On the other hand, if we believe that the government’s debt trajectory has
stabilized or will improve and if some progress is made on other areas
important for strengthening the social contract, ratings could stabilize at
current levels.

The bank’s customers have been told there is a major problem with online banking.

A spokesman for RBS said analysts were trying to find out what had gone wrong and the extent of the problem.

She added: “We are working to resolve the issue as quickly as possible and apologise for any inconvenience caused.”

About 400 executives and clients were treated to entertainment including a re-creation of the wizards’ high street Diagon Alley, flying Quidditch players and swooping Dementors.

The party for investment bankers, which was held late last month, is thought to have cost close to £100,000 at around £250 per guest.

The TaxPayers’ Alliance claimed taxpayers would be outraged but RBS said: “Spending time with customers at events like this one strengthens our business.”

Rank-and-file RBS staff have had their budgets for Christmas celebrations capped at £10 each.

RBS is 84 per cent owned by the taxpayer after being bailed out by Gordon Brown at the height of the banking crisis in 2008.

Edmond Ip, deputy chairman, said the company wanted to acquire the EDF networks because it was a sizeable business in the UK. The £5.8bn ($9.1bn) deal is the biggest overseas acquisition struck by any of Mr Li’s companies, according to Mr Ip.

“We have a few other investments [in the UK]. We are familiar with the regulatory framework there. It’s an environment we feel happy operating in,” said Mr Ip.

On 27 March 2007, Coppin and Bliss received an email from a colleague with the subject “Provexis”. The text read: “Gentlemen, This script does not exist” and a sales script for Provexis plc shares was attached. The text of the script contained inside information stating that Provexis plc had signed an agreement with an unnamed major food company, the announcement of the deal was imminent and that it was predicted the share price could rise as high as five or six pence, a 100% increase.

Over the next two days, Coppin and Bliss made a series of calls to clients in which they disclosed that Provexis plc was going to announce a major contract shortly which would make its share price increase substantially. Using this inside information, they encouraged some of their clients to buy Provexis plc shares.

On 30 March 2007, Provexis plc announced the new contract and its share price increased by 19.81% from the closing price on the previous day.

DETAILS – Betfair has reported 1H core EBITDA of £35.5m (+26% YoY), 4% behind our £37.1m estimate. Sales growth was 11% (£167.2m vs our £168.7m). Of greater concern than the EBITDA miss was a Q2 revenue increase of just 1.6%, partially as a result of reduced ARPU in horse racing. The declining ARPU has been a core part of our bear case and is manifesting itself faster than expected, with 1H sports ARPU down 16% (1H actives +33%, revenue +12%). Current trading is said to be better than Q2, but not helped by weather-related horse race cancellations

Mr Mamut and Mr Waterstone were both shareholders in Bookberry, a now bankrupt Russian bookstore chain.

Mr Mamut could not be reached on Monday.

Shares in HMV have fallen 75 per cent over the past 18 months, losing 17 per cent of their value on Thursday last week alone after the company reported an accelerating decline in sales.

Mr Mamut owns 50.1 per cent of Yevroset, having sold 49.9 per cent to mobile operator VimpelCom just a month after he acquired it. Last month, Yevroset said part of Mr Mamut’s stake would be sold in an initial public offering in London next year.

Chris Weafer, chief strategist at Uralsib Capital, the Moscow investment bank, said an obvious move for Mr Mamut would be to expand HMV into Russia, as the country had no large-scale retail equivalent.

The expectation (or is it hope?) remains that consumer price inflation will dip back below 3.0% late in 2011 as the temporary upward impact from VAT developments, higher energy, commodity and food prices, and sterling’s past sharp depreciation wanes. Meanwhile, underlying inflationary pressures should be limited by appreciable excess capacity, likely muted growth in 2011, strong competition on the high street, and high unemployment. Inflation will hopefully dip below 2.0% early in 2012 as the impact of the January 2011 VAT hikes drops out.

We still expect the Bank of England to keep interest rates down at 0.50% deep into 2011. This reflects our belief that the growth will slow appreciably in the first half of 2011. Specifically, we forecast the first interest rate hike to come in the fourth quarter of 2011 and see interest rates still only at 0.75% at the end of next year. Furthermore, we would not rule out interest rates staying down at 0.50% until 2012. And whenever interest rates do finally start to rise, they are likely to increase only gradually and remain very low compared to past norms, as monetary policy will need to remain loose for an extended period to offset the impact of the major, sustained fiscal squeeze.