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Thaioil to continue sustainability drive

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A flagship refinery of PTT Plc, Thaioil has evolved since its foundation in 1961: from a petroleum refinery producing a modest 35,000 barrels a day, into Thailand’s largest oil player, with current capacity standing at 275,000 barrels a day. Despite its mature age, the refinery has stood the test of time and has been carefully preserved and modernised to comply with global standards.

But the company has more strings to its bow than an eminent refinery that has aged remarkably well. “Thaioil has changed a lot since it was founded,” says Surong Bulakul, the company’s CEO. “It is no longer based around an oil refinery exclusively: we’re now a fully integrated company that also deals in electricity and sustainable energy.

“The cornerstones of the company are efficiency, flexibility and reliability,” he says. “The flexibility in our operation gives us the ability to produce a high value of products; reliability gives the ability to manage the reliable products and services to our customers. The Thaioil refinery is 50 years old and has been highly utilised at more than 100 percent – efficiency means effectiveness in all areas to make the lowest possible operating cost.

“These are the ablilties that allow us to fully utilise all our assets for the most benefit. Refining is certainly not a sunrise industry, but we are fortunate to be in the middle of a region where demand is still increasing. Asia has immense growth potential,” the CEO says.

A new beginning
With Surong Bulakul at the helm – he took the reins in 2010, after holding a string of executive positions at Thaioil’s parent group, PTT – the company has expanded within new markets and has moved into higher value products. “The business model is quite unique, and we keep modernising it by introducing innovative concepts and products using efficient technologies,” Bulakul says. “We have also given added value to its existing value chain by converting commodity products, such as petroleum, into specialty products.”

Currently the company covers areas including lubricant base oil, petrochemical, ethanol and power generation. So as not to become stagnant on the market, Thaioil constantly re-evaluates its offerings to provide solutions that benefit its clients – and the community in which the company is based.

So what defines the work ethic of Thaioil’s new CEO? “In terms of management I believe that communication is everything, and it will promote a high-performance organisation with excellent teamwork in place,” he says. “It’s crucial to be able to be in top quartile on performance and return on investment, as well as to create innovation and credibility in terms of sustainability. Another crucial part of my role as CEO is to keep our staff happy and to keep them involved in the business operations, as well as allowing them to have a say in community projects.”

Bulakul’s philanthropic leanings rub off across the entire spectrum of the company. Notably, the company has received an award for managing to wholly prevent accidents at its factories in 2010. “The reason … is that we employ preventative and minutely executed measures to avoid accidents,” Bulakul says. “We would be prepared to go to any length to protect our employees and community.”

The future is green
As a leading force in the sustainable stakes, ‘Think Green’ could well be Thaioil’s mantra. To further its position as a green industry maven, the company is taking active measure to develop and provide environmentally-friendly products. “Our expertise in oil and gas has led us to renewable energy, and through to becoming an energy converting company,” says Bulakul. “One of our highest priorities is to adhere to sustainable standards in order to contribute to building a sustainable future. These days, companies, including Thaioil, can’t justify dealing with nasty products that are harmful to the environment and human health.”

“We fully take advantage of the universal eco trend, and our products score higher on the sustainable scale than the set government standard,” he says. “As the journey of Thaioil continues, we will strive to make any changes and improvements necessary to align the business with new requirements.”

In keeping with the government’s policy to support and spur renewable energy production and consumption, Thaioil established Thaioil Ethanol: a wholly-owned subsidiary which functions as the ethanol arm of the business and delivers a string of related products.

The ethanol industry might not be entirely free of controversy, as critics deem it too taxing on farmland that would be better used for food crops. But no one can deny that it comes with obvious benefits such as affordability and sustainable properties. “We’re hoping that Gasohol will outdo fossil fuel in the future, and it is certainly a viable replacement,” stresses Bulakul.

Gasohol is a form of fuel made up of gasoline and ethanol. Currently these are combined in a 9:1 ratio, but to make the product even greener, Thaioil is trying to develop a way to increase the percentage of ethanol. The company is currently spending substantial R&D resources to achieve this particular goal.

In order to increase the production of ethanol, Thaioil is involved in Maesod Clean Energy Company, which boasts a daily output of 200,000 litres of ethanol from inedible sugarcane. It is a joint venture in which Thaioil holds 30 percent, while Petro Green and Padaeng Industry own the remainder part. Thaioil also owns a 50 percent stake in Sapthip, which outputs similar ethanol quantities daily, with the other half belonging to one of Thailand’s major cassava exporters.

