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Sunday newspaper round-up: Rate hike, Brexit, profit warnings, buybacks, Sky
Stronger than expected growth numbers have fuelled expectations that another rise in interest rates is on the way, with City traders now seeing a May rise from the Bank of England as an even-money bet. The economy expanded by 0.5% in the final quarter of 2017, according to official figures last week, faster than economists had forecast. - Sunday Times
The number of listed companies issuing profit warnings hit a a two-year high last year, sounding a warning about possible strains in the UK economy. Research by EY found that in the final quarter of 2017, 81 profit warnings were released by quoted companies, with support services and retail businesses feeling under the most intense pressure. EY added that in the first two weeks of 2018 more retail business put out profit warnings than in the first three months of the previous year. - Sunday Telegraph
The government has been accused of failing to look after the interests of small business after the first decline in the number of new companies created in seven years. Figures set to be released by the Centre for Entrepreneurs think tank tomorrow will reveal a 13.7% decline in the number of start-ups formed in Britain last year. The report, using data from Companies House, will show just over 589,000 new ventures created in 2017. - Sunday Times
BREXIT CORNER
Mandarins opposed to Britain's withdrawal from the EU have "taken control" of the Brexit agenda and are "forcing a weak Prime Minister" into a soft Brexit, senior government figures and MPs have warned. In a dramatic intensification of the war within the Conservative Party, Eurosceptics said that Philip Hammond's declaration last week that Brexit would be "very modest" appeared to articulate No 10's "direction of travel" on negotiations. - Sunday Telegraph
The European Union is beefing up its preparations for a 'no deal' Brexit, more than doubling the number of officials devoted to preparing for a breakdown in the talks, the Sunday Telegraph has learned. EU sources said the number of officials in the European Commission secretariat focussing on preparations for either a 'no deal' scenario or a 'hard Brexit' would expand from eight to 20 as concerns mount in Europe over whether Theresa May can deliver. - Sunday Telegraph
Over the next two days, hundreds of peers of the realm who rarely speak in parliament will pack their bags and head for the House of Lords. Approximately 185 peers are already down to speak on the EU withdrawal bill, which has its second reading on Tuesday and Wednesday. - Observer
Former cabinet ministers have been exposed attempting to profit from a new cash for Brexit gravy train in Westminster, following an undercover investigation. Lord Lansley, the former health secretary, was secretly filmed offering to use his knowledge and connections from within Westminster to provide "intelligence" on Brexit to a Chinese company offering him tens of thousands of pounds. - Sunday Times
GKN, ASTRA, SKY, EAST COST RAIL, GAS
Ministers could crack down on share buybacks if they decide they are being used to inflate bosses' pay packages. The department for business, energy & industrial strategy has hired the consultancy PwC and Alex Edmans from the London Business School to research the motivations and effects of buybacks - where a company purchases its own shares. Its findings will be published later this year. - Sunday Times
A hostile multibillion-pound bid for engineering giant GKN from turnaround specialist Melrose is coming under increasing scrutiny amid concerns about national security. It is understood that the UK Government has instructed senior officials to evaluate whether the proposed £7.4bn takeover of the aerospace and car parts manufacturer is in the public interest. - Sunday Telegraph
The hedge fund that was involved in a 15-year debt battle with Argentina, has snapped up a stake in pay-TV giant Sky. Elliott Management, the aggressive New York investor set up by billionaire financier Paul Singer, has built up a 1.1% stake ahead of a possible shareholder vote on its £11.7bn takeover by 21st Century Fox.
