Investment funds have bet against top retailers amid expectations of disappointing sales, the Sunday Times reported. Hedge fund Marshall Wace almost doubled its short position in Debenhams to almost 1% two days before Christmas from early December. Black Rock took a big short stake in Marks & Spencer in early December and has a 0.5% position. The paper said Debenhams and M&S, led by Marc Bolland, were likely to be casualties of underwhelming Christmas sales.
Profits at the UK's leading retailers are set to fall after they slashed prices before Christmas to lure shoppers, the Mail on Sunday said. Marks & Spencer could be heading for its worst profit numbers for five years following pre-Christmas price cuts, City analysts said. Retail footfall rose 0.6% in December but profits will be hit by "aggressive pricing", Tim Denison, a director at market research company Ipsos, said.
Pawnbroker H&T has dropped its interest in bidding for troubled rival Albemarle & Bond, increasing the chances of Albemarle falling into the hands of US vulture fund Apollo, the Sunday Times said. H&T withdrew its interest because it "lacks the firepower for a serious offer", the paper said. The decision not to bid follows the withdrawal last week of Jon Moulton's Better Capital from the process. EZ Corp of the US, Albemarle's biggest shareholder, could still decide to bid.
UK house prices are on track for their biggest rise since 2007, prompting concerns about a property bubble, the Sunday Times said. With leading forecasters preparing to release their final figures for 2013, Halifax is expected to show that prices rose 8.1% in the year to December - the fastest since October 2007. Prices rose in three-quarters of postcodes but fell in 15%, Hometrack research showed.
UK authorities are likely to charge more bankers and traders over the Libor-rigging scandal, the head of the Serious Fraud Office told the Sunday Telegraph. David Green said the SFO was conducting an "enormous" investigation into the Libor affair. The Libor probe and the recently announced investigation of Rolls-Royce over alleged corruption and bribery are "very different" from the SFO's cases of recent years, Green said.
City analysts expect the FTSE 100 to hit an all-time high in 2014, the Mail on Sunday reported. Citigroup predicts the index of leading shares
could hit 8,000 by the end of next year - a near-20% jump. Goldman Sachs and Capital Economics forecast the index will rise to 7,500, beating the record of 6,930 set in 1999. Citi's optimism is based on confidence in the economy and company profits.
More than a million homeowners will be at risk of mortgage default if the Bank of England (BoE) raises interest rates gradually over the next five years, the Observer reported, citing analysis by the Resolution Foundation thinktank. If the BoE increases borrowing costs from their current 0.5% to 3% by 2018 and economic growth is strong, 1.12m people households will be spending more than half of take-home pay on mortgage repayments, an indicator of over-indebtedness, the paper said.
The pound was the best performing G20 currency in the second half of 2013 but economists are warning sterling's strength could undermine the UK recovery, the Sunday Times reported. Sterling gained more than 8% against the dollar
in the last six months and is up 14% against the yen. "Much as the decline in sterling in the early part of 2013 helped to spur the recovery, the subsequent reversal of that weakness in the second half is likely to weigh on growth next year," Kevin Daly, chief UK economist at Goldman Sachs, said.
The market for share flotations was more than £7.7bn in 2013 - over three times the level for the year before, the Sunday Times reported. The total is the highest since 2007 when the financial crisis struck. Initial public offerings are likely to remain popular in 2014 with private equity firms looking to sell businesses. Potential offerings include Saga, the over-50s travel and insurance company, which could be valued at £3bn.
Pimco has warned that the Eurozone is "sleepwalking" towards Japanese-style deflation, the Sunday Telegraph said. The giant bond fund said deflation was the biggest threat to the single currency zone in 2014. Tolerating high unemployment and low growth risks triggering falling prices, Pimco's Mike Amey said.