EDF To Raise Gas And Electricity Prices

Energy giant EDF is to increase prices for householders by an average of 10.8%.

The rise, gas and electricity, around four times the rate of inflation, is set to be implemented on December 7.

EDF, which has 3.1 million customers and 5.5 million accounts overall, said its annual dual fuel bill was the lowest of the suppliers to have announced price rises so far.

Companies have blamed the changes on rising wholesale prices and increased running costs - especially for transporting gas and electricity to customers' homes - and the cost of energy efficiency programmes.

Martin Lawrence, EDF managing director of energy sourcing and customer supply, said: "We know that customers will not welcome this news and do not want to see prices going up.

"Our new prices will, however, be cheaper on average than those of all the other major suppliers which have announced standard price rises so far this autumn.

"We've taken extra measures to make sure the most vulnerable benefit from the best deals and we continue to help customers reduce their bills with energy efficiency measures."

Earlier this month Npower became the third of the so-called Big Six energy firms to confirm steep rises in its gas and electricity bills ahead of winter.

It said bills would increase by an average 8.8% for gas and 9.1% for electricity from November 26.

Just hours beforehand British Gas confirmed that its average dual fuel tariff would rise by 6% - or £80 annually - from November 16.

The Big Six - British Gas, EDF, E.On, NPower, Scottish Power and SSE - control 99% of the UK's domestic energy supplies.

E.ON is the only big supplier yet to announce price rises after it made a promise not to raise tariffs this year.

Last week the energy regulator Ofgem said it would make the market "simpler, clearer and fairer" for consumers.

The promise follows a call by the Prime Minister to energy giants to overhaul confusing tariff systems.

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Tearful 'Rogue Trader' Tells Of UBS Losses

A trader accused of Britain's biggest fraud was allegedly trying to cover millions of pounds worth of losses incurred during the financial crisis for the bank he called his "family", a court has heard.

Kweku Adoboli, 32, is accused of gambling away £1.4bn while working as a trader for Swiss bank UBS.

At one point, he was at risk of causing the bank losses of $12bn (£7.5bn), jurors at Southwark Crown Court were told.

Adoboli wept as he gave evidence for the first time at his trial, in which he claimed his off-book trades were to cover $40m (£24.9m) annual losses of his portfolio of companies from 2008.

The court heard that by 2007 Adoboli, aged just 27, and more senior trader John Hughes, 25, were in charge of a portfolio of companies with assets of $50bn (£31.1bn).

"Our book was massive. A tiny mistake led to huge losses. We were these two kids trying to make it work," he said.

Mr Adoboli, wearing a dark suit and red tie, denied he was a "gambler" and said his knowledge of UBS's systems did not result in "fraudulent behaviour".

Fighting back tears, he said: "It's hard to find the words to describe the relationship I had with UBS as an organisation. It isn't about a bank. It was about what I thought was my family, considering how much (I) neglected my real friends and family.

"Every single bit of effort I put into that organisation was for the benefit of the bank, the people around me and the book I worked on.

"If I was not so proud to work for UBS, I would never put so much effort trying to convince them that we could achieve something at this bank."

He added: "To find yourself in Wandsworth Prison for nine months because all you did was work so hard for this bank..." before stopping as he broke down in tears.

Mr Adoboli is facing two counts of fraud and four counts of false accounting between October 2008 and September 2011, allegedly gambling away the money on high-risk illegal trades aimed at boosting his annual bonuses and job prospects.

The former public schoolboy worked for UBS's global synthetic equities division, buying and selling exchange traded funds (ETFs), which track different types of stocks, bonds or commodities such as metals.

Ghanaian-born Mr Adoboli enjoyed a rapid rise at UBS after completing an internship while a student at Nottingham University in 2002, the court heard.

Mr Adoboli told the court he feared UBS would not survive $52bn (£32.3bn) losses incurred in 2007-08 as the banking crisis took hold.

He said: "The effect on the organisation was incredible. There were times we thought there was no way the organisation would survive. I grew up with UBS. I felt very loyal to UBS.

"What could we do to help this organisation survive this incredible crisis?"

The trial continues.

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Exclusive: RBS Eyes Worldpay Payout

By Mark Kleinman, City Editor

The taxpayer-controlled Royal Bank of Scotland is in line for a substantial windfall from the sale of part of the payments processing business it was forced to offload as punishment for its £45bn bail-out four years ago.

I understand that Advent International and Bain Capital, the controlling shareholders in Worldpay, have appointed JP Morgan, the investment bank, to explore a sale of the company's US operation.

Such a disposal could fetch as much as $1bn (£620bn), bankers say, and insiders tell me that a large chunk of the proceeds is likely to be returned to Worldpay's investors.

For RBS, that would represent a rare piece of welcome financial news. When it sold Worldpay in 2010, it was allowed to retain a 19.99% stake in the business by the European Commission.

Although that stake has since been diluted to 18%, the bank could still reap a dividend worth tens, or even, hundreds of millions of pounds, depending upon the sale price and the proportion of the proceeds that is paid out to shareholders.

Worldpay, which is one of the world's largest electronic payments processing companies, operates in more than 40 countries.

It said this year that its US revenues fell by 3.6% in the first half of the year following a "strategic decision to withdraw from certain unprofitable market segments".

RBS sold Worldpay for about £1.7bn in a deal structured to provide the former owner with additional payments worth up to £200m if the business met unspecified performance thresholds.

RBS and Worldpay declined to comment.

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Ford Confirms 1,400 Job Losses In The UK

Ford confirms it will make 1,400 employees redundant in the UK following the closure of two British factories.

The US company's Southampton plant in Swaythling, which has made Transit vans since 1972, will close next summer with a loss of more than 500 jobs.

