Cameron's Speech Rebuked By Fiscal Watchdog

David Cameron has been rebuked by the Office for Budget Responsibility about the impact of his Government's austerity measures on economic growth.

In a high-profile speech on Thursday, the Prime Minister said the OBR was "absolutely clear that the deficit reduction plan is not responsible" for depressed growth, adding "in fact, quite the opposite".

But the head of the independent fiscal watchdog has written to Mr Cameron saying he misrepresented its position.

Chairman Robert Chote wrote to Number 10, disputing the claims.

He insisted that it believed there was a short-term effect and that "fiscal consolidation measures have reduced economic growth over the past couple of years".

The strong retort from the watchdog came in response to a passage from the Prime Minister's speech which he used to insist there was "no alternative" to the Government's strategy.

"There's not some choice between dealing with our debts and planning for growth," he said.

"As the independent Office for Budget Responsibility has made clear growth has been depressed by the financial crisis, the problems in the eurozone and a 60% rise in oil prices between August 2010 and April 2011.

"They are absolutely clear that the deficit reduction plan is not responsible. In fact, quite the opposite."

But the OBR published a letter sent to Number 10 on Friday by Mr Chote in which he took exception to the claims.

"For the avoidance of doubt, I think it is important to point out that every forecast published by the OBR since the June 2010 Budget has incorporated the widely-held assumption that tax increases and spending cuts reduce economic growth in the short term."

He added that an impact of "external inflation shocks, deteriorating export markets and financial sector and eurozone difficulties were more likely explanations" than incorrect multipliers for the reason growth was even weaker that initially forecast.

A Downing Street spokesman said: "The OBR has today again highlighted external inflation shocks, the eurozone and financial sector difficulties as the reasons why their forecasts have come in lower than expected.

"That is precisely the point the Prime Minister was underlining."

16.01 | 0 komentar | Read More

US Boom: Jobs Jump By 236,000 In February

The number of people hired in the United States by non-farm employers jumped by 236,000 in February, exceeding expectations.

The unemployment rate also dropped to 7.7% from 7.9% in January, the lowest level since December 2008.

The Obama administration said it is evidence that the economic recovery is "gaining traction".

New jobs have averaged more than 200,000 per month since November last year.

Wages have increased and the gains were broad-based, led by the best construction hiring in six years.

New construction jobs continue to build up the US economy

But there was one negative detail in the government's February employment report.

Employers added fewer jobs in January than first estimated.

Job gains were lowered to 119,000 from an initially reported 157,000.

However, December hiring was a little better than first thought, with 219,000 jobs added instead of 196,000.

The upbeat figures saw a strengthening of the dollar, with Sterling sliding beneath the $1.49 figure.

Many economists expected hiring to fall in early 2013 largely due to the ongoing uncertainty surrounding the US budget, higher tax rates and looming federal spending cuts that took effect in March.

Yet the latest jobs report indicates job creation is speeding up.

However, early 2011 and 2012 also saw hiring jumps only to see the figures die back as the year went on.

White House economist Alan Krueger noted in a statement that the new unemployment rate was measured before $85bn (£56bn) in automatic budget cuts started taking effect.

The administration has warned that the cuts could have a negative impact on employment and economic growth.

It is urging Congress to move toward a "sustainable federal budget" by closing tax loopholes, enacting entitlement reforms and cutting spending.

16.01 | 0 komentar | Read More

More Than 400 In Barclays Millionaires' Club

By Mark Kleinman, City Editor

More than 400 staff at Barclays earned pay deals worth more than £1m last year, a reduction on 2011 but a substantial number for a year in which the bank's reputation was dragged through the mire.

According to Barclays' annual report, which was published on Friday morning, the number of employees paid more than £1m fell from 473 in 2011, with proportionately larger falls in the number paid more than £2.5m and in excess of £5m.

The disclosures are the most detailed given yet by Barclays and are designed to demonstrate a new commitment to transparency in the way it pays its top staff.

The 356-page annual report confirmed Sky News' revelation last month that Barclays had imposed around £450m of financial penalties on staff because of the Libor-rigging scandal through a combination of clawback and bonus reductions.

Barclays said it had decided to comply ahead of schedule with new Government requirements for companies to publish a single figure for the total remuneration of executive directors.

By one measure, this showed that Antony Jenkins, the new chief executive, earned a total of £1.129m in 2012, although this excludes a long-term share award valued at £1.467m.

The bank did not identify the pay package awarded to Rich Ricci, the chief executive of its investment bank, who was one of four executives to forego their annual bonus because of the Libor scandal, although he is thought to have received less than £3.5m in total.

Five employees were paid more than £5m in 2012, although the bank declined to identify them or specify what their total remuneration had been.

16.01 | 0 komentar | Read More

Barclays Chief Jenkins Hints At Jobs Axe

By Mark Kleinman, City Editor

The chief executive of Barclays has suggested that the growing automation of banking services could result in tens of thousands of jobs disappearing from its workforce during the next decade.

