Sunday newspaper round-up: Pay drag, GSK, bitcoin, rail rejig, Carillion
Britons are expecting smaller pay rises this year, according to a new survey, despite widespread optimism that wages are set to accelerate after years of weak growth. The survey of more than 5,000 consumers by Bank of America Merrill Lynch (BAML) shows that they expect their pay to climb by an average of just 2.4% in 2018, down from 2.7% last year. With inflation running at a higher rate, that would mean a real-terms wage cut. - Sunday Times
Up to £70m will have to be diverted from developing new cancer drugs in order to prepare for the impact of Brexit, Britain’s biggest maker pharmaceuticals of has warned. In a stark intervention over the extra costs being incurred, Phil Thomson, president of global affairs at GlaxoSmithKline (GSK), made clear that something approaching the figure would have to be spent whatever the outcome of trade talks. - Observer
Wall Street investors are nursing heavy losses on Bitcoin-linked investments as the first monthly futures contracts expire. One-month Bitcoin futures, which traded at close to $20,000 (£14,700) several weeks ago, have slumped in recent weeks as the cryptocurrency gold rush appears to fade. Bitcoin futures contracts launched on the Chicago Board Options Exchange in mid-December. - Sunday Telegraph
Shares are expensive – keep buying them. That appears to be investors’ consensus view. The storming run for stock markets in 2017 seemed almost too good to be trusted, but 2018 has started in similar style. - Observer
A cynic might say that when the last sane man bows to the Zeitgeist and succumbs to speculative mania, it marks the absolute top of the bull market. GMO’s Jeremy Grantham, the apostle of ‘value investing’, fears we are heading into one of the great asset bubbles of all time: a 50pc parabolic “near-term melt-up” on Wall Street, followed by an epic crash. If he is right, we face a wicked political denouement. - Sunday Telegraph
Investors should buckle up for a bumpier ride and not expect a repeat of last year’s returns despite a stellar start to 2018 for stock markets, according to one of the world’s most prominent investors. Mohamed El-Erian, chief economic adviser at Allianz, said 2017’s worldwide rally, which saw shares climb by more than 20% and bonds also rise, was a result of a combination of factors that is unlikely to be repeated. - Sunday Times
Taxpayers will help prop up ailing rail franchises under plans to encourage more companies to bid for routes. Ministers are changing the terms of new deals to cut the risk for private operators, amid concerns that they have been spooked by weaker consumer confidence and problems with existing franchises. - Sunday Times
More than 130,000 UK firms will be forced to pay VAT upfront for the first time on all goods imported from the European Union after Brexit, under controversial legislation to be considered by MPs on Monday. The VAT changes spelled out in the taxation (cross-border trade) bill – one of a string of Brexit laws passing through parliament – are causing uproar among UK business groups, which say that they will create acute cashflow problems and huge additional bureaucracy. - Observer
Regulators, banks and industry experts are warning consumers that big changes under way could provide a new ruse for fraudsters. A shift in how UK banks are structured, known as ring-fencing, must be completed by January 1, 2019 – but changes are happening now, well in advance of the deadline. - Mail on Sunday
Tension is mounting between Capital & Counties and the London borough of Hammersmith and Fulham amid speculation that Saudi investment firm Olayan Group is circling the property developer. It is said to be interested in buying a large project to redevelop Earls Court, west London, from Capital & Counties for about £500m. - Sunday Times
Tesco is expected to take the Christmas crown in the grocery wars this week as Britain’s biggest retailer reveals its best festive trading for six years. A flurry of household names will this week unveil how they fared over retail’s so-called "golden quarter" amid concerns about the strength of the high street. - Sunday Telegraph
Marks & Spencer is expected to lift the lid on the volatile state of high street trading this week when it reports a substantial drop in fashion and furniture sales. The retail industry’s bellwether is forecast to produce a 3.4% decline in clothing and homeware sales, and a 1.1% dip in food sales. - Sunday Times
New Look’s precarious finances are set to come under more pressure after the withdrawal of credit insurance to many of its suppliers. The development is a further blow for the ailing fashion retailer, which is struggling with falling sales and a debt burden of more than £1bn. - Sunday Times
Department stores may be facing extinction on an unforgiving high street, but the country’s biggest online fashion operator is proving a spectacular success. Sales at internet giant Asos, which sells brands from Hollister to Hugo Boss, could rise by 30 per cent this year to top £2.4 billion and soar past ailing high street giant Debenhams which sold £2.3 billion of goods last year. - Mail on Sunday
One of Britain’s top fracking firms has been accused of misleading the public over its intent to explore for shale gas in a protected area of ancient woodland in Sherwood Forest. Ineos, a UK-based petrochemicals firm, has said publicly it would exclude sensitive areas of the legendary home of Robin Hood from its seismic surveys. - Observer