Its stamping plant in Dagenham, which presses sheets of metal used to make the vans in Southampton, will be shut down at the same time.

It marks the end of more than a century of vehicle production in the UK by Ford, which will make only engines and other car parts in Britain from mid-2013.

The president and chief executive of Ford, Alan Mulally, was due to hold a conference call later.

"Using the same One Ford plan that led to strong profitability in North America, we will address the crisis in Europe with a laser focus on new products, a stronger brand and increased cost efficiency," he said in a statement.

"We recognise the impact our actions will have on many employees and their families in Europe, and we will work together with all stakeholders during this necessary transformation of our business." 

The move, revealed by Sky News on Wednesday, has been met with anger by unions representing the workers affected.

The Chairman of Ford of Britain, Joe Greenwell, told Jeff Randall Live

"All redundancies are voluntary. We are putting in place teams at our plants in order to work with individual employees on the best course of action for each of them."

Joe Greenwell also said:

"We have since 2007 had a 20 percent decline in sales in Europe. That's exacerbated an excess of cars. Our capacity utilisation is too low. The reality is against this background of demand we can't sustain two transit plants in the Ford portfolio."

Unite's general secretary Len McCluskey accused Ford of betraying its workforce. 

"Only a few months ago Ford was promising staff a new Transit model for Southampton in 2014," he said.

"The planned closures will really hurt the local economies and the supply chain will be badly hit - up to 10,000 jobs could be at risk."

The national officer of the GMB union, Justin Bowden, added: "This is devastating news for the workers in Southampton and Dagenham and is very bad news for UK manufacturing.

"Ford's track record in Britain is one of broken promises and factory closures. There will be a feeling of shock and anger, and Ford's commitment on investment will cut little ice."

Caroline Nokes, Conservative MP for Romsey and Southampton, described the news as a "bitter blow".

"It is critically important that we do everything we can to help those affected," she said.

"The closure will have a significant impact on employment.

"These 500 employees have broadly similar skills and it is very important that they are given the maximum support possible."

But Ford, which employs 11,400 people at sites across the UK, had some good news for its British workforce.

It confirmed the next generation of diesel engines would be built in the UK, safeguarding thousands of jobs.

The carmaker is in the process of restructuring its European operations following a slump in demand, and on Wednesday announced that it would shut down its "under-utilised" factory in Genk, Belgium, resulting in 4,300 job losses.

It hopes the three plant closures - which represent 18% of Ford's production capacity in Europe - will save between $450m (£279m) and $500m (£309m) in annual costs.

The company warned its European operations would lose in excess of $1.5bn (£0.9bn) this year.

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Samsung Sets Record For Smartphone Sales

Samsung has cemented its place as the world's leading smartphone seller after setting a record for the most units shipped in the third quarter.

The company sold 56.3 million smartphones, including its flagship Galaxy S III, in July-September, representing 31.3% of the global market - more than twice as much as rival Apple's 15% share.

Net profit for the South Korean firm doubled to a record 6.6trn won (£3.7bn) in Q3, powered by smartphone sales and huge demand for display panels.

The world's largest technology firm by revenue also saw a record operating profit in July-September of 8.12trn won (£4.6bn), up 91% from the same period last year.

The Galaxy has been a big seller for Samsung

Samsung said its mobile communications business took in 26.25trn won (£14.85bn) in Q3 revenue, accounting for more than half the company's total.

"The business environment remained difficult with global economic uncertainties persisting amid the fiscal concerns in the US and Europe," Samsung senior vice president Robert Yi said.

"However, we continued to break our quarterly profit records."

The Q3 net profit figure was well up from the 3.4trn won (£1.92bn) net profit posted a year ago and beat the previous record of 5.19trn (£2.93bn) won set in April-June.

Total company sales surged 26.4% on-year to an all-time high of 52.2trn won (£29.54bn).

Analysts expect the technology giant to see a marginal fall in income in the final quarter, as sales to retailers peak in the third quarter ahead of Christmas and technology firms ramp up spending on marketing for the year-end rush.

However, they said Samsung's telecommunications business will continue to drive profit with its latest offerings of high-end mobile products, such as its flagship Galaxy S III smartphone.

"We expect Samsung will deliver solid earnings growth with product leadership in the consumer branded business, smartphone and TV, and enhanced bargaining power in the component business, semiconductor and display panel," Citi said in a report.

However, Samsung shares were down over 2% at 1.287m won (£727) in early Friday trades.

The large display panel department has returned to profit for Samsung

The company said its display panel business helped drive its record in the quarter, compared to loss in the section the previous year.

Increasing demand for panels for smartphones and other high valued-added products, such as LED panels for TVs and LCD panels for tablets, offset weak demand for laptop and monitor panels.

Samsung's operating profits have risen every quarter since the first three months of 2011, as booming smartphone sales helped it leapfrog Apple as the world's biggest maker of the devices.

But its shares have been under pressure due to a long-running legal spat with the iPhone manufacturer.

Samsung was dealt a blow in late August when a US federal jury ruled that it infringed some of Apple's design and software patents and fined it more than $1bn (£620m). Samsung has appealed against the ruling.

The legal duel, being fought in around 10 countries, has mirrored an intense market battle between the Galaxy and iPhone. The pair is also tussling over the tablet market.

The South Korean firm launched the Galaxy Note II - the latest version of its oversized smartphone - at the end of September and this week Apple unveiled the iPad Mini.

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Nine More Banks Under Libor Rate-Fix Scrutiny

Nine additional banks have been drawn into accusations of Libor rate-fixing, according to news reports.

The Financial Times said some of the world's biggest banks, including Britain's Lloyds banking group, have been sent subpoenas by two US state attorney generals.

