Sunday newspaper round-up: Brexit, trade war, Rolls-Royce, Interserve

The European Union is set to reject Theresa May’s plan for a soft border in Northern Ireland, Ireland’s deputy prime minister said on Sunday. The prime minister suggested on Friday that a hard border between Northern Ireland and the Republic could be avoided through technological solutions and by exempting small businesses, which account for 80 per cent of cross-frontier trade, from checks. - Sunday Times

Angela Merkel has secured her fourth term in power after Germany’s Social Democratic party (SPD) agreed to form another “grand coalition” government with the conservative Christian Democratic Union (CDU). The SPD announcement ends almost six months of uncertainty in German politics, the longest the country has been without a government in its postwar history, and puts Europe’s largest economy in a position to answer the challenges for EU reform laid down by France's Emmanuel Macron. - Observer

Donald Trump has escalated his threat to launch a global trade war after warning he will slap a tax on cars made in the European Union if the bloc retaliates against his proposed tariffs on imports of steel and aluminium. In a tweet on Saturday night, Trump said: “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a tax on their cars which freely pour into the US.” - Sunday Times/Observer

Theresa May has called Donald Trump to raise Britain’s “deep concern” over US plans to impose tariffs of 25% on imports of steel and 10% on aluminium. The prime minister called the president on Sunday after world stock markets tumbled in the face of a threatened trade war with China, and escalating tensions between the US and EU. - Observer

Donald Trump’s debt-fuelled spending and tax cut plans are a growing risk to the US and world economies, as a short-term boost threatens to turn into a bust next year. Almost $400bn (£290bn) of extra spending combined with a $1.5 trillion tax cut in a booming economy could trigger overheating, top economists fear. A sharp interest rate rise in response typically leads to a downturn. - Sunday Telegraph

“Nimby councils” that refuse to build the homes Britain needs will be stripped of their right to decide where houses are constructed under a “revolution” in planning laws to be unveiled tomorrow. The housing secretary, Sajid Javid, said councils would be given higher targets for homes to be built and those that failed would have their planning powers removed and handed to an independent inspector, adding that he will approve at least two new towns between Oxford and Cambridge, with up to three more to follow. — Sunday Times

Gridlocked motorways, empty restaurants and idle diggers seen across Britain last week cost the economy at least £1bn a day and could halve GDP growth in the first three months of the year. Analysts said the impact of the “beast from the east” sweeping in from Siberia and the arrival of Storm Emma hitting the south coast was likely to be the most costly weather event since 2010, when freezing temperatures and snow brought the economy to a standstill a week before Christmas. - Observer

Mark Carney has called to end the "anarchy" of cryptocurrencies being used for criminal activities and warned against viewing as them true currencies. He said that cryptocurrencies, such as bitcoin, fail to store value, are difficult and expensive to use for purchases, and are no use as a unit of account - all of the usual definitions of a currency. - Sunday Telegraph

When Royal Bank of Scotland agreed a £200 million settlement with a shareholder action group last year, it seemed a triumph for thousands of small investors over a ruthless and oppressive bank. Thousands of ordinary shareholders had joined the RBoS Shareholders Action Group to sue the bank for inveigling them into buying shares during the Fred Goodwin era. - Mail on Sunday

One of the City’s most influential investors has called for a major overhaul of corporate governance including reform of executive pay and company culture. Old Mutual Global Investors, a £35bn fund management powerhouse, is pressing for an end to controversial long-term incentive bonus schemes, as part of a series of sweeping changes to the code that governs the behaviour of UK companies. - Sunday Telegraph

A prominent commercial landlord has voiced frustration at the wave of retailers seeking to cut their rent bills via restructurings. Lord Oakeshott, chairman of the property manager Olim, spoke out as the fashion chain New Look prepared to launch a company voluntary arrangement (CVA), which allow retailers to leave loss-making stores and negotiate rent reductions. - Sunday Times

Rolls-Royce is preparing fresh cuts to its management ranks as boss Warren East accelerates his plan to revive the engineering giant. He has hired consultant Alvarez & Marsal to help streamline the Derby-based company, which has a reputation for stifling bureaucracy, with the overhaul expected to see hundreds of long-serving staff eased out of the FTSE 100 stalwart. - Sunday Times

