United Kingdom

U.K. consumers face a brutal squeeze in 2011 as wage increases fail to keep pace with soaring inflation and the threat of rising unemployment tempers people's ability to negotiate pay increases, The Wall Street Journal reported. Data showed Wednesday that in the three months to November, growth in pay, excluding bonuses, remained at 2.3%, while data Tuesday showed annual inflation jumped to 3.7% in December from 3.3% in November.

U.K. consumer-price inflation accelerated sharply in December, underscoring the view that the Bank of England's most likely next move will be to tighten policy, but the economy's fragility suggests that action is a while off yet, The Wall Street Journal reported. Data from the Office for National Statistics Tuesday showed annual inflation jumped to 3.7% last month from 3.3% in November, well above expectations as economists polled by Dow Jones Newswires had forecast a figure of 3.4%.

Engineering company Siemens has provided funding to fulfil a wind turbine equipment order at a Scottish factory which went bankrupt last week, administrator Ernst & Young said on Wednesday, Reuters reported. 130 workers at the factory in Machrihanish on the west coast of Scotland -- owned by Danish wind power company Skykon -- will be able to return to work on Thursday to complete an order for 30 wind turbine towers destined for a 350-megawatt onshore wind farm in Lanarkshire, Scotland.

The number of Scottish business failures in 2010 was up by a quarter, according to the accountants KPMG, the BBC reported. The firm said there were 1,109 corporate insolvency appointments in 2010, compared to 883 in 2009. However KPMG said there were signs the market was starting to level out with a fall in the number of appointments between October and December. At the end of 2010, appointments were down 10% compared with the previous three months. The figure was 3% lower than the same period in 2009.

British holiday camp firm Pontin's has attracted ten offer approaches since going into administration, accountants KPMG said on Wednesday, Reuters reported. KPMG, who were appointed administrators in November, said the majority of the offers had come from parties who were keen to continue operating the business as a going concern. In its first report to creditors on the progress of the administration, KPMG said Pontin's secured creditor debt stood at about 44 million pounds ($68.5 million) with unsecured creditor debt amounting to 3.6 million pounds.

The number of U.K. companies going into administration declined 35% in 2010 compared with the previous year, but continued economic weakness means many more are still at risk, professional services firm Deloitte LLP said Wednesday, Dow Jones Daily Bankruptcy Review reported. A total of 2,086 U.K. firms went into administration last year, down from 3,188 in 2009, with the property and construction sectors the worst hit, accounting for one in five of total administrations.

Concern about the rising number of pensioners becoming bankrupt has been raised by campaigners following an analysis of debt figures, the BBC reported. Bankruptcy among all age groups has risen in the past 10 years, with the highest prevalence among 35 to 44-year-olds, the UK Insolvency Service said. But the service and charities have pointed to pensioners as being the fastest growing group of bankrupts. The elderly face debts at a time when their income drops, charities warn.

Mortgage lenders have warned that an imminent crackdown by the FSA on lending practices could keep the market in the “doldrums” for the foreseeable future and even jeopardise the economic recovery, the Financial Times reported. Under proposals from the City watchdog, lenders will have to do more to ensure borrowers can afford their mortgages. That could mean a curtailing of interest-only products, self-certified mortgages and products of longer than 25 years. Lord Turner, chairman of the FSA, recently claimed the changes would only marginally affect most would-be borrowers.

Multinational companies are facing a new British law they fear will force them to rethink their compliance strategies and upend their business practices, the Wall Street Journal reported today. The new law, called the Bribery Act, takes effect in April and it resembles the U.S. Foreign Corrupt Practices Act (FCPA), which bars companies that trade on U.S. exchanges from bribing foreign government officials to gain a business advantage. The British law, however, is more sweeping than its American counterpart, and corporate legal advisers are uncertain how extensive the fallout might be.

Net mortgage lending by U.K. banks was at its weakest in over 10 years in November as demand for new homes slowed, as is typical for this time of the year, data from the British Bankers Association showed on Tuesday, the Wall Street Journal reported today. Seasonally-adjusted net mortgage lending grew £1.5 billion ($2.31 billion) in October. That was the smallest increase since a £1.3 billion gain in August 1999 and compares with gains of £1.7 billion in October and £2.8 billion a year earlier.