The National Trust has written a heartfelt letter to a fracking company, urging it to abandon plans to survey one of its estates for shale gas reserves. Ineos Shale currently holds a licence to carry out pre-fracking tests in Nottinghamshire and is trying to force the Trust to grant it access to the Clumber Park. - Sunday Telegraph
The embattled builder Carillion could be bailed out by the government as it runs out of road with its lenders. The company, a big contractor on the HS2 north-south rail line, is due to submit a business plan to a clutch of lenders in the coming days, but if new funds do not come from the banks, it could be forced to tap the government for support, via emergency loans or by renegotiating contracts. - Sunday Times
British Airways passengers will no longer be able to recline their seats on short-haul flights, as the airline seeks to tackle so-called "legroom wars". The national flag-carrier is to emulate budget airlines later this year with a fleet of 35 planes that do not have reclining seats in economy class. - Sunday Telegraph
More than four-fifths of Britain’s biggest companies have so far failed to endorse a drive to promote more women to executive positions. The 30% Club, a campaign group seeking to increase the number of women in senior roles, has issued a rallying cry to the FTSE 100. - Sunday Times
Bosses at Berkeley Group stand to make a total of £127 million in bonuses between now and 2023 despite the housebuilder putting a cap on its controversial incentive scheme after protests by investors. The biggest winners are Tony Pidgley, Berkeley’s founder, and chief executive Rob Perrins who are in line to make £48 million and £33 million respectively. - Mail on Sunday
The London arms of American banks paid almost a thousand staff more than €1 million (£900,000) each in 2016, in the latest revelation of the vast rewards on offer to Britain’s best-paid bankers. Ten years after the financial crisis hit, pay rises at the biggest banks show no sign of abating – with the number of bankers paid more than €1 million still rising compared with the year before, according to an analysis of filings. - Mail on Sunday
INTERNATIONAL BUSINESS
Germany’s beleaguered chancellor returns to the negotiating table on Sunday to try and re-establish the coalition that governed Germany from 2013 to 2017. Angela Merkel’s efforts will involve tough bargaining with the centre-left, which eyes control over the country’s well-stocked state coffers as a reward for entering a new coalition – in the knowledge that failure of the talks could spell the end of the Merkel era. - Observer
Boosting the industrial and economic power of Europe, French president Emmanuel Macron told a crowd of students last year, means consolidating a competitive European industry on a “global scale”. In an impassioned speech, the former Rothschild banker said Europe is now “too weak, too slow and too inefficient” and must be bold, avoid procrastinating and react to threats. - Sunday Telegraph
The family which has run Aspall cider for eight generations is set to toast a multi-million pound windfall as brewing giant Molson Coors snaps up its Suffolk business. Barry and Henry Chevallier Guild, alongside other family members, have for more than 20 years run the business first started by their ancestor Clement Chevallier at Aspall Hall in 1728. - Sunday Telegraph
Chinese internet giant Tencent is eyeing a tie-up with a Burmese social network listed in London. The owner of the WeChat messaging app has held talks with MySQUAR about commercial partnerships and a potential investment, according to Asia-based bankers. - Sunday Times
Google has been profiting from a practice banned in America in which brokers secretly reap millions of pounds from vulnerable people seeking treatment for addictive diseases in the UK. An undercover investigation by The Sunday Times has found that the internet giant charged the middlemen as much as £200 each time someone accesses their website with a single click on the advertised link at the top of a Google search page. - Sunday Times
Apple has said that all iPhones, iPads and Mac computers are vulnerable to a major security flaw that leaves the devices open to hacking. The "Meltdown" and "Spectre" bugs, which were disclosed earlier this week, impact every device running the company’s iOS and macOS operating systems, as well as the Apple TV, the tech giant revealed overnight. - Sunday Telegraph
A British advertising agency is suing Uber over $19m (£14m) in unpaid bills, raising the stakes in a year-long row. Fetch Media, owned by Japan’s Dentsu, has been at odds with Uber since last January when the beleaguered San Francisco-based ride-hailing giant stopped paying its bills. - Sunday Times
Energy networks are preparing to dilute Britain’s natural gas grid with low-carbon hydrogen for the first time in a radical bid to cut emissions from the country’s heating system. Within weeks, a consortium of grid operators and experts will begin safety work in 130 homes and businesses before blending hydrogen into the methane-rich gas which has been used to heat British households and companies for over 50 years. - Sunday Telegraph
You are unlikely to have heard of him, but Chris Larsen last week briefly overtook Facebook’s founder Mark Zuckerberg to become the world’s fifth richest man. Larsen co-founded the cryptocurrency Ripple, which peaked at £2.80 last week – up from 15p early last month. - Mail on Sunday