In a week when we’ve seen a US pilot miraculously crash-land a plane full of people into a river without a single fatality, the Government’s ability to navigate our way through the financial downturn is looking increasingly dubious. So far, its initiatives have failed to engender enough confidence to get banks lending again, and with the Tories pulling away again in the polls, it was time for drastic action: a £20bn scheme to guarantee SME loans. Unfortunately the bigger companies won’t qualify – and they're not too pleased about being left on their own...
Britain’s banks are also looking deciding unhealthy again, after a week in which their post-Christmas share price gains have melted away – investors were spooked by rumours of further mark-downs, gloomy predictions from policymakers, and the imminent end to the rules on short-selling. With US behemoths Citigroup (which started the painful break-up process) and Bank of America (which has been forced to go cap-in-hand to the government for funding) struggling to keep their heads above water, there’s a good chance that British banks will also need more capital before too long. We now own a 43% stake in the new Lloyds-HBOS superbank – but will it turn out to be an economic millstone around our collective neck?
Elsewhere there were also red faces over at JJB, which was forced to admit that its CEO has lost his 27% stake without telling them – just as it announced another big sales slump. Primark was also in the news for all the wrong reasons, after one of its suppliers was accused of employing illegal immigrants and paying them peanuts (though it bounced back later in the week with another big sales hike). Tesco also got some stick after recording lower sales growth than all its major rivals over Christmas (although it’s not exactly on the breadline). And perhaps the most distressing news of all: the UK arm of Findus, the maker of student favourite Crispy Pancakes, was forced to call in the administrators. Perhaps there should be a minute’s silence during the Fifteen-to-One commercial break?
In happier news, the UK is now quaffing more imported wine than any other country (well, we need something to cheer us up). The rise of Aldi means graduate recruits can now pick up a remarkable £40k starting package. And we also learned that men with long ring fingers make better traders. It’s all about the testosterone, you see – although we suspect that our banks may be considerably emasculated in the coming months...
In today's bulletin:
US doubles up with $140bn Bank of America bailout
Fears fuelled as Honda culls 3,000 jobs
Cooper 'sorry' for Equitable Life
MT's Week in 60 Seconds
Making the impossible happen, with YouTube