The pubs business is going back to the future. What the industry likes to call “wet-led” businesses — pubs where the majority of the takings come from booze — are back in vogue, taking share from rivals that shifted their focus to food. Others, including Greene King, which bought the Spirit Pub Company for £744m in 2015, are scrambling to “put the pub back” into what have become pub-themed restaurants. - Sunday Times

The Restaurant Group, owner of chains such as Frankie & Benny’s and Garfunkel’s, is looking to sell some of its prime sites amid mounting pressure in the sector. The struggling chain is inviting offers for its flagship two-storey Chiquito restaurant in London’s Leicester Square — a tourist hotspot. - Sunday Times

Food giant Archer Daniels Midland (ADM) is looking to thwart Glencore’s pursuit of American grain trader Bunge by teaming up with a mystery Asian company. A $30bn (£21.7bn) ADM combination with Bunge would face significant competition and anti-trust hurdles. City sources said ADM was examining the possibility of forming a consortium with a rival, possibly from Asia, to get past regulatory issues. - Sunday Times

A Scottish multi-millionaire who made his fortune as a dealmaker in the pub industry is spearheading an unlikely rescue bid for troubled outsourcer Interserve. Alan McIntosh is the serial investor behind Emerald Investment Partners, a private equity vehicle emerging as a key player in the FTSE 250 contractor’s refinancing discussions. He is said to be worth more than £100m. - Sunday Telegraph

Internet giants were accused of profiting from sex trafficking in Britain as security chiefs warned of a new wave of “pop-up brothels” sweeping the country. The National Crime Agency (NCA) on Saturday accused firms such as Google and Facebook of “making profits” from the trafficking of vulnerable women, many of whom end up in temporary sex clubs and massage parlours that have sprung up around the country. - Sunday Times

Facebook holds sensitive information on about 200m European citizens, putting it in danger of breaching new internet privacy rules, a study has claimed. The social network holds data on race as well as sexual, political and religious preferences for 72% of its EU users — or 40% of the bloc’s 508m citizens — and uses this information to sell targeted advertising, according to researchers from Charles III University in Madrid. - Sunday Times

Hong Kong’s currency regime is coming under mounting strain as the US Federal Reserve steps up the pace of monetary tightening, threatening to set off an unpredictable chain of events in the world’s most over-stretched financial system. The enclave’s US dollar peg - usually rock solid - has suddenly become the focus of global markets after the currency fell last week to its lowest level since the current trading band was established in 2005. Analysts say the authorities may soon be compelled to defend the exchange rate, with escalating complications. - Sunday Telegraph

Investors will be paid £34m in compensation from asset managers that overcharged them for investment funds, while another asset manager is being pursued by the regulator. City watchdog the Financial Conduct Authority said that a number of asset management companies had taken the move to compensate investors, after it investigated the widespread issue of "closet tracker" funds. - Sunday Telegraph

Plans to build the world’s first tidal lagoon off Swansea are hanging in the balance. International Trade Secretary Liam Fox has refused to meet Austrian engineering firm Andritz, which has been working on plans to build a factory in Wales providing the parts for the lagoon. - Mail on Sunday

Topshop owner Sir Philip Green has called for an end to frosty relations with his bete noire Frank Field MP – although it seems the pair are unlikely to be close chums anytime soon. In letter sent to Field, Green suggested the pair ‘avoid another public spat that you so enjoy’ adding ‘why don’t we call a truce?’ - Mail on Sunday

New disclosure rules may force some investment banks to reveal that they pay men twice as much as women, according to a campaigner for equality in business. Fiona Hathorn, a former investment director for Old Mutual who is now managing director of Women On Boards UK, said many big banks are wrestling with how to present their gender pay gap data. - Sunday Times

Male MPs earn 10.4% more on average than their female counterparts despite identical basic salaries, exposing the way the gender pay gap in British society runs right to the heart of government. The parliamentary pay gap was revealed by analysis conducted by the Sunday Times data team, taking outside earnings and ministerial salaries into account, and is higher than the pay gap at the BBC. - Sunday Times