A good corporate citizen
The issue of corporate responsibility is close to the heart of Thaioil. Because few middle-men are involved in the production of ethanol, its increased use directly benefits the farmers of the product. Hence, Thaioil’s business model adds value to local farmers, because profits go directly to the individuals working in the Thai agricultural sector, particularly those focusing on farming sugarcane and cassava – approximately 10 percent of the country’s farmers – which are the two main resources used to produce ethanol.

As well as supporting farmers, Thaioil constantly orchestrates projects, large and small, to support people in the community. A recent project saw the company install a micro-turbine generator in a waterfall found in a remote village in Thailand. The resident cabbage and rice farmers benefited greatly from the initiative, since they had previously lived entirely without electricity. “The electricity that is now generated in the village is of the green variety, but most importantly it has transformed the farmers’ lives,” says Bulakul. “At last they are able to benefit from the gadgets of civilisation such as lightbulbs and TVs, and they can now also access the internet, which not only brings them pleasure and a means to communicate, but will enable them to check on current market prices for their stock, as well give them the chance to monitor weather forecasts and other important news.”

About 1,000 people benefited from the arrival of the micro-turbine, and a similar project masterminded by Thaioil in Thailand’s Tak province, on the border with Burma, was endorsed by the UN. In this case, multiple sources of energy were used, including solar, bio and flowing water-generated energy.

Bank secrecy and tax planning an intimate relationship, says Afschrift Law

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It is difficult to find a subject of a tax nature which raises so many passions as that of bank secrecy. It is true that, in this field, principles and symbols confront in the most evident manner.

On one side, there are those who consider that the state must know everything, and that tax collection must not curtail individual rights. On the other, there are those who insist that private life is a value which must prevail over tax policy considerations.

It is extremely difficult to actually reconcile these two points of view, as it comes to choose between the interests of the state or the ones of the individual. Of course, in theory, this question should never be put on the table, as the state is supposed to protect the individual’s rights – but this is all theory today, as it is obvious that states and individuals have developed by having opposing interests.

Furthermore, from one country to another, the protected values are different, as are the legal frameworks. The only common thing: all of them have tried to reach a balance between secrecy and the interest of the state.

International pressure
Since 2008, and especially after the last G20 summit, an international trend forced the most heavily taxed states to try to eliminate bank secrecy (and every other kind of secrecy); most of the countries had no choice but to review their bank secrecy regulations in order to comply with this trend.

This is how grey and blacklists have been created, and it is also how most of the bank-secrecy protective countries were forced to take several steps back. Switzerland is a perfect example.

There is no doubt: bank secrecy is suffering under a massive attack from governments. Whether directly, by changing the legal provisions specific to bank secrecy; or indirectly, by imposing new obligations to the different actors of the financial sector; governments are forcing banks to comply with an unprecedented number of obligations related to recording financial transactions and even disclosing suspicious transactions to the authorities. J. Wakefield described this situation perfectly when she wrote, in her well-known contribution Follow The Money, that banks had, by law, to “turn into law enforcement agents and give officials access to personal financial information without a warrant or subpoena.”

Bank secrecy is trapped in a vast regulatory and law enforcement network. Even worse, sometimes states will use stolen data or outright aggression in order to achieve ‘transparency.’ It is difficult to forget the example of the Swiss bank which had to collaborate with US authorities in order to avoid the revocation of its licence in the US.

Bank secrecy is also trapped in the international crisis; the causes of which are multiple, but the first of them being the incapacity of modern states to deal with their public finances and the bad management of public funds causing a constant need for new liquidity. These needs generate new taxation measures.

Given that governments collect almost half of their taxpayers’ benefits and spend more than half of them, it is obvious that taxes will rise as, in this economic model, governments are trying to balance budgets by increasing income rather than decreasing spending.

The real problem is that these policies generally lead to a market failure, as private markets are gradually rendered unable to allocate services or goods in an efficient way, as high taxes affect income distribution.

Evolution of optimisation
It is under these circumstances that bank secrecy is currently considered more as a means to commit fraud than an individual right; is it also because they are considered under this scope that offshore jurisdictions are attacked.

