BA Owner Faces Strike Threat Over Job Cuts

Staff at Spanish airline Iberia have rejected a restructuring plan that involves 4,500 job cuts and are willing to strike, labour unions said.

The threat of industrial action comes after IAG - the company formed by merging BA and Iberia - revealed an operating profit of just £13.5m in the nine months to September 30.

In addition to cutting nearly a quarter of the workforce, IAG has proposed a staff salary cut of 25-35% for three years.

"We are willing to take any necessary action," the airline unions said in a statement.

The results show Iberia is the weak link in the group, making a standalone operating loss of £209m in the period, while BA contributed operating profits of £228m.

On a pre-tax basis, taking wider cost pressures into account, the group made a loss of £134m in the nine months.

IAG shares have shed 40% of their value since the group's formation in 2011.

Iberia is Europe's leading carrier to Latin America, but it has been battling against increased competition from low-cost airlines and high-speed trains, labour disputes and Spain's deep economic crisis.

It is bleeding cash as revenues fail to cover its high operating costs, with a 15% spike in fuel costs.

"Iberia is in a fight for survival and we will transform it to reduce its cost base so it can grow profitably in the future," IAG chief executive Willie Walsh said in a statement.

Mr Walsh is no stranger to battles with trade unions and took on employees of BA over reforms when he was boss of the UK flag carrier.

He has also been a vocal critic of the British Government's aviation policy and said it was a "disgrace".

A BA aircrew strike in 2010 cost the airline up to £7m per day, but Mr Walsh used contract pilots and retrained ground staff on planes.

Mr Walsh stood firm on an airline's decision to withdraw travel perks from striking cabin crew, but staff called the ploy "bullying tactics".

Mr Walsh rejected suggestions the withdrawal of concessions was a "punishment" or an attempt to "break the union".

He added: "We told them about the consequences if they went on strike."

IAG's transformation plan for Iberia includes the fleet being downsized by 25 aircraft and routes cut by 15% in 2013, to concentrate on longer haul, profitable destinations.

Iberia head Rafael Sanchez-Lozano said: "It is unprofitable in all its markets. We have to take tough decisions now to save the company and return it to profitability.

"Unless we take radical action to introduce permanent structural change the future for the airline is bleak."

Whilst the possibility of strikes by Iberia staff now loom, passengers booked from Heathrow to Madrid should feel secure, Business Travel News editor-in-chief Malcolm Ginsberg.

"Previously Iberia operated out of Terminal 3 at Heathrow but have now joined sister carrier British Airways in Terminal 5," he told Sky News.

"From a practical point of view if an Iberia flight is cancelled at short notice it should be relatively easy to transfer to British Airways - providing they have space."

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Treasury Gets £35bn Windfall From QE Interest

The Treasury is to receive a £35bn boost as part of a deal with the Bank of England that will effectively reduce public debt.

Chancellor George Osborne and Bank Governor Sir Mervyn King have agreed that the BoE will give the Treasury interest earned through its £375bn economy-boosting programme known as quantitative easing (QE).

The cash - currently on the BoE's books - will flatter the public accounts by reducing the budget deficit, while also acting as a "small loosening of monetary conditions" equivalent to taking more QE action, according to the Bank.

The announcement comes a day after it decided not to extend QE at its monthly policy-setting meeting.

The Treasury said the agreement was in line with similar practices surrounding QE in the United States and Japan.

In a letter to Mr Osborne, Sir Mervyn stressed the cash transferred to the Government would likely need to be paid back to the Bank in the future.

The move comes at an apt time for Mr Osborne as he faces pressure on his plans to cut borrowing.

But JP Morgan Chase economist Malcolm Barr said it was "still likely" that the Chancellor will need to push back debt reduction targets in his upcoming autumn statement.

Shadow chief secretary to the Treasury Rachel Reeves said it was a "smoke and mirrors" deal.

"Instead of changing course and taking action to create the jobs and growth we need to get the deficit down. The Chancellor seems to think he can just be bailed out in the short term by money from the Bank of England," she added.

Under the arrangement, £11bn is expected to be handed to the Treasury this year, with the remaining £24bn paid in four instalments over the next financial year.

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Olympic Stadium: Dismay Over Delayed Future

By Enda Brady, Sky News Correspondent

Olympic and Paralympic champions have voiced their dismay at news that the stadium may not open fully until the summer of 2016.

Four bids are still being considered as full-time tenants at the Stratford venue, but each bid will require significant and time-consuming modifications.

Dennis Hone, chief executive of the London Legacy Development Committee, revealed this week that it will not re-open until August 2015 at the earliest and probably not before August 2016.

Olympic champion Jessica Ennis told Sky News it was important the stadium was opened to the public without delay.

