City urgently needs to update its attitudes

The City stands accused of failing to modernise key aspects of its
employment practices. The focus of the criticism is the area of discrimination
against women. Two high profile cases in the past fortnight have highlighted
the urgent need to bring the City in line with industry and make it a less
hostile environment to women employees.

Last week, Kay Swinburne, a £300,000-a-year investment banker with Deutsche
Bank, won her claim of sexual bias, constructive dismissal and breach of
contract against her employer. And a fortnight ago, Aisling Sykes, a top banker
with JP Morgan, also won her case for unfair dismissal against her firm. She
claimed she lost her job when she became pregnant with her fourth child.

The danger is that the macho culture, which breeds such unfairness against
women, could drive away talent from areas crucial to the UK economy. Official
data published by the Office for National Statistics last week, reveals that
unemployment is at its lowest for 20 years.

But is this good news? Well maybe not, because the big fall in the number of
people claiming dole could push inflation to above the level that the Bank of
England is comfortable with. Skill shortages appear to be driving up wages and
excessive pay growth fuels inflation. Inflationary pressures would force the
Bank to put up interest rates and ultimately higher cost of borrowing would
hurt borrowers a truly vicious cycle.

Supermarket aims for lion’s share of on-line shoppers

Tesco, the supermarket chain, has announced major expansion of its on-line
home shopping. The company, which already enjoys the status of largest on-line
grocery retailer in the world, is planning to create 7,000 new jobs by
increasing the number of its stores offering online shopping threefold, from 100
to 300.

By 2004, retail analysts predict online retail business could be worth as
much as £2.3bn. Tesco, which already has a quarter of a million customers, is
proactively positioning itself to seize the lion’s share of new Internet
grocery business going forward. Tesco Direct has been capturing new ground from
other retailers and expansion of its home shopping service would mean that each
store would service a 2,000-customer radius.

Telecommunications firms fight over company split

Mannesmann, the German telecoms company, is continuing to play Oliver as
part of its defence strategy against Vodafone’s hostile takeover bid. Now, to
put an end to the stand-off between the two companies, Vodafone the UK
corporate raider has agreed to pay £3bn more on condition that the board of the
German target supports the bid.

The increased offer means that Vodafone is happy to pay nearly £100bn for
its rival. However the problem is that Mannesmann says that it wants to control
no less than 58.5 per cent of the combined company, whereas Vodafone maintains
that it is only prepared to offer up to 48.9 per cent if the deal is done.

City urgently needs to update its attitudes

The City stands accused of failing to modernise key aspects of its
employment practices. The focus of the criticism is the area of discrimination
against women. Two high profile cases in the past fortnight have highlighted
the urgent need to bring the City in line with industry and make it a less
hostile environment to women employees.

Last week, Kay Swinburne, a £300,000-a-year investment banker with Deutsche
Bank, won her claim of sexual bias, constructive dismissal and breach of
contract against her employer. And a fortnight ago, Aisling Sykes, a top banker
with JP Morgan, also won her case for unfair dismissal against her firm. She
claimed she lost her job when she became pregnant with her fourth child.

The danger is that the macho culture, which breeds such unfairness against
women, could drive away talent from areas crucial to the UK economy. Official
data published by the Office for National Statistics last week, reveals that
unemployment is at its lowest for 20 years.

But is this good news? Well maybe not, because the big fall in the number of
people claiming dole could push inflation to above the level that the Bank of
England is comfortable with. Skill shortages appear to be driving up wages and
excessive pay growth fuels inflation. Inflationary pressures would force the
Bank to put up interest rates and ultimately higher cost of borrowing would
hurt borrowers a truly vicious cycle (see report, p8).

Supermarket aims for lion’s share of on-line shoppers

Tesco, the supermarket chain, has announced major expansion of its on-line
home shopping. The company, which already enjoys the status of largest on-line
grocery retailer in the world, is planning to create 7,000 new jobs by
increasing the number of its stores offering online shopping threefold, from
100 to 300.

By 2004, retail analysts predict online retail business could be worth as
much as £2.3bn. Tesco, which already has a quarter of a million customers, is
proactively positioning itself to seize the lion’s share of new Internet
grocery business going forward. Tesco Direct has been capturing new ground from
other retailers and expansion of its home shopping service would mean that each
store would service a 2,000-customer radius.

Telecommunications firms fight over company split

Mannesmann, the German telecoms company, is continuing to play Oliver as
part of its defence strategy against Vodafone’s hostile takeover bid. Now, to
put an end to the stand-off between the two companies, Vodafone the UK
corporate raider has agreed to pay £3bn more on condition that the board of the
German target supports the bid.

The increased offer means that Vodafone is happy to pay nearly £100bn for
its rival. However the problem is that Mannesmann says that it wants to control
no less than 58.5 per cent of the combined company, whereas Vodafone maintains
that it is only prepared to offer up to 48.9 per cent if the deal is done.

By Paul Audu, Investment Manager