007.
On a more positive note, the Office for National Statistics (ONS) revealed that manufacturing output, excluding mining, oil and gas, rose by 0.3% in July compared with June, taking the annual rise to 4.9%, the highest for 16 years. Overall industrial output also rose by 0.3% in July, taking the annual rise to 1.9%.
On Thursday, the results of research by Experian, on behalf of the BBC, were published and revealed that towns and cities in the North East and the Midlands are less able to cope with sudden economic shocks. The league table revealed that Middlesbrough, Mansfield, Nottingham and Stoke-on-Trent were worst equipped to resist changes in the economy, whilst Elmbridge and Waverley in Surrey were amongst those best equipped.
On Friday, the British Airports Authority (BAA) announced that passenger numbers at the airports it operates Heathrow, Stansted, Glasgow, Edinburgh, Aberdeen and Southampton fell by an average of 3.2% in the year to the end of August. Two of its Scottish airports, Glasgow and Aberdeen, were the worst performers, showing falls of 9.9% and 9% respectively, but Heathrow performed relatively well, showing just a 0.8% fall.
Elsewhere, administrators for Connaught, KPMG, reported that the majority of Connaught's maintenance contracts would be bought by building firm Morgan Sindall for 28 million. The news will be cold comfort for nearly 800 Connaught workers 95 of them at Connaught's headquarters in Exeter who have lost their jobs, but will save another 2,500 jobs. Those jobs will be transferred to Lovell Partnerships, Morgan Sindall's own affordable housing unit, but there was no indication of what would happen to sub-contractors employed by Connaught.
Housing prices in the UK rose by just 0.2% in August
By: steven tunaley
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