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from Breakingviews:

UK’s problem: it’s the best in Europe

By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

UK GDP stalled in the fourth quarter, contracting by 0.2 percent. That’s bad. But which major west European economy will perform best in 2012? It’s the UK again, the IMF predicted this week.

Britain’s main problem is that it’s doing best in a troubled continent. If it achieves the meagre 0.6 percent growth the IMF predicts in 2012 it will have grown twice as fast as France or Germany and have evaded the 0.5 recession the IMF forecasts for the euro zone as a whole. The euro zone’s fiscal pain is the main obstacle to a firmer British recovery.

UK cuts, it’s true, aren’t helping growth in the short term. Since April austerity has kicked in hard, booting 193,000 unfortunate public sector employees out of work. Unemployment has risen to 2.7 million and will go higher.

Press Round-up – January 26

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Einhorn and Greenlight fined by UK financial regulators
David Einhorn, one of the world’s highest profile hedge fund managers, and his firm, Greenlight Capital, have been fined 7.2 million pounds ($11.22 million) by UK regulators for trading before a 2009 equity fundraising by Punch Taverns. (FT)


Ex-Lloyds chief joins UK advisory firm
Eric Daniels, former chief executive of Lloyds Banking Group and one of the most high-profile figures in the financial crisis, is joining a little-known advisory firm. (FT)

from John Lloyd:

A yacht not fit for a queen

Her Majesty Elizabeth the Second, by the Grace of God, of the United Kingdom of Great Britain and Northern Ireland, and of Her other Realms and Territories, Queen, Head of the Commonwealth, Defender of the Faith … is in want of a yacht.

She had one, the Royal Yacht Britannia, which she loved very much. When the Labour government of Tony Blair said it was too expensive and decommissioned it soon after assuming office in 1997, she was seen to weep at the ceremony. Last year, Blair was reported as saying he regretted the decision, pressed upon him by the then-chancellor, Gordon Brown, and inherited from the previous, Conservative administration. It cost £11 million a year to run, and a necessary refit would have cost some £50 million. So it was put out to the nautical equivalent of pasture. It’s now on show at a dock in Leith, the port of Scotland’s capital, Edinburgh, where it’s in much demand as a venue for “occasions."

Press Round-up – January 25

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IMF issues $440 billion global warning for 2012
Europe will enter a mild recession this year, Britain will slow to a crawl and growth worldwide will expand significantly less than hoped, the International Monetary Fund said. (Times)


S&P downgrades French banks
The loss of France’s long-cherished triple A sovereign debt status spilt over into its banking sector on Tuesday as Standard & Poor’s cut its long-term ratings for Societe Generale and Credit Agricole, two of the country’s top three banks. (FT)

Press Round-up – January 24

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Berlin ready to see stronger “firewall”
Germany is open to boosting the firepower of the euro zone’s rescue funds to 750 billion euros in exchange for strict budget rules favoured by Berlin in a new fiscal compact for all members of the currency union. (FT)

 
UK’s Cable plans to curb top pay
British business secretary Vince Cable outlined the most ambitious attempt in a decade to reign in soaring executive pay with measures to boost shareholder power and demystify complex pay deals.  (FT)

Press Round-up – January 23

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IKEA shelves Indian retail move
Sweden’s IKEA, the world’s biggest furniture retailer, is withholding its entry into India in spite of New Delhi’s move to open its market to foreign retailers as the Swedish homewares company accelerates its expansion in other BRIC countries. (FT)

Miliband urges Cameron to block RBS chief’s bonus
UK opposition leader Ed Miliband has challenged the Prime Minister David Cameron to block Royal Bank of Scotland chief executive Stephen Hester’s bonus. (Telegraph)

Press Round-up – January 20

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China set to buy stake in Thames Water
A Chinese sovereign wealth fund is poised to buy a stake in the water network that serves London, in what would be the fund’s first acquisition in the UK following investment talks with British politicians. (FT)

Italy’s banks tap into ECB fund
Italy’s banks, led by UniCredit, were the biggest users of the special three-year funding mechanism launched by the European Central Bank in December, according to a new research report. (FT)

Press Round-up – January 19

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RBS tests Cameron’s resolve on pay-outs
David Cameron’s pledge to curb executive pay and stop “rewards for failure” is set to face its biggest test, as Royal Bank of Scotland prepares to offer a bonus of more than 1 million pound to its chief executive, even though the state-controlled bank’s share price has almost halved in a year. (FT)

Fears rise over looming Commerzbank and MPS fiscal plans
European regulators are convinced that two of the continent’s banks, Commerzbank  and Monte dei Paschi, will fail to produce credible plans to plug capital deficits by Friday’s deadline, exposing both to the risk of full or partial nationalisation. (FT)

Press Round-up – January 18

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King holds fast on bank supervision
The governor of the Bank of England on Tuesday dismissed suggestions that its proposed new powers be subjected to internal checks and balances, in an often testy encounter with British MPs. (FT)

Citigroup plunges as rival overtakes
Citigroup’s investment banking business plunged into the red in the fourth quarter of last year as revenues from trading and deal advice dried up. (Times)

Press Round-up – January 17

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S&P downgrades euro zone bailout fund
Standard & Poor’s on Monday stripped the eurozone’s rescue fund of its AAA credit rating, potentially constraining its ability to contain the region’s debt crisis and focusing attention on efforts to create a more robust successor.  (FT)

Italy’s Monti seeks help on borrowing
Italy’s prime minister Mario Monti has pleaded for Germany and other creditor countries to do more to help lower his country’s borrowing costs, warning there would be a “powerful backlash” among voters in the eurozone’s struggling periphery if they did not. (FT)

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