The EY Item Club says the UK's recovery is entrenched and that the economy will expand by 1.4% this year and 2.4% next year, the Mail on Sunday and other papers reported. The highly regarded report by independent economists also dismissed fears of a housing bubble as "hysteria". House prices will help drive the recovery and will rise by 3.5% this year and 6.5% next year, it predicts. However, the report warned that consumer spending, the main driver of recovery so far, is not enough to sustain growth on its own.
Canada's TD Bank is considering a bid for Royal Bank of Scotland's Citizens US retail banking business, the Sunday Times said. A sale of Citizens, one of the biggest banks in the northeast US, is already planned for 2015 but the Chancellor's desire to split RBS into a good and bad bank could make a sale more likely. TD Bank's Chief Executive Bharat Masrani has already hinted he is interested in Citizens.
Small shareholders cashed in their Royal Mail shares
on their first day of trading to make a quick profit. Stock Exchange records show that almost half of trades in the first two hours of October 10th were for 227 shares - the number allocated to individual shareholders buying £750 of the stock, the Sunday Times reported. Brokers said locking out hedge funds from the initial allocation had contributed to the 38% share price rise on the day and that the sellers were small investors while big long-term funds held on to their shares.
Burberry is expected to announce first-half sales of £1bn - up 16% - when it reports its results, the Sunday Express said. Citing analyst forecasts, the paper predicted sales in China would help drive the increase. The luxury clothing brand published a profit warning in September after Chinese sales slowed but Chief Executive Angela Ahrendts said recently that sales in the world's second-biggest economy have been better than expected.
Serco risks losing three big Government contracts if it cannot demonstrate "change and corporate renewal" in the next six weeks, the Sunday Times said. Senior Whitehall officials told the paper the Cabinet Office was not convinced Serco had taken enough action to mend its ways after the Government accused it of overcharging for electronic tagging of prisoners and altering records on transporting prisoners. The contracts in question are Serco's existing £258m prisoner escort contract, management of three Yorkshire jails and bidding for the £800m probation service privatization.
WH Smith has shut down its website after it was discovered the retailer was selling pornographic ebooks online, the Sunday Express and Mail on Sunday reported. More than 60 of the books were found on the site but WH Smith said they were placed there by a third-party company. WH Smith said the books highlighted a "new industry issue due to the explosion of self-publishing".
BP could claims worth tens of millions of dollars from UK shareholders who lost money after the Gulf of Mexico oil spill, the Sunday Telegraph reported. A court in Texas ruled last week that UK shareholders could use Texas and English law to pursue claims over the plunge in BP's share price after the 2010 disaster. US courts look allow for class actions whereas British courts do not. The Texas case involves six funds that allege BP did not disclose fully its position in the wake of the spill.
Potential suitors are circling Albemarle & Bond as the pawnbroker tries to renegotiate its bank loans, the Sunday Times said. Vulture funds, buyout firms and rivals are sizing up A&B after it failed to raise new capital. Its finances were after it was hit by the falling price of gold. A handful of potential buyers have approached A&B's banks about buying its debts cheaply and taking control.
Chancellor George Osborne has declared victory in his dispute with the International Monetary Fund, the Sunday Telegraph reported. George Osborne, speaking on the fringe of the IMF's annual meeting, said: "The UK has been singled out in a couple of the meetings I've been in, as an example [of] the improving economic situation and I think there is a recognition that we've stuck to an economic plan that is delivering." The paper said his words were a veiled attack on IMF chief economist Olivier Blanchard, who criticised Osborne's policies earlier this year.
High business rates have driven Kingfisher to cut its UK retail space by about 15%, the Sunday Times reported. The owner of B&Q has already announced a 5% reduction to shareholders but is now planning a further 10% cut to save £16m in rent and £7m in rates.
Barclays will appeal against a £70m legal claim over interest rate hedging products it sold to Guardian Care Homes, the Sunday Telegraph reported. The three-day hearing, starting October 14th, will seek to strike out the Libor element of the company's case in the first major court case linked to banks' efforts to rig the Libor price. The bank has admitted its involvement in the Libor scandal but has resisted civil claims linked to last year's settlement with regulators.