Shares in Balfour Beatty plunged by 15% as the infrastructure group issued its fifth profit warning in less than two years following the discovery of a £75m shortfall at its UK construction services business.
Balfours executive chairman, Steve Marshall, is also stepping down. The group has brought in KPMG to conduct a review of the construction services business. The accountants will analyse commercial controls, contract value forecasting and project-level reporting for contracts at the division. KPMGs review follows an internal inquiry last year that found overruns and overspends.
Continue reading...UK housebuilders could face aggressive competition in London from the Indian developer Lodha Group, which is planning a £3bn push into property in the capital, according to the Financial Times.
India's biggest housing developer, which last year bought the former Canadian high commission building in Mayfair for £306m, wants to develop properties ranging from mid-market to super-prime. "We want to be among the top two developers in London in the next five years," Abhishek Lodha, managing director, told the FT.
Continue reading...Affordable housing quotas get waived and the interests of residents trampled as toothless authorities bow to the dazzling wealth of investors from Russia, China and the Middle East
I always said you should never trust a bank with property, or a property developer with money, says Peter Rees. The former chief planner of the City of London should know about such things, having presided over the results of both. Over the last 30 years, he has ushered in a menagerie of their monuments, from the Gherkin and Cheesegrater to the Walkie-Talkie and Heron Tower, during which time he has seen a significant shift in the balance of power. When I arrived in the job in the 1980s, the big banks were in control of London, he says. But now its the big house-builders. Weve gone from being ruled by Barclays bank to being controlled by Berkeley homes.
Left unchecked, the banks went off the rails in spectacular fashion, as they sprayed money into the great mortgage mirage. And now property developers have been allowed to follow suit. Fuelled by the dazzling wealth of investors from Russia, China and the Middle East, who they turned to when the banks stopped lending, their steroidal schemes are causing irreparable harm to our cities.
Continue reading...Because of their criminal record, many ex-offenders find it difficult to find employment; trapped in a vicious cycle, they end up reoffending. To tackle this, Paul Harrod founded Bristol Together, a social business that employs ex-offenders to renovate empty properties.
Harrod had previously co-founded Aspire, a social enterprise that employs the homeless, ex-offenders and other people who are long-term unemployed to do maintenance and gardening jobs. "I've always had real interest in this area and a belief that meaningful paid employment is the route to recovery," he says, emphasising that Bristol Together offers full-time, permanent jobs: "You have to invest in people for the long term."
Continue reading...Rolling financial, economic and business news through the day, as Britains builders report strong growth in August and sterling weakens
Closing summarySterling volatility jumps as Scottish gap narrowsPound could fall 5% if Yes campaign win referendumUK construction booming againEarlier:
Switzerlands GDP misses forecasts with 0% growth4.42pm BST
Time to wrap up. Quick summary follows:
The pound has hit a five-month low, down over a cent against the US dollar, after the latest polling data showed a surge in support for Scottish independence.
For the first time since YouGov started polling on it, all age groups under 60 are in favour of Scottish independence pic.twitter.com/I0xlSE4GIH
Given that there are no terms of reference, or contingency plans for Scottish independence if there is a yes vote, this has the potential to deliver enormous financial, economic and, of course, political risk to the U.K.
Shocking IMF chart showing the speed at which money has been escaping Ukraines economy in the past six months. pic.twitter.com/I0KrUQLGqN
The United States officially has the hottest manufacturing sector in the world. pic.twitter.com/CRNqNSj8MZ
4.20pm BST
The Scottish polling data has given the markets a large helping of their least favourite dish - uncertainty.
So says Chris Beauchamp of IG:
Fresh five-month lows are being seen in GBP/USD this afternoon, thanks to polls that indicate a swing to the Yes camp in the Scottish referendum.
This has overridden the better reading this morning from the UK construction sector, which showed impressive growth. With less than three weeks until the election, the evident worry is that the divorce of Scotland from the rest of the UK will be a lot messier, with all the attendant worries about the sharing (or non-sharing) of the debt burden and potential currency arrangements. Markets hate uncertainty, and the Scottish referendum is providing this in spades.
4.06pm BST
JP Morgan has added todays US factory data to yesterdays surveys, and concluded that global manufacturing growth was unchanged in August. The US lead the way, and France brought up the rear.
Global manufacturing growth stable: JPMorgan Global Man #PMI posts 52.6 (Jul: 52.4). US best performer, France worst http://t.co/mtxQucfd9z
3.53pm BST
Back to the Scottish referendum...and analyst Alan Monks of JPMorgan says that the chance of a Yes vote has risen, but perhaps not by as much as the six-point gap reported by YouGov last night suggests.
Monks reckons that there is a significant bias towards the status quo, when people are asked to vote on major constitutional reform.