It is in this difficult context that tax optimising had to evolve, as taxpayers cannot afford to become the passive spectators of this situation: solutions must be found, provided that legal provisions must also be respected, as fraud is in any case not an option.

It is obvious that to do so, taxpayers will not try to hide their money, but will instead move it to a country that levies taxes more leniently, or to use it in the most tax-optimised way. Funds will depart to places like Singapore and Hong Kong, which are not concerned by the savings guideline; or to Luxembourg, a country where lawmaking is done in an ingenious and innovative way, and where a number of interesting tax rules do not depend on the status of the bank secrecy regulation.

In years to come, a number of different attitudes and approaches to tax optimisation will emerge.

In the first place, taxpayers will try to use the favourable provisions of the law of their actual country of residence. For example, in Belgium, the taxpayer’s little-to-profit principle provides that any taxpayer has the right to choose the most suitable route in order to generate the least taxes, as long as the legal consequences of this way are respected; this principle prevails in Belgium over the principle of “substance over form.”
Furthermore, Belgian holding companies can benefit, under certain conditions, from the exemption of the withholding tax on dividends and capital gains, while at the same time deducting the interest of the loans taken out by the company – even if these loans were taken in order to acquire shares.

When the legal system of the country of residence appears insufficient to satisfy the taxpayer’s planning needs, he will probably establish in a country with lower taxation.

For example, a major shareholder will consider moving to Belgium, where he will have to pay only 15 percent on the Belgian-source interest and 25 percent on dividends, while avoiding tax on capital gains and wealth tax.
As for (professionally inactive) wealthy individuals, they will likely move to Switzerland and benefit from the Swiss lump sum taxation system, paying thus exclusively every year, under certain conditions, a fixed amount, calculated on the rent paid or the rent value of their property in Switzerland, without any kind of relation to their real income or wealth.

Or the taxpayer could consider settling in Israel, where foreigners who establish there and nationals who return can benefit from tax exoneration for a 10-year period after the date of immigration to Israel.

Capital transfers
Nevertheless, as it is not always easy to leave one’s country of origin, sometimes only the capital will travel abroad. Most of the time this will be transferred to different structures of a foreign jurisdiction, such as the SPF Private Wealth Management Company of Luxembourg – intended for individuals and patrimonial entities, and ideal for important holders of shares and equity portfolios wishing to benefit from a zero percent constitution capital duty of one percent, and an exemption of income, communal and wealth tax.

The inheritance can also be transferred to a discretionary and irrevocable trust. Israeli trusts are extremely interesting because of their advantageous tax situation since, insofar as the settler and the beneficiaries are foreign residents, the assets held by the trust will be considered to be held by a foreign resident. The consequence will be that the income and non-Israeli benefit of the trust (and sometimes even certain investment income of Israeli origin) will not be taxed in Israel.

As for companies, important possibilities of tax planning and optimisation can arise from the use by companies or groups of companies of Belgian and Luxembourg companies.

More particularly in Luxembourg, the professionals of the investment can use professionals-oriented companies, such as SICAV; and specialised funds of investment, which are given total income, communal, commercial and wealth tax exoneration.

Professionals will also consider the constitution of a Soparfi (company of financial participations), which can benefit from the provisions of double taxation convention and those of the directive mother-subsidiary guideline, and whose financial transactions (dividends, capital gains) can, under certain conditions, be exonerated from any kind of taxation.

Taxpayer power
The struggle against bank secrecy does not mean that taxpayers are powerless; on the contrary, they still have effective means of action against the increasingly aggressive national and international tax provisions.

Taxpayers, whether companies or individuals, cannot just hope that a better regulation of public finances will lead in the future to lower taxes and a subsequent return of the traditional value of protection for private life.
Confronted with a government which seeks more and more transparency without showing any, taxpayers have no other choice than to put in place an effective strategy of tax and asset planning.
Our role at Afschrift is to help our clients achieve these targets.

Moody’s: Eurozone a danger to UK’s AAA rating

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Britain’s AAA credit rating could be at risk due to the crisis in the eurozone, Moody’s said in its UK end of year assessment late on Tuesday.

In spite of a “stable” rating, Moody’s warned that Britain may face a downgrade if no policies are implemented to help stabilise markets.

According to the agency, the current rating is based on its strong institutions, government finances and low susceptibility to external event. It cautioned, however, that the future of the ranking is dependent on whether or not a resolution is found for the sovereign debt crisis.

