Friday newspaper round-up: European banks, VW, BP, Monsanto/Bayer

European banks could be forced to put as much as €40bn of extra capital into their UK branches as a result of the country’s decision to quit the EU, according to a report from the Boston Consulting Group. The BCG report also says Brexit will trigger an 8-22 per cent rise in annual costs for the banks’ capital markets divisions and says this may prompt lenders to withdraw from some activities. – Financial Times

Philip Hammond, the new chancellor, signalled that he would scale back austerity as he works to tackle the economic “shock” of Brexit. On his first day in the job, Mr Hammond said the UK is entering a “new phase” and that confidence has been shaken. The predicted slowdown could see public borrowing rise by £30bn a year, or even more if Mr Hammond decides to cancel any of the spending cuts pencilled in by his predecessor. – Financial Times

Volkswagen’s “cynical” cheating of emissions controls should be investigated and the company possibly prosecuted by the UK Government, according to the Transport Select Committee. MPs on the committee have also criticised the British government of “trying to pass the buck” to the EU over the scandal, saying challenging the giant German car maker is a national responsibility, rather than one to be passed on to the European community. – Telegraph

The Government must build 300,000 homes each year in England to help solve the housing crisis, an increase of 50pc from its current target, a committee of Lords has advised. The cross-party House of Lords Economic Affairs Committee said that the Government had to “recognise the inability of the private sector, as currently incentivised, to build the number of homes needed”. – Telegraph

About 3,500 Post Office workers are being forced to take a cut in pension benefits as the government-backed service tries to cut costs. About half the Post Office’s 7,000-strong workforce is being forced to shift from a final salary pension scheme to a defined contribution scheme, a move that unions say could cut retirement benefits by 30% or even more in some cases. – Guardian

Business leaders have overwhelmingly welcomed Theresa May’s decision to merge the government’s business and energy departments and add the phrase “industrial strategy” into the title, claiming it could allow the UK to build a long-term economic plan. The new Conservative prime minister has appointed Greg Clark as the secretary of state for the new department of business, energy and industrial strategy. Clark replaces Sajid Javid, the former business, innovation and skills secretary, who has been moved to communities and local government to take over Clark’s old job. – Guardian

BP’s final bill for covering all of the costs linked to its Deepwater Horizon oil disaster stands at $61.6 billion, the oil group said yesterday as it moved to draw a line under the catastrophe. It is the first time BP has sought to bring such clarity to the final cost.BP said that the figure was the first “reliable estimate of all of its remaining material liabilities in connection with the incident” in 2010, which killed 11 people, cost Tony Hayward, the chief executive, his job and led the group to overhaul its safety practices. – The Times

Bayer, the German drug and chemicals firm, has raised its offer for the American seed company Monsanto, saying the two groups had been in private talks for weeks. The $125-per-share offer is $3 higher than its previous bid in May, which Monsanto dismissed as “incomplete and financially inadequate”, and represents a premium of 40 per cent over Monsanto’s closing share price on May 9 before takeover rumours began to circulate. – The Times