Friday evening business bulletin
Market sentiment will be tested next week when the City’s full-year results season kicks off with figures from Royal Dutch Shell and AstraZeneca.
Royal Dutch Shell is expected to reveal full-year profits of more than US$26bn (£13.2bn) on Thursday despite a tough end to 2007 for the oil major.
Consensus forecasts put fourth-quarter earnings at US$5.82bn (£2.95bn) as higher operating costs and lower refining margins bite, even though oil prices soared to 100 dollars a barrel. This would leave full-year earnings at US$26.65bn (£13.5bn), 5% ahead of 2006.
Shell has ratcheted up capital spending to seek out new sources of oil and gas since the reserves scandal of 2004, with chief executive Jeroen van der Veer’s selling off maturing assets to "rejuvenate" the oil major’s portfolio. But analysts predict production will be at the lower end of its guided 3.3 to 3.5m barrels of oil equivalent a day.
The average family faces a hike of nearly £200 in household bills this year, putting a further squeeze on disposable income, a report said today.
The cost of gas, electricity, water and council tax bills look set to increase by £193 or 8.3% during 2008, assuming all energy suppliers raise their prices, Capital Economics said. It added that even if the remaining three big suppliers did not follow the lead of British Gas, NPower and EDF, overall utility and council tax bills would still rise by 6.2% or £143.
But the group said real household income is unlikely to rise by much more than the 1.5% increase seen in 2007.
As a result households’ spending power looks set to be squeezed further, contributing to a sharp slowdown in real consumer spending growth. The biggest price jumps are set to come in energy prices, with the average consumer likely to see a 15.1% increase in their gas bills and a 12.1% rise in electricity costs, assuming all suppliers hike prices, or jumps of 9.9% and 6.2% respectively if they do not.
Disabled workers at two factories set to shut under a controversial closure programme have voted in favour of strike action in protest at the decision, it was announced today.
The Unite and GMB unions said their members at Remploy sites in Aintree and Birkenhead in the North West had strongly supported a campaign of industrial action. The workers were the first to be balloted over plans to close 28 Remploy plants, which employ mainly disabled workers.
Remploy will be given notice of strike action at the two sites, which could begin early February. Unite assistant general secretary Tony Burke said: "These ballot results give a strong indication of the strength of feeling across Remploy nationally. Remploy management are determined to close these factories and business units, and Unite and its members are equally determined to stop them.
"We are extremely disappointed it has come to this stage and hope that Remploy management listens to its workforce to stop the closures and save the jobs of its loyal staff, many of whom will find it difficult to find employment if the company’s plans to close 28 factories go ahead."
Workers at other Remploy factories earmarked for closure are also being balloted on strikes.
The pound at 4:30pm was US$1.9808 compared to US$1.9733 at the previous close, while the euro at 4:30pm was £0.7426 compared to £0.7468 pounds at the previous close.