She said: "I've some amazing memories of the stadium, like a lot of other athletes.

"I'd love to see it opened to the public as soon as possible."

Leyton Orient FC are among four bidders to use the stadium in Stratford

Paralympic double gold medallist Hannah Cockroft said it was vital to speed up the process so that the goodwill generated by the success of London 2012 could be tapped into.

"The danger is that if it's not opened fully to the public for four years then that interest will wane," she said.

"It's an amazing venue and people want to see it, they want to be a part of it. I really hope they sort this out, they have to."

A transformation project costing nearly £300m is currently under way at the site and is expected to last up to 18 months.

The park itself will be opened to the public on July 27 next year, one year to the day the Games opened in London.

Maria Miller, Secretary of State for Culture, Media and Sport, told Sky News: "The stadium is vital for the legacy of the Games, but the important thing is to get the right tenant in."

The four bidders are West Ham United FC, Leyton Orient FC, a Formula One venture and the University College of Football Business - an academic institution owned and run by Burnley FC.

A final decision is expected in the first half of 2013, or possibly sooner.

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Fuel Duty: Osborne Faces Call To Delay Hike

Chancellor George Osborne is being challenged to use money saved from closing tax loopholes to fund a delay in next year's planned fuel duty hike.

Labour is pushing for the planned 3p hike to be postponed for a second time and will force a Commons vote next week.

The move will increase the pressure on Mr Osborne to take action on fuel in his Autumn Statement next month.

The Chancellor has already postponed the hike once but it is due to come into force in January. Labour wants a further delay to at least April.

Shadow chancellor Ed Balls insists "it cannot be right" to hit struggling families and businesses with another tax rise.

Ed Balls wants George Osborne to delay the hike

In a blog for PoliticsHome, he wrote: "I am clear that now is not the right time to hit the economy with another tax rise on small firms and people on low and middle incomes.

"The Government needs to act and clamp down on those avoiding paying their fair share of tax so that millions don't have to pay more.

"And I hope MPs from other parties will join us next week in pushing them to do so."

He suggested the money could come from clamping down on tax avoidance, citing one example of employment agencies using a loophole to lower their liability.

Mr Balls said they categorised part of a worker's pay as expenses, which means they pay less tax and national insurance and have higher profit margins.

"HM Revenue and Customs has forecast that these schemes cost the exchequer £650m a year. Recent estimates have now put it as high as £1bn a year," he wrote.

Scrapping the rise in August cost the Treasury £500m and it is estimated the further delay will cost another £350m.

However, campaigners from FairFuelUK claim allowing it to go ahead in January could lead to 35,000 job losses and hit economic growth.

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BA Owner IAG Hit By Iberia Performance

IAG - the company formed by merging BA and Iberia - has made an operating profit of just £13.5m in the nine months to September 30.

The results show Iberia is the weak link in the group, making a standalone operating loss of £209m in the period, while BA contributed operating profits of £228m.

On a pre-tax basis, taking wider cost pressures into account, the group made a loss of £134m in the nine months.

IAG has announced a transformation plan for Iberia, which will result in 4,500 job losses at Iberia.

Iberia's fleet is being downsized by 25 aircraft and its routes are being cut by 15% in 2013, to concentrate on those which are most profitable.

"Iberia is in (a) fight for survival," the carrier's chief executive Rafael Sanchez-Lozano said in a statement.

"It is unprofitable in all its markets. We have to take tough decisions now to save the company and return it to profitability.

"Unless we take radical action to introduce permanent structural change the future for the airline is bleak."

Mr Sanchez-Lozano added: "However this plan gives us a platform to turn the business around and grow."

The group reported a 9% increase in passenger numbers and a 15% hike in fuel costs, as more job losses look likely at the Spanish airline.

Mr Sanchez-Lozano said "the Spanish and European economic crisis has impacted on Iberia, but its problems are systemic and pre-date the country's current difficulties."

IAG said it was announcing "a comprehensive plan to save Iberia after record losses and return it to profitability."

The parent group's said plans to cut 4,500 jobs are designed to safeguard around 15,500 posts across the airline.

IAG added that a deadline of January 31, 2013, had been set to reach agreement with unions over the cuts.

The group warned: "If agreement is not reached, deeper cuts and a more radical reduction in the size and scale of Iberia's operations will take place to secure the natural long haul traffic flows at Madrid and safeguard the company's future."

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HSBC Offshore Account Holders Investigated

HM Revenue and Customs (HMRC) has said it is studying a list of British HSBC customers in Jersey after a whistleblower handed over a list of names, addresses and account balances.

The department will now investigate the customers' details to establish whether any of them used the offshore accounts to evade tax.

Together, the 4,388 UK-based customers have a total of £699m in the bank accounts - which were often undisclosed to tax authorities, the Daily Telegraph claimed.

