News

Clive Cowdery, the insurance entrepreneur, has secured commitments from investors of just over £500m for a new vehicle to consolidate the hard-hit financial services sector, at the lower end of his range of expectations, reports the FT.

Cowdery, who sold his first Resolution vehicle this year to arch-rival Hugh Osmond for £5bn, has been meeting investors during the past few weeks to raise funds for the new venture, also called Resolution.

British Airways is in merger talks with the Australian airline Qantas in a deal that could create the world's first global airline, reports the Times. BA has also been discussing a merger with Iberia, the Spanish national carrier, and hopes to expand its alliance with American Airlines. The combination of the four would create the largest airline in the world, which would be capable of carrying 198 million passengers a year - nearly six times BA's current traffic.

3i will on Thursday announce plans to cut about 15% of its workforce in one of the starkest illustrations of how private equity groups are slashing costs to prepare for a sharp downturn in their industry. The UK's biggest listed private equity group will cut about 100 of its 660 staff, with half the job losses affecting its UK operations, as it trims back-office functions, including marketing and human resources, reports the FT.

The Financial Services Authority said yesterday that more than half a million Halifax customers on tracker mortgages should benefit from further interest rate cuts even though the small print on their loans supposedly prevents them from doing so. An estimated 550,000 Halifax borrowers with tracker mortgages, which move up and down in line with the base rate, appeared set to miss out on future rate cuts because the small print on their loans allowed Halifax to stop reducing rates once the base rate falls below 3%, reports the Times.

The retail sector took another battering yesterday as the Glasgow-based group Bowie Castlebank called in the administrators and cut 817 jobs. Another 847 staff are facing an uncertain future after Bowie, the Scottish retail group behind Klick Photopoint and Max Spielman photo processors and William Munro dry cleaners, appointed the accountant KPMG, reports the Independent.

The Government's response to the mortgage lending crisis has been confused and ineffective critics warn, with calls for new solutions gathering pace as repossessions rise and mortgage lending figures continue to plummet. The Council of Mortgage Lenders (CML) estimates that there was £258bn worth of gross mortgage lending in 2008, down dramatically from £363bn last year, reports the Independent.

Gordon Brown is to press ahead with plans for more part-time working rights for 4.5m staff, rejecting demands from business leaders that the measure be dropped when new laws are announced on Wednesday in the Queen's Speech. The prime minister's aides say the government's last full legislative package will help Britain through the recession, but some business leaders warn it could make matters worse, reports the FT.

The heads of Ford and General Motors have offered to work for $1 a year and forego bonuses and corporate jets in return for their companies getting a share of $34bn in US government funding aimed at returning the nation's car industry to profitability. Ford chief executive Alan Mulally and GM chairman Rick Wagoner submitted detailed business plans, alongside Chrysler chief Bob Nardelli, to the US Congress asking for the money, writes the Telegraph.

The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital. Kevin Norrish, the bank's commodities strategist, said the average fall in the price of copper, lead, and zinc has been roughly 60% since the peak in July this year, reports the Telegraph.

Two senior dealmakers involved in Terra Firma's £3.2bn acquisition of the struggling record group EMI are leaving the private equity firm. Chris Roling, who was parachuted into EMI as chief operating officer and chief financial officer by Guy Hands, Terra Firma's founder, is leaving after Terra Firma injected an undisclosed sum into the business, writes the Times.