It said New York attorney general Eric Schneiderman and Connecticut's George Jepsen also sent subpoenas to Bank of America, Bank of Tokyo Mitsubishi UFJ, Credit Suisse, Rabobank, Royal Bank of Canada, Societe Generale, Norinchukin Bank and West LB.

Lloyds declined to comment about the report to Sky News. Its share price dropped around 1.5% in early trading.

The two US prosecutors have now put 16 banks under scrutiny, after previously launching investigations into Royal Bank of Scotland, Barclays,HSBC, Deutsche Bank, Citigroup,JPMorgan Chase and UBS.

The US investigators have made requests for both communications and document trails at the banks.

Both states are examining if the banks colluded to fix interest rates and thereby adversely affecting both investors and borrowers in their jurisdictions.

The banking industry has come under intense pressure over Libor as the inter-bank rate affects more $300trn in global transactions.

Other legal probes into the Libor scandal have been launched in Britain, Japan and Canada over benchmark rate manipulation.

The scandal was exposed last June when Barclays agreed to pay £290m in fines to UK and US regulators over alleged attempts at Libor manipulation at the time of the global financial crisis.

A number of key Barclays executives were forced from office and taint from the scandal spread across the industry and embroiled Bank of England and Cabinet Office executives.

The British Bankers' Association, which was responsible for Libor oversight, has since offered to relinquish the role amid calls for reform.

The FT said: "Unlike US federal prosecutors, Mr Schneiderman is armed with his state's Martin Act, a 1921 New York law considered one of the country's most powerful prosecutorial tools.

"The law allows Mr Schneiderman to investigate anyone doing business in New York and to bring cases without having to show that the accused intended to commit fraud.

"It also allows him to operate across state lines, essentially acting on behalf of investors across the US."

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Petrol Prices Cut By Up To 2p By Supermarkets

Supermarkets across the UK have lowered their petrol prices following a fall in the wholesale cost of fuel.

Asda was the first to announce it would cut up to 2p off a litre of petrol, saying customers would pay no more than 133.7p.

Rivals Sainsbury's and Tesco followed with similar pledges of price reductions of up to 2p.

The AA broadly welcomed the move, but urged other retailers to do the same.

"Unless the rest of the market reflects the lower cost, it's a case of the same old story - prices up like a rocket, falling like a feather," said the AA's head of public affairs, Paul Watters.

The roadside recovery group is in the process of providing information to the Office of Fair Trading, which is investigating whether a fall in oil prices is being passed on to motorists.

"Last week, our fuel price report pointed to a 4p drop in petrol wholesale prices working its way through the system," Mr Watters said.

"UK average petrol pump prices reached a late summer high of around 140p a litre in mid-September and sat there for more than a fortnight.

"More than a month on, the average petrol price yesterday was down to only 138.70p a litre."

Asda cut its petrol prices by 3p a litre at the end of September and other retailers said they would follow suit.

Meanwhile, average diesel prices have fallen by 1p a litre - almost exactly reflecting the late summer fall in diesel wholesale costs, according to the AA.

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Good News For Retailers As Economy Revives

How GDP Is Compiled Really Matters

Updated: 8:11am UK, Thursday 25 October 2012

By Ed Conway, Economics Editor

I've covered economics for a decade or so, but I confess that until very recently I didn't really know what GDP really is.

I mean, like most of you I knew it was the broadest and most widely-used measure of our economy's health - that it determines whether we're officially in recession or not (two or more quarters of shrinking GDP equals a recession).

I knew it was the sum of everything spent, earned or made in Britain.

What I didn't know was how it's actually put together.

I guess I vaguely assumed - and I don't think I'm entirely alone - that the Office for National Statistics had some kind of electronic hotline into British business, some privileged access to their numbers, which in turn became the Gross Domestic Product number.

Turns out I was monumentally wrong.

For it transpires that GDP - that big number we're all so focused on, the figure that tells us whether we're in a recession or booming, that can end a political career and swing an election - is actually a big, big survey.

I know this because earlier this month I spent some time in the ONS headquarters in Newport with the team who put together this most significant of all numbers.

For the first time, they allowed cameras into their offices to show how GDP really comes into being - and the genesis might well surprise you.

At this point it might be worth explaining why this matters so much: there is arguably no other number out there that can swing the financial markets quite so much, that can influence Britain's feelgood factor, that dominates the headlines and strikes fear into politicians.

And yet there are many people who question whether we can really rely on the numbers.

Some economists argue that the GDP figures in recent months have painted a far more negative picture of the UK economy than is actually the case.

Some argue that Britain never really experienced a double-dip recession - but that this reality will only ever be confirmed many years into the future when the ONS revises those initial estimates.

So how GDP is put together really matters. And it all starts with the pounds in your pockets.

For the first estimate of GDP - the one today - is created from data collected in surveys of tens of thousands of surveys from businesses around the country - whether they're manufacturers, construction firms, retailers or others.

Each month a large sample of them is asked by the ONS to tell them their turnover (how much money is going through the till), along with a few other industry-specific questions which form part of the retail sales, manufacturing output and other releases.

The turnover number is what matters from the perspective of GDP. They fill the relevant questionnaire in and post it to the ONS (they can also submit the data through an automated telephone system).

When those envelopes arrive there the questionnaires are scanned and the numbers go into the ONS' systems.

The problem is that by the time that first estimate needs to be produced, the ONS only has 44% of the relevant data (the rest arrives in dribs and drabs over the following months, hence the revisions). In particular, the ONS only has early responses for the final month of the quarter.

So there are some pretty big gaps to be filled, and the ONS has to make some estimates about what the other data will eventually say when it comes in.

