BoJ slowdown warning and weak US manufacturing add to economic worries - as it happened

Labour MP Rachel Reeves says Interserve’s collapse shows the government should stop outsourcing vital services to the private sector.

Here’s more reaction:

Interserve’s fate was sealed once its biggest shareholder, hedge fund Coltrane Asset Management, opposed the deal.

It wasn’t prepared to see its 28% stake shrunk to just 1.5%, through the debt-for-equity plan drawn up with its creditors.

Those lenders had agreed to swap debt totalling £485m in the company for newly issued shares worth approximately £435.2m.

Interserve’s shares have now been suspended - although not before tumbling to 6.2p, down a third today.

Shareholders had already suffered huge losses, as the company’s financial position deteriorated:

NEWSFLASH: Shareholders in UK outsourcing firm Interserve have voted AGAINST the company’s rescue plan.

Over 60% of investors rejected the debt-for-equity scheme, which would have almost wiped them out and handed the company to its creditors.

The company, which cleans schools and hospitals, run probation services and build roads and bridges, is now facing immediate pre-pack administration.

This, it pledges, should mean that services continue as normal.

It has just told the City:

The board of directors of the Company is convening an urgent board meeting to consider its options. In the absence of any viable alternative, it expects to implement an alternative deleveraging transaction, which is likely to involve the Company making an application for administration and, if the order is granted, the immediate sale of the Company’s business and assets (i.e. the entire Group) to a newly-incorporated company, to be owned by the existing lenders. This transaction would achieve substantially the same balance sheet and liquidity outcomes for the Group as the Deleveraging Plan.

The alternative transaction will be implemented very quickly and via a carefully-managed process and the administration and sale is expected to be completed this evening, ensuring that the business will continue to operate as normal for customers and suppliers.

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After a wild week, the Brexit crisis has calmed down today. MPs will be holding meetings (and conversing on WhatsApp) about the way ahead, now that parliament has voted to seek an Article 50 extension.

A third Meaningful Vote may come next Tuesday. But in the meantime, businesses face continued uncertainty - and the prospect of massive disruption in just two weeks.

Colin Ellis of credit rating agency Moody says the UK economy continues to suffer:

The uncertainty around the Brexit outcome remains very high and will continue to weigh on investment, hiring and spending decisions, which is credit negative for UK debt issuers

While the EU authorities have signalled that they will certainly consider a request to extend the Brexit process, it is not certain that they will agree to an extension

On balance, Moody’s thinks the EU will probably grant an extension given that it is in the EU’s own interest to avoid a no-deal Brexit.

Back in the UK, Sky News are reporting that Arcadia - Philip Green’s retail empire - is about to be shaken up -- and that could mean job losses.

Mark Kleinman explains:

Sir Philip Green is accelerating efforts to restructure his Arcadia retail empire through a programme that could involve announcing significant numbers of store closures and substantial job losses as soon as next month.

Sky News has learnt that the billionaire tycoon and his advisers are working on proposals to unveil a Company Voluntary Arrangement (CVA) - a form of insolvency mechanism - within a matter of weeks.

The scheme, which would require the approval of creditors including landlords and the Pension Protection Fund (PPF), would trigger substantial job losses across the Arcadia business, whose brands include Top Shop, Dorothy Perkins and Miss Selfridge.

Formal discussions with landlords are expected to begin in the coming weeks, with property agents expected to be drafted in shortly to work on the programme.

China’s premier Li Keqiang is also concerned about the state of the global economy.

Speaking in Beijing today, Li says that China has “encountered new, downward pressure, and promised to do more to help the economy.

Li pledged:

“Of course, we are faced with many uncertain factors this year....

We can deploy quantity-based or price-based policy tools such as reserve requirements and interest rates. This is not monetary easing but to more effectively support the real economy.”

China’s central bank has already cut interest rates in recent months, while the government has pledged tax cuts to help businesses and consumers.

But what China really needs is an end to the trade war with China. The signs there aren’t good -- hopes for a summit between president’s Trump and Xi in March have faded.

The two side are now aiming for April.... or possibly even later, judging by these quote from secretary of state Mike Pompeo:

One for the chartists...

Back to Japan... and Uhuru, the Japanese-based IoT [Internet of Things] company backed by Softbank, reckons the Bank of Japan is being “typically conservative”.

CEO Takashi Sonoda tells us:

“The Bank of Japan is being typically conservative and basing outlook on historical data. The general mood in Japan is one of confidence. This is especially true in the area of technology.

Japan is positioning itself to be at the forefront of the data distribution economy and is confident this will grow rapidly.”