I have learned that during meetings with leading shareholders following Barclays' annual results last month, Antony Jenkins said that he envisaged a future in which the bank employed as few as 100,000 people. Barclays currently employs approximately 140,000 staff.

Mr Jenkins is understood to have discussed during the investor meetings the objective of Barclays becoming a self service-oriented company which allows its remaining staff to focus on delivering "added value" to customers and clients across its retail, investment and wealth management operations.

The suggestion by Mr Jenkins could stoke concerns that he is planning a vast redundancy programme, although a Barclays insider insisted that Mr Jenkins had not been setting a formal target for job cuts and that his comments should be regarded as "blue-sky thinking about the long-term future".

"He was talking about how the bank needs to be more efficient in general terms," a person close to Mr Jenkins said. "It's about how we do the same or more with a smaller headcount, but there is no specificity about how much smaller."

Antony Jenkins replaced Bob Diamond as chief executive last year

Even so, the reference to such a potentially dramatic reduction in the size of Barclays' workforce is inflammatory, given Mr Jenkins' effort to position it as the 'Go-To' bank for stakeholders. Mr Jenkins took over as chief executive in the wake of the Libor-rigging scandal that saw Barclays fined £291m by regulators in the UK and US.

His comments come as banks face growing pressure from investors to make themselves more efficient amid pressure from regulators to hold more capital. The major UK-based banks have consistently underperformed in terms of delivering returns to investors since the financial crisis because of their bloated cost bases, and have been under pressure to reduce bonus pools in order to deliver more capital to shareholders.

Barclays has more than 1,650 branches in Britain, employing tens of thousands of people. Achieving job reductions on the scale implied by Mr Jenkins during his recent meetings would, insiders said, principally involve Barclays' investment bank's back office as well as the closure of some branches both in the bank's home market and overseas, although a spokesman said that such actions were not on the bank's immediate agenda.

Any large-scale closure of UK branches would entail further bad news for high streets ravaged by the collapse of a string of prominent retailers.

Mr Jenkins has already set out a concrete cost reduction programme at Barclays, which will involve £1.7bn being eradicated from the bank's cost-base by 2015. 3700 jobs will be axed as part of the plan to address costs, which the Barclays chief executive referred to last month as a "strategic battleground".

Many of the proposed job cuts are taking place within Barclays' investment banking arm, with the bulk of the rest focused on its retail banking operations in troubled Eurozone countries such as Italy and Spain.

Accompanying last month's full-year results, in which Barclays reported a profit of £246m, Mr Jenkins gave a presentation about the future of the bank in which he referred to the "21st Century industrialisation" of the industry.

The "large-scale focused automation of core processes", "globalisation of processes [and] reduced real-estate footprint" and "customer and client-centric self-service via best-in-class digital and mobile" were all signalled by the Barclays chief in his presentation.

Barclays has been a pioneer in internet and mobile-based banking and payment services, including through its money-transfer app, Ping-It, which has been hugely popular as customers increasingly switch to digital channels.

One investor said Mr Jenkins' presentation underlined his determination to overhaul Barclays in a more radical way than even that attempted by Bob Diamond, his predecessor.

Barclays declined to comment on Mr Jenkins' remarks.

16.01 | 0 komentar | Read More

PM: We'll Come Through If We Hold Firm

Cameron Firm On Tough Resolutions

Updated: 4:54pm UK, Thursday 07 March 2013

By Jon Craig, Chief Political Correspondent, in Keighley

David Cameron came to Bronte country to talk about human emotions … or rather the impact on them of these tough economic times.

"I know things are tough right now," he said at the beginning of his big speech on the economy in a smart, modern workshop at the Cinetic Landis factory, heading up hill out of Keighley towards the moors.

"Families are struggling with the bills at the end of the month. Some are just a pay cheque away from going into the red. Parents are worried about what the future holds for their children."

Spoken with Bronte-like passion.

It was as if he wanted to answer straightaway the criticism of his opponents - and some Conservative MPs - that he's a rich, posh boy who doesn't understand the hardship facing ordinary families.

But after the "I feel your pain" opening, he ended his speech with a defiant message on the economy, rejecting calls for a U-turn on spending cuts and repeating Margaret Thatcher's famous slogan: "There is no alternative."

"This month's Budget will be about sticking to the course," said the Prime Minister. "Because there is no alternative that will secure our country's future."

Aah, but there is, his critics are arguing. And those critics now include Vince Cable, according to Labour, after his New Statesman article calling for more borrowing to fund more capital spending.

But David Cameron wasn't having any of that.

After he said in his speech that he was prepared to "roll up his sleeves and fight" opponents of various Government initiatives like the HS2 rail project, I asked him in his Q&A if he would do the same with his Business Secretary.