It relies for this on computer models, backed up by assumptions and calculations from the ONS staff themselves. After they make these calls they meet and discuss them in so-called "balancing meetings": the statisticians ask each other whether the data are reliable and their assumptions have foundation.

During this entire period, those GDP assumptions and the ultimate figure are kept locked up (quite literally - there are safes into which they are put) such that only a dozen or so statisticians actually know the number before it comes out.

So far as anyone knows, there has never been a leak of a number as sensitive as this from the ONS. But 24 hours before the figures are published, selected ministers and officials also get a look.

The figures are revised again a month after that initial release, and then again a month later. During that period, more information has come in from quarterly surveys which measure families' and businesses' incomes, and other spending data.

As I said, GDP can be measured in terms of what we spend, what we earn and what we make - they should all add up to the same number, since what one person buys another person sells. And the extra data furnishes that initial estimate and, occasionally, contradicts it.

The ONS maintains that its record of revisions is acceptable by international standards. It points out that its surveys have far more respondents than those put together by independent competitors.

But some, most notably Kevin Daly of Goldman Sachs, argue that it has a tendency to revise the more distant history so substantially that often periods we thought at the time were slumps were actually booms.

A case in point is the early 1990s: at the time, the ONS said the UK was suffering a double-dip recession.

But by the end of the millennium it had revised its assessment: far from slumping, the UK was actually bouncing back forcefully at that point. When Norman Lamont referred to "green shoots", it turns out he was absolutely right.

Today, the GDP figures have been telling an altogether different story to the unemployment figures, which seem to suggest there never was a double-dip. Based on precedent, we are unlikely to know the definitive story for years to come.

Which implies that the ONS, and the way it puts together this most important of all numbers, will remain in the spotlight for the foreseeable future.

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Recession Ends Amid Olympics Boost

How GDP Is Compiled Really Matters

Updated: 8:11am UK, Thursday 25 October 2012

By Ed Conway, Economics Editor

I've covered economics for a decade or so, but I confess that until very recently I didn't really know what GDP really is.

I mean, like most of you I knew it was the broadest and most widely-used measure of our economy's health - that it determines whether we're officially in recession or not (two or more quarters of shrinking GDP equals a recession).

I knew it was the sum of everything spent, earned or made in Britain.

What I didn't know was how it's actually put together.

I guess I vaguely assumed - and I don't think I'm entirely alone - that the Office for National Statistics had some kind of electronic hotline into British business, some privileged access to their numbers, which in turn became the Gross Domestic Product number.

Turns out I was monumentally wrong.

For it transpires that GDP - that big number we're all so focused on, the figure that tells us whether we're in a recession or booming, that can end a political career and swing an election - is actually a big, big survey.

I know this because earlier this month I spent some time in the ONS headquarters in Newport with the team who put together this most significant of all numbers.

For the first time, they allowed cameras into their offices to show how GDP really comes into being - and the genesis might well surprise you.

At this point it might be worth explaining why this matters so much: there is arguably no other number out there that can swing the financial markets quite so much, that can influence Britain's feelgood factor, that dominates the headlines and strikes fear into politicians.

And yet there are many people who question whether we can really rely on the numbers.

Some economists argue that the GDP figures in recent months have painted a far more negative picture of the UK economy than is actually the case.

Some argue that Britain never really experienced a double-dip recession - but that this reality will only ever be confirmed many years into the future when the ONS revises those initial estimates.

So how GDP is put together really matters. And it all starts with the pounds in your pockets.

For the first estimate of GDP - the one today - is created from data collected in surveys of tens of thousands of surveys from businesses around the country - whether they're manufacturers, construction firms, retailers or others.

Each month a large sample of them is asked by the ONS to tell them their turnover (how much money is going through the till), along with a few other industry-specific questions which form part of the retail sales, manufacturing output and other releases.

The turnover number is what matters from the perspective of GDP. They fill the relevant questionnaire in and post it to the ONS (they can also submit the data through an automated telephone system).

When those envelopes arrive there the questionnaires are scanned and the numbers go into the ONS' systems.

The problem is that by the time that first estimate needs to be produced, the ONS only has 44% of the relevant data (the rest arrives in dribs and drabs over the following months, hence the revisions). In particular, the ONS only has early responses for the final month of the quarter.

So there are some pretty big gaps to be filled, and the ONS has to make some estimates about what the other data will eventually say when it comes in.

It relies for this on computer models, backed up by assumptions and calculations from the ONS staff themselves. After they make these calls they meet and discuss them in so-called "balancing meetings": the statisticians ask each other whether the data are reliable and their assumptions have foundation.

During this entire period, those GDP assumptions and the ultimate figure are kept locked up (quite literally - there are safes into which they are put) such that only a dozen or so statisticians actually know the number before it comes out.

So far as anyone knows, there has never been a leak of a number as sensitive as this from the ONS. But 24 hours before the figures are published, selected ministers and officials also get a look.

The figures are revised again a month after that initial release, and then again a month later. During that period, more information has come in from quarterly surveys which measure families' and businesses' incomes, and other spending data.

As I said, GDP can be measured in terms of what we spend, what we earn and what we make - they should all add up to the same number, since what one person buys another person sells. And the extra data furnishes that initial estimate and, occasionally, contradicts it.

The ONS maintains that its record of revisions is acceptable by international standards. It points out that its surveys have far more respondents than those put together by independent competitors.

But some, most notably Kevin Daly of Goldman Sachs, argue that it has a tendency to revise the more distant history so substantially that often periods we thought at the time were slumps were actually booms.

A case in point is the early 1990s: at the time, the ONS said the UK was suffering a double-dip recession.

But by the end of the millennium it had revised its assessment: far from slumping, the UK was actually bouncing back forcefully at that point. When Norman Lamont referred to "green shoots", it turns out he was absolutely right.

