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The economy
“[The economic times we are facing are] arguably the worst they’ve been in
60 years. And I think it’s going to be more profound and long-lasting than
people thought.”

Chancellor Alistair Darling is a little too frank with The Guardian, 30
August

“I do not underestimate these challenges, but I believe that Britain’s
future is bright. We will bring resolution to the task and determination to
build, brick by brick, the foundations for success in this new world.”


The prime minister has a more upbeat view of circumstances, Evening
Standard
, 8 September

“In the three months to July, the seasonally adjusted chained volume
index for the output of the production industries fell by 1.1% compared with the
previous three months. Between June and July output of the manufacturing
industries fell by 0.2%… There were widespread falls in manufacturing, with a
significant decrease in output of 1.3% in the electrical and optical equipment
industries. There were no significant increases.”

The fifth successive monthly fall is said to be the longest run of decline for
seven years, ONS, 9 September

“The continued inability of many to secure mortgage finance is reflected
in the collapse in transactions. The average number of transactions per surveyor
(over the past three months) is now at 12.7, the lowest figure since the survey
began with some Chartered Surveyor estate agents in a number of regions
reporting less than one sale per week.”

Royal Institution of Chartered Surveyors, 9 September

“In the United States, uncertainty as to the extent of weakness hinges
importantly on how rapidly the effects of temporary fiscal stimulus will fade.
In the euro area and its three largest economies, as well as in the UK, activity
is foreseen to remain broadly flat.”

The OECD forecast quarter-on-quarter falls in GDP of -0.3% in Q3 and -0.4% in
Q4, making the UK the only G7 country expected to experience a downturn, 2
September

Industrial relations
“We have done a lot of talking about co-ordinating our industrial action and
campaigning over the government’s draconian public sector pay policy. Now is the
time to put those words into action. The people who keep this country running
are facing financial misery and the daily worry of how to make ends meet. They
are being forced into financial hardship at the hands of a government out of
touch and hell-bent on driving down the wages of millions of hardworking
families… which is why we are balloting our members across civil and public
services for what would be the most sustained action over pay since the Thatcher
era.”

Mark Serwotka, PCS union general secretary, challenges the government’s public
sector pay cap at the TUC conference, 8 September

“It’s nice to actually get caught up a bit, but it will be a different
story if this thing stretches more than a month.”

An unidentified supplier to Boeing, overworked because of the 787 Dreamliner,
sees a silver lining in the Boeing machinists’ strike that started on 6
September, Wall Street Journal Europe, 12 September

“The US economy looks like it is travelling along two tracks. If you look
at output… the economy has been rising at a decent clip. But people aren’t
feeling it in their wallets because the factors driving their own incomes ­ such
as jobs and wages ­ are under strain… One answer is that the business cycle is
changing… With better technology, businesses get ahead of the inventory
build-ups or demand slowdowns more quickly. The declining influence of unions is
also putting management in a position to fire workers more quickly.”

Wall Street Journal Europe analysis, 8 September

Retail
“We have responded to the difficult trading conditions by investing in the
long-term development and growth of the business ­ opening new stores, driving
available sales opportunities, investing in margin, product and service while
containing costs. We have maintained market share, supported long-standing
relationships with suppliers and customers and continue to invest in our
partners. This determined and balanced approach will ensure the long-term health
of the business and enable us to emerge from the current downturn stronger and
more competitive than before.”

John Lewis Partnership chairman Charlie Mayfield announces six-month sales at
John Lewis up 0.5% and operating profit down 34.4%; Waitrose sales up 5.5% and
operating profit down 3.2%, 11 September

“Aldi is selling a suit designed for the savvy businessmen, aimed at
office workers feeling the pinch. The Aldi ‘credit crunch suit’ includes
trousers costing £7.99 and jacket priced at £16.99.”

Aldi, 5 September

“To have grown like-for-like sales by 7.6% in this economic climate is a
clear testament to the strength of Morrisons’ recovery. More shoppers are
choosing Morrisons because of our price-crunching deals and our unrivalled fresh
offer in store. The consumer environment in the first half of 2008 was the worst
for many years… Customer numbers were up by 4.7% in like-for-like stores, and we
believe that between 1% and 1.5% of this is accounted for by the effects of
providing discount to our staff from November 2007… In our Optimisation Plan, we
have targeted to grow annual like-for-like sales ahead of the market overall…
Our £1.1bn revolving credit facility remains undrawn. The board is pleased to
confirm its intention to increase the dividend by 18.5% to 0.8 pence per
share”

Morrisons chief executive Marc Bolland reports good results, but the share price
fell 14%.

“Consumers are shopping less, they’re not spending less when they come
in, but footfall is down. We had to pay what we had to in order to get Homebase
at the time. If I’d known then that there would be two big downturns taking
place in the next three or four years that would have affected my valuation of
the business.”