No need, he said, somewhat unconvincingly. "He agrees with the Government's policy," he said. "The article he wrote in the New Statesman was cleared and approved by the Treasury."

Really? By Danny Alexander, perhaps, but not George Osborne, I fancy.

Vince Cable's intervention rather took the gloss off the PM's speech in the big, shiny workshop in this highly impressive machine tools factory, where they're working seven days a week to meet their export demands from China and other countries.

The Prime Minister was clearly intending, less than a fortnight before the Budget, to give a few pointers to the Chancellor's statement on March 20. There would be more help for people to get mortgages, he hinted, and possibly more help for motorists hit by rising fuel bills.

He described himself as a "low tax Conservative" and said the only way to cut taxes was to cut the deficit. Labour, he said, believed there was a "magic money tree". From branding Ed Miliband a "croupier in the casino" at PMQs to a "magic money tree". Colourful!

But the main thrust of his defiant message came at the end of his speech, when he concluded by insisting the Government would "stick to the course" because it was about "doing the right thing".

Why? Because, he said, if there were to be good jobs, good public services and money to look after people in their old age, the deficit had to be cut and there must be no more "squandering billions on welfare for people who could work".

This speech came just a few days after Mr Cameron pledged in a Sunday Telegraph article that there would be no "lurch to the Right".

And yet here he was repeating Mrs Thatcher's "There is no alternative" slogan.

But then Margaret Thatcher has always been David Cameron's heroine, in true Wuthering Heights style.

Was Maggie Catherine Earnshaw to Dave's Heathcliffe, I wonder? No, it was Gordon Brown who was likened to the brooding Heathcliffe.

Wait a minute, the PM also talked here about "tough choices", a Tony Blair phrase.

Perhaps Dave is Jane Eyre to Blair's Mr Rochester? No, Frank Field compared Gordon Brown to him too.

Many Tory MPs see the Prime Minister as a flawed hero these days, however.

No wonder he only stayed in Bronte country for about an hour and a half.

16.01 | 0 komentar | Read More

Esure Sets Price Range Ahead Of Flotation

esure has set a price range of 240p to 310p per share ahead of its much anticipated London initial public offering.

The mid-point values the company - founded and chaired one of Britain's wealthiest entrepreneurs, Peter Wood - at £1.1bn.

The home and motor insurer said it would repay "all of esure's outstanding debt" with the £50m it hopes to raise from the sale of new shares.

Mr Wood and private equity firm Tosca Penta will also reduce their stakes in the company, which provides insurance for around two million people in the UK.

Michael Winner featured in esure's advertising campaigns

Esure will be floating between 35% and 50% of its share capital in the offering, which is due to be completed on March 22.

In a statement, Mr Wood described the company's flotation as a "milestone".

"We have worked hard for many years to make esure a business that can compete at the highest level with confidence," he said.

"We live and breathe insurance at esure and look forward to bringing that knowledge, commitment and focus to bear as a premium listed company."

The flotation follows last year's listing of fellow insurance group Direct Line - also founded by Mr Wood - and the housebuilder Crest Nicholson in February.

A number of other companies are also believed to be drawing up plans to go public.

Esure was founded in 2000 and quickly became one of the country's fastest-growing insurance providers.

It also owns the Sheila's Wheels brand and half of the GoCompare price comparison business.

16.01 | 0 komentar | Read More

RBS Apology As Customers Hit By New IT Glitch

RBS, NatWest and Ulster Bank have apologised after many customers were unable to use their accounts online or withdraw cash for several hours.

The technical problems, which started on Wednesday evening, come less than a year after they were hit by a computer meltdown that left millions of people unable to access their money.

"We are disappointed that our customers have faced disruption to banking services for a period this evening, and apologise for that," the banks said in a message on Twitter.

The banks said their systems were back to normal around three hours after they admitted there was a problem - but not before hundreds of customers took to Twitter to voice their frustration.

Complaints piled up on Twitter as customers could not access cash

Many said they had difficulties using cash machines or logging into online banking, while others complained their cards had been declined.

Steve Ireland, who lives in London, told Sky News he discovered the problem when he tried to pay with his card at a supermarket.

"I was out shopping after a night out with my partner to celebrate a birthday," he said. "I went into a very big chain supermarket and got to the cash desk with all my shopping, only to be told the card was declined.

RBS boss Stephen Hester had to apologise for a glitch last June

"It was a really bad experience and very embarrassing. You get evil looks from the cashier when you can't pay."

Stuart Keel, from Cornwall, said he tried to use a cash machine but it was not working.

"We went to the supermarket thinking we could use our cards in there, no problem," he said.

"While we were walking around I was using my NatWest (smartphone) app and it wasn't working at all."

He said his card was then declined at the checkout.

"I thought, 'There's something not right here'," he added.

In June last year, millions of people were affected when a software update failed at the banks.