Today, the GDP figures have been telling an altogether different story to the unemployment figures, which seem to suggest there never was a double-dip. Based on precedent, we are unlikely to know the definitive story for years to come.

Which implies that the ONS, and the way it puts together this most important of all numbers, will remain in the spotlight for the foreseeable future.

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Unions 'Strike Out' At Reform Proposals

The TUC has rounded on proposals to reform trade union laws, claiming they would weaken union members' voices and potentially risk escalating disputes.

The changes recommended by business lobby group the CBI include allowing employers to offer pay settlements directly to workers to resolve long running rows.

It also called for statements from employers and unions, along with the full consequences of any industrial action, to be placed on ballot papers.

The CBI argues the laws, which have changed little since the 1980s, fail to reflect the modern workplace and too often empower union leaders at the expense of staff.

CBI deputy director general Neil Bentley said it was right that firms be allowed to offer pay settlements directly to their staff, claiming unions were too often "obstructing" a reasonable deal.

"These changes are simple, and would underpin positive improvements in the way that employers, unions and employees work together, leading to closer cooperation and engagement.

"Like the changes of behaviour the new employment relationship requires of employers, they will put the ordinary member in charge."

TUC General Secretary Brendan Barber said: "The TUC has always been in favour of better regulation to reduce red tape for unions and promote greater workplace democracy.

"One obvious way to do this is to enable electronic voting in ballots, but the CBI is curiously silent about this idea.

"Another is to review the laws that stand in the way of union members deciding democratically to take industrial action as a last resort, such as the unnecessary technical requirements that provoke unfair intervention from the courts.

"The CBI proposals would actually weaken employees' voice, and some would make employment relations at sensitive times much harder to handle."

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Unions: 4,300 Job Losses As Ford Closes Plant

Unions have claimed that Ford will close its factory in the Belgian town of Genk, resulting in 4,300 job losses, according to media reports.

The US automaker will tranfer production from the plant in 2014 as it attempts to deal with a slump in demand across Europe, according to Reuters.

"The management has decided to close the car assembly and the press activities in Genk at the end of the current production cycle in 2014," Luc Prenen, leader of the ACV union, told workers gathered outside the plant.

"This will result in the closing of the Genk production site and will cause the loss of 4,300 jobs." 

Production of the company's new Mondeo, S-Max and Galaxy models will be transferred to Valencia, Spain.

Hundreds of employees gathered outside the gates of the plant in eastern Belgium, as local Ford managers met with staff representatives.

More follows...

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Argos Overhaul Could See 75 Stores Close

Argos has said it will close 75 stores in the UK over the next five years as it unveils a transformation plan for the business.

The retailer's parent company, Home Retail Group, made the announcement as it reported a 37% fall in group pre-tax profit to £18m in the six months to the start of September.

Argos only made £3.3m during the period.

Home Retail said it had reviewed Argos' 739 stores on the basis of several factors, including profitability and attractiveness of location.

"As a result, it is likely that Argos will close or relocate at least 75 stores as their leases come to an end over the next five years," the company said in a statement.

A review of the business highlighted a "clear opportunity" to invest more in digital technologies, Home Retail Group's boss said.

It will also reduce the circulation of the traditional Argos catalogue, which was launched in 1973. 

"The transformation plan aims to deliver growth by repositioning Argos as a digitally-led business from a catalogue-led business, leading the market growth of digital commerce through online, mobile and tablet, and offering customers more products with the fastest, most convenient fulfilment options," chief executive Terry Duddy said.

"This plan provides the right approach for Argos to achieve a long-term sustainable performance and profit recovery." 

The company said it was aiming for £4.5bn of sales for Argos by 2018 and would invest £100m a year in the business over the next three years to achieve this.

Home Retail Group's shares rose over 8% in morning trading following the announcement.

But Neil Saunders from retail analysts Conlumino said a big question mark remains over the sustainability of Argos' business model.

"On the surface, its review looks sensible and has credibility," he said.

"However, executing the strategy will not be easy and there are a number of challenges Argos will need to address."

He said the company will have to create a superior digital experience for consumers, make sure it remains high in shoppers' minds, and has a unique edge to its product mix.

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Beer Sales 'Downed By Tax Regime'

The beer industry claims taxes are crippling sales following revelations almost 120 million fewer pints were drunk over the summer, despite the Euro 2012 football championship and the Olympic Games.

The British Beer & Pub Association (BBPA) said sales of beer in pubs fell 4.8% in the quarter to September while supermarkets and off-license sales were down by 6.5%.

It blamed taxes for the 5.6% overall reduction and said there was an urgent need to freeze the beer duty escalator.

The Government's controversial policy means increases of 2% above inflation until 2014/15.

The BBPA warned that the reduction in sales was hitting Government revenues as well as jobs.

It said that beer prices have endured an "astonishing" 42% tax hike since the 2%-above inflation escalator was introduced in 2008.

There is pressure for a full Parliamentary debate on the impact of beer taxes, following a petition signed by over 100,000 people which demanded Government action on the issue.

Brigid Simmonds, chief executive of the BBPA, said: "If the Government wants to encourage growth, back British business and support local communities, then it must end the beer duty escalator.

A Treasury spokesman responded: "The Government hugely values the economic contribution made by pubs and breweries. We have introduced a range of tax measures that will help the alcohol industry, and pubs in particular.

"Cutting employers' national insurance contributions will make it cheaper for pubs to employ people on incomes of less than £21,000.

The industry will also benefit from the reductions in corporation tax, fuel duty cut and extension of the small business rates relief holiday. Small beer producers are also benefiting from the small breweries relief.

