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Carillion takes hit after rescue plan rejected by lenders

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Carillion shares fall on reports that lenders have rejected a rescue pan of the construction company.

Carillion is struggling with £900 million of debt and a £590 million pension deficit. Workers’ unions are being asked to step in to attempt to save the 19,500 jobs that are held at the construction firm.

Shares were down on morning trading on the London Stock Exchange. By mid-afternoon, shares were down 26.5% (5.3 points) to 14.7%. To put this into perspective, Carillion shares have lost 90% of their value since July 2017.

The key lenders of HSBC, Barclays, Santander and Royal Bank of Scotland have discussed reducing debt and restructuring the organisation’s balance sheet.

A government spokeswoman declined to comment on any specific meetings on the potential future of the company. She said: “Carillion is a major supplier to the government with a number of long-term contracts. We are committed to maintaining a healthy supplier market and work closely with our key suppliers.

“The company has kept us informed of the steps it is taking to restructure the business. We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress.”

A spokesman from Carillion declined to comment.

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UK ranked ‘best country for business’ in 2018 Forbes list

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Forbes‘ annual rankings sees Britain top the list despite Brexit uncertainty still in the air.

The UK ranked in the top 25 in each of the categories judged, except for political risk. The country performed best in the categories of technological readiness (fourth) and the size and education of its workforce (third).

For 2018, the Forbes annual list judged 153 countries on 15 major factors. The financial services sector and US investment were major positives that were pivotal in the UK topping the list.

New Zealand, the Netherlands, Sweden and Canada were second, third, fourth and fifth, respectively. Ireland also appeared in the top ten in eighth place.

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UK car manufacturing falters in September

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The fall in UK car manufacturing was predominantly attributed to an overall fall in demand of 14% in the UK market.

UK car output fell 4.1% to 153,224 vehicles last month. The months of April, May, June and August also saw declines.

Domestic demand declined by a large sum to 31,421 units (14.2%) in September. This contributes to the overall year-to-date production decrease of 2.2%. Alongside this, exports dropped by 1.1% to 121,803.

The first nine months of 2017 has seen 1,259,509 cars manufactured, a decline of 2.2% when compared with last year.

With many looking towards more environmentally-friendly modes of transport and the advent of the e-car, the traditional British car manufacturers are unsurprisingly taking a hit. The beginning of this week saw Mayor Sadiq Khan introduce the toxicity charge (T-charge) to encourage people to drive less polluting cars. This will add to the already-existing £11.50 congestion charge.

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Unemployment and zero-hour contracts down in latest jobs data

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The UK employment rate is at its highest level since comparable records began in 1971, according to the latest data released by the Office of National Statistics today.

The ONS also revealed that 20,000 fewer people are on zero-hour contracts compared to this time last year, with 883,000 depending on zero-hour employment for their main income.

“Estimates from the Labour Force Survey show that, between January to March 2017 and April to June 2017, the number of people in work increased, the number of unemployed people fell, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) also fell,” the ONS said.

The employment rate is at 75.1% and the unemployment rate is now 4.4%, down from 4.9% last year and the lowest since 1975.

“Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.1%, both including and excluding bonuses, compared with a year earlier,” the data revealed.

There are now 32.07m people at work in the UK, 125,000 more than in the first three months of the year and 338,000 more than this time last year.

 

 

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GDP growth and interest-rate rise predicted amid positive UK forecast

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GDP growth of almost 2%, an interest rate hike in Q1 2018 and inflation easing to 2% in 2019 are all part of the National Institute of Economic and Social Research’s latest forecast for the UK economy.

Predicting 1.7% GDP growth this year and 1.9% in 2018, the NIESR has brought forward its prediction of an interest rate increase from Q2 2019 to Q1 2018, a “modest withdrawal of some of the additional stimulus that was injected into the economy after the 2016 EU referendum,” it said. The think tank also predicted an elimination of the fiscal deficit in 2022, and a peaking of debt to ration in 2018/19.

“The economy has slowed each year since 2014 and according to our forecast, 2017 will mark the trough for GDP growth,” it said in its analysis. Thereafter, we envisage a modest recovery that takes economic growth to a level that is close to potential.”

It also described movement in the UK’s labour market as “puzzling”, with employment growing, unemployment dropping and wage growth remaining “muted”.

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Premier makes “world-class” oil find off Mexico

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UK independent exploration firm Premier Oil has announced a “world-class oil discovery” off the coast of Mexico.

The find, made with partners Talos Energy and Sierra Oil & Gas, came at the Zama-1 well, the first private offshore exploration well in Mexico’s history. Premier holds a 25% share in Block 7, where the well is located.

