Most Britons Face 60 Percent Income Loss in Retirement
REUTERS UK: Almost two-thirds of people living in Britain today are likely to see a 60 percent drop in their income when they retire over the next 40 years and a plummeting quality of life, a report said Thursday.

The 15 million households earn between 18,000 and 44,000 pounds each and represent roughly 35 million people, according to the study by London's Chatham House think-tank.

Their incomes will take the biggest hit from retirement compared to the lowest and highest 20 percent of earners.

"The UK has a distinct problem with middle-income earners who are failing to save enough and are likely to find the drop in income during retirement unexpected and unacceptable," said Paola Subacchi, one of the report's authors. >>> Reporting by Olesya Dmitracova; Editing by Steve Addison | London | Thursday, March 10, 2011

Trouble for Libya's Oil Industry
As the battle for Libya intensifies, oil production in the country has plummeted. In the rebel-held east it's down by as much as 90 percent. Now OPEC is considering boosting output for the first time in two years. Al Jazeera's Alan Fisher reports

Amanda Lamb: Top Tips to Find Your Place in the Sun

Express - Amanda Lamb: Tops tips to find a place in the sun

Niall Ferguson: China Will Overtake the US within a Decade
Niall Ferguson, historian and author of Civilization, tells Robert Miller that the credit crisis means China's economy will overtake the US much quicker than expected
Watch Telegraph video here | Monday, March 07, 2011

Oil Markets Brace for Saudi 'Rage' as Global Spare Capacity Wears Thin
THE DAILY TELEGRAPH: Those exhorting OPEC to boost output should be careful what they wish for. The cartel card can be played once only, and it risks exposing the fragility of the global energy system if the Gulf powers are seen struggling to deliver.

Goldman Sachs suspects that OPEC has been pumping far above its agreed quota since November and therefore cannot easily raise output much without cutting deep into global spare capacity.

Jeff Currie, the bank's oil guru, said Saudi output had quietly crept up by 700,000 barrels a day (bpd) even before the Libyan supply shock.

Assumptions that OPEC has added 1.9m bpd over the last two years are wishful thinking. These new fields have been "largely offset" by attrition in old fields.

"We believe that OPEC spare capacity has already dropped below 2m bpd. The question therefore arises how much spare capacity is left to absorb potential supply disruptions in other countries," he said.

If this picture is broadly correct, spare capacity is already close to the wafer-thin levels that led to wild price moves in mid-2008.

The flow of Libyan oil has so far fallen by 1m bpd. This may not sound much against global supply of 88m, but oil prices are determined by levels of spare capacity once supply tightens.

Beyond a certain point, the price spiral can kick in with explosive force until the economic damage crushes demand.

Libya's conflict has already cut spare capacity by a third. Hopes for a quick solution are fading as the country succumbs to civil war along ancient lines of tribal cleavage. A raft of new projects planned for the Sirte Basin by mid-decade will be mothballed. >>> Ambrose Evans-Pritchard, International Business Editor | Tuesday, March 08, 2011

Warning of ‘Food Price Riots in the UK’
YAHOO! FINANCE: A senior economist at the worldwide bank HSBC (LSE: HSBA.L - news) has warned of civil unrest in Britain if food prices continue to soar.

Speaking on Jeff Randall Live, senior global economist Karen Ward cautioned that the UK could experience the kind of food riots seen in other countries.

"Even in the developed world I think we have very, very low wage growth, so people aren't getting more in their pay packet to compensate them for food and energy, and I think we could see social unrest certainly in parts of the developed world and the UK as well."

She (SNP: ^SHEY - news) went on to highlight the link between high food prices and the escalating cost of crude oil.

"More and more we are seeing that some of these foodstuffs are actually substitutes for energy itself, particularly biofuels. So I think the energy markets are a significant contributor to these food price gains."

The comments come as the United Nations warned the cost of food is now at the highest level for 21 years and set to rise further. >>> SKY NEWS | Tuesday, March 08, 2011

Shares Bonanza For State-Owned Bank Chief
SKY NEWS: Royal Bank of Scotland boss Stephen Hester has been awarded an extra shares bonus worth up to £4.5m - taking his pay package for 2010 to a potential £7.7m.

The award - made under the bank's long-term incentive plan - is on top of a £2m annual bonus already confirmed by the group and Mr Hester's £1.2m salary.

He also stands to pick up six million shares as part of his 2011 maximum annual bonus.

Based on the current share price, these would be worth around £2.7m.