“The significant increase in the government’s deficit and debt stocks since 2008 has eroded its ability to absorb further macroeconomic or fiscal shocks without rating implications,” the ratings agency said.

AT&T kills $39bn takeover bid for T-Mobile

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After months of opposition from regulators and rivals, AT&T late on Monday dropped its controversial $39bn takeover bid for T-Mobile USA, the company said.

The FCC, which was against the takeover since it was announced in March, said that the bid would reduce competition and choice, and increase prices for consumers.

AT&T announced it will now have to take a $4bn charge for dropping the offer, of which a $3bn breakup fee will go to T-Mobile’s parent company Deutsche Telecom.

In addition, AT&T said it plans to enter into a roaming agreement with T-Mobile.

SEC sues ex-Freddie Mac and ex-Fannie Mae executives

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The Securities and Exchange Commission late on Sunday filed securities fraud charges against six former Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) executives.

The SEC court filing showed that executives had claimed that their company’s exposure from 2007 to 2008 was between $2bn and $6bn, when it was actually as high as $244bn.

Those alleged of fraud include former Fannie Mae CEO Daniel Mudd, vice president of Single Family Mortgage, Thomas Lund, and chief risk officer Enrico Dallavecchia. The names for Freddie Mac executives include CEO Richard Syron, Vice President Patricia Cook, and Single Family Guarantee Vice President, Donald Bisenius.  

Zynga IPO prices hit top of the range

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Online games producer Zynga late on Thursday managed to raise $1bn in its initial public offering after it priced shares at the top end of a preliminary $8.50 to $10 market range.

The creator of games including “FarmVille” and “CityVille” sold 100 million shares of Class A common stock at $10 a share in the IPO. The initial share price gives the group a valuation of an estimated $7bn.

Zynga’s offering is the largest by a US internet company since Google’s IPO raised $1.9bn in 2004, Bloomberg data showed.

Brazil sues Chevron for $10.6bn oil spill damage

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Brazilian federal prosecutors late on Wednesday sued US-based Chevron and rig operator Transocean for $10.6bn in damages following environmental harm alleged to have been caused by an oil leakage in early November.

Prosecutors also asked the court to force the companies to shut down operations at the Frade field in Brazil until the case is resolved. The Frade field site, where the spill occurred, is Chevron’s biggest capital investment.

“During an investigation, the attorney general’s office found that Chevron and Transocean were not capable of controlling the damage from a spill of 3,000 barrels of oil, proving a lack of environmental planning and management,” a prosecutors’ statement said.

Olympus meets earnings deadline to stay in TSE

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Japanese optical equipment manufacturer Olympus has submitted long delayed earnings reports on Wednesday, only hours before a crucial deadline to avoid being removed from the Tokyo Stock Exchange.

The TSE, the world’s second largest bourse, has now removed the company from its watch list for automatic ejection. However, Olympus continues to be at risk of being delisted pending results of an investigation into the group’s accounting practices.

The camera maker reported net assets of ¥46bn as of the end of September, according to its surrendered financial report for the second quarter.

Areva shelves projects and plans 1,500 job cuts amid $1.6bn loss

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Areva, the globe’s largest supplier of nuclear fuel and services, on Tuesday said it is to suspend building work at sites including Africa, the US and France.

The news comes a day after it announced it is expecting to post an operating loss of between $1.4 and $1.6bn this year.

The French company also unveiled plans of limiting its dividend payout to 25 percent of net profits for the next 24 months, according to CEO, Luc Oursel.

Areva will slash up to 1,500 jobs in Germany and has suspended a nuclear plant project in the US to help offset losses, Oursel unveiled in a statement.

Equity deals drought to cost banker jobs

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A handful of bumper deals in the first half of 2011, such as the $10bn flotation of commodities firm Glencore and a $13bn fundraising by Commerzbank, has helped cushion the impact of a slow second half for many but with just $17.6bn raised in Europe since the end of July, banks are having to make a call on when things might pick up.

Annualised, the volumes seen between August and November would make for the lowest European equity fundraising levels for more than 10 years, according to Thomson Reuters data.

“I expect to see a substantial culling of the herd. Banks will leave and even for the banks that remain there will be some level of head count shrinkage,” said one senior banker working in equity capital markets (ECM), which includes activity such as stock market listings, rights issues and secondary share sales.