"However, at a time when we are working hard to get down the deficit, alcohol duty revenues do make an important contribution to the public finances.

Crucially, the Government has not made any changes beyond what was announced at the budget in 2008," he said.

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Insurance Report: AA Says It's Good And Bad News

Car insurance costs are going down - but home insurance premiums are rising, the AA has revealed.

Taking an average of the cheapest five premiums, fully-comprehensive car insurance policy fell 2.9% to £844 in the period July-September 2012 compared with the previous three months, according to AA Insurance.

But after a summer of storms and floods, a similar survey of home buildings insurance revealed an average rise of 2.4% to £181, while home contents insurance rose 1% to £242.

Over the late summer period, young male drivers saw their premiums fall 0.7% to £1,603 on average, while those for young women fell 2.2% to £1,127.

All regions of the UK saw average car insurance premiums fall except Anglia, where they rose 1.4%.

Scotland remains the cheapest region in which to buy car insurance, averaging £438, while Greater Manchester and Liverpool are the most expensive areas at £1,059.

On home buildings insurance, the AA reported a rise in every region in the UK over the late summer period.

The biggest regional increase, of 3.5% to £177, was in Yorkshire and East Anglia, while London and southeast England were the regions with the highest average premiums, up 2.9% to £200.

Wales and the West Country had the cheapest home building premiums, up 1.1% to £157.

AA Insurance director Simon Douglas said: "I am very concerned that no agreement has yet been reached in finding an affordable option to the 'statement of principles' between the insurance industry and the Government.

"(This) ensures that families in flood-prone properties can continue to obtain flood cover.

"This expires in June next year, and if no agreement is reached soon, could lead to the most vulnerable homes becoming uninsurable."

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Yahoo!'s Marissa Mayer Promises Mobile Focus

Yahoo!'s new chief executive has insisted the company does not need a "giant pivot" in direction as it reported better-than-expected financial results.

Marrisa Mayer - who was poached from Google after 13 years with the company - instead said Yahoo! needed to focus on its mobile offerings.

She said Yahoo! had underinvested in the technology, and would update its websites - which include sports results, news and email - to make them more smartphone-friendly.

"Our vision is to make the world's daily habits inspiring and entertaining," she said in her first public appearance since taking the helm in July.

"Mobile represents not only a daily habit, but a platform shift we have to ride in order to be relevant."

Yahoo! is headquartered in Sunnyvale, California

Excluding $2.8bn (£1.7bn) earned from the sale of its shares in Chinese internet giant Alibaba, Yahoo!'s income was $177m (£110.5m) in the third quarter of this year.

Its revenues rose slightly to $1.09bn (£0.68bn) compared with $1.07bn (£0.66bn) a year ago.

Rather than invest in a different businesses strategy, Ms Mayer said Yahoo! would improve its performance by finding opportunities in its existing businesses, including internet search.

"We're committed to going back to our roots as a consumer internet company focused on user experience," she said, adding: "We intend to win."

But she said her top priority was to invest in the industry's transition to mobile devices - which even companies like Facebook and Google are struggling with.

"We do need more mobile engineers here," Ms Mayer admitted.

"It is clear that at some point in the future Yahoo! will have to be a predominately mobile company."

Ms Mayer is Yahoo!'s third boss in a year, after former boss Scott Thompson resigned less than six months at the top over a controversy about his academic credentials.

The company makes the majority of its money from advertising online, but has fallen behind rivals like Google in recent years, and missed out on the online social networking boom.

Yahoo! still gets around 700 million users visiting it every month, but the amount of time people spend on its websites is declining.

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Anglo American To Discuss Future Of Boss

By Mark Kleinman, City editor

The board of Anglo American, the FTSE 100 mining group, will this week discuss demands to replace its chief executive amid growing shareholder concern over her leadership.

I have learned that Anglo American directors will consider issues including investor feedback about Cynthia Carroll at a board meeting in Brazil which begins on Tuesday.

The company has been under pressure in recent months to accelerate succession planning amid growing unrest over the performance of Ms Carroll, who has served as its chief executive since 2007.

This weekend, a number of senior City sources said that plans for Ms Carroll to step down could be announced within a matter of weeks. A person close to Anglo insisted that the board meeting was routine and that a wide range of issues would be on the agenda.

Ms Carroll is being targeted by institutions unhappy with the company's strategy, falling profitability and share price, and repeated delays to production from Minas Rio, an iron ore project that is among the company's most important growth prospects but which is now years behind schedule.

Some investors are also annoyed about the handling of a settlement in August with the Chilean government over a copper asset, although it was broadly seen as a decent compromise deal.

Sir John Parker, the respected industrialist who has chaired Anglo since being brought in to defend it against a hostile takeover bid from Xstrata in 2009, has had extensive discussions with shareholders in recent months.

"He appears to have got the message," one institutional investor told me this weekend. "There have been signals from the company that there will be change at the top – and soon."

Some investors have floated the idea of parachuting in Alex Vanselow, the former chief financial officer of BHP Billiton, the world's biggest mining group, to replace Ms Carroll. A person close to Anglo said such an idea was "not currently being considered".

Like other miners with a presence in the country, Anglo has been hit hard by recent industrial unrest in South Africa. Last month, Anglo Platinum, which is majority-owned by Anglo American, suspended its operations there in an attempt to protect the safety of tens of thousands of staff.

Ms Carroll, who regularly features in lists of the world's most influential businesswomen, joined Anglo at the beginning of 2007, and in March will mark her sixth anniversary in the job.

She is also a non-executive director of BP, the oil company which is this weekend finalising details of a deal to sell its Russian joint venture stake to the state-backed energy group Rosneft.

