US New Jobs At Lowest Level For Nine Months

US Jobs Figures Are Deeply Worrying

Updated: 4:04pm UK, Friday 05 April 2013

By Ed Conway, Economics Editor

Americans are dropping out of the jobs market, and fast. That's the depressing takeaway from today's non-farm payroll report.

The overall participation rate – a measure, essentially, of the proportion of people of working age either in a job or looking for one – has fallen to the lowest level since 1978.

It is, as far as employment experts are concerned, a deeply worrying signal: increasingly, potential workers are giving up on getting work, dropping out of the jobs market instead of attempting to find a new position.

In fact, as you can see from the chart, participation has been falling since the turn of the millennium, though it's only in the wake of the financial crisis that the drop has become more vertiginous.

Why be concerned about this? Well, a high participation rate has typically been seen as evidence of the American economy's strength – a complement to its high productivity rate and consistently-strong GDP growth rate.

A low participation rate, on the other hand, is often evident in economies which are more sclerotic and less efficient – particularly ones with over-generous welfare states which some think discourage people from working.

So, for instance, Japan and Spain both have participation rates below 60%: Germany's has only just tipped fractionally above it.

The reality is that now, for the first time since 1977, America's participation rate, at 63.3%, is lower than Britain's, which is 63.6%, or was in the three months to the end of January.

It would be nice to claim that this was because Britain was in some way becoming leaner and meaner, but the statistics suggest otherwise: Britain's participation rate has remained steady since 2005 while America's has fallen sharply as people leave the workforce.

It might be odd, having said all of the above to say that today's nasty US jobs report (the headline, by the way, was that a mere 88,000 net jobs were added in March – well below the rise in the population) also technically make it more likely that the Federal Reserve will scale back its stimulus.

But in one sense they do. The Fed has committed to more quantitative easing, buying up $85bn (£55.8bn) of debt each month until the unemployment rate drops below 6.5%.

But because unemployment measures the number of working people as a percentage of the total workforce, it can fall as a direct result of the workforce falling – and that's what happened this time, with the rate dropping from 7.7% to 7.6%.

Now, pragmatically speaking the Fed will try to "look through" this optical illusion. But it's an important reminder that when you tie your monetary policy to a very specific number, it doesn't always make it easy to predict future moves from the central bank.

Mark Carney, who is coming in as Bank of England Governor this summer and has nodded approvingly over at what the Fed has been doing, should take note.

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HMV Rescue Saves 141 Stores And 2,500 Jobs

By Mark Kleinman, City Editor

HMV's future as a high street retailer has been salvaged in a £50m deal that secures 2,500 jobs on Britain's beleaguered high streets.

Hilco, a restructuring firm, confirmed on Friday morning that it had struck an agreement with Deloitte, the administrator to HMV, to rescue the retailer.

The deal, which was revealed exclusively by Sky News on Thursday night, will keep 141 shops open, including 25 which had already been earmarked for closure by Deloitte. All nine of the Fopp-branded shops are included in the transaction.

While that represents little more than half of HMV's UK stores that were open before it called in administrators in January, it represents a more optimistic outcome for the chain than many analysts had predicted.

Hilco acquired HMV's Canadian operations two years ago, since when the performance of the business has surpassed expectations.

Paul McGowan, Hilco chief executive, said the deal had the backing of key HMV suppliers and landlords.

He said: "We hope to replicate some of the success we have had in the Canadian market with the HMV Canada business which we acquired almost two years ago and which is now trading strongly.

"The structural differences in the markets and the higher level of competition in the UK will prove additional challenges for the UK business but we believe it has a successful future ahead of it."

Mr McGowan will become chairman of HMV, with two other Hilco executives taking key roles with the retailer.

HMV had been weighed down by a mountain of debt, allied to a combination of waning consumer confidence and intense pressure from supermarkets encroaching on its entertainment retailing turf, as well as the rapid rise of low-cost digital rivals.

Hilco said it would abandon a recently-introduced practice of selling tablets and other digital devices, using the space instead for an expanded music and visual entertainment range.

Ian Topping, one of the Hilco executives who will be involved in running HMV, said: "The reaction of the British public to the administration of HMV shows a strong desire for the business to continue to trade and we hope to play a constructive part in delivering that."

Hilco also confirmed that it would seek to re-establish a presence for HMV in Ireland.

Nick Edwards, joint administrator at Deloitte, said the deal "provides a solid financial footing on which the business can be taken forward".

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Food Prices Set To Soar After Big Freeze

By Emma Birchley, East of England Correspondent

Months of heavy rain followed by extreme cold are set to hit harvests and push the price of the weekly shop up ever higher.