It said a number of criminals, former bankers, doctors, mining and oil workers, celebrities and other well-known figures are on the list.

"We can confirm we have received the data and we are studying it," HMRC said in a statement.

"We receive information from a very wide range of sources which we use to ensure the tax rules are being respected.

"Clamping down on those who try to cheat the system through evading taxes and overclaiming benefits is a top priority for us and we value the information we receive from the public and business community."

HSBC, the UK's largest bank, said: "We are investigating the reports of an alleged loss of certain client data in Jersey as a matter of urgency.

"We have not been notified of any investigation in relation to this matter by HMRC or any other authority but, should we receive notification, we will cooperate fully with the authorities.

"HSBC remains fully committed to adoption of the highest global standards including the procedures for the acceptance of clients."

The report comes after the bank set aside a further $800m (£500m) to cover settlements for breaching anti-money-laundering rules, as revealed by Sky News' City Editor.

The move takes its total bill to around $1.5bn (£935m) to cover fines from US authorities, which are investigating the bank's procedures in Mexico.

Tax authorities around the world are in the process of clamping down on people who evade taxes by putting their money offshore.

Last week a Greek magazine published the details of more than 2,000 HSBC clients with Swiss accounts.

The information came from a list distributed to European authorities in 2010 by Christine Lagarde, then France's finance minister, after a whistleblower in Geneva sold the details.

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Supermarkets Cut Petrol Prices By Another 2p

Three supermarket chains have cut their petrol prices again, reducing the cost of fuel by 2p at pumps across the nation.

Asda was the first to announce the discount, which follows similar reductions towards the end of last month.

It will now charge 137.7p for a litre of diesel and 131.7p for unleaded petrol on its forecourts.

Sainsbury's and Tesco followed suit, saying they would also slash 2p off their prices.

Welcoming the move, the president of roadside recovery group AA, Edmund King, said: "Once again the supermarkets have led the way on fuel price reductions.

"We have said there is scope for price cuts given wholesale price falls and welcome the move and hope all the other retailers follow."

He said that many people are cutting back on the number of car journeys they make because of the high cost of fuel.

"This reduction will go a little way towards helping families and businesses keep mobile," he added.

Asda's petrol trading director, Andy Peake, said his company was "leading the way" in reducing the price at the pump.

"Unlike other retailers, our price cuts benefit everyone across the country, meaning that no one filling up at Asda will be forced to play a postcode lottery," he said.

A Tesco spokesman said: "As Britain's biggest petrol retailer with 490 forecourts, more motorists will make savings at the pumps at Tesco than at any other fuel retailer."

And Sainsbury's head of fuel, Richard Crampton, said: "With Christmas on the horizon, we know that this can be an expensive time of year so we're delighted to announce that we will be lowering our petrol and diesel prices."

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World Stock Markets Fall After Obama Victory

Four More Years: A City Expert's View

Updated: 6:25am UK, Thursday 08 November 2012

By David Buik, Cantor Index

There is a considerable school of thought that Barack Obama was rather an insipid and ineffectual Commander-in-Chief and that his first term achieved very little.

Maybe it would be no bad thing to reflect on what did happen in the US and the world at large over the past 4 years and what he did achieve in his first four years as well as what he abjectly failed to do.

As they say in the trade, President Obama inherited a horrific 'hospital pass' from George W Bush in the form of a savaged economy, which was heading vertically in to a vortex of deep recession courtesy of the sub-prime lending crisis, which took the US financial sector to the brink of disaster, triggering 'bail-outs' orchestrated by Hank Paulson, Bush's Treasury Secretary, for Bear Stearns, AIG, Freddie Mac and Fannie Mae, but NOT Lehman, which clearly exacerbated the magnitude of the crisis.

This financial meltdown manifested itself thanks to the breathtaking and irrationally exuberant incompetence of the FED Chairman Alan Greenspan, who recklessly encouraged banks to lend money indiscriminately without adequate regulation.

Consequently, shortly into his Presidency, Obama was forced to agree a recommended $789bn 'bail-out support fund' for the financial sector, implemented by the new FED Chairman Ben Bernanke.  This rescue act was the start of quantitative easing.  At the end of November 2008 the DOW had dropped to 8829. Once QE had been introduced it rallied sharply and today it stands at circa 13000 – up 47%.

QE provided financial institutions with cheap money which underwrote the value of equities.  However there is no doubt that Wall Street was not the flavour of the month for the man in the street – never has been; never will be!

Unfortunately equity markets are not necessarily a reliable barometer of economic activity.  Unemployment was at 7.9% in November 2008 and steadily rose to 10% by October 2009.  Since then it has slowly, but not resolutely fallen back to 7.9%.