“All banks are having to reevaluate their business models and figure out what they can and can’t be committed to … We are at a point in the bank profitability cycle where you have to ask yourself if there is not a demonstrable value proposition, how can all this headcount and cost continue to be justified?”

Investment banks such as Barclays, Credit Suisse and the European arms of their US peers have invested heavily in equity business as a whole, banking on a pick-up in the market that was then scuppered by economic woes.

Some banks are already scaling back in equities – Italy’s UniCredit ditched its equities sales and trading team in Western Europe in favour of a tie-up with French brokerage Kepler Capital Markets, effectively outsourcing the business –while others are reassessing the importance of Europe.

“A lot of banks are asking themselves whether Europe is really going to be a region in which they want to engage,” said one London-based banker.

Last month the chief financial officer of Japan’s Nomura said 60 percent of a planned $1.2bn cost savings would come from Europe, where it is losing money and has 4,500 workers, or about 13 percent of its total staff.

Little by little
Europe is seen as the most fiercely competitive region for ECM business, with the largest number of players chasing the smallest number of deals.

At least ten banks want to be among the top five, bankers say, and aggressive pitching for deals is pushing fees down to what some consider to be unsustainable levels.

Goldman Sachs is at the top of the European ECM league tables for 2011, followed by Deutsche Bank in second and Morgan Stanley in third place.

Those committed to maintaining their position in both Europe and ECM will have to strike the right balance between short-term cuts and the ability to jump on any uptick in activity.

“You need to keep a certain infrastructure in place because the market can bounce back and if you cut back too far then you’ll miss out on all the opportunities because hiring takes a long time in this industry,” said a second senior ECM banker.

Unlike their equities trading colleagues, ECM teams have not yet been heavily affected by job cuts, but they have little doubt the overall number of people working in the sector will shrink, with a wave of cuts likely mid-year if continued market uncertainty keeps the first half quiet.

“If you could get a real read on numbers of ECM people in Europe, my guess is that by January 2013 you are going to be 25-30 percent down on January this year,” said one ECM banker. Several others agreed 25 percent was a realistic number.

“It is going to be very different on a bank by bank basis. Some banks will be 5-10 percent down, and some will be 50-60 percent down,” he added.

While most think banks will do their best to scale back rather than mothball whole departments, for some the exit of smaller players is inevitable.

“We are going to see a winnowing out of competition, starting with the non-bulge bracket banks,” said the second senior ECM banker, referring to banks lower down the league tables.

“The second and third tier players are probably going to be withdrawing little by little. Even parts of the bulge bracket will be struggling to stay in there.”

German president criticises G20’s crisis approach

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German President Christian Wulff criticised efforts by the Group of 20 nations to contain the global financial crisis, saying they were too small in scale and had achieved little.

Last month’s summit of G20 leaders in France failed to bring progress which the world urgently needed, Wulff said, citing regulation of the financial sector and setting stricter guidelines for the operations of major banks as examples of the group’s failures.

“The approaches that have been tried so far are too modest to match the scale of the problems that the crisis has exposed,” Wulff said in a speech to businessmen on Monday during a visit to Abu Dhabi, capital of the UAE.

Accompanied by a political and business delegation, Wulff is visiting the UAE as part of a tour to several Gulf states. He has a largely ceremonial role and little direct influence on government policy, but has spoken out this year as the eurozone debt crisis has worsened; in August he questioned the legality of the ECB’s bond-buying programme.

Excessive debt, economic imbalances and competitive weaknesses in a number of countries have eroded trust in global financial markets, Wulff said on Monday, adding that the problem was not limited to Europe.

“In the context of the G20 and of global responsibility too, I appeal to everyone to start paying far more attention to sound, sustainable economic development and finances.”

Wulff said that as Europe worked to repair its economy, Berlin would count on the oil-rich UAE as a major investor in Germany. But he did not make any public appeal for the UAE or other Gulf countries to contribute emergency aid to Europe.

EU leaders agreed at a summit in Brussels on Friday that eurozone states and other nations should provide up to €200bn ($270bn) in bilateral loans to the IMF to help it tackle the zone’s debt crisis. They envisaged €50bn of the total coming from non-euro countries, but it is not clear which nations would be willing to provide the money.