Customers were unable to view up-to-date balances, while payments such as direct debits for bills were not made and some wages were not received.

Stephen Hester, the chief executive of the banks' parent company RBS Group, which is 80% state-owned, was forced to apologise for the problems at the time and £100m was put aside to compensate customers.

16.01 | 0 komentar | Read More

Aviva Shares Hit After Dividend Slashed

The country's second-largest insurer has seen its share price tumble after announcing a huge loss and cut to its dividend.

Aviva lost more than 14% of its value when the FTSE 100 opened for trading.

It had updated the market on its performance for 2012, confiring it was slashing payouts to shareholders by a quarter to pay for a turnaround strategy aimed at bolstering capital and profit.

Investors will get 19p per share in total from 2012 earnings, down from 26p the previous year.

The company slumped to a net loss of £3bn, mainly owing to a massive writedown following the sale of its US business.

The dividend cut is the latest step in a reorganisation launched by Aviva last July after investors irked by a persistently weak share price forced out chief executive Andrew Moss.

Under the recovery plan, the company has cut costs and raised about £2.4bn by selling less profitable businesses, including its US subsidiary.

Its underlying profits were in line with analysts' expectations and suggested Aviva's core day-to-day business in the UK is healthy.

News of the lower dividend at Aviva emerged as rival British insurer Standard Life cited a strong capital position for announcing a one-off payout of £302m to shareholders.

Investors have traditionally looked to insurers for strong dividend payments as revenues are seen as predictable, given the practice of customers renewing policies annually.

16.01 | 0 komentar | Read More

Daw Mill Mine Closes Leaving 650 Jobs At Risk

The owner of Daw Mill Colliery confirms it will close, ending 47 years of coal production at the Warwickshire mine.

UK Coal Mine Holdings said the majority of its 650-strong workforce face redundancy.

The move comes after what the company's chief executive described as a "ferocious" underground fire at the colliery last month.

The fire - believed to be the largest in a UK coal mine in more than 30 years - is still burning at a depth of 740 metres with no signs of stopping, the company said.

"This has been a terrible week, not just for the company and its employees but also for the energy security of the country," Kevin McCullough said in a statement.

"Having successfully completed the restructuring, and being only weeks away from returning to healthy production, this ferocious fire has dealt a blow to everything we tried to achieve over the last 12 months - in just ten days."

He said the company is exploring the possibility of transferring some staff to other mines, but added: "this news is likely to see the majority of the Daw Mill workforce being made redundant."

A small team will remain on site to secure the mine over the coming months, the company said.

It added that it is in discussions with the Department of Energy and Climate Change over managing the closure of Daw Mill and seeking a way forward for its remaining collieries.

Its deep mines at Kellingley in North Yorkshire and Thoresby in Nottingham - along with its surface mines - will continue to produce coal for use in the UK's power stations.

News of the closure comes after Hargreaves Services said Maltby Colliery - which has been producing coal for more than 100 years in Rotherham - was no longer viable on health and safety grounds.

UK Coal Mine Holdings supplies about 5% of the UK's energy needs making it the country's largest coal producer.

Daw Mill has been at risk of closure since March last year when it said restructuring was needed to safeguard its future.

16.01 | 0 komentar | Read More

Payday Loans: Firms Face Tougher Ad Rules

Payday loans firms are facing tighter advertising rules as the Government tries to ensure that companies do not take advantage of people drowning in debt.

The plans include limiting the number of adverts firms are allowed to put out per hour, the times they can advertise and forcing them to make sure that interest rates are clearly displayed.

The Government will work with the Advertising Standards Authority and the industry to make sure advertising does not tempt consumers into taking out payday loans that they cannot afford.

The clampdown emerged as the Office of Fair Trading (OFT) prepares to publish the results of a wide-ranging probe into the payday lending industry later.

The OFT has carried out spot checks of 50 major lenders and obtained information from all 240 lenders in the market.

The regulator said in its interim report last autumn that formal investigations have been launched into several firms over their debt collection methods.

Charities have reported rocketing numbers of complaints about payday lenders from borrowers.

The Money Advice Trust (MAT) recently said that complaints about payday loans have doubled year-on-year to reach a record of 20,000 across 2012.

The charity warned that "something is drastically wrong" with the way that expensive loans are being dished out to people who cannot afford them, with lenders often rolling over loans.

New regulator the Financial Conduct Authority (FCA), which will oversee the consumer credit market from next year, will prioritise tighter rules on payday lending that could come into effect from April 2014.

The FCA's rules will be binding and if they are broken the regulator will have tough enforcement powers including imposing unlimited fines and the ability to claw consumers' money back.

The Government is also planning to do more to encourage greater communication within the industry to stop consumers taking out multiple loans from different lenders.

Sajid Javid, Economic Secretary to the Treasury, said: "The Government is introducing a fundamentally new approach to regulating consumer credit, which will ensure that irresponsible firms and bad practice will have no place in the consumer credit marketplace.

