Freeze-frame
More pain to come
The chancellor George Osborne this week gave with one hand, pledging to freeze fuel duty until the next election, then potentially took away with the other as he confirmed that an elected Conservative government post-2015 would seek to continue cutting costs through most of the life of the next parliament. He confirmed his desire to slash another £25bn from the deficit by extending austerity measures out towards 2020 in a bid to return the UK budget to a surplus for the first time since just after the turn of the century.
Cash coming
Companies to open coffers
A survey by Deloitte has raised hopes that corporate spending could be about to pick up after a prolonged period of consolidation and cost cutting. The quarterly survey of chief financial officers of some of the largest UK companies indicated that risk appetite is at its highest for six years, with 54 per cent of respondents saying it was a good time to increase the risk on their balance sheets. It was also clear that the prospect of investing for a UK recovery is more prominent in their thinking than expansion into emerging markets or even investment in the US or Japan. An expansion in corporate spending would mark a sharp about-turn from the latest official statistics, which showed a 2.7 per cent fall in business investment during the second quarter of the year.
Oil crunch
Shell warning
Peter Voser, the chief executive of Royal Dutch Shell, this week warned of an "oil crunch" if investment in oil and gas extraction does not continue, or even accelerate. While demand for energy is expected to double in the next 50 years as the emerging economies of the world continue their breakneck development, in the same time period many of the most significant oil and gas producing fields will see production decline significantly. With an eye on the future, Mr Voser appealed for more oil and for companies to be allowed to make deals with Iran to tap some of the world's most prospective remaining conventional fossil fuel sources.
Supermarket swap
Tesco slump
Half-year results from Tesco this week emphasised the scale of the continued challenge facing chief executive Philip Clarke as he battles to turn the grocery giant's performance around. Although UK food sales edged up, merchandise sales lagged behind as a turnaround plan is carried out. Meanwhile, overseas sales took a hit and the company followed up its recent exit from the US by pushing its Chinese operations into a joint venture there in which Tesco will carry a 20 per cent stake. Rival Sainsbury emphasised the different fortunes the two are experiencing by issuing a positive trading update on the same day which showed that total sales rose by 5 per cent in the second quarter of its financial year.
Help is coming
Support brought forward
Despite some economic commentators urging a rethink of the expansion of the government's Help to Buy home loan guarantee scheme to the secondary property market, amid fears it could stoke another property bubble, the second phase of the scheme was brought forward this week. The power of review of Help to Buy was placed under the auspices of the Bank of England's Financial Policy Committee recently, but the announcement that its start date is being brought forward from January to this month just happened to coincide with the start of the Conservative Party conference this week.
See Help to Buy to accelerates housing recovery
Apple squeeze
$150bn call
Activist US investor Carl Icahn has met with Apple chief executive Tim Cook in a bid to persuade the board to up its return of cash to investors. Mr Icahn, who has a $2bn or 0.5 per cent stake in the technology giant, encouraged Mr Cook to increase the proposed $60bn buyback Apple has already announced as high as $150bn, arguing that with $147bn in cash at the last count the company could even borrow at historically low rates to fund the cash return.