A controversial decision to allow two companies to hand back a rail franchise three years early is to be investigated by Britain's public spending watchdog. Chris Grayling, the transport secretary, was accused of effectively bailing out Stagecoach and Virgin's joint venture Virgin Trains East Coast by allowing them to cut short their deal to run trains on the East Coast mainline. - Observer
Government ministers will undertake a fresh review of the UK's gas supplies after major disruptions late last year ripped through the market, driving prices to multi-year highs. The UK gas price rose to its highest level since 2011 after an explosion in Austria compounded disruption following outages in Norway and a crack in the country's main North Sea pipeline system. - Sunday Telegraph
City firms are scrambling to sign up to a government-backed gender equality charter after calls from Virgin Money chief Jayne-Anne Gadhia to "get on board" in the wake of the Presidents Club dinner scandal. Ms Gadhia told The Sunday Telegraph it was "about time" that banks not signed up to the Government's Women in Finance Charter did so. - Sunday Telegraph
Rio Tinto is facing renewed questions over its decision to open a $12bn (£8.5bn) mine in the middle of the Gobi desert. Jean-Sébastien Jacques, Rio's chief executive, flew to Mongolia last week for talks with the government amid escalating tension between the two sides. - Sunday Times
RBS, Credit Suisse and Deutsche Bank are among the banking giants tightening their belts in London by ditching expensive properties and consolidating into smaller offices. Finance companies are already planning to vacate 4.5m sq ft of office space in the capital over the next three to four years, with the cuts "baked in" regardless of the outcome of Brexit trade talks, the consultancy said. - Sunday Telegraph
The property entrepreneur behind the regeneration of London's famous Burlington Arcade has formed a new joint venture with building and civil engineering contractor Sir Robert McAlpine to build £2bn of offices across the south east. John Baker formed the Commercial Parks Group to take advantage of the growing need for more offices in the south east, he said, with initial acquisitions including £20m worth of property in Crawley, Haywards Heath and Bromley. - Sunday Telegraph
The UK government is lobbying on behalf of UK-based tobacco giants operating overseas, despite spending millions of pounds trying to curb smoking rates abroad. Freedom of information requests reveal that the Foreign Office and the Department for International Trade have been championing the interests of British American Tobacco, despite the government being forced to draw up new guidelines for UK embassy staff after it emerged in 2012 that the UK ambassador had been lobbying the Panama government on behalf of BAT. - Observer
TECH TALES
A Swiss predator is weighing a takeover bid of up to £150m for part of AIM-listed Telit Communications, the embattled "internet of things" supplier that saw its chief executive resign last year amid allegations he was a fugitive on the run from American authorities. City sources said U-blox, a semiconductor maker listed in Switzerland, has expressed an interest in buying Telit's automotive division, which supplies companies such as Tesla. - Sunday Times
Britain's energy, water and transport companies have been ordered to strengthen their cyber defences or risk fines amid growing fears that Russian hackers are planning an attack on critical infrastructure. Companies dealing with infrastructure that have failed to prepare for assaults will be penalised in the event of an attack, the Government has announced. Offenders face fines of up to £17m for weak defences or failing to notify regulators about cyber attacks. - Sunday Telegraph
Businesses are "sleepwalking to massive penalties" by not being ready for new EU data protection laws set to come into force at the end of May, a leading American data scientist has warned. Research by Jeff Jonas, the "wizard of big data", found that 60% of companies did not have structures in place to deal with the general data protection regulation (GDPR). - Sunday Times
Tesla is piecing together components of its Model 3 electric car by hand as it scrambles to work out production kinks and stem billions of pounds in losses. Reports this weekend warned that the car maker run by Elon Musk, above, could face fresh delays to its all-important Model 3 saloon because of difficulties automating manufacturing at its Las Vegas "gigafactory", where the vehicle's batteries are assembled. - Sunday Times
Mark Zuckerberg often waxes philosophical about the "magic" of technology. The Facebook founder's best trick, however, may be conjuring up millions of non-existent users, and then using them to convince companies to plough billions of pounds in advertising into his ever-growing empire. - Sunday Times
SoftBank, the Japanese technology colossus, is studying an audacious plan to create a global digital payments system that could take on PayPal, Apple Pay and China's Alipay. The investment giant - led by maverick billionaire dealmaker Masayoshi Son - has evolved into the world's most aggressive investor in new technologies. - Sunday Times
A Japan-based cryptocurrency exchange will refund to customers about $400m (£282m) stolen by hackers two days ago in one of the biggest thefts of digital funds. Coincheck said it would use its cash to reimburse about 46.3bn yen to the 260,000 people who lost their holdings of NEM, the world's 10th-biggest cryptocurrency by market capitalisation. - Observer