The $50bn auto industry bail-out in 2009 probably saved 150,000 jobs and also certainly stopped the President losing the support of Ohio. However unemployment remains a huge problem and the rate of 7.9% is probably distorted as so many people have stopped applying for jobs in dismay.  So the real rate is probably nearer 13%.  Then of course there is the housing market, which is slowly improving from a completely trashed base level, though many people remain under water with negative equity.

President Obama has some way to go before he implements his healthcare/Obamacare and pension ideals against virulent opposition from the GOP in Congress.

Easily the most worrying aspect of the US economy is the manner the budget deficit has grown since 2008 – from $9 trillion to $16 trillion.

In the long-term this is totally unacceptable, particularly as the US is so reliant on outside support for Treasuries, particularly from China. If this support were to be withdrawn or even cut, it could have a very adverse effect on the cost of funding for the US, thus severely damaging the recovery process as well as increasing unemployment dramatically.

Very important changes are shortly being made in China's government.  It will not be long before China overtakes the US as the most important economy in the world.  President Obama will need to improve his relationship with China, cutting back on the jingoistic rhetoric on currency and trade protection. He should try negotiating!

President Obama has proved to be an extremely abrasive and divisive politician.  The Democrats lost their majority in Congress on 2010 and Obama failed to find any common ground with the Republicans, which resulted in the government failing to get through its legislative programme. I cannot see that impasse changing.

The 'fiscal cliff' will appear over the horizon at the end of December.  Common ground has to be found over public expenditure cuts and taxation increases need to be agreed.  The President's interpersonal skills for dealing with his opponents need sharpening up. If not - There will be trouble in River City!" The President was very lucky to be up against a Republican candidate, who never really caught the public's imagination.  He has a chance to redeem himself!

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Morrisons' Sales Fall Ahead Of Xmas Battle

Morrisons supermarket chain says customer confidence remains "fragile" as it reports a fall in underlying sales.

The UK's fourth largest grocer said sales at stores open for over a year, excluding fuel, fell 2.1% in the first three quarters of this year.

It compares with a fall of 0.9% in the first half, and total sales, excluding fuel, were down 0.4%.

"With consumer confidence still fragile and high levels of promotional activity a persistent feature of the market, the trading environment has remained challenging through the period and sales were lower than anticipated," the chain said in a statement.

It added that it expects the environment to "remain challenging" over the rest of the year, but that its financial performance will be in line with expectations.

Industry data released by Kantar Worldpanel showed Morrisons, which has 450 stores, lagging behind its three big rivals: Tesco, Sainsbury's and Asda.

The figures also show it missing out on the sales growth seen by smaller chains, including discounters Aldi and Lidl.

It means competition this Christmas - when supermarkets battle to cash in on the festive spending rush - will be tougher than ever.

In response, Morrisons promised customers they could buy their Christmas lunch groceries for £2.49 per head as part of its "Dreaming Of A Tight Christmas" campaign. 

Retail analysts Conlumino said the supermarket needed "short term remedies" to help quash its loss of market share to rivals.

"A resurgent Tesco is discounting and vouchering extensively, the deep discounters continue to gain ground and Asda is pushing its 'everyday low price' message harder than ever," senior consultant Joseph Robinson said. 

"Against this backdrop Morrisons – whose customers remain more price sensitive than average – has simply lost ground and lost footfall and spend to other players."

He added: "The key challenge going forward will be to balance longer term aspirations and strategies with shorter term tactics to drive footfall and spend."

Following the news, Morrisons' share fell over 1%, while rival Tesco's were up over 1.6% making it the biggest riser on the FTSE 100 in early trading. 

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Pay Gap In Reverse As Women Work 'For Free'

The gender pay gap is so large that women will effectively work the rest of the year for free, it is claimed.

A study by the campaign group Fawcett Society suggests that, rather than improving, the pay and jobs prospects of women are going into reverse amid the Government's austerity measures.

Chief executive Ceri Goddard said: "At the same time, women's unemployment stands at a 24-year high and growing numbers of women have been forced into low paid, part-time and insecure  employment - underemployment.

"Far from slowly moving forward, we now face going into reverse. If Government wants to avoid an unprecedented backwards step on its watch, they must take more action."

The conclusions were released as separate research for the Chartered Management Institute (CMI) found that the average female company executive earns more than £400,000 less than a male counterpart over her career.

According to the Institute, the average gender pay gap for UK executives is more than £10,000 annually.

It also claimed that women receive less than half the bonus payments given to men and 4.3% of female executives were made redundant in the past year, 1.1 percentage points more than male bosses.

It found that while women now make up 57% of company executives only 40% are departmental heads and fewer than one in four are chief executives.

The survey of more than 38,000 executives revealed a "substantial" gender pay gap at the higher end of the executive career ladder, the Institute said.

