Now even John Lewis is suffering from the High Street malaise. Over the six months to 30 July, group profits were down 3% to £78mn. And while sales were up 10%, in stores open more than a year sales were down 1.5%. Chairman, Sir Stuart Hampson, said: “There’s been plenty of recent comment that High Street trading over the last six months has been the worst in 15 years. I’d certainly agree with that, particularly the severity of the downturn for non-food retail spending.” But there was some good news. Like for like sales at grocery subsidiary Waitrose were up 4.4%, and the company is still pressing ahead with plans to open a further 10 departments stores over the next two years.
Sony loses LCD share
Sony is struggling. With the Walkman the Japanese giant once dominated the portable music market - now it’s all iPod. The LCD business is not going its way either. Matsushita Electric Industrial and Sharp Corp both seem to be growing at Sony’s expense. As a result, and despite the big things expected of the new portable games machine and the PlayStation 3, complete with new generation Blu Ray DVD, the company is to lay off 10,000 workers world wide.
TV for your mobile phone
TV for your mobile phone is coming closer. O2 and Arqiva (previously NTL Broadcast) are about to launch a trial among 400 people in Oxford offering 16 channels including BBC1, BBC2 ITV and Channel 4. “Increasingly, new forms of content are making their way onto mobile devices - music, in particular, is already booming - and the latest buzz is about television,” said Dave Williams, O2’s chief technology officer. “There will be many millions of mobile TV viewers worldwide by 2010.”
The trouble with watching video on your mobile right now is the terrible toll it takes on your battery. The Oxford trial will be testing the new DVB standard, Digital Video Broadcast, which uses something known as time slicing to extend battery life. DVB is vying with DVB-H as the standard for the future in TV over mobile phones.
Now exports hit manufacturing
Just as it seemed like things couldn’t get any worse, they did.
At least last month, demand from abroad for our manufactured good seemed promising. But now, a month on, even that is down.
According to the CBI, September saw “a sharp drop in the demand from abroad for capital goods, such as machinery and equipment, while a weak European export market also continues to depress orders.”
Ian McCafferty, CBI Chief Economic Adviser said:
“A combination of weak consumer spending and challenging world markets is weighing on UK manufacturing, following the sector’s contraction over the first half of the year. Cost pressures from high oil and transportation prices will only serve to depress profits further.
“Although it is too early to say if this month’s decline in export demand is the start of a trend, the fall is a further blow for manufacturers at a difficult time. Firms will be hoping this is not the first sign of slow-down in the global economy in the face of the latest oil price increases.”
In all the CBI industrial trends index was -27 in September, with 39 per cent of firms reporting total order books below normal, while 12 per cent say they are above normal. The August index was the lowest since October 2003.
The “biggest climbdown in English legal history” sees end to Equitable Life writ
When Equitable Life, Britain’s oldest life insurer, found itself being forced to honour Guaranteed Annuity Rates, it went close to collapse. It has tried to renege on these rates, but The House of Lords said a guarantee means, well it means a guarantee. Equitable Life was in crisis and policy holders had to pick up the tab, seeing the value of their funds slashed.
“If only our accountants, Ernst & Young, had warned us, things would have been different,” said the insurer and promptly sued them for £2bn. Then in July, it lowered the level of the suit to £700mn.
But, yesterday, it withdrew the case altogether. The Judge, or so it was feared, was likely to decide that the Equitable Life directors of that time would have carried on regardless of any warnings from Ernst and Young. The firm said it made the decision with “great sadness and frustration” but that it would have been “foolhardy” to continue.
Policyholders are baying for blood, the legal costs amount to £50 a head and the affair could yet claim the scalp of Chairman Vanni Treves and chief executive, Charles Thomson.
Paul Braithwaite of the Equitable Members Action Group said: “Policyholders are angry and disillusioned at the stewardship of the new board. It is a bitter pill. Equitable seems to be cursed.”
Ernst & Young chairman, Nick Land, said the Equitable Life climb down represented a “complete vindication” and that the whole affair was “ill conceived.”
The accountant’s QC, Mark Hapgood, said in court, that this was “the biggest climb-down in English legal history”.
Still, in a saga that has offered very little but doom and gloom for policyholders, at least there’s the case against former directors- they are being sued for £1.7bn.
John Lewis feelspinch
Now even John Lewis is suffering from the High Street malaise. Over the six months to 30 July, group profits were down 3% to £78mn. And while sales were up 10%, in stores open more than a year sales were down 1.5%. Chairman, Sir Stuart Hampson, said: “There’s been plenty of recent comment that High Street trading over the last six months has been the worst in 15 years. I’d certainly agree with that, particularly the severity of the downturn for non-food retail spending.” But there was some good news. Like for like sales at grocery subsidiary Waitrose were up 4.4%, and the company is still pressing ahead with plans to open a further 10 departments stores over the next two years.
