Thursday's newspaper round-up: Recession, Bank of America, Aviva

Thu 20 Aug 2009

LONDON (SHARECAST) - Britain has emerged from the worst recession since the Second World War, new Bank of England figures suggested yesterday, writes the Times. Detailed forecasts published by the Bank showed that gross domestic product (GDP) will rise by 0.2 per cent between July and September, marking the first economic expansion since the first three months of last year. These growth figures have been extrapolated by economists from data published by the Bank in the wake of last week’s Inflation Report, adds the paper. Meanwhile, another major international body has declared that the world economy has stabilised, and seems set for a return to growth. The Paris-based Organisation for Economic Co-operation and Development said yesterday that the world's 30 most advanced economies stopped contracting in the second quarter of the year, having endured the sharpest downturn since the Great Depression, writes the Independent. Bank of America Merrill Lynch is offering traders one-year "retention bonuses" to discourage rival banks from poaching its talent, says the Telegraph. Three-quarters of Aviva's 1m eligible policyholders have voted on a proposal to pay windfalls averaging £500 to those willing to forego any future interest in the insurer's surplus funds, or "inherited estate," says the Telegraph. Britain's banks are all but certain to rack up losses from their retail operations in the second half of the year. David Sayer, global head of retail banking at KPMG, said that an analysis of the results reported by the "big four" banks revealed that the day-to-day operations of providing current accounts, savings, loans and mortgages were barely profitable in the first half, writes the Independent. Guy Hands, the private equity magnate behind EMI, forced out the head of the music giant’s £1 billion UK pension fund, Ian Smellie, in a long-running row about top-up payments to the scheme, writes the Times. Vantis, the accounting and tax adviser, has been forced to postpone the publication of its full-year results because of a dispute with its Ernst & Young, writes the FT. Air France-KLM has pulled out of the bidding for state-owned Czech Airlines (CSA), blaming the economic downturn, reports the Independent. Demand for gold among investors is still running 46 per cent higher than last year, despite signs of recovery in economies across the world. But overall demand for the yellow metal dipped by 9 per cent in the second quarter, compared with the same period in 2008, as the high price continued to squeeze jewellery purchasing, according to the World Gold Council, says the Independent. Warren Buffett has given warning that the US’s $1.8 trillion (£1.1 trillion) budget deficit could harm the purchasing power of the dollar, even though he admits the American economy “appears to be on a slow path to recovery,” according to the Telegraph. British manufacturers were the most positive in more than a year about future production levels, but order books fell sharply again in August, according to the CBI, says the Telegraph. HM Revenue & Customs officers swooped on homes in London and Gravesend yesterday and arrested seven people in connection with a suspected £38 million tax fraud in the carbon emissions trading market, reports the Times. An Indian government delegation arrives today in Houston, the heart of the American oil industry, hoping to raise as much as $4 billion (£2.4 billion) by auctioning rights to drill for hydrocarbons at the Bay of Bengal, says the Times.