A former executive at Alcan, an aluminium producer that was bought by Rio Tinto, one of Anglo's main rivals, Ms Carroll also chairs Anglo Platinum and De Beers, two Anglo subsidiaries.

Since her arrival as the first woman and the first non-South African to run Anglo, she has overseen a sweeping shake-up of Anglo's operations, improving its safety record and tidying up a string of minority shareholdings owned by the company.

The company's share price performance has been poor, however, lagging behind that of several rivals.

Ms Carroll's supporters point to the spate of recent announcements from large mining companies announcing decisions to rein in capital spending amid soaring costs.

A source close to Anglo also said that recent engagement with shareholders in South Africa and the US had provided "some encouraging feedback about [Cynthia's] strategy and stewardship".

If Ms Carroll does step down in the near future, it would have broader implications given Government and European efforts to promote female corporate leadership.

Ms Carroll is one of just four women running companies in the UK's blue-chip index, while another, Dame Marjorie Scardino of Pearson, recently announced her intention to retire in the coming months.

People close to Anglo concede that there is little chance of Ms Carroll's successor being appointed from within the company, regardless of the timing.

Anglo declined to comment.

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Financial Mood Less Downbeat - But Not For Long

The tight squeeze on household finances appears to be easing amid signs of a rise in consumer spending, according to two new surveys.

Family budgets were at their least strained for almost two years in October, Markit said, helped by a near-stabilisation of employment income and a drop in debt levels.

A separate survey by Deloitte also found people are starting to loosen the firm grip on their purse strings, with fewer bargain hunting and simply buying less.

But the bursts of optimism may be short lived.

Looking ahead, however, consumers remain cautious and there are no signs of them going on a spending spree as yet.

More than twice as many households expect their financial well-being to worsen over the next year compared with those who expect an improvement, the Markit household finance index found.

Concerns remain about job security and the costs of living, with the vast majority expecting their food, transport and utility bills to go up, according to the Deloitte Consumer Tracker.

Separate surveys found that the squeeze on family budgets is weakening

Tim Moore, senior economist at Markit, said: "While pressures on current finances were reported to have moderated again, helped by stabilising incomes and lower debt, the steep reversal in future sentiment is a clear signal that households are likely to keep a tight rein on spending in the months ahead.

"Weak economic sentiment and worries about rising living costs are again the main factors bearing down on the outlook for households' financial well-being."

Ian Stewart, chief economist at Deloitte, said: "This brighter outlook is tempered with caution as there is no evidence yet of a significant loosening of the purse strings.

"The real test is when we will see a pronounced shift towards greater discretionary spending, especially on big ticket items such as holidays and white goods, and consumers trading up. This will be key to whether we see continued growth in consumer spending in 2013."

The findings come after it was revealed last week that inflation dropped to a its lowest level for nearly three years in September, but analysts warned that energy bill hikes, combined with rising food and petrol costs, will push living costs back up again.

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Amazon 'Exploits' VAT Tax Loophole On Ebooks

Amazon is taking advantage of a European tax anomaly to make extra profit on ebooks sold in the UK, according to media reports.

The online retailer moved its European headquarters to Luxembourg in 2006, meaning it pays only 3% VAT on digital books sold to British readers, the Guardian says.

But according to a contract seen by the newspaper, Amazon starts negotiations with its publishers on the basis that the UK VAT rate of 20% is knocked off the cost price.

The difference sees the company make an extra £1.38 of profit every time it sells a £10 ebook in this country, the report claims.

It goes on to say Amazon negotiates further discounts, sometimes resulting in publishers receiving less than 10% of the total sale price of a book.

The company, which makes ereaders including the Kindle Fire, dominates the ebook market, selling nine out of 10 ebooks sold in the UK according to some estimates.

Accountant Richard Murphy, who founded the Tax Justice Network, said Luxembourg's 3% tax rate on ebooks is being taken advantage of by Amazon.

"Luxembourg has this low VAT level to make publishing more accessible - and although Amazon is exploiting this, it is not passing it on to the industry," he told Sky News.

"The time has come for an inquiry into whether Amazon is abusing its market position.

"And whether its commercial power is having a detrimental effect on the publishing industry."

But Mr Murphy also highlighted the discrepancy between the UK's tax rate on print books- which is 0% - and the 20% for ebooks.

"The Government needs to looks into this - ebooks should be subject to the same zero tax rate as print books in the UK," he added.

Amazon responded: "Our goal is to make it easy for readers to discover and read the books they love by expanding access to millions of books in both digital and print. 

"We've been able to do this by focusing on innovation, as exemplified by Kindle, and by offering customers the widest selection at the best possible prices and service.

"This innovation and service have not only benefited readers, but authors, too".

Earlier in the year, the Guardian said Amazon generated UK sales over the past three years of between £7.6bn and £10.3bn, but paid virtually no corporation tax.

It follows a report in The Sunday Times that eBay paid just over £1m in corporation tax in Britain, despite generating sales of almost £800m in a year.

And last week Starbucks' UK managing director defended his company's tax arrangements on Sky News.

The company paid no corporation tax for the last three year, despite sales of £1.2bn in the UK.

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BP Hones Tie-Up With Russia's Rosneft

By Mark Kleinman, City Editor

BP is in talks to secure an indemnity against legal claims from a group of Russian oligarchs as part of a £16bn deal that would cement a partnership between two of the world's biggest oil companies.

BP and Rosneft, the Kremlin-backed oil giant, are this weekend locked in talks aimed at finalising what will become one of the most significant alliances ever struck in the energy industry.

I understand that part of the discussions is focused on securing an indemnity for BP against ongoing litigation from the oligarchs who own AAR, BP's existing Russian partner.

