views

WHAT THE OTHER PAPERS SAY THIS MORNING

FINANCIAL TIMES

TENSIONS LIE AHEAD FOR TREASURY
Early this year, a top Treasury official sipped coffee in the departmental canteen and mused about the process of deficit reduction. It would be a long grind, he said, requiring hard work and persistence. Most important, he predicted, would be the task of “keeping a coalition in favour of consolidation”.

VOLATILITY IN DENIM MARKET HITS JEAN BRANDS
The companies behind denim brands such as Levi Strauss and Wrangler are witnessing volatility in the cost of the heavy cloth, threatening price rises for jeans, jackets and other garments. Denim mills, which have traditionally fixed fabric prices for manufacturers between annual cotton harvests, have begun raising prices, sometimes on a week-to-week or even a day-to-day basis, according to industry executives. Jack Matthews, vice-president of fabric sales at PCCA, whose Texas denim mill exports fabric to factories in Latin America, described levels of volatility as “about as crazy as I’ve seen in my career”.

ITALIAN BONDS RISE FOLLOWING AUCTION
Italian government bonds rose on Thursday after a successful auction of debt in a further sign that the EU rescue package and central bank buying of eurozone securities appeared to be shoring up the market.

AUDITS LAY BARE THE CHALLENGES THAT LIE AHEAD
Following an audit of the headquarters and 11 branches of Agricultural Bank of China at the end of April, China’s National Audit Office revealed that it had found lending irregularities amounting to tens of billions of renminbi.The audit came at an embarrassing time for the country’s fourth-largest lender.

THE TIMES

POUND PAYS AS WEAK EXPORTS HIT RECOVERY FEARS
Sterling plunged yesterday after worse than expected trade figures dented hopes that the economic recovery was gaining traction.

BLACK CAB MAKER BLAMES ASH FOR SALES FALL
Black cab maker cuts 60 staff as sales slump Manganese Bronze blames downturn on end of car scrappage, new showroom tax and impact of volcanic ash on airport traffic Robert Lea, Industrial Editor Sales of the London’s famous black cab have slumped as its maker blamed a litany of market reversals, including the volcanic ash cloud. Manganese Bronze also revealed that it was cutting 60 jobs at its plant in Coventry. In a statement at its annual meeting, the company said that sales had fallen by nearly 11 per cent this year.

The Daily Telegraph

BAE BOSS FEARS BUDGET-DRIVEN COALITION DEFENCE REVIEW
Ian King, chief executive of BAE Systems, also said he feared the Strategic Defence Review (SDR) would be rushed through in order to tie in with the wider Government spending review which will be carried out over the next six months.

FIVE MILLION HOME OWNERS UNABLE TO AFFORD INTEREST RATE RISE
More than five million home owners will be unable to afford a rise in interest rates and will be in danger of being evicted from their homes, charities have warned. Despite repossessions falling slightly at the start of the year, charities and housing experts warned home owners remained “vulnerable” to a rise in interest rates which would put additional pressure on their finances. A third of home owners would not be able to afford a rise.

WALL STREET JOURNAL

ITALY'S LACK OF GROWTH MAKES DEBT BURDEN HEAVIER
Europe's nearly trillion-dollar rescue fund has eased the economic pressure on nations at the euro-zone's periphery, but a deeper problem is making it difficult for those countries to escape their huge debts—a lack of growth. The problem is a particular concern for Italy, Europe's most heavily indebted country.

EXPERTS SEE EUROPE CRISIS DELAYING FED RATE BOOST
Turmoil in Europe is leading investors and analysts to push back the moment at which they expect the Federal Reserve to raise interest rates even as the U.S. economy picks up and creates more jobs. A new Wall Street Journal survey of economists finds 42 per cent expect the Fed will hold off on tightening credit until 2011 or beyond.