More than a quarter of winter wheat could not be planted last autumn because of waterlogged fields and attempts to catch up this spring have been hampered by frost.

But poor grain yields do not just affect the price of bread and biscuits.

Animal feed is 50% more expensive than 15 months ago, in turn increasing the cost of producing meat, milk and eggs.

Snow covers a field in North Yorkshire, with many crops affected

Mother-of-three Sarah Tait is concerned. She has already seen her weekly bill rise from £80 to around £100 in the past 18 months or so.

She said: "It is a worry. It just means there will be other things we don't buy because we have to buy food and retailers have got you really because you have got to pay what the prices say."

Other crops including potatoes, tomatoes and sugar beet have also been delayed.

In the 12 months to February fruit has risen in price by almost 12%, vegetables are up 7%, meat costs 4% more and bread and cereals are 3% more expensive - all above general inflation, which stands at 2.8%.

On the Euston Estate in Suffolk crops like winter barley have struggled from the start after being sown in November rather than the end of September due to the weather.

Estate manager Andrew Blenkiron expects the late planting to have a 20% impact on yield.

He said: "There are areas of the field that we couldn't plant because it was so wet and usually we would try to work through the winter and try to patch it up, but there's still water lying in it in early April."

UK growers should also have planted 50% of their spring cereals by now but have in fact only managed to sow 15% due to the weather.

Shoppers are being advised by Richard Dodd from the British Retail Consortium not to be too worried.

He said: "Customers shouldn't panic about the impact on food prices of this weather, of course it's adding an extra pressure, but at the same time the cost of lots of key world commodities, things like wheat are actually coming  down, and that's certainly balancing out any upward influences from weather.

"And of course retailing remains incredibly competitive so as the retailers battle it out for every bit of spending that is to be had from customers, they are doing all they can to protect customers from any effects."

But at the beginning of the year, Waitrose's managing director Mark Price warned the price increases in some commodities will be "massive".

And it will be some months before the full impact of the bad weather on crops becomes clear.

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HBOS Bank Bosses Life-Ban Call In Report

Exclusive: Ex-HBOS Banker Gets Ban

Updated: 8:00pm UK, Wednesday 12 September 2012

By Mark Kleinman, City Editor

One of the former executives who led HBOS to the brink of collapse in 2008 is to be hit with a massive fine and a lifetime ban from the industry, I can exclusively reveal.

Peter Cummings, the head of corporate lending at HBOS until its rescue by Lloyds TSB, is to be fined £500,000 by the Financial Services Authority (FSA) following a long-running investigation into his stewardship of the bank's vast balance sheet.

I am told that the City regulator plans to disclose the details of its probe tomorrow morning, although it is conceivable that a statement will be made this evening.

Mr Cummings was well-known in the City for leading the aggressive growth of HBOS' corporate lending activities, counting Sir Philip Green, the Top Shop billionaire, and Mike Ashley, the Sports Direct tycoon, among his most important clients.

He also presided over HBOS' acquisition of shareholdings in prominent businesses such as McCarthy & Stone, the retirement home-builder, and David Lloyd Leisure, the health and fitness club operator.

Since HBOS' rescue by Lloyds, the enlarged group's share price has tumbled, leaving taxpayers nursing a multi-billion pound paper loss.

In a statement in March, the FSA confirmed that it had been conducting an enforcement investigation into HBOS, saying that the bank "was guilty of very serious misconduct, which contributed to the circumstances that led to the UK government having to inject taxpayer funding into HBOS."

The lender, now part of Lloyds Banking Group - which is 41% owned by British taxpayers - escaped a fine from the regulator because (in the FSA's words) "public funds have already been called on to address the consequences of Bank of Scotland's misconduct, levying a penalty on the enlarged Group means the taxpayer would effectively pay twice for the same actions committed by the firm."

In the same statement, the FSA detailed a litany of failings at HBOS between 2006 and the early part of 2008.

"Between January 2006 and March 2008, Bank of Scotland's Corporate Division pursued an aggressive growth strategy that focused on high-risk, sub-investment grade lending."

Over the period, the division's transactions increased in size, complexity and risk.

Its portfolio was high risk with highly concentrated exposures to property and to significant large borrowers.

This strategy was highly vulnerable to a downturn in the economic cycle, yet the Corporate Division continued with the strategy even as markets began to worsen in 2007.

Rather than re-evaluating its business as conditions worsened, the division set out to increase its market share as other lenders started to pull out of the market.

In addition, its internal culture was focused on revenue rather than assessing the level of risk in transactions.

