These are stories Report on Business is following Thursday, July 7. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
News of the World to close There have been some memorable headlines in the News of the World: Fergie 'sells' Andy for £500k, Posh kidnap, Harry's drug shame. Here's one I wouldn't be surprised to see in its final edition if the staff of Britain's best-read Sunday tabloid had its way: Murdoch screwed us! (More likely it will be something with sex, drugs or the royal family in the headline. Or Posh and Becks.)
The paper, founded in the 1840s and known for its outrageous headlines, is shutting down amid a scandal over phone hacking.
News International, the division of Rupert Murdoch's News Corp. empire that owns the paper, said it will publish its last edition this Sunday. Any revenue from the last issue will be given to charity, though there will be no advertising.
The paper has been "sullied" by bad behaviour, said News International chairman James Murdoch, who added that its actions were "inhuman" if the allegations are true.
Among the allegations are that News of the World hacked into the voice mails of murder victims and their families. In one case, The Globe and Mail's Eric Reguly reports, the tabloid is accused of having intercepted the messages of Milly Dowler, a teenager found dead in 2002.
The scandal has had such an impact in Britain that Prime Minister David Cameron has conceded that a public inquiry is necessary.
It has also put in jeopardy a multibillion-dollar takeover by Murdoch of British Sky Broadcasting Group PLC. Reports today suggested the proposed deal - Mr. Murdoch is bidding for the 61 per cent of the broadcaster he doesn't already own - would be set back by Britain's culture secretary. Of course, responding to the scandal and shutting down News of the World may help his cause.
There has also been some anger over the support by the Murdochs of Rebekah Brooks, now chief executive of News International but, until 2003, editor of News of the World. The Murdochs have supported her amid the widening scandal, and today James Murdoch said he was satisfied she didn't know about any hacking.
- Tabloid involved in phone-hacking scandal to shut down
- BSkyB shares hit by fears of phone hacking fallout
- Murdoch has more to lose than loyalty of tabloid readers
- Murdoch advertisers get cold feet over hacking claims
- Phone-hacking scandal likely marks end of media baron's control of British politics
ECB hikes rates The European Central Bank hiked its key lending rate as expected today, and left the door open to further increases, though probably not immediately.
After the ECB boosted the benchmark rate by one-quarter of a percentage point to 1.5 per cent, chief Jean-Claude Trichet said the central bank will "continue to monitor very closely all developments with respect to upside risks to price stability." Translation: Further hikes possible to fight inflation.
But he didn't use the words "strong vigilance," which suggests no increase next month.
"His carefully worded comments suggested that, although rates remain low and their stance accommodative, the central bank is not in a huge rush to tighten further," said senior economist Jennifer Lee of BMO Nesbitt Burns. "... Today's move is probably not the final rate hike for 2011."
Some observers see rate hikes in the troubled euro zone as a policy blunder amid a debt crisis that threatens the entire 17-member monetary union and its banking system. Countries such as Greece, Portugal and Ireland can ill afford rate hikes as they struggle to stay afloat and fight high rates of unemployment.
From Mr. Trichet's point of view, of course, he's not trying to kill the euro zone, only fulfill his mandate of keeping inflation in check. "All in all, it is essential that the recent price developments do not give rise to broad-based inflationary pressures over the medium term," he said.
Still, many market players believe it could be a policy mistake, said senior currency strategist Camilla Sutton of Scotia Capital, though she stressed the dilemma of the central bank.
The ECB also eased Portugal's situation somewhat, saying it would now accept Portuguese debt as collateral no matter how it's rated. That does not solve the issue of whether it will take the bonds of Greece should all the major credit raters decide a rollover of some debt constitutes a default.
Separately, the Bank of England kept rates on hold at 0.5 per cent.
- ECB raises rates to 1.5%
- Politcs hamper efforts to solve world's debt crisis
- Europe assails 'bias' of ratings agencies
Atco to acquire Australian firm Calgary's Atco Ltd. has struck a deal worth about $1-billion to acquire Western Australia Gas Networks, a distribution utility that serves Perth and its surrounding regions.
“In April 2010, our board of directors approved an Australian growth strategy modeled after Atco's existing Canadian enterprise of diverse yet complementary businesses,” chief executive officer Nancy Southern said in a statement.
"The acquisition of Western Australia Gas Networks is an important step towards achieving this strategy. Driven by natural resource development, the utility is situated in the heart of one of the fastest growing economies in the world and complements our existing portfolio of energy infrastructure assets in Australia.”
Rogers launches LTE Rogers Communications Inc. today became the first Canadian wireless operator to turn on a commercial Long Term Evolution (LTE) wireless network in the Ottawa region, with plans to roll the new technology into Toronto, Vancouver and Montreal in the fall.
As smart phones and tablets eat up more and more wireless data over the airwaves, global carriers are moving from current third-generation, or 3G, wireless services to next-generation 4G networks such as LTE and Wi-Max, which offer much faster downloading speeds more suited to mobile video and other advanced applications. Globe and Mail telecom writer Iain Marlow reports.
Proxy firm urges RIM to act A leading proxy advisory firm says it's "underwhelmed" by what it sees as stalling on the part of Research In Motion Ltd. to reform its board-management structure.
The BlackBerry maker has been under pressure to split the jobs of chief executive officer and chairman, and put off a showdown with shareholders by agreeing to strike a committee of independent directors that will study the issue.
Shareholder Northwest & Ethical Investments LP had proposed a vote on the matter at RIM's annual meeting next week, but RIM responded with its proposal, and the two sides agreed. Still, proxy adviser Glass Lewis & Co. said, it's simply avoiding the split and should take "concrete action" on a matter that needs no further study.
“While we commend the board for actively engaging with NEI in an attempt to reach a mutually agreeable solution, we are underwhelmed with the board’s continued avoidance of a commitment to appoint an independent chairman,” Dimitri Zagoroff and Marian Macindoe of Glass Lewis said in a report, according to Bloomberg News.
Jim Balsillie and Mike Lazaridis each hold the title of co-CEO and co-chairman.
Have house prices peaked? House prices have likely peaked after a strong six months, Royal LePage Real Estate Services said today.
While prices saw big year-over-year price increases in the second quarter, “high house prices are concealing early signs of a moderating market," the company said, Globe and Mail real estate writer Steve Ladurantaye reports.
“The market has seen its near-term peak in house price appreciation, and a slower second half of the year is expected."
Separately, Statistics Canada said today, prices for new homes rose 0.4 per cent in May, extending April's 0.3-per-cent climb.
Prices were driven largely by the Toronto area and Montreal, the agency said, while the biggest decline was in the Ottawa region "as some builders offered promotional pricing or free upgrade packages to generate sales."
In Economy Lab today Every time it seems the Canadian real estate market is about to be torpedoed by higher interest rates, events around the world conspire to keep a lid on increases and spur a new round of furious buying among house hunters. But does that mean the housing boom will last indefinitely? Globe and Mail real estate writer Steve Ladurantaye reports.
In International Business today Debt defaults are a bit like falling in love. Sometimes there is a clear single moment: a flood of emotion, no money in the bank. But more often than not these new states of being creep in gradually. The Lex team at The Financial Times takes a look.
In Personal Finance today If you haven't mastered the art of asking for a deal, try it. You might be surprised at how much you can save.
Trusts can be a great way to shelter income and assets if you know the rules.
Intense devotion to finding bargains can whittle a $555.44 grocery store bill down to $5.97, to cite one extreme example.
From today's Report on Business