BP to use profits to plug FRS 17 hole
Energy giant BP has revealed a massive £1.35bn pensions deficit, calculated under controversial accounting rule FRS 17, as it posted a 42% rise in quarterly profits.
Link: FRS 17 special area
Strong oil prices will help the company to pay this off, allowing it to reduce its deficit quicker than most companies.
BP said reducing the pension liability would be the priority of its free cash flow for the rest of the year.
The announcement follows warnings from the CBI this week that an estimated £160bn UK-wide corporate pensions deficit will hit economic growth as companies use profits to pay liabilities.