Bank of Scotland did not have systems and controls that were appropriate to the high level of risks that its Corporate Division was taking on.

And there were serious deficiencies in Bank of Scotland's control framework which provided insufficient challenge to the Corporate Division's strategy; the framework for managing credit risk across the portfolio; the distribution framework which did not operate effectively in reducing the risks in the portfolio; and the process for identifying and managing transactions that showed signs of stress.

From April 2008, as it became apparent that high value transactions were demonstrating signs of stress, it should have been apparent to Bank of Scotland that a more prudent approach was needed to mitigate risk, yet it was slow to move such transactions to its High Risk area within its Corporate Division.

There was a significant risk that this would have an impact on the firm's capital requirements.

It also meant the full extent of the stress within the corporate portfolio was not visible to the Group's Board or auditors.

In addition, while the firm's auditors agreed that the overall level of the firm's provisioning was acceptable, in relation to the Corporate Division provisions were consistently made at the optimistic rather than prudent end of the acceptable range, despite warnings from the divisional risk function and Bank of Scotland's auditors."

The fine for Mr Cummings is the latest in a string of punishments meted out by the City regulator in recent times.

The FSA was itself criticised strongly, not only for its lax supervision of Britain's biggest banks, but also for failing to anticipate the public and political appetite for a full report on the reasons for their collapse.

Last December, the FSA produced such a report on the failure of RBS, but said it would not begin a corresponding piece of work on HBOS' collapse until enforcement proceedings had been completed.

Assuming no other former HBOS executives will be subject to such actions, the fine for Mr Cummings is likely to mean that work will begin shortly.

The regulator is expected to face further questions about whether Mr Cummings has been made a scapegoat for HBOS' failure.

Andy Hornby, the ex-HBOS chief executive, and Lord Stevenson, its former chairman, were at the helm at the time the bank had to be bailed out.

There is no suggestion that any of Mr Cummings' actions or lending decision were unauthorised.

The FSA supervised the rapid expansion of HBOS' balance sheet during the economic boom years but, by its own admission, did nothing to curtail it.

There is also likely to be scepticism about the FSA's decision to hand Mr Cummings a lifetime ban from the banking sector because he has already retired.

The regulator was similarly criticised at RBS for pronouncing no sanction against Fred Goodwin, the bank's former chief executive, but instead pursuing Johnny Cameron, who ran its investment banking arm but was widely felt to have been unjustly singled-out.

The FSA declined to comment on Wednesday, while Mr Cummings could not be reached for comment.

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HMV Rescue: Hilco Deal To Save Jobs And Shops

By Mark Kleinman, City Editor

HMV, Britain's last remaining independent music retail chain, is on the verge of being rescued in a £50m deal that will preserve 2,500 jobs.

Hilco, the specialist restructuring firm, is poised to sign a binding agreement to secure HMV's future following weeks of speculation that the chain and its historic logo could disappear from high streets.

The deal, which could be announced as early as this morning, will involve HMV emerging from administration, backed by a new company incorporated in the UK.

Hilco will acquire roughly 130 HMV-branded stores, and all nine of the outlets which operate under the cut-price music brand Fopp.

People close to the talks said an agreement was likely to be struck later although it could yet be delayed.

Hilco has been the frontrunner to become the new owner of HMV since soon after Deloitte was appointed as administrator at the end of January. Initially brought in to manage the retailer's business alongside Deloitte, the restructuring firm acquired HMV's debts just days later.

The chain is expected to be run by a combination of incumbent HMV and newly-appointed Hilco executives.

Major music companies and film studios, anxious to retain a major distribution channel on Britain's high streets, are understood to have agreed to new supply terms with HMV and have given their blessing to the deal. HMV's landlords, confronted with the prospect of scores more vacant shops, are also understood to be supportive.

Some of the shops being taken on by Hilco had been earmarked for closure by Deloitte, so the final redundancy toll from HMV's restructuring was unclear. Prior to falling into administration, HMV had 230 shops in the UK.

Hilco, which has successfully turned around the performance of HMV's Canadian business since buying it two years ago, also has plans to re-establish the brand in Ireland by reopening a store on Dublin's Henry Street.

HMV's 16 Irish outlets, including the famous Grafton Street shop that has hosted gigs by the likes of U2, were closed in January.

Since the turn of the year, thousands of jobs have disappeared from Britain's high streets as prominent chains including Blockbuster UK, Republic and Jessops have been forced to call in administrators.

Some have been reborn in truncated form, with Jessops acquired by the Dragons' Den entrepreneur Peter Jones and Republic taken over by Mike Ashley, the Sports Direct tycoon.