Pakistan flood pain lingers

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The 2010 floods in Pakistan started late in July, following heavier than normal monsoon rains in Balochistan, the Punjab, Sindh, Pakhtunkhwa and the Khyber; in fact the whole Indus River Basin was affected.

At one stage nearly 20 percent of Pakistan’s land area was covered with water, a total of some 307,374 square miles (796,095 square kilometres). According to the Pakistani government the floods affected nearly 20 million people, mostly as a result of destroying infrastructure, property and crops. The death toll was nearly 2,000.

Initially, Ban-Ki-Moon, Secretary General of the UN, asked for emergency relief amounting to some $460m, noting that he had never seen a flood of this magnitude before. By August 15 only 20 percent of these funds had been received, which was a huge concern for the UN. The World Health Organisation reported, at the time, that 10 million people had no other choice but to drink polluted water.

The damage to the already frail Pakistan economy was immense. Infrastructure damage was calculated to be in the region of $4bn; wheat crops to the value of $500m were destroyed by the floodwaters and the total crop loss was estimated to be in the region of $1bn, much higher according to Pakistan’s own calculations. The impact on the country’s economy could well have been as high as $43bn.

More than 100,000 animals died during the floods and 17 million acres of agricultural land was submerged by the raging waters.

The last thing Pakistan needed was a disaster of this magnitude; the country’s economy was already extremely fragile and depended on a support package of some $11.3bn from the IMF. Even before the floods, the government was finding it difficult to adhere to the fiscal discipline required by the package. The country has an oversized public sector, a relatively small tax base and perpetual problems with its balance of payments.

Pakistan’s Finance Minister, Abdul Hafeez Sheikh, said in an interview with TIME magazine, “Now, it alters all the calculations, all the projections, all the scenarios. It is still too early to assess the full impact of the disaster, but the damage is colossal, it’s still unfolding. It will run into billions and billions of dollars.”

Aid donors did not come forward with the help that was needed, which forced the Pakistani government to take up a World Bank loan of $900m. This only added to the country’s already huge debt burden of $55.5bn and will make it even more difficult for the government to balance its budget in future.

Moody’s subsequently downgraded its rating of Pakistan government bonds, causing interest rates on them to increase even further. Standard & Poors affirmed its B-rating for long-term Pakistan government debt on November 15 last year.

Financial institutions, such as Nomura, UBS and Morgan Stanley, have warned that Pakistan will not be able to service such a large debt indefinitely, especially taking into account the high interest rates involved.

State entities in Dubai show $101.5bn debt

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Moody’s Investors Service on Tuesday said Dubai and its state-owned non-financials have outstanding debt of $101.5bn and could require further financial support to meet their obligations.

The credit rating agency’s report showed that it remains concerned about the emirate’s maturing debt in spite of the “significant process” made by the authorities and state-owned companies to deal with it.

Figures published by the agency showed that Dubai’s government has about $27.9bn of direct debt, while State-owned corporations have $68.6bn in debt.

The FT reported quoting an unnamed senior government official that Dubai may restructure by next year some issued bonds to assist these companies to meet their $3.8bn debt payments.

Italian cabinet approves radical austerity measures

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Italy’s new Prime Minister Mario Monti announced late on Sunday and ahead of a crucial EU summit on Thursday and Friday, that his cabinet has approved a €30bn package of austerity measures to help “reawaken” the Italian financial system.

Europe’s third biggest economy is scheduled to present the plan to parliament today in a bid to help pull Italy back from the verge of insolvency and assist in saving the common currency from collapse.

The austerity plan includes budget cuts, a higher pension age and instruments to help fight tax evasion.

Fitch cuts US credit outlook to negative

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Fitch Ratings late on Monday warned the US it may cut its AAA rating if policymakers failed to agree on a “credible plan” to reduce its swelling budget deficit by 2013. There is a “slightly greater than 50 percent chance of a downgrade over a two year horizon,” said Fitch.

The ratings agency downgraded the US outlook from stable to negative after a bipartisan super-committee failed to agree on much needed $1.2trn deficit cutting measures.

 “The negative outlook reflects Fitch’s declining confidence that timely fiscal measures necessary to place US public finances on a sustainable path and secure the US AAA sovereign rating will be forthcoming,” said a Fitch statement.

Meanwhile, UK chancellor George Osborne will on Tuesday deliver his autumn statement to the House of Commons. Osborne is due to unveil measures which will focus on tackling the increased deficit of almost £30bn.