"Consumers can have greater confidence that the new FCA will intervene early and decisively in their interests - thanks to its more focused remit, objectives and powers."

16.01 | 0 komentar | Read More

Sharp Deal: Shares Soar As Samsung Invests

Samsung has announced a 10.4 billion yen (£70m) capital injection in Sharp, making it the Japanese firm's largest foreign shareholder.

The South Korean company, which will take a 3% stake in its rival, will secure a supply of Sharp's liquid-crystal display technology for its mobile phones and tablets as part of the deal.

Market speculation about the transaction - which was confirmed after the Asian markets closed - sent Sharp's shares soaring more than 17%, before closing 14% higher.

The company said the deal would help shore up its troubled finances while boosting "mutual trust" between the firms.

Samsung added that the investment "would lay a firm foundation for Samsung to secure a steady supply of LCD panels from diversified sources".

Samsung's Galaxy S3 smartphone has shipped around 40m units worldwide

The deal is significant for both Sharp - which last year warned about its chances of survival - and Japan's once-dominant manufacturing industry.

Hiroshi Sakai, chief economist at SMBC Friend Securities, said: "For Japan, it is symbolic and shocking news as Sharp, which used to be a frontrunner in the panel industry, is struggling while its rival Samsung has raced past it."

The deal is the latest investment in Japan's companies by Samsung after it acquired a 5% stake in Wacom, which makes digital pen technology, in January.

Mr Sakai added that deals between Japanese and foreign rivals are likely to increase, as a strong yen, weak demand in export markets and fierce competition hit business.

"Many other Japanese electronics makers are struggling to survive," he said.

"But they still have attractive technologies and some foreign rivals are quite interested in them."

It is not just Sharp which is struggling to compete. Sony plans to sell its headquarters in Manhattan and a major building in Tokyo to raise money, and Panasonic is also restructuring its finances.

Sharp has been attempting to raise capital as part of its turnaround plan, and in February said its loss in the nine months to December had doubled to over 420 billion yen (£3bn).

In December it announced investment from US-based Qualcomm to jointly develop future display technology, and has also been in talks with Taiwan-based Hon Hai Precision Industry to raise capital.

16.01 | 0 komentar | Read More

New Car Sales Up For 12th Successive Month

New car sales rose for the 12th successive month in the UK in February, bucking the market trend of falling demand across Europe.

More follows...

16.01 | 0 komentar | Read More

Funding For Lending Credit Cut Sharply

British lenders taking part in a Bank of England scheme to boost firms' and households' access to credit cut lending sharply in the last three months, official statistics have revealed.

The lower than expected Funding for Lending Scheme (FLS) figures have dampened hopes that the project could help revive economic growth.

The BoE announced the scheme jointly with the Government in June 2012, as a way to unblock a credit log-jam which some economists say is a big factor behind Britain's weak economic recovery.

Banks and building societies cut lending by a net £2.425bn between October and December.

The figure compares to an increase of around £1bn in the first months of the FLS's operation.

Total net lending by banks and building societies taking part in the scheme - which includes all major British lenders apart from HSBC - is now down by £1.502bn since June 30.

The bank said that the scheme's benefits will not be fully clear until later in 2013.

"I would not expect to see a return to rising aggregate quantities until we start getting data for 2013 at the earliest," the bank's Paul Fisher said.

Taxpayer-backed lenders Royal Bank of Scotland and Lloyds Banking Group saw lending fall, despite drawing money from the scheme.

Lloyds has drawn £3bn so far, but lending fell by £3.1bn last quarter, while RBS has taken £750m, but its lending still fell by £1.7bn.

Prime Minister David Cameron's official spokesman said that the Government and the BoE had always made clear that it would take some time before the impact of the Funding for Lending scheme was felt, and that it was not expected as early as the fourth quarter of 2012.

"I think the Bank of England at the time of the launch of the policy was clear that it would take some time for the impact of the policy to be fully felt," the spokesman said.

"The most recent figures for lending in the economy, for January - the first month of Q1 2013 (the first quarter of 2013) - show that lending to the economy increased in January.

"I think we are also seeing the impact of the Funding for Lending scheme through lower borrowing costs. I think we are seeing evidence of the policy having a clear impact."

But shadow chancellor Ed Balls said: "These are deeply disappointing figures. Net lending is actually down since the Funding for Lending scheme started and down by £2.4bn in the final three months of 2012.

"And the Bank of England's own figures show that net lending to businesses fell by £4.5bn in the last quarter."

16.01 | 0 komentar | Read More

New FSA Rules Prompt Internet Bank Rethink

By Mark Kleinman, City Editor

A new retail bank which has been struggling to secure funding and regulatory approval for more than three years has restarted talks with potential investors, buoyed by new rules governing start-up lenders.