"A lot of businesses have been focused on getting more women on boards but we've still got a lot to do on equal pay and equal representation in top executive roles," said CMI chief executive Ann Francke.

"Women make up almost three out of four at the bottom of the ladder but only one out of four at the top."

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Rail Bid Shambles: FirstGroup Holds Dividend

The flawed bid process at the Department for Transport (DfT) which cost FirstGroup (FG) the West Coast Mainline rail franchise will also hit the company's shareholders.

In its first half results announcement FG confirmed it was holding dividend payments at last year's level as a result of the uncertainty sprung on the group by the Government's decision to suspend all franchise competitions while it investigates the botched process.

The bus and rail operator said its underlying pre-tax profits for the period fell 42.4% to £48.7m - largely due to the absence of a one-off exceptional gain made this time last year on its UK Bus pension scheme.

Revenues rose 2.6% to £3.25bn but it was the decision to freeze dividends to shareholders at 7.62p per share that caught the eye among the figures.

The Government tore up a deal last month to award the West Coast contract to FirstGroup in a humiliating U-turn that led top three civil servants being suspended.

Ministers froze the award of other rail franchise competitions after the Department for Transport (DfT) said that "completely unacceptable" flaws had been uncovered in its handling of bids.

The decision was taken after Virgin Trains, the current operator, threatened court action after losing out in the bidding process.

Its founder Sir Richard Branson had labelled the award to FirstGroup "preposterous", claiming it would have threatened FirstGroup's financial future.

Virgin is continuing to run the London to Scotland route for a further nine months while the DfT plans a competition for an interim agreement.

Shares in FirstGroup have fallen more than 40% in 2012 - down 4% in early trading on Wednesday.

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Burberry's Profit Falls After Perfume Hit

Burberry reports a fall of almost 30% in profit in the first half of this year, but its revenue beat expectations despite a slowdown in demand from Asia.

It said pre-tax profit over the six months to the end September was £112m - which includes one-off items worth £61m - compared with £159m for the same period in 2011.  

But the luxury fashion brand's underlying business, if the one-exceptional charges are stripped out, performed better than expected, with pre-tax profit up 6% at £173m.

Last month the luxury fashion firm reassured investors that sales had steadied towards the end of its second quarter after issuing a shock profit warning in September.

Burberry's first-half revenue was up 6% to £883m, but growth slowed to 5% in the second quarter, compared with 11% in the first.

Its retail revenue also grew - up 9% to £577m - despite what chief executive Angela Ahrendts described as a "challenging external environment".

The exception items included a one-off charge related to the termination of a fragrance and beauty licence deal, as Burberry plans to bring its perfume business in-house. 

Ms Ahrendts said this marked a "significant brand and business opportunities".

"Our global teams are excited to partner with long-standing distributors, suppliers and customers to optimise these under-penetrated categories," she said.

"One consistent brand expression, leveraged across all categories, will underpin future growth in the beauty division and our existing core business."

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BRC: Retail Sales Fall Ahead Of Christmas Rush

Retail sales have grown at their slowest pace for almost a year as shoppers stick to buying only essential items, according to new research.

Like-for-like sales were down 0.1% in October, compared with the same period last year, a study by the British Retail Consortium (BRC) and professional services group KPMG showed.

Meanwhile, total sales were up 1.1%, against a 1.5% rise the year before - the slowest growth in total sales, excluding Easter, since November 2011.

It follows a surprise hike in September when like-for-like sales were up 1.5% and total sales were up 3.4%, which the BRC's director general described a "something of a false dawn".

"October's poor performance wasn't a one off," Stephen Robertson said.

"Year-to-date average growth hasn't outpaced inflation meaning overall sales volumes going backwards."

October's online sales were especially poor, he said, adding that the last three months include the two weakest growth rates recorded in four years.

"Falling consumer confidence means people are limiting spending to essential items and are cautious about committing to big-ticket and discretionary buying," he said.

"This underwhelming showing means there's all to play for as Christmas approaches."

KPMG's head of retail, David McCorquodale, said that although official figures last month showed the UK was out of recession, consumer confidence has not yet bounced back.

"Retailers are holding less stock than a year ago and may choose to be cautious with pre-Christmas sales in order to protect margins," he added

"However, the disappointing sales figures for October indicate that winning share of the Christmas wallet will be just as competitive over the next two months as it was last year."

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Marks And Spencer Reports Fall In Profit

Marks and Spencer has reported a fall in underlying pre-tax profit to £297m for the first half of this year.

The chain blamed pressure on consumers' disposable incomes and volatile trading conditions - hit by bad weather - for the figure, which compares with £307m profit over the same period last year.  

But sales across the 128-year-old group were up 0.9% at £4.7bn driven by strong performance in its food division and internationally.