RBS has also revealed bonus payments for a raft of other executives at the bank, which is 83% owned by the taxpayer.

They include a £1.4m annual handout and potential £2.8m long-term incentive payout for finance boss Bruce Van Saun. >>> Graham Fitzgerald, Sky News Online | Tuesday, March 08, 2011

Big Bonus For Barclays Boss
The boss of Barclays, Bob Diamond, is to get a £6.5m bonus

Higher Oil Keeps Wall St. On Edge
Mar 7 - Summary of business headlines: U.S. crude rallies above $105 as violence in Libya continues; U.S. consumer credit up in January but consumers show sign of restraint; Stocks fall in U.S. and Europe. Conway G. Gittens reports

State Pension Reform: £140 a Week for Everyone
THE DAILY TELEGRAPH: Pensioners are to receive a flat-rate universal retirement payment of £140 a week that will end the injustice of working mothers being penalised for taking a break to raise children, under reforms to be signalled by Iain Duncan Smith today.

The Work and Pensions Secretary will pledge to sweep away a host of complex rules and "fundamentally simplify" the basic state pension.

Insiders said Mr Duncan's Smith's intervention represents the start of a Coalition drive to replace the existing state pension regime with a "single tier" retirement payment.

Official estimates suggest that many women who take time out from work for family reasons are left up to £40 a week worse off by rules that base pension payments on National Insurance contributions.

Charities said a universal pension would "reduce fear for those approaching retirement."

In a speech to charity leaders and pension experts, Mr Duncan Smith will condemn the pension system as a bureaucratic mess that leaves many people confused and puts young people off saving. >>> James Kirkup, Political Correspondent | Monday, March 07, 2011

THE DAILY TELEGRAPH: Pension changes Q&A: who will win and lose? – News that the Government plans to introduce a universal state pension have been welcomed by many. It will replace the current hotchpotch of basic state pension, earnings-related “top-up” payments, plus additional means-tested benefits. >>> Emma Simon | Monday, March 07, 2011

Greek Debt Price Soars as Moody's Cuts Credit Rating Below Egypt
THE DAILY TELEGRAPH: The Greek government has reacted angrily to Moody's decision to cut the country's credit rating below that of Egypt, a move that prompted investors to dump the debt of other struggling European economies.

The country's debt was lowered to B1 from Ba1, as the ratings agency warned that Greece faces a shortfall in tax revenue and huge challenges in reforming state-owned companies and its costly healthcare system.

"The sheer magnitude of the task is becoming ever more apparent," said Sarah Carlson, an analyst at Moody's.

The Greek Finance Ministry yesterday described Moody's move as "totally unjustfied".

"Having completely missed the build-up of risk that led to the global financial crisis in 2008, the rating agencies are now competing with each other to be the first to identify risks that will lead to the next crisis," it said. Continue reading and comment >>> Richard Blackden | Monday, March 07, 2011

Oil Prices Flare on Libya Fighting
Mar 4 - Summary of business headlines: Oil hits fresh 2-1/2 year high as Libyans take up arms, Wall Street knocked lower; U.S. enjoys strongest job creation in nine months, falling unemployment rate; Galleon hedge fund founder heads to court ahead of insider trading trial. Conway G. Gittens reports

Britain at Risk of Another Financial Crisis, Bank of England Chief Warns
THE DAILY TELEGRAPH: Britain risks suffering another financial crisis without reform of the country’s banks, the Governor of the Bank of England warns today.

In an interview with The Daily Telegraph, Mervyn King says that “imbalances” in the banking system remain and are “beginning to grow again”.

Mr King urges high street banks to take a better, longer term view towards their customers and to stop focusing on the need to “simply maximise profits next week”.

He accuses them of routinely exploiting their millions of customers. “If it’s possible [for financial services firms] to make money out of gullible or unsuspecting customers, particularly institutional customers, [they think] that is perfectly acceptable,” he says.

The Governor criticises the “weight put on the importance and value of takeovers” and raises concerns that companies with good reputations have been “destroyed” in the search for short-term profits.

Mr King expresses regret for not sounding a louder warning over his concerns before the last banking crisis.

The Governor’s remarks are a warning to George Osborne, the Chancellor, as a government commission considers whether to force high street banks to sell off their investment banking arms. Continue reading and comment >>> Robert Winnett, Deputy Political Editor | Friday, March 04, 2011

Why the Dollar's Reign Is Near an End
THE WALL STREET JOURNAL: For decades the dollar has served as the world's main reserve currency, but, argues Barry Eichengreen, it will soon have to share that role. Here's why—and what it will mean for international markets and companies.