I have learnt that Home & Savings Bank, which has been seeking as much as £250m of external capital since 2009, has in recent weeks resumed canvassing private equity firms, hedge funds and wealthy individuals about backing its launch plans.

The company, which would be a telephone and internet-based lender, is the brainchild of a group of former bank executives and Martin Finegold, the boss of Cambridge Place Asset Management, a London-based hedge fund.

People familiar with Home & Savings Bank's business plan said it had scaled back its ambitions and was now aiming to raise between £100m and £150m.

The nascent bank's management team includes Stuart Sinclair, former head of Tesco Personal Finance, and Peter Birch, one-time head of Abbey National.

Its new fundraising objective has been galvanised by the imminent publication of guidelines by the Financial Services Authority (FSA), which will allow banking start-ups to operate with much less capital than established high street rivals.

Mr Finegold's fund has already burned through millions of pounds in costs incurred by the development of Home & Savings Bank.

Over a three-year period it has held talks with dozens of possible investors, including Advent International and Blackstone, the buyout firms, and Magnetar Financial, the hedge fund. Home & Savings Bank also tried to pursue a stock market flotation but without success.

All of those discussions proved fruitless amid what many analysts see as a vicious circle hindering such embryonic projects: regulators will not approve new lenders until they have sufficient capital, while investors are reluctant to commit capital when there is uncertainty about whether a bank will receive regulatory approval.

Since the financial crisis a number of new retail banks have launched in Britain, the most prominent of which has been Metro Bank. Despite its public relations success, however, even it has made only modest competitive in-roads against the likes of Barclays, Lloyds Banking Group and Royal Bank of Scotland.

Last month, Sky News revealed that talks over the FSA reforms were being held up by demands from the Treasury to accelerate further the timetable for authorising new banks.

A spokesman for Home & Savings Bank declined to comment.

16.01 | 0 komentar | Read More

China Spending Billions More On Defence

By Mark Stone, China Correspondent

China is to increase its defence budget spending by 10.7%, the country's government has announced.

The increase means a total of RMB720bn (£76.4bn) will be allocated to the Chinese military. 

The announcement said: "Funds will be used to support efforts to improve the working and living conditions of officers and enlisted personnel, make the armed forces more mechanised and information-based, and safeguard national security."

The announcement comes on the first day of China's National People's Congress (NPC).

The annual event holds more significance this year because it coincides with the once-in-a-decade leadership transition in the ruling Communist Party.

Some 3,000 delegates from provinces around the country gather in Beijing's Great Hall of the People for the 12-day event. 

Together they create the world's largest parliament, whose job, in theory, is to vote on and enact laws proposed by the ruling party.

In practice though, the NPC is widely seen as nothing more than a rubber-stamping body which gives a nod to decisions that have already been made by the Communist Party.

The defence budget increase comes at a time of significant regional tensions.

China is locked in an increasingly bitter territorial dispute with Japan over a set of tiny islands in the East China Sea.

The two countries both hold a territorial claim to the islands and have come close to clashing on several occasions in recent months.

The European Council on Foreign Relations (ECFR) has warned that the dispute is a threat to regional peace.

China has made no secret of its desire to project its power beyond its borders, but it is not alone in increasing its defence budget.

Japan's new Prime Minister Shinzo Abe did the same in January and America has pledged to realign its forces towards the Asia-Pacific region over the coming decade.

The US annual defence budget in 2012 was £418bn, significantly more than China's publicly-stated increase to £76bn.

Senior British diplomatic sources have told Sky News of their concern over the China-Japan dispute.

Premier Wen Jiabao officially steps aside during this congress

The fear is that an accidental clash between the two navies could escalate matters very quickly.

A Japanese diplomat, speaking on condition of anonymity, recently told Sky News that there was currently no "hotline" between the two militaries, increasing the chances of a "misunderstanding".

The opening day of the National Party Congress is traditionally the moment for the outgoing Premier to deliver a speech reflecting on the achievements of the past 5 years.

Premier Wen Jiabao outlined a "truly extraordinary period of time in the course of China's development."

He ran through the figures which characterise China's continued rise over the past five years:

:: GDP up from £2.8tn to £5.5tn.

:: 58.7 million jobs created.

:: 18 million government-subsidised houses built.

:: 19,700km (12,241 miles) of railway laid.

:: 609,000km (378,415 miles) of roads constructed.

:: 31 new airports opened.

Premier Wen, who steps down during this congress, predicted the economy would grow by "around 7.5%" in 2013 but warned of challenges.

"Our country still faces many difficulties and challenges in its economic development in 2013, an we need to work hard if we want to attain a growth target of around 7.5%," he said.

The economy remains the biggest challenge for China. It has largely avoided a direct hit by the global economic crisis but the knock-on effects have slowed manufacturing and exports.

16.01 | 0 komentar | Read More

Pressure On First Buyers As House Prices Rise

By Nick Martin, Sky Correspondent

House prices edged up month-on-month in both January and February this year, bringing good news for homeowners but adding pressure on first-time buyers.