In its UK stores, however, sales were flat in the second quarter, with a 1.6% rise in food partially offsetting a 1.8% fall in general merchandise sales. 

It follows a 6.8% slump in general merchandise sales in the first quarter as a result of the wet summer weather and problems with stock availability, which left stores short of bestselling womenswear lines.

The group's chief executive, Marc Bolland, told Sky News: "We have repaired our womenswear position strongly over the second quarter.

"The issues we had were with merchandising and stock, we're now bucking the trends."

He added: "The first quarter was a difficult quarter as we explained three months ago, the second quarter has improved quite strongly."

Marks and Spencer, which has 730 stores in the UK and 390 overseas, said it was "well set up" for its busiest time of the year.

"As we approach the all-important Christmas period, we have better than ever Christmas products, to help our customers enjoy a special Christmas at home," Mr Bolland said.

Primark has been one of the high street's best performing stores

Eighteen months ago, Marks and Spencer launched a plan to transform itself into an "international multi-channel retailer" by boosting its website and making it easier to buy products on smartphones and tablets. 

Mr Bolland said this strategy was making "strong progress", with growth across its multi-channel business.

Retail analysts Conlumino described the results as a "mixed bag".

"While the overall half year numbers look anaemic, there has been a material uplift in fortunes since the first quarter," managing director Neil Saunders said, adding that it is too early to say whether the group is on the path to sustainable growth.

"M&S has still underperformed the market in fashion and growth in general merchandise remains elusive on a like-for-like basis.

"All of this points to the fact that M&S still has plenty of issues to resolve and there is still much work to be done."

The results came as Associated British Foods revealed that revenue across its 230 Primark stores had grown by 17%.

The clothes retailer has been one of the best performing stores on the high streets in the UK, Ireland and Spain because of its low prices and quick adoption of fashion trends.

The group, which also includes Twinings, Silver Spoon and Ryvita among other brands, reported a 17% rise in full-year profit.

Following "exceptional performance", the company said its adjusted pre-tax profit was £974m and revenue was up 11% to £12.3bn.

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Two Day Greek General Strike Before Austerity Vote

A two-day General Strike is underway in Greece as Parliament prepares to vote on a new round of austerity measures which unions argue will devastate the poor and drive a failing economy to collapse.

Thousands are expected to join a march in Athens in protest at the 18.5 billion euros (£14.8bn) of proposed cuts, which include a rise in the retirement age to 67 as well as pensions being slashed by up to 15% for workers whose pots are worth more than 1,000 euros (£800) per month.

The effects of the strike - organised by the country's two main unions - are being felt internationally, with scores of flights cancelled as air traffic controllers join the walkout.

Public bus workers in the capital joined taxi drivers as well as metro, tram and train workers in walking out, paralysing traffic in the capital.

Ferry lines were also crippled, as ships linking to Greece's islands remained docked.

The government argues that the strikes only make the country's dire economic situation more perilous.

It needs the austerity bill to pass to pass through Parliament to secure crucial international aid totalling 31.5 billion euros (£25bn) and prevent the debt-laden nation from potentially defaulting later this month.

According to EU Economic and Monetary Affairs Commissioner Olli Rehn, the international lenders and Greece are on track to reach a deal to unfreeze the next tranche of loans at a meeting of euro zone finance ministers on November 12.

The EU, European Commission and International Monetary Fund demanded more savings in return for further financial support.

The austerity package, which was put to Parliament late on Monday, would also include salary cuts for academics, hospital doctors, judges, diplomats and members of the armed forces.

Greek MPs are due to hold an emergency vote on Wednesday with opposition critics saying the measures will only deepen the country's five year recession.

But some Greeks have noted that there may not be a better solution.

Yannis Levas, who works in a recruitment company aimed at finding jobs for Greeks abroad, called the measures "a double-edged sword. "On the one side they must not go through, on the other they must. There is always that dilemma if we will return or not to the drachma," he said.

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Delicate Diplomacy On Cameron Gulf Arms Tour

David Cameron is attempting to cement major UK arms sales and bolster relations with allies on a three-day tour of the Gulf and Middle East.

The Prime Minister will personally spearhead a push to persuade the United Arab Emirates to buy 60 of BAE's Typhoon jets over French rivals in a deal reported to be worth upwards of £3bn.

On Tuesday, he will travel to Saudi Arabia - Britain's biggest trading partner in the region - which is also considering adding to its fleet of aircraft.

Downing Street said the visit - Mr Cameron's second to each country as premier - was part of a wider effort to build a "reinvigorated partnership" between Britain and the region's leaders.

Reinforced military ties are seen as crucial amid continued fears over Iran's nuclear ambitions and the threat Tehran could seek to badly disrupt oil supplies by blocking the Straits of Hormuz.

