Friday lunchtime business bulletin

Apr 25 2008 By Andrew Mernin

Newcastle-based Northern Rock is close to submitting a plan expected to outline 2,000 job cuts to the Government, the bank’s chairman has said.

Ron Sandler said Northern Rock’s management team was "fairly close" to finalising the legally-required redundancy form but would not confirm reports that it will be delivered to ministers next week.

The plan will start a 90-day consultation with unions over job cuts, with Mr Sandler suggesting that the total number of redundancies would be around 2,000.

The vast majority of job losses will be concentrated in the North East.

The beleaguered bank was nationalised in February after Chancellor Alistair Darling failed to attract a buyer in the private sector.

The owner of car retailers Evans Halshaw and Stratstone said today it had been encouraged by trading over the first three months of the year.

The update from Pendragon came as a relief to investors after the company issued two profit warnings last year and lowered guidance for 2008.

It admitted trading conditions were tough, but stressed that its key indicators were positive and that a ``satisfactory" outcome to the current financial year was expected.

Pendragon responded to the tougher conditions in 2007 by targeting lower price used cars and reducing its exposure to nearly new cars where values have been affected by deflationary pressure from lower new car prices.

Norwich Union parent Aviva today reported falling first quarter sales in its UK division, but said stronger growth in the United States and Asia-Pacific regions helped offset the tough domestic market.

The group posted a 5% increase in worldwide life and pension sales to £8.17bn, despite a 3% drop in UK new business, at £2.77bn.

Aviva cautioned that the UK market was set to remain "constrained" this year, but stuck by plans for full-year growth in the division of up to 0.5% as it hoped for a pick-up in sales in the second half.

Andrew Moss, group chief executive of Aviva, said: "While we expect some further short-term uncertainty in some of our markets, the strength of our balance sheet and the prudent management actions we took last year will help us ride out economic turbulence."

The pound at 10am was US$1.9757 compared to US$1.9718 at the previous close while the euro at 10am was £0.7887 compared to £0.7944 at the previous close.