Business this week

The World Health Organisation said that processed meat causes cancer. After assessing the evidence, the WHO categorised ham, sausages, bacon and the like as “Group 1” carcinogens, a list of things certain to be dangerous. Other Group 1 substances include alcohol and tobacco, although the risk posed by processed meat is much lower. The WHO also said that red meat was probably carcinogenic.

There was a double blow for embattled Volkswagen. First, the German carmaker lost its position as the world’s biggest car-producer to Toyota. Although VW outsold its Japanese rival during the first half of 2015, Toyota sold 7.49m vehicles in the nine months to September compared with VW’s 7.43m. Then the firm reported a net loss of €1.7 billion ($1.9 billion) for the third quarter, its first loss for 15 years. VW has put aside €6.7 billion to deal with cars that cheated emissions tests, although it is too early to say the extent to which the scandal, which came to light last month, has hit sales.

Britain’s GDP figures gave some cause for concern. They show that in the third quarter Britain’s economy grew by just 0.5%, down from 0.6% last year in the same period. The economy is suffering from the strength of the pound, which has hit the country’s manufacturing exports. The news could mean a delay to the first interest-rate rise since 2007.

The Federal Reserve declined to raise interest rates in America. However, it made explicit reference to the possibility of raising rates at its next meeting in December.

When in Rome, roam

The European Parliament voted to ban data-roaming charges for mobile phones within the EU. The ban will come into effect from June 2017. Separately, internet providers will be barred from charging extra for “fast lanes”, except for certain specialised services, after the parliament voted to protect “network neutrality”—equal treatment for all internet traffic.

BP’s profits fell by 40% in the three months to the end of September, compared with the same period last year. The firm blamed the low price of gas and oil. BP, which has already slashed its costs, said it would find billions of dollars more savings in the coming year. Shell, another oil firm, reported a loss of $6.1 billion in the same quarter, compared with a $5.3 billion profit last year.

Square, a payments company run by Jack Dorsey, who is also boss of Twitter, reported a loss of $53.9m in the three months to the end of September. The results are expected to be the last it will publish before an initial public offering. Square will be one of the first “unicorns”—startups valued at over $1 billion—to go public.

Deutsche Bank said it would cut 9,000 full-time jobs and pull out of ten countries after announcing a €6 billion third-quarter loss. It will also suspend dividends for two years.

Theranos, one of Silicon Valley’s most prominent start-ups, with a valuation of around $9 billion, faced a barrage of negative press reports suggesting the firm’s blood-testing technology is not all it purports to be. Theranos claims it can do a wide variety of health tests by drawing a few drops of blood from the finger. However, the Wall Street Journal claimed that its tests are not reliable.

Everything remains rosy at Apple, after the firm released strong fourth-quarter results. The firm sold 48m iPhones during the last three months of its fiscal year, with sales particularly strong in Greater China. Apple’s net income was $11.1 billion, compared with $8.5 billion during the same quarter last year.

American regulators said they would be looking into accounting practices at IBM and the way it recognised revenue. The news came as the computer firm said it would buy back $4 billion of its shares. 

Two of America’s biggest pharmacy chains look set to merge. Walgreens Boots Alliance says it has agreed to buy Rite Aid for $17.2 billion. The deal is likely to need approval from competition authorities.

Pfizer, an American drugmaker, was reported to be in talks to buy Allergan to create a health-care giant worth more than $300 billion.

A drug problem

Valeant Pharmaceuticals tried to rebut claims it was massaging its figures. Shares in the drugmaker had fallen after it was criticised by Andrew Left, a trader, over its accounting relationship with specialist pharmacies. Valeant denied wrongdoing. See article.

Financial regulators in Nigeria ordered the suspension of four past and present directors of Stanbic IBTC, a division of Standard Bank, after it accused them of accounting irregularities. Stanbic denies the charge.