This bias could be more significant on 18th September than is evident in any of the polls on voting intentions we discuss. For this reason, our view is this: while the chances of a vote for independence has increased from the 20-25% probability we expressed a few weeks ago, we do not think the probability is quite as high as some of the recent polls suggest. Polls can of course be misleading.
But in the absence of other clear signs of trend, we await more such surveys to get a clearer gauge of momentum in the run up to the referendum.
3.46pm BST
As I was saying....
Rarely has the economic gulf that separates the US from the eurozone looked wider than now, with US ISM at 59 and zone PMI at 50.7
3.44pm BST
The International Monetary Fund has warned that Ukraine will suffer a deeper recession than previously thought and may need more financial help, as the conflict with Russia continues.
In a new report, the IMF predicted that Ukraines GDP will shrink by 6.5%, down from 5% before.
IMF: Ukraine May Need $19 Bln In Additional Financing By End-2015, Assuming Fighting Continues Through 2015
IMF: Ukraine May Need Another Bailout Due to War
3.29pm BST
Update: the pound has now dipped below $1.65....
Cable drops below $1.6500 #forex $GBPUSD
3.24pm BST
The pound has fallen further, as the strong American factory data pushes up the US dollar.
The prospects of Scotland breaking away from the UK continue to hit sterling.
3.20pm BST
Those two surveys, from ISM and Markit, are pretty conclusive that Americas manufacturing sector just enjoyed a blowout month.
Aug #ISM #manufacturing headline is best since March, 2011. New #orders best in 10 years! #Production strong, too: http://t.co/tCDvCEz5gF
Markit's #Manufacturing #PMI survey round-up: US booms while Eurozone & UK struggle. Japan reviving, China stagnates pic.twitter.com/75OPlGC7dQ
3.08pm BST
And the rival measure of the US factory sector, from ISM, has also shown strong growth, just like Markit a few minutes ago.
The ISM PMI index jumped to 59.0, up from 57.1 which is the highest since March 2011. It also found a big jump in new orders.
*ISM FACTORY ORDERS INDEX JUMPED IN AUGUST TO 10-YEAR HIGH
2.57pm BST
Just in. Americas factory sector posted its fastest growth in over four years, according to data firm Markit.
Markits US manufacturing Purchasing Managers Index came in at 57.9, up from 55.8 in July. Any reading over 50 shows growth, and this is the sharpest improvement in conditions since April 2010.
Manufacturing payrolls rise at steepest pace since March, 2013 pic.twitter.com/4jfN3m1QxY
The US manufacturing sector has gone from strength to strength this summer, with Augusts improvement in business conditions the sharpest for over four years.
Impressive new business and output gains were matched by a solid rebound in employment growth. The latest survey points to the fastest upturn in payroll numbers for around a year-and-a-half, highlighting that the manufacturing sector continues to have a positive impact on overall labor market conditions.
2.40pm BST
My colleague in Berlin, Ben Knight, writes that car pick-up service Uber is fighting on after being slapped with a ban in Germany:
The car sharing service Uber has been hit with a temporary ban in Germany after a court in Frankfurt ruled that the mobile app violates the countrys Passenger Transportation Act.
The ruling came into force on Tuesday following an expedited hearing. It means the ban remains in place until a full hearing takes place and Uber could face a 250,000 (£198,000) fine per ride.
Go on, Germany, tell us the one about structural rigidities inhibiting growth in France and Italy again. #uberneindanke
2.21pm BST
Just in. Halliburton, the US contractor, has reached a $1.1bn settlement over its role in the Deepwater Horizon disaster of 2011.
Halliburton handled the cement work for the BP oil rig which caught fire and sunk in April 2011, with the loss of 11 lives, causing the huge environmental disaster in the Gulf of Mexico.
Halliburton reaches settlement on claims related to Macondo. Read more. http://t.co/ISOEx5I8Bj
2.06pm BST
A reminder of how the cost of insuring against the pound being volatile this month has surged this morning, following the Scottish independence polling.
If you are wondering about the effect of this Scotland poll this morning ...Cable 1 month option vol exploded pic.twitter.com/UmJgXDREMQ
Yes vote ahead among all but older voters in latest YouGov Scotland #IndyRef poll pic.twitter.com/x2Ae5NdMYg
4 reasons why the narrowing #IndyRef gap might be significant http://t.co/Xu5c1b90fn - thoughts on that YouGov poll pic.twitter.com/vPSaBI6xGN
12.58pm BST
The government is inviting suggestions for measures that the chancellor could announce in Decembers autumn statement.
In the interest of open and transparent policy-making, the Treasury is keen to consider original and innovative ideas which could be included in the fiscal update.
Have your say about whats in this years Autumn Statement http://t.co/aKMy2TTcZN #AS2014
12.30pm BST
Get your diaries out. George Osborne will deliver the autumn statement on December 3rd.