Trevor Moore, who had a brief stint running HMV before its collapse into administration, had hoped to put together a bid for the company but was made redundant in February.

Among the other suitors which looked at bidding for HMV were Asda, the supermarket chain, and Jon Moulton, the private equity veteran.

HMV had been struggling for several years, pinned down under a debt mountain that vastly outweighed its stock market value. Caught between the dual pressures of fast-growing competition from digital rivals and waning consumer confidence, the company had shed some of its most prized assets, including Waterstones, the books retailer.

Hilco has had a mixed track record investing in other British retailers, having bought assets from chains including Allied Carpets, Ethel Austin and Woolworths.

Neither Deloitte nor Hilco could be reached for comment.

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HP Chairman Raymond Lane Resigns Amid Woes

The chairman of Hewlett-Packard is to resign amid a shakeup of the board of directors at the struggling US computer giant.

Non-executive chairman Raymond Lane was re-elected to the board last month with less than 60% of shareholder votes.

He will be replaced on an interim basis by Ralph Whitworth during the search for a permanent replacement. Mr Whitworth received 96% of the vote during the annual general meeting.

HP, which is still the world's biggest PC maker, has seen its market value half in less than three years, wiping out $45bn (£29.5bn) in shareholder wealth.

The damage would be even worse, if HP's stock had not rebounded during the past two months on hopes that the company is now headed in the right direction.

In addition to Mr Lane's departure two other top executives, John Hammergren and G. Kennedy Thompson, would be stepping down.

Meg Whitman has attempted to turn the firm's performance around

The departures are said to be linked to the £7.2bn purchase of UK software company Autonomy, which was allegedly sold at an over-inflated price.

The news comes with HP in the middle of a massive shift in strategy as consumers gravitate from traditional PCs to mobile devices, including tablets.

HP chief executive and president Meg Whitman said: "Ray, John and Ken have invested a part of themselves in HP."

"Their leadership is reflected in the early success we've had turning the company around. I'm grateful that Ray will continue to serve, and I wish John and Ken the very best.

"I also appreciate Ralph's willingness to increase his responsibilities during this transition."

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Boeing's Dreamliner: IAG Orders More Planes

Boeing 787 Dreamliner Timeline

Updated: 8:24am UK, Thursday 04 April 2013

The turbulent history of the Boeing 787 Dreamliner:

Apr 3, 2013: Company says it has completed more than half of its battery tests

Mar 25, 2013: Boeing says its first test flight with the new lithium-ion battery went according to plan.

Mar 15, 2013: Boeing unveils modifications to its 787 batteries, saying the Dreamliner is "absolutely safe".

Mar 12, 2013:  FAA approves Boeing's certification plan for a new battery system for the aircraft.

Mar 7, 2013: US National Transportation Safety Board says it has failed to identify the cause of the Jan 7 fire.

Feb 28, 2013: Boeing says it has found a "permanent" solution to fix problems with Dreamliner batteries.

Feb 25, 2013: All Nippon Air (ANA) confirms all of its fleet will remain grounded until the end of May.

Feb 8, 2013: Boeing confirms it has sent letters to airlines expecting imminent deliveries of possible delays.

Feb 7, 2013: US Federal Aviation Administration (FAA) allows limited test flight of the grounded Dreamliner.

Feb 5, 2013: Japanese official reveal CT scans of failed batteries does not reveal fire cause.

Feb 4, 2013: Boeing requests FAA approval for test flights of grounded model.

Jan 30, 2013: Amid revenue loss forecasts of $500m to $5bn, Boeing CEO addresses investors and downplays impact.

Jan 28, 2013: Investigators widen battery examination to sub-contractors of lithium ion battery maker GS Yuasa

Jan 21, 2013: Safety officials start probe of lithium ion battery maker GS Yuasa

Jan 19, 2013: Boeing says it is stopping deliveries of the Dreamliner to airlines

Jan 18, 2013: FAA officials arrive in Japan to examine a 787 and its melted battery pack after an ANA emergency landing two days earlier

Jan 17, 2013: The European Aviation Safety Agency,  FAA and Qatar Airways ground Dreamliners under their regulatory control

Jan 16, 2013: Japan Air Lines Co Ltd (JAL) follows suit and suspends Dreamliner flights from Japan over safety concerns

Jan 16, 2013: ANA grounds all 17 of its 787s after four of its aircraft suffer problems

Jan 16, 2013: ANA 787 Dreamliner makes emergency landing in Takamatsu, Japan, after smoke appears in cabin

Jan 11, 2013: The Federal Aviation Authority (FAA) announces a review of the 787 design and systems

