Departing Bank of England Deputy Governor Paul Tucker has told the Sunday Telegraph that the UK's economic recovery shows quantitative easing has worked. Tucker told the paper that the early benefits of the BoE's bond-buying programme were submerged by the Eurozone crisis. He said it was too early to tell whether the economy had achieved "escape velocity" but he added: "I felt that as soon as [fears] receded, spirits would revive and the existing monetary stimulus would gain traction. And I think that's what has happened."
The Bank of England (BoE) could rewrite its forecasts for unemployment and interest rates within weeks because of the strength of Britain's recovery. The Sunday Times said BoE Chief Economist Spencer Dale hinted about the change in a Twitter debate last week. He said the Monetary Policy Committee was "starting to work on a new forecast" for publication with the November inflation report. The BoE has pegged the next interest rate rise to a fall in unemployment to 7% or less.
QinetiQ is set to be broken up with a sale of its US division that could encourage interest in the rest of the weapons laboratory, the Sunday Times reported. The former Ministry of Defence research arm sent sale documents to potential suitors for the US business last week. Industry sources told the paper that US Services, which provides more than a third of group sales, could sell for about £300m but that a bidding contest could push the price to £400m.
The British Bankers' Association has attacked plans to implement the Vickers Commission's proposed split of investment banking. In a letter to the Treasury, BBA Chief Executive Anthony Browne said restrictions imposed on banks could undermine the UK's economic recovery, the Sunday Times said. Browne said the ring fence was so rigid that it prevented banks from selling many types of trade finance to small and medium companies trying to sell goods abroad. He called on the Government to review the details of the plan prescribed by Sir John Vickers' independent banking commission.
One of Marks & Spencer's most senior womenswear executives has resigned from the group, dealing a blow to hopes of a revival in female fashions, the Sunday Times said. Development and Buying Director Gillian Ridley Whittle has told M&S she wants to join Target, the Australian department store chain. Her departure follows those of Janie Schaffer, the former lingerie head, and Kate Bostock, the head of clothing, who left late last year. Chief Executive Marc Bolland has struggled to turn round the important but ailing womenswear business. Ridley Whittle is unlikely to leave before 2014.
Companies listed on the London Stock Exchange issued more profit warnings last month than in any since the peak of the financial crisis, the Sunday Telegraph and other papers said. September had the most profit warwarnings since 2008, an EY survey showed. Despite the improving UK picture, disquiet about the global economy knocked confidence as a more unsettled global economy damaged confidence. But over the third quarter warnings by UK quoted companies were down almost 20% from a year earlier, the accountants' survey said.
WPP is expected to report sales up 4% in the three months to the end of September, the Mail on Sunday said. Analysts expect Sir Martin Sorrell's advertising giant to announce like for like sales for the first nine months up 3% in its October 21st trading statement. WPP's UK arm is likely to have been better than in other parts of its business, reflecting the growing strength of the economy.
The chairman of Serco was warned by top UK government officials last week that the troubled outsourcing business will lose out on government contracts unless it overhauls its business practices quickly, the Sunday Times reported. The paper said Alastair Lyons was called in to discuss a number of key contracts. Serco told the Sunday Times: "We have frequent meetings with government to discuss progress." The paper said Serco faces an end of November deadline to improve its performance. A Cabinet Office investigation into two high-profile fiascos in its work for the Government ends next month.