Brace yourselves for new financial forecasts; eagerly waited, with the general election just five months later.
Autumn Statement will take place December 3, the Chancellor has announced #AS2014
12.09pm BST
The reshaping of Britains Co-operative Group continues.
It just announced the sale of its security arm, Sunwin Services, to US firm Cardtronics for £41.5m in cash.
11.35am BST
So what does this mornings jump in sterling volatility actually mean?
Basically, it shows that the cost of hedging against the risk of the pounds value fluctuating wildly over the next month has risen. Traders are seeking protection against turmoil as the Scottish independence vote approaches.
11.27am BST
Reuters newswire snap:
11.20am BST
The pound is continuing to fall against the US dollar this morning.
Its now down 0.8 of a cent, or 0.5%, at $1.6526 today, as traders adjust their view of this months Scottish referendum on independence.
Poll showing surge in support for Scottish independence triggers biggest rise in sterling volatility in 3 years: pic.twitter.com/SUablsXSYF
Scottish referendum: the f/x market has started to take seriously the possibility of a yes vote for the first time. pic.twitter.com/Qdeo5O3ZmJ
Given that there are no terms of reference, or contingency plans for Scottish independence if there is a yes vote, this has the potential to deliver enormous financial, economic and, of course, political risk to the U.K.
11.02am BST
Looking back at the booming UK construction sector....building firm Redrow has revealed it expanded its workforce by a fifth last year to cope with the demand.
My colleague Jennifer Rankin reports:
Redrow said it had created 230 jobs, including 48 apprenticeships, amid the housing market revival.
The new recruits include surveyors, planners, and sales and marketing experts, while the companys expansion may have created up to five times as many jobs on the building sites managed by its contractors, according to John Tutte, Redrow chief executive.
10.47am BST
Howard Archer of IHS Global Insight says this latest drop in eurozone producer prices is a worrying sign for the region:
It is looking ever more likely that the European Central Bank will ultimately have to undertake some form of quantitative easing QE, although we suspect that it will be limited given apparent wariness among some Governing Council members to go down this route.
The ECB may well initially at least limit itself to buying Asset Backed Securities rather than government bonds.
10.43am BST
The latest economic news from the eurozone is less encouraging, though.
Producer prices (which measures the cost of goods and services from euro firms at the factory gate) fell by 0.1% month-on-month in July, and were 1.1% lower than a year ago.
Bye bye PPI, hello PPD - producer price deflation. Euro zone producer prices -1.1% in July, 13th month of decline: pic.twitter.com/maP101extP
Or inflation.. RT @fwred: No pipeline deflation. pic.twitter.com/ltvvMdfJY1
10.26am BST
This shortage of skilled construction workers could suggest that the spare capacity in the UK labour market is being sucked up.
Something for the Bank of Englands monetary policy committee to ponder, as Rob Wood of Berenberg explains:
The strength of construction output has raised capacity pressures, which were reflected in further rises in sub-contractor charges. If that trend of falling capacity is reflected in other sectors in the coming months it could become an issue for the Bank of England, who are currently assuming there is still enough slack in the economy to allow interest rates to stay on hold until next year.
10.15am BST
Paul Kavanagh of City firm Killik & Co reminds me that builders have already seen their wages rise this year:
@graemewearden already has....one house builder recently observed bricklayer rates have moved from £120 per day to £180, £200 soon
@graemewearden in fairness, there has not been inflation here for seven years so they should have 'provisioned' for this day
10.02am BST
Its a good time to be a skilled builder, points out Jeremy Cook, chief economist at the currency exchange company, World First.
Heres his take on todays unexpectedly strong construction data:
The UK construction market is booming at the moment. Output and orders continue to fly higher, while the employment of skilled sub-contractor labour has contracted so much that availability has fallen to a record low and rates to a record high.
It is a good time to be working in construction if you have the skill-set. Gains appear to have been made across all three divisions housing, commercial and civil engineering of the construction sector driving confidence higher still.
9.54am BST
David Noble, Group CEO at the Chartered Institute of Purchasing & Supply, is worried by the shortage of skilled builders, and the pressure on raw materials:
The sector is struggling to find enough skilled tradesmen to keep pace with new work and the labour market will continue to put pressure on costs until the next wave of apprentices begin to enter the jobs market.
Indeed, across the supply chain, delivery times have seen the sharpest rise since the survey began, with input prices growing at the fastest rate since July 2011. With the UKs appetite for building materials growing throughout the summer, suppliers are struggling to ramp up production to pre-crisis levels.
9.39am BST
The UK construction sector has posted its strongest jump in activity in seven month, raising fears of a shortage of skilled staff.
