PRESS DIGEST - Financial Times - May 10

The Financial Times

INCOME GAP NARROWS UNDER LABOUR

Figures published on Friday by the Office for National Statistics reveal the income gap between affluent areas of southeast England and other regions has narrowed under Labour. The divide, however, remains wide with gross disposable house income per head 23 percent higher in London than the average for the rest of the UK in 2006. Northern Ireland, Wales and Scotland are the regions that have seen the divide narrow the most, with gross disposable annual income in Northern Ireland having risen by more than 60 percent since 1997. This compares with a 43.7 percent rise for the UK as a whole.

DEMAND FOR FUEL DRIVES PRICES OF OIL AND CORN TO RECORD LEVELS

Crude oil and corn prices reached record highs on Friday as the world's hunger for fuels continued to upset energy and agriculture markets. Oil reached 126.2 dollars a barrel in a week which has seen prices jump by 10 dollars, and some traders are now betting on when it will hit 200 dollars. The increase in energy costs is putting fresh pressure on Opec to increase levels of production but on Thursday, Abdalla El-Badri, Opec's secretary-general, said the market did not need more oil. "There is clearly no shortage of oil," he said. Corn prices rose to a record 6.27 dollars a bushel, up 75 percent in the past year, and some analysts have warned that corn may reach seven dollars a bushel this year.

WAITROSE OFFERS INFLATION HOPE

Mark Price, managing director at Waitrose, has said food price inflation should peak this year, falling to nought percent in the second half of his company's financial year, which begins in August. Price, however, cautioned that food prices were unlikely to fall, saying: "I don't think it will ever go back (to the mid-1990s deflation). We've got issues about feeding the planet." Waitrose has a broad perspective on the market as it is a farmer as will as a grocer. Not all retailers concur, with one agricultural specialist at a leading supermarket saying he believed food price inflation would continue and warning that retailers who did not pass on higher prices would put their businesses at risk.

SLOWDOWN FAILS TO EASE CALL FOR LUXURY HOMES

A report from Halifax reveals demand for luxury homes in the UK has grown with sales of million pound properties having increased by more than a third in 2007. Despite a fall of 9 nine percent in total property sales in the UK last year, sales of million pound homes rose 36 percent to 8,257. Purchases of two million pound properties increased by almost half over the same period compared with the previous year. The freeze on mortgage lending has mainly targeted those without large deposits or high levels of equity in their property, which, say analysts, rarely applies to those purchasing homes worth over one million pounds.