LONDON Newspaper Watcher Alert (UK)-Prudential, Lloyds Banking, BP

Date: Monday 07 Jun 2010

Some of Prudential’s biggest shareholders have approached Mark Tucker about replacing Tidjane Thiam as chief executive of the embattled UK insurer, The Times has learnt.

Pru investors said last night that they had sounded out the man who served as chief executive from 2005 until last September within the past two weeks about his appetite to return to the job. One Pru shareholder said: “Tucker really knows the business, particularly in Asia. He was resigned to leaving for something different. But he’ll hate what’s happening and might be prepared to come back to restore some stability,” the Times reports.

The embattled board of Prudential will try to draw a line under its failed $35.5bn (£24.5bn) bid for AIG's Asian business AIA as it outlines a "business as usual" strategy at Monday's annual meeting. Despite assurances that the company's strategy has not changed, Harvey McGrath, the chairman, and Tidjane Thiam, the chief executive, are likely to face calls to resign at what could be a stormy meeting, the Telegraph reports.

BP saw the first significant progress in its seven-week attempt to capture oil pouring from its leaking well in the Gulf of Mexico on Sunday, but was still catching only about half of the estimated flow. Tony Hayward, chief executive, said he hoped the cap lowered over the well last week would eventually catch the “vast majority” of the leaking oil. But US authorities warned that there was a “long way to go” before it reached that point, the FT reports.

David Cameron launches a campaign on Monday to prepare Britain for an era of public sector “pain”, laying the ground for decisions that would “affect our economy, our society – indeed our whole way of life”. With just over two weeks until the Budget, Mr Cameron will promise an unprecedented level of public and business consultation before unleashing cuts that would hit “every single person in our country”. George Osborne, chancellor, will say on Tuesday that he is looking at the possible creation of a Canadian-style “star chamber” of senior ministers and officials to grill cabinet members on their proposed spending plans, the FT reports.

George Osborne, chancellor, is to press ahead with plans for a levy on UK-based banks, in spite of the G20 finance ministers at the weekend scrapping worldwide plans for a banking tax. Mr Osborne is expected to outline his thinking on a unilateral British bank tax in his Budget on June 22, undeterred by the hostile reaction to the idea from some ministers at the G20 meeting at Busan in South Korea. The prospect of a global bank levy died at 5am on Saturday when weary finance ministers agreed to drop the proposal from their final communiqué in the face of a wave of opposition, led by Canada, the FT reports.

The campaign by Lloyds shareholders to win back some of the £14bn lost in the value of their shares after the HBOS merger will start on Wednesday. Lloyds’ leaders and the Treasury could be sued by Lloyds Banking Group shareholders aggrieved by the merger. A campaign to recruit more of Lloyds’ 800,000 shareholders to pursue the claim will start in Reading on Wednesday. About 500 shareholders have joined the group already, the Times reports.

The recovery in the manufacturing sector picked up pace in the second quarter as factory output and new orders hit record highs. A snapshot of manufacturing activity between March and the end of May, compiled by the EEF manufacturing organisation and by BDO Stoy Hayward, the accountant, showed that the output among factories rose to the highest level since 1995. The gauge of output jumped to 30, up from the previous reading of 8 in March and well up from the low of -52 hit last June, the Times reports.

Inflation is a greater risk to the British economy than deflation, a majority of economists polled by The Daily Telegraph have said. They fear policymakers will try to inflate their way out of the debt crisis. Their concerns are not expected to be reflected in the Bank of England's decision this week on interest rates, with the Monetary Policy Committee expected to leave the rate at 0.5%.

PricewaterhouseCoopers is facing an inquiry by accounting regulators into its failure to notice that JP Morgan was paying up to £16 billion of clients’ money into the wrong bank accounts. Last week the Financial Services Authority fined the investment bank £33.3m — the largest penalty that the City regulator has imposed — for breaches of client money rules under which customers’ funds became mixed with the bank’s own cash over a seven-year period, the Times reports.

The nation's leading tax experts have warned the Treasury that it risks "unintended consequences" from rushing capital gains tax (CGT) reform. In a sharp intervention into what is becoming one of the most divisive issues between the coalition parties, the Chartered Institute for Taxation (CIT) is calling for a more considered approach to this and other tax reforms., the Independent reports.

Shares in Hitachi plummeted earlier today amid fears that the possible cancellation of £7.5bn worth of train orders by the British government could trigger similar capitulation by other countries. The 6.5% plunge in Hitachi’s stock followed signs that the Japanese engineering conglomerate may become an early and deliberately high-profile foreign victim of the UK government’s new spending cuts – part of the “pain” promised over the weekend by David Cameron, the Times reports.