Mr Cameron has first flown to a military airbase near Dubai, where a number of RAF Typhoons, are stationed to promote the aircraft to military and political figures from the UAE.

He will also hold talks with the Crown Prince of Abu Dhabi and Prime Minister of the UAE on the potential for a joint work on the next generation of military aerospace equipment.

David Cameron having breakfast with troops in Dubai

The Government hopes to secure deals for 100 Typhoons to be sold to the region in the coming year - worth at least £6bn to British firms.

Mr Cameron faces a tough balancing act, however, as he attempts to secure billions in investment from the oil-rich states while addressing concerns about the human rights records of their regimes.

The Arab Spring has led to an increased focus on largely autocratic rule in many states, including crackdowns on pro-democracy and other protest movements.

The Government has been criticised for failing to condemn abuses and accused of continuing to sell military equipment with insufficient guarantees it would not be used in repression.

But Saudi officials reacted angrily to an "insulting" inquiry into it by the Commons foreign affairs committee, warning it would be "re-evaluating" relations.

"We want to work together with the Gulf countries towards a future that is rich in prosperity, strong in defence and open in its handling and pursuit of political and economic reform," Downing Street said ahead of the visit.

On Wednesday, Mr Cameron will make a short visit to the Middle East before flying home for talks with German Chancellor Angela Merkel at Downing Street ahead of the crunch EU budget summit.

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Ryanair Sees Profit Soar 10% In First Half

Ryanair has reported an after-tax profit of 596m euros (£477m) for the first half of 2012, up 10% on the same period last year.

The budget airline's results beat analysts' expectations thanks to a surge in passenger numbers over the summer and a lower fuel bill. 

It said traffic was up 7% - 48m passengers flew with Ryanair over the period - and fuel costs were lower than forecast because of a saving programme.

The Dubin-based company, known for its low cost tickets, added that average fares were up, helping to boost revenue by 15% to 3.1bn euros (£2.48bn).

Chief executive Michael O'Leary said: "Profits exceeded our expectations driven by a combination of strong summer bookings, particularly post the Olympics, a 6% rise in average fares, and lower than forecast fuel bill due to the successful implementation of our fuel savings programme."

Ryanair, which accounts for around 12% of all European short-haul flights, said business in the region "remains tough" because recessions, Government cuts, high fuel costs and taxes.

But it said continues to see growth opportunities in Europe, following the collapse of a number of rival airlines. 

Mr O'Leary , who has discussed launching long-haul flights for years, said they were still "two or three years away yet".

"It's unlikely you'll see a Ryanair transatlantic (flight) for the next three or four years," he told Sky News. 

Last month, the company said it would not be bidding for London's Stansted airport, after the airport's owner BAA excluded it from the process.

It is waiting to hear whether European Union (EU) antitrust regulators will approve its takeover of Aer Lingus.

In a recent update on its bid, Ryanair said it had offered concessions to the regulators in an attempt to secure regulatory clearance.

It has a deadline of February 6 for its decision on the 700m euro (£560m) deal.

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HSBC Sees 52% Profit Drop For Third Quarter

HSBC has announced a 52% fall in third quarter profit, as the bank taking further hits on US anti-laundering fines and mis-selling insurance in the UK.

It confirmed setting aside another $800m (£500m) to cover fines from US authorities, taking the total bill to $1.5bn (£937m).

Sky City Editor Mark Kleinman exclusively reported the £500m hit over laundering fines on Sunday.

More follows...

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RBS Confirms £1.2bn Loss After PPI Hit

RBS has confirmed it made a loss before tax of £1.2bn in the third quarter, compared with a profit of £2bn for the same period last year.

As revealed by Sky's City Editor, the bank has set aside a further £400m for the mis-selling of payment protection insurance, meaning the scandal has cost it £1.7bn to date.

This provision took the total compensation bill for Britain's four largest lenders past the £10bn mark.

The 82% taxpayer-owned bank also said it had taken a further hit of £50m to cover costs relating to the summer's massive IT failure - which saw many RBS, NatWest and Ulster Bank customers locked out of their accounts.

It takes its bill for the meltdown to £175m.

The bank also expects to face "material fines" in relation to how Libor and other interest rates were set, it added.

RBS is under investigation by US and UK authorities over the rate-rigging scandal and is expected to be one of the next banks to settle after Barclays was fined £290m in June.

"The group expects to enter into negotiations to settle some of these investigations in the near term and believes the probable outcome is that it will incur financial penalties," RBS said.

It added that it had dismissed "a number of employees for misconduct" after investigations into rate setting.

But the group's core banking operations - if the mis-selling and IT charges are stripped out - performed well, with operating profit for the three months reaching £1bn.

