The arrival of a new chairman in the shape of David Clementi, former deputy governor of the Bank of England, in any case makes this an easier nettle to grasp than it might otherwise have been.None the less, it will still be something of an event. This is apparently the first dividend cut from the Pru since the First World War.Having survived the stock market crash of 1929, the great depression, the Second World War and the oil shocks of the mid-1970s without need of a dividend cut, why now? OK, so in terms of its duration, this latest bear market has been a serious one, but it is nothing the Pru hasn’t weathered before without upset. What’s more, the company reaffirmed its commitment to a progressive dividend policy less than a year ago, and to make matters worse still, one of its very own directors, Michael McLintock, wearing his hat as chief executive of M & G, wrote an open letter to the City a while back imploring companies to think long and hard before cutting their dividends.With low inflation, he said, markets would deliver much lower rates of return going forward than investors had come to expect during the 1980s and 1990s. In such circumstances the dividend would become a big component in total return. And therein lies the problem for life assurers like the Pru.Lower rates of return has forced the Pru and others to slash bonuses to policyholders. This in turn cuts the cash flow the life assurer derives from the life fund.

So it not only looks inequitable for life assurers to keep increasing dividends when they are reducing bonuses, it also becomes progressively more difficult financially. According to some outside estimates, the cash flow Prudential receives from its life fund might be reduced by as much as £100m this year, substantially reducing the amount of capital Pru has got to underwrite business growth in the Far East and elsewhere.The Pru therefore faces a stark choice. Either it must stop writing new business, or it must have a rights issue, which inevitably would be seen as a “rescue rights issue”, or it must cut the dividend. Legal and General, with results later this week, cleverly managed to nip in with a rights issue just before the stock market plunged into the abyss. HBOS too managed to raise a billion pounds through a share placing for unspecified business expansion purposes, half of which ended up being injected into the flagging life fund. Aviva went the dividend cut route and got hammered by financial commentators for its pains. Yet the two things basically amount to the same thing and it can reasonably be argued that to cut the dividend is the more open and honest approach.L&G is being accused of the old trick of raising money from shareholders in a rights issue just to pay it all back to them through an unsustainably high dividend Maybe, maybe not.

David Prosser, the chief executive, must address that issue when he announces his results on Thursday. But it is an interesting question as to which route the Pru would be taking if a rights issue were still in any way an option.Nokia/VodafoneNokia and Vodafone are so much a part of each other’s success that like motherhood and apple pie, it’s hard to imagine them apart. So it comes as a bit of a surprise to hear Sir Christopher Gent, Vodafone’s outgoing chief executive, suggesting the partnership may be reaching its natural end.Vodafone’s own branded, picture messaging phones, produced by Japan’s Sharp, are apparently “flying off the shelves” with such speed that they are now outselling Nokia. For the Vodafone networks, Sir Christopher sees Nokia’s position being steadily eroded..That’s obviously more bad news for Nokia, whose market share has long been indefensibly high but may now be facing a meltdown. It also tells us quite a lot about the evolution of the mobile phones market, with the big network operators increasingly determined to monopolise the value chain with their own label products. The handset, and what it does, is too important a tool of service differentiation to leave to the manufacturers, Vodafone and others figure.jeremy.warner independent.co.uk. It is high summer at Heathrow and quite out of the blue British Airways is brought to a shuddering halt by strike action, leaving thousands of passengers stranded and hundreds of flights cancelled.

The cause of the industrial unrest is a swingeing programme of cost-cutting designed to restore the country’s flag-carrying airline to financial health. Fast forward six years and his successor, Rod Eddington, finds himself confronting a not dissimilar crisis after the first strike under his leadership.There are some differences between 1997 and 2003 Then it was the cabin crew who went on strike Now it is check-in staff. The industrial action six years ago was an official dispute which followed a staff ballot. Last weekend’s chaos at Heathrow was the result of a wildcat strike which took the unions as much by surprise as BA.There is, however, a common thread linking the events of six years ago and those which caught BA so badly on the hop last weekend. In 1997, Mr Ayling was struggling to cut costs in the face of an economic downturn in some of BA’s key markets and came up with his Business Efficiency Plan – an attempt to take £1bn out of the airline’s cost base.Six years on, the personnel may have changed but the same old challenges remain and it is Mr Eddington who is seeking to achieve savings, again of £1bn, this time through something called the Future Shape and Size programme.