The oligarchs, who include some of Russia's most powerful businessmen, own the remaining 50% of TNK-BP. As Sky News revealed this week, they have struck a preliminary agreement to sell their shares to Rosneft.

It is unlikely that Rosneft would fully cover future legal claims against BP made by the oligarchs, but analysts believe AAR would be unlikely to pursue any action if BP strikes a formal deal with Rosneft that has the backing of Vladimir Putin, the Russian president.

People close to the talks between BP and Rosneft cautioned that there "remain a lot of moving parts", and that an announcement as early as Monday looked possible, but unlikely.

The broad thrust of the partnership currently being discussed would see BP selling its 50% stake in TNK-BP to Rosneft for $27bn (£16.8bn).

The Russian company would pay between $11bn (£6.8bn) and $13bn (£8.1bn)  in cash, with BP taking a stake of between 16% and 20% in Rosneft.

BP executives are leaning towards taking a larger shareholding in Rosneft because they believe it would signal an irrevocable commitment to the British company's presence in Russia.

BP would also gain either one or two seats on Rosneft's board.

An indemnity against legal action from the oligarchs is seen as an important, but not pivotal, issue by BP.

BP declined to comment.

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Exclusive: Bankers Court PCC Chairman

By Mark Kleinman, City Editor

The chairman of the Press Complaints Commission (PCC) is being lined up to orchestrate the creation of a new banking standards body that would have the power to ban individuals found guilty of malpractice.

I have learned Lord Hunt of Wirral has been approached by the British Bankers' Association (BBA) to help draw up a framework for the independent body. He is also being sounded out about becoming its inaugural chairman.

The approach to Lord Hunt was made by Anthony Browne, the new BBA chief executive, several weeks ago.

The Conservative peer would be a logical choice for the role. A former senior partner of Beachcroft, the law firm, he specialised in the insurance and financial services sectors throughout a career dating back to the 1960s.

Now chairman of the Lending Standards Board, another banking sector body, Lord Hunt also has vast experience of developing professional bodies across a wide range of industries, including the legal profession.

He served in the cabinets of both Margaret Thatcher and John Major, and was the architect of a report on the future of the Financial Ombudsman Service.

I understand Lord Hunt is interested in taking on the banking standards body role, although he has not yet formally agreed to do so.

The new organisation has become a key priority of Mr Browne, who only took over at the BBA a few weeks ago.

He believes the toll taken on the reputation of the banking sector by Libor and insurance mis-selling scandals, as well as the continuing controversy over bankers' pay, can only be repaired by prolonged evidence of high ethical standards.

Among the powers of the new body would be the ability to strike off rogue bankers, exceeding the current capabilities of the Financial Services Authority.

Speaking at the BBA's annual conference earlier this week, Mr Browne insisted the creation of a new body was at the feasibility study stage, with a taskforce comprised of bank representatives beginning work on it.

"It has got to be credible. There is no point doing this if it seems like a whitewash," he said.

As I revealed last month, the suggestion for a new banking standards body and a register from which industry employees could be struck off was made by Barclays in its submission to the Parliamentary Commission on Banking Standards.

Sir David Walker, who takes over as Barclays' chairman in about 10 days' time, backed the principle of a new body. Also speaking at the BBA summit, he said a more formal code of conduct had worked well in the accounting, legal and medical professions and was required to restore trust in banking.

"The tricky part is working out what it would take to make someone ineligible to work in banking. There's a lot of work that needs to be done," he said.

Chaired by Andrew Tyrie, the Conservative MP who also chairs the Treasury Select Committee, the Commission is likely to consider the creation of a banking standards body and a requirement for bankers to possess formal qualifications.

Lord Hunt and the BBA both declined to comment.

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Gardeners Blamed For Spreading Potato Blight

By Emma Birchley, East of England Correspondent

Allotment holders who fail to deal with blight-ridden potato plants have been blamed for spreading the fungal infection to farmers' fields.

If it is not detected, blight can destroy crops and the spores can quickly spread 30 miles or more in the wind.

Tackle it the right way and it can be controlled, but the Potato Council says some home and allotment growers are failing to spot the signs in time.

"If someone on an allotment has a blighted plant, a single leaf on that plant can produce 120,000 spores," said the organisation's director Rob Clayton.

"They can blow around in the wind and in warm, wet conditions they can infect neighbouring plants, neighbouring allotments and the whole neighbourhood."

Rob Clayton says some gardeners are not spotting the signs

The muggy, damp conditions of this summer have been the perfect breeding ground for the fungal infection.

Susanna Colaco has had an allotment in Cambridge since 1986. She has never known a year like it for blight. But she is angry that the finger is being pointed at growers like her.

"I think allotment holders are very responsible.

"On this site we purchase certified seed stock from our allotment trading hut and we are very careful that at the first sign of blight we inform all the members on site and ask them to remove foliage and to be vigilant."

That foliage must then be burnt, deeply buried or binned. It can even go in the council's compost bin as the contents are heated to a high temperature.

But infected leaves or rotten potatoes must never be put on the compost heap.

Gardener Susanna Colaco says allotment holders are very responsible

"If somebody throws a rotten potato on a compost heap at this time of year it can sprout ... and it can kick off a whole cycle of infection from next year on," said Mr Clayton.

Late blight, as it is known, or phytophthora infestans, is the type which destroyed vital potato crops in Ireland in the mid-19th century causing the Great Famine. A million people died.

Farmers expect to lose around 7% of their crop to blight, but this year the loss is predicted to be more like 10%.

And the usual £55m cost of coping with the fungal infection is likely to increase to around £80m.

Potatoes are already 11% more expensive than they were this time last year and the price is expected to rise significantly higher as the impact of the increased farming costs filter through to the shops and markets.

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