“We are delighted to be announcing this significant new oil discovery offshore Mexico,” said CEO Tony Durrant. “We have encountered a very substantial oil bearing interval which indicates over 1 billion barrels of oil in place, a commercial standalone development which adds materially to Premier’s portfolio of assets worldwide”

The find was made in 166 metres (546 feet) of water, around 60 kilometres (37 miles) offshore the industrial port of Dos Bocas.

“It is particularly pleasing that our strategy of focusing our exploration portfolio on high impact opportunities in proven but under-drilled basins has led to this world class discovery with our first well in Mexico,” said Durrant. “The oil discovered in the Zama-1 well is an extremely important event for Premier, the joint venture and for Mexico and we look forward to working with the government and our partners to realise the full potential of this exciting discovery.”

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£150m aviation investment announced at Rolls-Royce

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Aircraft engine giant Rolls-Royce has announced £150m of investment in its civil engineering facilities in the UK.

The development at new and existing facilities is intended to provide for a plan to double engine production and will come onstream over the next few years, with the company developing and testing the next generation of aviation engines.

“This investment comes at a time of unprecedented growth in Rolls-Royce, said Eric Schulz, Rolls-Royce president. “We are doubling the production of new engines at the same time as introducing three new engines to the market.

“With this investment, we are creating the capacity and flexibility to deliver on our goals, while committing to sustain employment in the UK and I would like to thank the unions for their support in delivering this important package of investment.”

The group employs over 22,000 in the UK and the bulk of the investment will be formed by a civil aero engine testing facility at Derby. Derby’s maintenance repair and overhaul facility, its Derby manufacturing facility and its Nottinghamshire factory are also in line for investment, and the company announced a reversal of previously announced plans to close its Derby precision machining facility.

The news was welcomed by business secretary Greg Clark and Unite negotiator Simon Hemmings.

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British tech firm Imagination for sale amid Apple dispute

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UK computer processor firm Imagination Technologies Group is on the market and has received takeover interest from a number of parties, the group announced in a statement today.

The company, which designs and makes graphics and processing chips for products such as Apple’s iPhone, said that following approaches from potential buyers “the board of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders”.

Imagination’s share price collapsed in April after Apple said it would no longer use its licensed technology in 15 months’ to two years’ time. “Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information. This evidence has been requested by Imagination but Apple has declined to provide it,” the company announced at the time.

“Further, Imagination believes that it would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights, accordingly Imagination does not accept Apple’s assertions.

“Imagination has reserved all its rights in respect of Apple’s unauthorised use of Imagination’s confidential information and Imagination’s intellectual property rights,” it said in April.

The company “remains in dispute with Apple Inc”, today’s statement also said.

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EE to introduce balloon and drone-based masts

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Mobile provider EE has revealed its own patent-pending drone and baloon-based mobile masts aimed at improving coverage throughout the UK.

The company claims that its air masts will be able to serve sites where 4G coverage is absent, or to aid search and rescue operations. EE expects to first use the technology in the UK later this year.

“We are going to extraordinary lengths to connect communities across the UK,” said CEO Marc Allera. “Innovation is essential for us to go further than we’ve ever gone, and deliver a network that’s more reliable than ever before. Rural parts of the UK provide more challenges to mobile coverage than anywhere else, so we have to work harder there – developing these technologies will ultimately help our customers, even in the most hard-to-reach areas.”

The drones and balloons will use small cells to connect into the EE network via satellite or 4G.

“Looking ahead, I see innovations like this revolutionising the way people connect,” Allera said. “We’re developing the concept of ‘coverage on demand’. What if an event organiser could request a temporary EE capacity increase in a rural area, or a climber going up Ben Nevis could order an EE aerial coverage solution to follow them as they climb? We need to innovate, and we need to think differently, always using customers’ needs to drive the way we create new technologies.”

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No ‘rationalisation’ at Vauxhall, says Business Secretary

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UK Business Secretary Greg Clarke has claimed that GM-owned carmaker Vauxhall’s UK future is secure.

“There is some way to go in discussions between GM and PSA but I was reassured by GM’s intention, communicated to me, to build on the success of these operations rather than rationalise them,” he said having met General Motors president Dan Ammann amid reports of a sale of Vauxhall and Opel to the parent company of Peugeot and Citroen.

“We will continue to be in close contact with GM and PSA in the days and weeks ahead,” said Clark.

GM was more cautious in its announcement: “While we have no definitive news to report at this time, we can affirm that our objective in exploring opportunities with PSA Group is to build on the success of Opel Vauxhall and to put the business and the operations in the strongest possible position for the future. We look forward to engaging with our stakeholders as part of these ongoing discussions,” it said.

The proposed deal is facing union opposition and political uncertainty, with details of the plan still thin after news of takeover talks emerged earlier this week.