Builders have reported a surge in housebuilding, and a rise in commercial and civil engineering last month.
UK construction firms saw one of the sharpest rises in output for seven years in August, with increasing workloads driven by an array of factors including surging homebuilding activity, greater infrastructure spending and renewed confidence within the commercial development sector.
Acute skill shortages meant that sub- contractor charges rose at the fastest pace since the survey began in 1997. Meanwhile, sub-contractor availability fell at a survey-record pace, which could act to further ignite pay pressures in the short term.
9.29am BST
The pound has dipped against the US dollar this morning after a poll showed the Yes to Independence camp gaining ground in the Scottish referendum battle.
Its not a big move -- sterling is down about 0.3% today. One pound is worth $1.6564, down from $1.66 last night before the poll was released.
A Scottish yes to independence poses far more questions (about the currency, the debt, the oil, the future) than it answers but my best guess is that a Yes would trigger a 3-5% fall by sterling as an initial reaction, compared to an equally unsophisticated guess that the UK leaving the EU sends sterling down 10-15%.
It is now unlikely that the gap is big enough for a no this time around to kick the issue into the long grass for ever. If, for example, the UK were to leave the EU after a referendum, Mr Salmond would leap back on the bandwagon and apply for an independent Scotland to remain in. And so on.
9.13am BST
The latest Spanish employment figures are also out this morning, and show a small rise in unemployment.
But the underlying picture does show signs of improvement within Spains chronically weak labour market.
8.35am BST
Economists are concerned by the evaporation of growth in the Swiss economy in the last quarter.
Maxime Botteron of Credit Suisse is worried that capital investment fell, saying:
For us its really below expectations. We expected a bit more growth. The trend in exports is not a big surprise. Trade data so far already pointed to a rather weak contribution of exports. What is a bit more surprising is the weak investment spending, especially in the construction sector.
The global economy isnt developing as wed expected,
We think the weakness will last into 2015. The pickup will come, but not as strongly as wed thought.
#brexit Stagnant Swiss economy sends warning msg to UK europhobes hailing CH as the model to follow after leaving EU
8.18am BST
Bloomberg pins the blame firmly on the weakness of the Eurozone, saying:
The Swiss economy lost pace in the second quarter with private consumption failing to make up for slowing exports as stagnating growth in the euro-area took its toll....
8.16am BST
These are the worst Swiss growth figures in two years, as our friends at fastFT flag up:
8.10am BST
The full Swiss GDP report is available on the State Secretariat for Economic Affairs (SECO)s website.
It shows that exports of jewellery made a notable positive contribution to growth. However, the countrys banking sector did not:
On the production side many sectors reported virtually no change in value added between the 1st and 2nd quarters.
Industry, energy and water supply made an overall small positive contribution to GDP growth, by contrast the value added in the financial sector and some public sector economic areas showed a stagnating to slightly falling trend.
8.02am BST
Todays GDP report shows that the Swiss economy has suffered a slowdown in export growth.
Exports rose by just 0.6% in April-June, down from robust growth of 2.3% in January-March.
7.49am BST
Heres Reuters first take on the unexpectedly weak Swiss GDP figures released this morning.
Switzerlands economy stalled in the second quarter, with output unchanged from the first, dragged down by weaker exports and falling construction spending, data showed on Tuesday.
Analysts polled by Reuters had forecast a quarterly growth rate of 0.5%.
7.42am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The breaking news this morning is that Switzerland has joined the ranks of European countries suffering a slowdown.
Another housebuilder with record results - North-focused Redrow's FY PBT up 91% to £132m. Help to Buy supported 35% of completions.
It will be a wide-ranging discussion . the bar has been raised. We have to bear in mind who the counterparties are. They are members of the International Monetary Fund, the (European) Commission, and the European Central Bank
You must understand their limits. They cannot speak politically.
Continue reading...
KPMG instructed to investigate after internal reviews at troubled construction firm unearth extra losses and write-downs
Shares in Balfour Beatty plunged by almost 25% as the infrastructure group issued its fifth profit warning in two years following the discovery of a £75m shortfall in expected profits at its UK construction services business.
Balfours executive chairman, Steve Marshall, is also stepping down. The group has brought in KPMG to conduct a review of the construction services business. The accountants will analyse commercial controls, contract value forecasting and project-level reporting for contracts at the division. KPMGs review follows an internal probe last year that found overruns and overspends.
Continue reading...
UK housebuilders could face aggressive competition in London from the Indian developer Lodha Group, which is planning a £3bn push into property in the capital, according to the Financial Times.
India's biggest housing developer, which last year bought the former Canadian high commission building in Mayfair for £306m, wants to develop properties ranging from mid-market to super-prime. "We want to be among the top two developers in London in the next five years," Abhishek Lodha, managing director, told the FT.
Continue reading...