The single most astonishing fact about foreign exchange is not the high volume of transactions, as incredible as that growth has been. Nor is it the volatility of currency rates, as wild as the markets are these days.

Instead, it's the extent to which the market remains dollar-centric.

Consider this: When a South Korean wine wholesaler wants to import Chilean cabernet, the Korean importer buys U.S. dollars, not pesos, with which to pay the Chilean exporter. Indeed, the dollar is virtually the exclusive vehicle for foreign-exchange transactions between Chile and Korea, despite the fact that less than 20% of the merchandise trade of both countries is with the U.S.

Chile and Korea are hardly an anomaly: Fully 85% of foreign-exchange transactions world-wide are trades of other currencies for dollars. What's more, what is true of foreign-exchange transactions is true of other international business. The Organization of Petroleum Exporting Countries sets the price of oil in dollars. The dollar is the currency of denomination of half of all international debt securities. More than 60% of the foreign reserves of central banks and governments are in dollars.

The greenback, in other words, is not just America's currency. It's the world's.

But as astonishing as that is, what may be even more astonishing is this: The dollar's reign is coming to an end.

I believe that over the next 10 years, we're going to see a profound shift toward a world in which several currencies compete for dominance.

The impact of such a shift will be equally profound, with implications for, among other things, the stability of exchange rates, the stability of financial markets, the ease with which the U.S. will be able to finance budget and current-account deficits, and whether the Fed can follow a policy of benign neglect toward the dollar. >>> Barry Eichengreen | Wednesday, March 02, 2011

Dr. Eichengreen is the George C. Pardee and Helen N. Pardee professor of economics and political science at the University of California, Berkeley. His new book is "Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System." He can be reached at reports@wsj.com.

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Oil Backs Down
Mar 3 - Summary of business headlines: Oil prices fall as Libyan peace proposal emerges; U.N. food index hits record high; U.S. economy growing despite inflation scare; Stocks rally ahead of jobs report. Conway Gittens reports

Apple Shares Rise on Jobs Return
Mar 2 - Summary of business headlines: Apple shares rally as Steve Jobs returns to unveil iPad 2; U.S. crude rallies above $102; Economic recovery slowly moving along - Fed; Wall Street rallies despite higher oil prices. Conway G. Gittens reports

Saudi Arabia Contagion Triggers Gulf Rout
THE DAILY TELEGRAPH: Fears of sectarian uprisings in Bahrain and Saudi Arabia have set off the first serious wave of investor flight from the Gulf, compounding market turmoil as civil war in Libya pushes Brent crude over $116 a barrel.

Saudi Arabia’s Tadawul stock index has tumbled 11pc in wild trading over the past two days, led by banks and insurers. Dubai’s bourse has hit a 7-year low.

The latest sell-off was triggered by the arrest of a Shi’ite cleric in the Kingdom’s Eastern Province after he called for democratic reforms and a constitutional monarchy. The province is home to Saudi Arabia’s aggrieved Shi’ite minority and also holds the country’s vast Ghawar oilfield, placing it at the epicentre of global crude supply.

“Unrest in this region can have fatal consequences for the world,” said JBC Energy. “The plunge on the Saudi stock exchange can be interpreted as a sign of waning trust.”

In Bahrain, the island nation’s Sunni elite holds sway over a Shi’ite majority that is denied key jobs and has a token political voice, making it a trial run for Saudi Arabia’s near-identical tensions in the Eastern Province.

Bahraini dissidents have so far been much bolder, prompting a bloody crackdown last month when at least seven people were shot by the military. The ruling family – under intense pressure from Washington to stop the killings – has since held out an olive branch to protesters and let the radical Haq leader Hassan Mushaima return from exile, yet the crisis is far from contained.

My Mushaima said on Wednesday that protesters have “the right to appeal for help from Iran” if Saudi military units interfere in the struggle. Tanks were seen crossing the 17-mile causeway from Saudi Arabia to Bahrain on Tuesday.

“These were supposed to be Bahrain’s tanks returning from Kuwait: that is not a credible story,” said Siras Abi Ali, a Gulf expert at the risk group Exclusive Analysis.