A decline in charges on bad debt helped boost performance at the bank, which said its restructuring would be complete in the next 18 months.

As part of this plan, the number of employees was down by 9,900 from a year earlier, resulting in a 5% fall in staff costs compared to the previous quarter.

The bank described the collapse of the sale of 316 branches to Santander as "disappointing".

As a condition of RBS' state bailout, the European Union ordered it to offload the branches by the end of next year. RBS said it did not expect this to change and so had restarted efforts to sell them.

The group's chief executive, Stephen Hester, said it now needed to focus on improving its reputation.

"The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully," he said in a statement.

"The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank's safety and soundness has advanced so well."

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Car Insurance Cost Fall 'Will Not Last'

Car insurance premiums are said to have gone into reverse gear by £360 (13.6%) for young drivers - but there are concerns costs could rise dramatically after next month's EU gender ruling.

Insurance comparison site Confused.com has advised 17 to 20-year-old drivers to take advantage of "today's preferential rates" but warned them to avoid 2013's predicted price hikes by "shopping around".

Average comprehensive car insurance prices now stand at £757 as of this year's third quarter, compared to £843 for last year's third quarter - a significant year-on-year fall of £87 (10.3%).

Car insurance prices actually fell for all age groups, particularly young female drivers, but predictions from the Treasury indicate that young female drivers could see rises of up to 24% after the EU gender ruling becomes law on December 12.

After this date women and men cannot be priced differently for insurance meaning women will no longer directly benefit from being statistically less risky drivers as far as insurers are concerned.

This predicted insurance price rise could affect female drivers throughout various age groups, according to the Treasury data.

Sharon Flaherty, editor of Confused.com, told Sky News: "At the moment women pay less than men and statistically this is because on average they are less of a risk on the roads than young male drivers.

"However the bad news is that on December 21 the law change will mean that men and women have to be judged as exactly the same on the roads.

"Women will effectively be charged more because statistically they will no longer be allowed to be rated as safer on the roads."

Women aged 26-30 years are forecast an 18% price hike once the gender directive takes effect. Female drivers aged 31-35 are expected to suffer a 10% price rise.

Smaller price rises are expected for women aged 36-40 who are predicted to experience a 3% rise, and 41 to 45-year-old female drivers are only expected to receive a 1% price rise for their future car insurance policies.

Women on average saw their premiums shrink by 11.7% over all in the third quarter.

For spouses of either gender the average premium cost for a joint insurance policy is a lot less than average costs for solo drivers.

Male drivers insured plus spouse are quoted on average £432, compared to £907 as insured only driver, for women it costs an average of £787 for insured only driver cover, but just £418 for women who have a spouse on their policy.

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Comet Collapse: Gift Vouchers Suspended

Gift vouchers for stricken electrical retailer Comet have been suspended, the chain's administrator has confirmed.

Deloitte, which was appointed on Friday, has launched an "urgent" search for a buyer to protect some 6,600 jobs at the 236-outlet chain.

But, as a consequence, of administration gift vouchers have been suspended even though all Comet stores remain open and the group's staff will continue to be paid.

A spokesman for Deloitte said: "We are assessing the position with regard to gift vouchers, to establish whether it is possible for the company to accept them in future.

"But in the meantime stores have been instructed not to accept payment by means other than credit card or cash.

"If ultimately it is not possible for customers to redeem gift cards at Comet, then they will have an unsecured claim against the company, and the administrators will be pleased to provide the appropriate forms for customers to make such a claim if and when that eventuality arises."

The collapse of Comet marks one of the biggest high street casualties since the demise of Woolworths in 2008 and comes a month after the failure of JJB Sports.

Neville Kahn, joint administrator and restructuring services partner at Deloitte, said on appointment: "Our immediate priorities are to stabilise the business, fully assess its financial position, and begin an urgent process to seek a suitable buyer which would also preserve jobs.

"We appreciate the co-operation and support from the management, staff, customers, landlords and suppliers at what is clearly a very difficult time."

Deloitte said Comet had been hit by weak high street trading conditions, competition from online rivals and being unable to secure the trade credit insurance needed to safeguard suppliers.

"The inability to obtain supplier credit for the peak Christmas trading period means that the company had no realistic prospect of raising further capital to build up sufficient stock to allow it to continue trading," Deloitte added.

In particular, it was knocked by the lack of first-time home buyers, which had been key customers for Comet.

Its administration comes just months after Comet was taken over by investment firm OpCapita, which bought the chain in February.

The UK's high street electrical market has come under huge pressure as cash-strapped shoppers put off purchases of big-ticket items such as TVs and large appliances, as online rivals take a bigger slice of the sector.

The spokesman said extended warranties previously purchased remain unaffected by the administration and remain valid.

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