In this week's roundup we report on a shares increase for Rolls-Royce following the conclusion of a bribery probe and a profit upgrade, as well as news that tobacco company BAT is to buy rival firm Reynolds for £41 billion. The IMF has also raised the UK's economic growth forecast for 2017, while Travelex has warned that the pound-dollar tourist rate is at its lowest since 1986.
Rolls-Royce shares climb after bribery probe conclusion
The conclusion of a bribery investigation and a profit upgrade resulted in shares in Rolls-Royce climbing by 5% on Tuesday. The aerospace company agreed to pay £671 million to settle bribery and corruption cases with authorities in the UK, the US and Brazil, while it also announced that its 2016 profit would be greater than expected.
The investigation has been ongoing since 2012 and although the penalty was bigger than anticipated, the impact has been lessened after it was agreed that Rolls-Royce could spread the payment over five years.
In early trading on Tuesday, shares in the company had jumped by 4.7%. In its statement on Monday, the aero-engine maker revealed that its profit for 2016 was greater than the £686 million forecast by analysts.
BAT to buy rival tobacco company for £41bn
British American Tobacco (BAT) is taking over US rival company Reynolds American at a cost of $49.4 billion (£41.01 billion). The agreement comes after BAT increased its previous offer by more than $2 billion.
The deal will result in the creation of the world's biggest listed tobacco company and will see BAT returning to the US market after 12 years away.
Nicandro Durante, Chief Executive of BAT, said of the deal: "It will create a stronger, global tobacco and NGP (next generation products) business with direct access for our products across the most attractive markets in the world."
IMF raises 2017 growth forecast for UK
The International Monetary Fund (IMF) has increased its forecast for UK economic growth in 2017. The IMF cited a better-than-expected economic performance following Britain's decision to leave the European Union as reason for raising its growth expectation from 1.1% to 1.5% this year.
However, the international organisation said its growth forecasts for the global economy over 2017 and 2018 remain unchanged, at 3.4% and 3.6% respectively.
In its World Economic Outlook, the IMF said: "There is a wide dispersion of possible outcomes around the projections, given uncertainty surrounding the policy stance of the incoming US administration and its global ramifications."
Travelex: Pound-dollar tourist rate lowest for more than 30 years
Travelex has revealed that UK holidaymakers heading to the US are currently getting the lowest exchange rates for more than 30 years. The foreign exchange company said that on Monday, most firms were offering $1.17 for every pound. This represents the lowest rates since 1986.
It was revealed that Travelex's tourist rate is down 19% from its strongest level against the dollar over the past 12 months, while the pound also stands at its lowest level against the euro since November, at 1.10 euros.
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