He said the outcome in Bahrain will set the template for events across the border. “There is no good outcome from this for Saudi Arabia. If Bahrain offers concessions, the Saudi Shia will demand similar concessions. If they crack down, they risk an uprising. These people do not want to live under the House of Saud,” he said. >>> Ambrose Evans-Pritchard, International Business Editor | Wednesday, March 02, 2011

Ausweitung der Yuan-Menge: China attackiert den Dollar
Dollar- und Yuan-Noten: Drohende Dollar-Dämmerung. Bild: Spiegel Online
SPIEGEL ONLINE: Die chinesische Notenbank überrascht mit einer spektakulären Ankündigung: Die angehende Supermacht will ihren kompletten Außenhandel künftig in Yuan abwickeln, nicht mehr in Dollar. Peking rüttelt an Amerikas Anspruch, die Leitwährung zu stellen - mit gravierenden Folgen für die USA.

Berlin - Es ist unscheinbare Ankündigung, doch sie hat das Potential, das Machtgefüge auf dem Weltwährungsmarkt nachhaltig zu verändern: China stärkt die internationale Rolle des Yuan. Alle Exporteure und Importeure sollen noch in diesem Jahr die Geschäfte mit ihren ausländischen Partnern in Yuan abrechnen können, teilte die Zentralbank am Mittwoch in Peking mit.

Damit werde auf die wachsende Bedeutung des Yuan als weltweite Reservewährung reagiert. "Die Marktnachfrage nach einer grenzüberschreitenden Verwendung des Yuan steigt", erklärte die Zentralbank. Testweise wurde bereits im vergangenen Jahr 67.000 Unternehmen in 20 Provinzen erlaubt, ihre Auslandsgeschäfte in Yuan abzuwickeln. Das Handelsvolumen belief sich auf umgerechnet rund 56 Milliarden Euro.

Jetzt soll die Yuan-Menge ausgeweitet werden, es sollen deutlich mehr Geschäfte in der chinesischen Währung abgewickelt werden - und weniger in der amerikanischen. Chinesische Unternehmen handeln zurzeit oft in Dollar, sie sind dadurch abhängig von den Entscheidungen der US-Notenbank Fed, zahlen bei einem steigenden Ölpreis drauf und müssen höhere Transaktionsgebühren als nötig berappen. Das soll sich jetzt ändern.

Langfristig will die Volksrepublik sogar noch weiter gehen. Sie will den streng reglementierten Yuan schrittweise in eine frei konvertierbare Weltwährung aufbauen. >>> ssu/AFP/Reuters | Mittwoch, 02. M¨rz 2011

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Libya Hopes Oil Does Not Become Weapon
REUTERS: Libya hopes tensions with Western countries over a popular revolt in the country do not reach the stage where the Tripoli government considers oil as a political weapon, a top oil official said on Wednesday.

Shokri Ghanem, chairman of Libya's National Oil Corporation, also told Reuters in an interview that Libya's troubles had created the country's worst energy crisis in decades and Libyan supply disruptions to world markets could push oil above $130 a barrel in the next month if troubles persist.

Oil markets will be watching closely to see if the departure of oil workers fearful of violence in Libya will further cut output in the world's 12th largest exporter. >>> Reporting by Michael Georgy; editing by Keiron Henderson | Tripoli | Wednesday, March 02, 2011

Wall Street Rattled by $100 Oil
Mar 1 - Summary of business headlines: Oil spikes close to $100 on Middle East worries causing a 1.5 percent drop across Wall Street; Fed chief thinks price spike will be short; Factory activity, auto sales point to stronger recovery. Conway Gittens reports

Anger at the Banks Is Justified, Mervyn King Says
THE DAILY TELEGRAPH: The Governor of the Bank of England, Mervyn King, has expressed "surprise" that the public is not more angry with the bankers who caused the recession.

In some of his strongest language yet, Mervyn King today claimed the fall in households' living standards was the fault of the financial services sector and he expressed sympathy that innocent families paying the price.

"The people whose jobs were destroyed were in no way responsible for the excesses of the financial sector and the crisis that followed," he told MPs on the Treasury Select Committee.

In most aspects, he said, the economy had been on a sound footing before the crisis. Previous downturns were often caused by inefficiencies or weak management and were useful opportunities to improve systems. "None of that applied in this crisis," he said. "We had quite a successfully operating economy."

The people who are now suffering "did not get bonuses of the scale people in the financial sector got". The financial crisis may have occurred two years ago but, as austerity measures kick in, "the cost is now being felt", he said.

It remains "a big political problem", he added: "I'm surprised the real anger hasn't been greater than it has." >>> Philip Aldrick, Economics Editor | Tuesday, March 01, 2011