TV for your mobile phone
TV for your mobile phone is coming closer. O2 and Arqiva (previously NTL Broadcast) are about to launch a trial among 400 people in Oxford offering 16 channels including BBC1, BBC2 ITV and Channel 4. “Increasingly, new forms of content are making their way onto mobile devices - music, in particular, is already booming - and the latest buzz is about television,” said Dave Williams, O2’s chief technology officer. “There will be many millions of mobile TV viewers worldwide by 2010.”
The trouble with watching video on your mobile right now is the terrible toll it takes on your battery. The Oxford trial will be testing the new DVB standard, Digital Video Broadcast, which uses something known as time slicing to extend battery life. DVB is vying with DVB-H as the standard for the future in TV over mobile phones.
Now exports hit manufacturing
Just as it seemed like things couldn’t get any worse, they did.
At least last month, demand from abroad for our manufactured good seemed promising. But now, a month on, even that is down.
According to the CBI, September saw “a sharp drop in the demand from abroad for capital goods, such as machinery and equipment, while a weak European export market also continues to depress orders.”
Ian McCafferty, CBI Chief Economic Adviser said:
“A combination of weak consumer spending and challenging world markets is weighing on UK manufacturing, following the sector’s contraction over the first half of the year. Cost pressures from high oil and transportation prices will only serve to depress profits further.
“Although it is too early to say if this month’s decline in export demand is the start of a trend, the fall is a further blow for manufacturers at a difficult time. Firms will be hoping this is not the first sign of slow-down in the global economy in the face of the latest oil price increases.”
In all the CBI industrial trends index was -27 in September, with 39 per cent of firms reporting total order books below normal, while 12 per cent say they are above normal. The August index was the lowest since October 2003.
Mini boom predicted in aftermath of hurricanes
It’s one of those perversions of economics: sometimes the longer-term impact of disasters and wars can be positive for an economy. History is littered with examples, and 2006 might prove to be a classic case.
Here’s the bad news so far. While the economic effects of Hurricane Katrina might seem trivial in comparison to the human misery, they shouldn’t be ignored and right now the winds are having a devastating effect on the US economy. According to the latest data from the US government, US jobless figures have surged by 214,000 thanks to the storm. Meanwhile, confidence has plummeted. Most of the reports currently available refer to a period before Katrina, the most noticeable exception is the Michigan Consumer Sentiments Index, which has fallen to a 13 year low.
And all that is without taking into account the impact of the high price of oil on the economy, caused by storm damage.
Then there’s Rita. At the time of going to press, it looks as if the not so lovely Rita is veering east, and will miss some of the key areas previously thought to be in danger- but then again, with hurricanes nothing is certain.
Some estimates have suggested that the area to be hit by Rita accounts for 27.5% of US refining capacity. There are also fears that pipelines could be affected too.
And while the damage the storm may or may not inflict is conjecture at this stage, there is a lot we do know.
We do know, for example, the largest refinery in the US, Exxon Mobil’s operation in Baytown has been shut down. We do know that almost 92% of all US crude production in the Gulf of Mexico, accounting for almost 10% of US needs, is out of action. We do know that around 66% of natural gas production in the Gulf has been shut down.
And when the crisis is over, workers will not return to their rigs immediately. Some will be attending to their storm damaged homes, and when they do make the trek back to work, they will have to suffer in a seriously disrupted transport system.
But then, once the panic is over, and the re-building is underway, it could be a different story.
There’s a feeling that there’s a panic premium built into the price of oil. When the crisis is over, they say, oil will fall, or at worst stabilise, relieving pressure on inflation, enabling the Fed to end its run of upping the rate of interest, and maybe allowing other central banks, such as our own Bank of England, to do the same.
Then there’s the perverse economic effects of disasters. As storm damaged regions of the US are repaired, the US economy will benefit from an injection of spending. How significant will this be? Capital Economic reckons that 2006 will see a 1.5% surge in US GDP thanks to a fiscal stimulus from reconstruction.
Authors guild take on google
Maybe book publishers are being a little like King Canute, trying to hold back the inevitable internet tide, or maybe they are simply fighting for their rightful corner of the market.
Google has plans to create a massive online library, using books from US libraries of Stanford, Michigan and Harvard universities, and by 2015 from the New York Public Library. It is also planning to include out of copyright books from the Oxford University library.
Now the Authors Guild has filed a lawsuit against the Internet wonder company.
Nick Taylor, president of N the New York-based Authors Guild, said in a statement: “This is a plain and brazen violation of copyright law.”
Google maintains that its online library will help authors. It says only extracts from books will be available and its library will create more awareness for their work.