Terry Duddy, chief executive of Home Retail Group, explains that Homebase is
about to be written down in book value from £1bn to around £300m. Argos bought
it for £900m in 2002, The Times, 12 September

“In these circumstances we do not anticipate any return to growth in
consumer spending in the medium term and we must prepare for another tough year
in 2009/10. Our priorities remain: to set realistic sales budgets; to control
stocks; identify further cost savings within the group; continue to invest in
the brand through improving design and quality of our ranges, marketing and
shopfit.”

Next plc, 10 September

“As we did not expect to see any improvement in the short term, we put in
place a robust action plan to protect margins, adjust costs and generate cash
while maintaining key strategic investments.”

Kesa Electricals plc, owner of Comet, announces like-for-like sales decline of
9.9% in the three months to 31 July, 10 September

Pubs and leisure
“Like for like, pub contribution is down 3.4% over the year to 23 August
2008. To help our licensees through this period, Punch has provided an
increasing level of support through food expertise, promotional support, drinks
discounts and rent concessions. In the current financing market environment, the
board considers it prudent to retain cash and further strengthen the balance
sheet ahead of returning cash to shareholders through distributions. Firstly,
although the group has secure, long-term debt and no near-term requirement for
funding, the board believes the main priority for the use of cash is to support
the repayment of the group’s convertible bonds in spite of the fact that this
does not become due until December 2010… As a consequence of the above
considerations, the board considers it prudent not to propose a final dividend
for the year ended 23 August 2008.”

Punch Taverns, 3 September

“We achieved an increase in LFL [like-for-like] food sales (up 7.9%)
combined with an anticipated decline in LFL bar sales (down by 4.3%), resulting
in an overall LFL sales decline of 1.1%. The board proposes, subject to
shareholders’ consent, to pay a final dividend of 7.6p per share, giving an
unchanged total dividend for the year of 12.0p per share.”

JD Wetherspoon results statement, 5 September

“Many of our passengers are very frequent flyers, visiting friends and
family, or are second home owners. If a Ryanair passenger goes back to the same
destination twice, the second time is to go and clean up and apologise.”


Jim French, chairman of regional carrier FlyBe, announced a 14% rise in profits,
while Ryanair earnings collapsed 85%, Evening Standard, 9 September

Deals
“In the current consolidation phase in the chemical industry, the
acquisition of Ciba offers clear advantages in terms of global
competition.”

German chemicals group BASF launches an agreed $3bn takeover offer for
struggling Swiss rival Ciba, 15 September

“Neptune Orient Lines’ second quarter profit was less than expected;
there are fewer containers going to North America, marine fuel prices are up and
Asia-Europe freight prices are still down.”

An insider says that NOL’s original plan to pay up to $7bn for Hapag-Lloyd is
“out of the question”, Wall Street Journal Europe, 8 September

“The deal is part of Ferrovial’s strategy to focus its UK airport
business on BAA.”

The Spanish airport owner sells Belfast George Best airport for £132.5m, having
paid £43m in 2003, 6 September

“[We] will not be able to agree a combination on terms acceptable to both
Adecco and the board of Michael Page at this time.”

Adecco abandons a tentative offer for recruiter Michael Page, just as thousands
of job-seeking bankers come onto the market, Evening Standard, 16
September

“It would be dreadful news if something were to happen to Dell.”

The mayor of Limerick worries about Dell’s privately-discussed plans to offload
its factories to contract computer manufacturers, Wall Street Journal
Europe
, 16 September

“The proposed site has important historical links to Arthur Guinness and
his first brewery.”

Diageo announces plans for a state-of-the-art £400m brewery in Co Kildare,
The Times, 12 September

Bail outs
“Shotgun marriages are rarely a success.”
WSJE’s Heard on the Street column wonders about the forced tie-up of Bank of
America and beleaguered Merrill Lynch, Wall Street Journal Europe, 16
September

“[The US government should not look at the Federal Reserve] as a wondrous
new font of seemingly costless federal funding — a magical piggy bank.”


Former Fed chairman Alan Greenspan, MSNBC, 5 September

“[The Bank of England should not be seen as] ‘a magical piggy bank’ [for
mortgage lenders]. I hope everyone will understand that the proposals to be
published next week, important though they are, will not and cannot solve the
shortage of funding to finance bank lending, including mortgage lending.’’


Bank of England Governor Mervyn King tells MPs on the Treasury Select Committee,
Daily Telegraph, 12 September

“What the American government has done is the right thing to do because
it will help restore confidence.”

Alistair Darling gives the thumbs up to the Fannie/Freddie rescue, The
Times
, 9 September

“We are now on the right track to put these last two quarters behind
us.”

Lehman CEO Richard Fuld Jr (just days before the company filed for Chapter 11,
Wall Street Journal Europe, 12 September

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