Headlines

It’s said that British politicians care only about one subject right now, but besides Brexit there’s at least one other mess that needs sorting out quickly: The poor quality of company audits. While this may sound like a dry topic, it has ugly real-world implications, a Bloomberg View reported. Just look at the collapse this week of cake chain Patisserie Valerie’s owner after an accounting scandal, an event that puts as many as 2,800 jobs at risk.

France’s private sector slipped further into contraction in January despite a tentative recovery in its manufacturing sector, a closely watched survey showed on Thursday, the Financial Times reported. Disruption to business caused by a series of protests and blockages which swept the country at the end of the year resulted in the first contraction in the private sector for two-and-a-half years in December 2018. The latest purchasing managers’ survey from IHS Markit showed that turbulence had rippled into 2019.

British Airways parent IAG SA abandoned an eight-month pursuit of Norwegian Air Shuttle ASA, leaving the indebted discount airline reeling as it faces a cash crunch during the slow winter season, Bloomberg News reported. IAG “does not intend” to make a further bid and will be selling a 3.9 percent stake in due course, it said Thursday. Norwegian slumped as much as 26 percent, the most ever, while IAG reversed earlier declines to trade higher. Bjorn Kjos, the Scandinavian carrier’s chief executive officer, previously rejected two offers from London-based IAG as undervaluing the business.

Germany’s powerhouse manufacturing sector slipped into contraction in January, an early indicator showed, underscoring the extent of the slowdown in the eurozone’s largest economy, the Financial Times reported. The IHS Markit manufacturing purchasing managers' index dropped to 49.9 in January from 51.8 in December, marking its lowest level in more than four years. The gauge fell below the threshold of 50 that separates expansion from contraction and fell far short of a score of 51.3 expected by economists in a Reuters poll.

The European Central Bank has sounded the alarm over the eurozone economy, warning a slowdown it thought would be temporary was showing signs of becoming long-lasting because of global trade tensions, Brexit and financial market volatility, the Financial Times reported. The shift in outlook, which policymakers said had clearly “moved to the downside”, comes just six weeks after the ECB removed the most important element of its crisis-era stimulus, halting new purchases of bonds as part of its €2.6tn quantitative easing programme.

Ireland’s central bank has warned of “immense” economic threats from a no-deal Brexit, saying the “worst-case” scenario for Dublin was a disorderly UK departure from the EU, the Financial Times reported. The bank said it foresaw huge damage to Ireland’s economy should political talks fail in coming weeks, adding that immediate turmoil in financial markets would come alongside a drop in consumer spending, disruption in ports and airports, and lower exports. Ireland’s economic rebound from the 2008 crash has taken the country to the cusp of full employment less than a decade

The European Commission is suing Slovenia for seizing European Central Bank documents in a raid at its own central bank three years ago as investigators looked into its role in bank bailouts, Bloomberg News reported. The Commission said Thursday in a statement that it’s “decided to refer Slovenia to the Court of Justice of the EU for the violation of the inviolability of the archives of the ECB.” Attempts in 2016, 2017 and 2018 to clarify the facts and circumstances were unsuccessful, it said.

First, it was the IL&FS Group that ran out of money. Now that the bankrupt Indian infrastructure lender-operator has been sequestered from creditors, the country’s securitization industry is on borrowed time, a Bloomberg View reported. It all began on Tuesday with S&P Global’s Indian affiliate, Crisil, downgrading Jharkhand Road Projects Implementation Co.’s annuity-backed bonds to D after it skipped interest and principal payments. It’s a strategic default on an instrument rated AA just last week. The borrower had money.

Amlak Finance, a Sharia-complaint home financier in Dubai, initiated talks with creditors to restructure its debt again, The National reported. The company had previously restructured its Dh10.2 billion investment deposits and settled Dh2.8bn in cash with financiers in 2014, and subsequently revised the terms of the 12-year deal in 2016, Amlak said in a statement on Wednesday to the Dubai Financial Market, where its shares are traded.

Bank of England Deputy Governor Ben Broadbent said on Wednesday he was puzzled by widespread warnings that household debt in Britain had reached unsustainable levels, the International New York Times reported on a Reuters story. Growth in household debt, rather than levels, had proven to be a better indicator of financial distress across different countries, Broadbent said in a speech to the London Business School. Excluding car and student loans, unsecured household debt in Britain is no higher than it was 25 years ago, relative to income, Broadbent said.