Building society Nationwide said it was cautiously optimistic that activity will pick up in the months ahead.

It comes after reports revealed more young people were living with their parents while trying to save for a deposit for a property. 

According to the Halifax, the average age of a first-time buyer is 30 years old - up from 29 in 2011.

There has been a significant increase in the proportion of first time buyers receiving financial help in recent years.

The Council of Mortgage Lenders (CML) estimate that 65% of first time buyers of had financial assistance in mid 2012 compared with 31% in mid-2005.

Kirsty Gilmore, 26, from Bristol, has been living at home for 18 months and has saved more than £30,000. But that is still not enough to buy a property. She says the market is so competitive it is hard to get a good price.

"I want to have my own place, I want to start a family and have a home to call my own, not just my mum and dad's.

"You feel a bit excluded from society - nobody cares and you're stuck in this rut really - and everyone else my age is," she told Sky News.

Mortgage approvals for home buyers have dipped for the first time since a Government scheme to boost lending was launched last August, Bank of England figures showed.

There were 54,719 approvals in January, showing a 2% decline compared with an 11-month high recorded the previous month and marking the first time that there has been a month-on-month decrease since July.

Mortgage approvals for house purchases had been on a steady upward path since the Government's Funding for Lending scheme, which aims to help borrowers by giving lenders access to cheap finance, was launched at the start of August.

The latest figures echo recent findings from the CML, with some analysts blaming the recent bad weather.

Housing minister Mark Prisk said the Government was trying to help first time buyers get onto the property ladder.

"Many people have to rely on the bank of mum and dad - so what we are trying to do with the builders and the Government by putting equity loans forward is make those deposit affordable for first time buyers. It's already helped 17,000 people. We hope it will help 27,000."

16.01 | 0 komentar | Read More

HSBC Boss Gulliver In Line For £2m Bonus

By Mark Kleinman, City Editor

HSBC is to award its chief executive a bonus of just under £2m for 2012 following a year of successful strategic action to overhaul the bank but which was marred by a £1.2bn fine for violating US money-laundering laws.

I have learned that HSBC, Britain's biggest lender by market capitalisation, will announce on Monday alongside its full-year results that Stuart Gulliver has been awarded the bonus as part of a multimillion pound pay package.

Mr Gulliver intends to accept the award, according to HSBC insiders. His bonus will be deferred and subject to clawback, and he will not be able to cash it in until he retires from or leaves HSBC.

As part of an effort to demonstrate greater transparency over the way it rewards top executives, HSBC will for the first time publish a single figure for the aggregate pay and benefits packages awarded to Mr Gulliver and his most senior colleagues.

This will include pension contributions as well as salary, annual bonus and a long-term share award that has been allotted to him this year. It is designed to show compliance with new Government rules that will come into force later this year, which have been spearheaded by Vince Cable, the Business Secretary.

Douglas Flint, the chairman, Sir Simon Robertson, the deputy chairman, and John Thornton, the non-executive director who chairs the remuneration committee, are understood to have orchestrated the switch to the new disclosure regime ahead of the Government deadline.

For 2011, Mr Gulliver was awarded an annual bonus of just over £2.1m, alongside his base salary of £1.25m and £3.75m in long-term share awards, making a total of £7.2m.

In 2012, his bonus and LTIP are understood to have been determined "in broadly the same ballpark" with a total package worth between £6m and £7m, one person close to the bank said.

HSBC has been applauded by many leading City shareholders for the way it details its executive pay policies through the publication of a 'scorecard' for Mr Gulliver, who took over in 2011.

The chief executive is eligible for an annual bonus of three times his salary and six times his base pay in long-term incentive awards.

A chunk of both payments is determined by HSBC's compliance success and the bank's reputation during a 12-month period. Mr Gulliver is understood to have been awarded nothing in this bracket in 2012, the same outcome as a year earlier, when HSBC was fined for mis-selling bonds to elderly customers.

HSBC suffered one of the most ignominious episodes in its history last year, when it was forced to pay £1.2bn to US regulators to settle money laundering and sanctions breaches which had allowed its Mexican operation to be used by drug cartels and terrorist organisations.

In January, the bank established a committee to bolster its defences against financial crime, recruiting the former heads of HM Revenue and Customs and the Serious Organised Crime Agency, as well as a former US deputy attorney-general.

HSBC will set out plans on Monday to claw back millions of pounds from senior executives deemed to have been culpable in the Mexican situation.

While the bank will not name the affected individuals, they include Sandy Flockhart, the former head of the bank's Asian operation, who was at one stage seen as a contender against Mr Gulliver for the top job.

Mr Flockhart, who left HSBC last year, ran its Mexican subsidiary between 2002 and 2007, and had several million pounds-worth of shares which he is understood to have been told he will not now receive.

