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Morning Wrap: need to know business stories

Top stories from around the web.

Lloyds will sell Spanish retail division to Sabadell (BBC):

Lloyds Banking Group has agreed to sell its Spanish retail banking business to Banco Sabadell in exchange for a 1.8% stake in the Spanish bank. Lloyds said that the stake - which it will hold for at least two years - was worth about 84m euros ($110m; £72m). The Spanish business made a £43m loss last year. Lloyds said it would make a £250m loss as a result of the sale.

Greggs Bakery in profit warning (BBC):

High Street bakery Greggs has warned of lower than expected profits this year after reporting falling sales. The chain said like-for-like sales, which exclude newly-opened outlets, were down 4.4% so far this year. It blamed bad weather and "under pressure" consumers, and said it did not expect market conditions to improve in the short term.

Rentokil Initial sells City Link for £1 (Telegraph):

The multifarious company, best known as the rat-catcher to the Queen, will book a £40m loss on the parcels business, which has been plagued by losses and management departures after Rentokil acquired it in 2006 as part of a £210m takeover of Target Express.

Rentokil had hoped City Link would return to the black this year after failing to turn a profit since 2007 but the group was forced to admit last month that its goal was no longer realistic, despite a reduction in operating losses. Adjusted operating losses at City Link narrowed from £31m in 2011 to £26m in 2012.

UK manufacturing jobs to come home in next decade (Telegraph):

As many as 200,000 manufacturing jobs will return to the UK over the next decade, cutting the trade deficit by a third, as outsourcing becomes increasingly “unattractive”, according to new research.

Advances in production technologies, as well as rising costs and regulations abroad, will “fundamentally change” the economics of manufacturing, a study by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) found.

Aberdeen Asset Management sees profits rise 37 per cent as appetite for assets returns (City AM):

Investment group Aberdeen Asset Management has released interim results for the six months to 31 March. The firm saw pre-tax profits rise by 37 per cent to £222.8m.


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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.