Morning business news - March 19Wednesday 19 March 2014 10.48
Britain's Chancellor George Osborne is due to announce the country's latest budget later this afternoon. Despite signs of growth in the country's economy, Mr Osborne is expected to outline further cuts as he attempts to reduce Britain's budget deficit. A new cap on welfare spending, a crackdown on tax avoidance and cuts in public spending will all form part of his plans, according to analysts. However budget measures to ease the pressure on middle income earners are also expected.
Brenda Kelly, from trading firm IG Group in London, says that some measures - including the Help to Buy housing scheme being expanded to 2020, more help for flood victims, an expanded apprenticeship scheme and the expansion of tax-free childcare - have already been flagged. Ms Kelly says that people in the UK are hoping to see changes in the income tax rate, adding that George Osborne is coming under pressure to ease the squeezing of middle class incomes. The changing of stamp duty rates is also key, with many Britons complaining about the stamp duty "cliff-edge". Ms Kelly says this might temper the rapid rise in house prices in the UK, especially in London and the southeast. She says that some of the changes could be funded from increases in National Insurance contributions and changes to payment of VAT. On corporation tax, Ms Kelly says it will be cut from 23% to 21% with further cuts expected next year to bring it down to 20%. This will apply to companies with profits of over £1.5m. Business rates are also set to be cut, and Ms Kelly says this will come as a relief to small companies in a sector which has not seen the level of growth that has been seen in some other areas of the UK economy.
MORNING BRIEFS - Motor group Toyota has reached a $1 billion settlement with the US Justice Department over the car maker's handling of complaints tied to the unintended acceleration of some of its vehicles, according to reports. The Japanese firm has recalled millions of vehicles since 2009 because of the acceleration issue, and US authorities have been looking into claims that they misled customers about the cause and scale of the problem. Details of the settlement are expected to be announced later today, and US news agency CNN reports that Toyota would like avoid criminal charges as part of the deal.
*** The country's largest hotel group has raised €265m in a stock market flotation in Dublin and London and says it plans to use the money to buy a number of new properties in the country. Dalata Hotel Group, which operates the Maldron brand, already controls 40 hotels - the majority of which it manages on behalf of other owners. In terms of the number of rooms, it claims to run 10% of the country's total hotel stock - making it three times bigger than its nearest competitor. It now plans to increase this lead, with CEO Pat McCann saying the time was now right to buy Irish hotels. Dalata is looking to purchase up to 25 properties as part of this expansion and is thought to be in discussions with the National Asset Management Agency and Bank of Scotland, amongst others, about the possibility of buying portfolios of hotel assets.
*** Google has formally set out its stall in the area of smart-watches - an emerging technology that is expected to be worth $2.5 billion in 2014 alone. Yesterday Google unveiled software specially tailored to run on so-called 'wearable' technology - along side this were announcements from manufacturers like Motorola and LG, who unveiled their plans for Google-powered product launches this year. Its main rival Apple has not yet said whether it will launch its own smartwatch, though CEO Tim Cook has repeatedly said they are interested in the area. Most expect some kind of a so-called iWatch to be unveiled in the coming months.