I understand, however, that Lord Green, the trade minister who stepped down as HSBC chairman in 2010, will not be included in the clawback effort, partly because he opted to take his long-term pay awards as pension contributions.

Michael Geoghegan, Mr Gulliver's predecessor as chief executive, has also been excluded from the clawback arrangement because the bank's remuneration committee did not conclude that he had been personally responsible for the compliance failings.

The effort to demonstrate pay restraint will be reflected in a lower bonus pool than the £2.8bn that was paid out for 2011, less than a quarter of which was paid to UK employees. HSBC will say on Monday that there has been an across-the-board reduction in the payout pot because of the US fine, although it is still understood to be paying out roughly £2bn in bonuses to staff around the world.

HSBC is also expected to pay a healthy final dividend, with its payouts to shareholders an increasingly-important source of income to UK investors in the context of a banking sector which has seen dividend expenditure shrink dramatically since the financial crisis.

In the UK, HSBC has abandoned a structure for paying staff that saw it impose a £50,000 cap on cash bonuses last year. The scheme involved the bank issuing shares that were then sold immediately in the market to hand executives larger cash sums.

HSBC bosses felt the initiative, devised with the Bank of England and Financial Services Authority, was "cosmetic". Instead, payouts will not include a cash ceiling but larger sums will have to be deferred for several years and won't pay out until employees leave or retire.

Analysts expect HSBC's full-year results to show continued progress under Mr Gulliver at accelerating the pace of change of what had historically been seen as a sluggish supertanker.

He has sold scores of businesses which did not meet internal targets for generating returns and has prioritised growth in the world's fastest-growing economies.

"HSBC has made excellent progress in its strategy to simplify the business and refocus it on growth markets and markets that benefit from international connectivity," analysts at Shore Capital said.

They predict underlying full-year profit of £12.5bn, against £11.8bn in 2011.

HSBC, which declined to comment, is also expected to outline a further provision for compensating customers who were mis-sold payment protection insurance.

16.01 | 0 komentar | Read More

Obama Signs Order To Start Spending Cuts

President Barack Obama has signed an order authorising $85bn cuts in domestic and defence spending following the failure of efforts to strike a deal with Republicans on cutting the US deficit.

Mr Obama and Republican leaders in the House and Senate declared themselves still deadlocked after a last-minute White House meeting last night.

The two sides are at odds over the president's insistence on increasing tax revenue as part of any plan to tackle the country's $16.6trn debt.

Mr Obama signed the order which officially enacts the across-the-board reductions - known as a "sequester" in government budget language. Under the law, the president had until midnight.

The $85bn cuts apply to the remainder of the 2013 fiscal year, which ends on September 30. But the legislation that requires the spending reduction will continue slashing government spending by about $1trn more over a 10-year period.

Speaking after the White House meeting, Mr Obama said: "Let's be clear, none of this is necessary."

He blamed the deadlock on Republicans who he said refused to close tax loopholes that benefit the wealthy, adding that "the pain will be real" for the American people.

"I am not a dictator. I'm the president," Mr Obama said, warning he could not force his Republican foes to "do the right thing," or make the Secret Service barricade Republicans leaders in a room until a deal is done.

"These cuts will hurt our economy, will cost us jobs and to set it right both sides need to be able to compromise," Mr Obama added.

US Speaker of the House John Boehner walked out of the meeting

Republican John Boehner, speaker of the House of Representatives, walked out of the meeting to say there would be no compromise as long as Mr Obama insisted on higher tax revenue.

Republicans are standing fast against further increasing taxes and will not compromise on achieving debt reduction through spending cuts alone.

The opposition party is still feeling the sting from its most conservative members after agreeing at the end of 2012 to allow the expiration of Bush-era tax cuts for Americans earning $400,000 or more a year.

Friday's meeting was the first the two sides have held this year on the budget battle, and it lasted less than an hour.

The immediate impact of the cuts on the public is uncertain, but they will carve 5% from domestic agencies and 8% from the Pentagon between now and October 1.

Defence officials say they will be forced to reduce the working week of 800,000 civilian employees, scale back flight hours of warplanes and postpone some equipment maintenance.

The deployment of a second aircraft carrier to the Persian Gulf has also been cancelled.

The US Navy will gradually stand down several hundred planes starting in April, the Air Force will curtail flying hours and the Army will cut back training for all units except those deploying to Afghanistan.

Several major programmes will be unaffected, including the Social Security pension programme, the Medicaid health care programme for the poor and food stamps.

Pentagon chief Chuck Hagel warned that the budget cuts will endanger the US military's ability to conduct its missions.

"This will have a major impact on training and readiness," he said. "Later this month, we intend to issue preliminary notifications to thousands of civilian employees who will be furloughed."

Mr Hagel also acknowledged that the budget cuts "will cause pain, particularly among our civilian workforce and their families".

16.01 | 0 komentar | Read More