Jan 11, 2013: ANA discovers engine oil leak after a domestic flight lands at Miyazaki

Jan 11, 2013: A separate ANA flight to Matsuyama reported a crack appearing in the pilot's window

Jan 9, 2013: ANA cancels a Boeing 787 Dreamliner flight due to a brake problem

Jan 8, 2013: Japan Air Lines (JAL) grounds a jet at Boston Logan International Airport after a 787 leaks 150 litres of fuel

Jan 7, 2013: A fire erupts in a battery pack in another JAL Dreamliner at Boston

Dec 13, 2012: Qatar Airways grounds one of its Dreamliners because of a faulty generator

Dec 5, 2012: The FAA orders inspections of all 787 Dreamliners in service in the US

Dec 4, 2012: A United Airlines 787 is forced to make an emergency landing in New Orleans after a generator fails

July 23, 2012: ANA grounds five Dreamliners due to an engine component issue

Feb 22, 2012: Boeing says around 55 Dreamliners may be affected by a flaw in the fuselage

Oct 26, 2011: The Dreamliner makes its maiden flight with paying passengers on board an ANA jet

Sep 26, 2011: Boeing delivers its first 787 Dreamliner to Japan's ANA, three years late

Jun 23, 2010: Boeing postpones the first flight of the Dreamliner because of a structural flaw

Dec 15, 2009: The passenger jet 787 Dreamliner takes off on its maiden test flight

Apr 9, 2008: Boeing says there will be a revised plan for the first 787 flight and initial deliveries

Dec 11, 2008: Boeing announces further delays due to strike action by machinists Sept-Nov

Oct 19, 2007: Boeing says there will be a six-month delay to deliveries due to assembly issues

Jul 8, 2007: The first assembled 787 goes on display to media, employees and customers

Jul 18, 2006: Boeing says it is making "solid progress" on the 787 Dreamliner programme

Jan 28, 2005: Boeing gives its new commercial airplane an official model designation number - 787

Jan 29, 2003: Boeing announces the launch of a new aircraft called the 7E7

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Triple-Dip Fears Ease With Upbeat PMI Survey

Britain's services sector recorded its strongest expansion in seven months in March, helping to ease fears of a pending triple-dip recession.

The main Markit/CIPS Purchasing Managers' Index (PMI) for the dominant service sector climbed to 52.4 in March from 51.8 in February.

The rise further above the 50 point line that divides growth from contraction confounded economists' forecasts for a drop to 51.5 and was the highest reading since August, when the London Olympics boosted business.

"The Government and Bank of England will breathe sighs of relief in seeing signs of a gathering upturn in the service sector during March," Chris Williamson, chief economist at survey compilers Markit, said.

"(It) looks set to have helped the UK avoid a triple-dip recession by the narrowest of margins."

The British economy shrank at the end of last year and another consecutive quarter of contraction would tip it into a third recession in less than five years.

Official data on how the economy fared in the first quarter is not due until April 25.

But it looks to have made a positive start after an Office for National Statistics (ONS) release showed the strongest growth in services in five months in January.

Services as measured by the ONS make up more than three quarters of British economic activity.

However, Markit's survey does not include the public sector or retailers, focusing instead on areas such as transport and communication, business services and entertainment.

Nonetheless, March's improvement in the services PMI offset contractions in manufacturing and construction and points to 0.1% economic growth in the first three months of 2013, Mr Williamson said.

The Bank of England is now less likely to extend asset purchases to support output, expected in an announcement later today, although economists expect more action before the end of the year.

Moreover, Mr Williamson said the economy was probably stronger than recent data suggested because unusually cold and snowy weather early this year hurt many businesses, whether by keeping consumers at home or disrupting deliveries to factories.

"We would therefore expect to see faster economic growth in the second quarter and, barring any surprises such as a further worsening of the euro zone crisis or severe weather, monetary policy is set to be on hold for the foreseeable future," he added.

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Rogue Trader Admits $8.3bn Goldman Sachs Fraud

A rogue trader has pleaded guilty to defrauding Wall Street giant Goldman Sachs with unauthorised trades totalling $8.3bn (£5.5bn).

Ex-Goldman trader Matthew Taylor admitted that he exceeded internal risk limits and lied to supervisors to cover up his activities involving futures trade in 2007.

Taylor, 34, pleaded guilty to one count of wire fraud in a United States federal court in lower Manhattan on Wednesday morning, after voluntarily turning himself in to authorities earlier in the day.

The Massachusetts Institute of Technology graduate pleaded guilty some four months after the Commodities Futures Trading Commission (CFTC) filed a civil complaint against him.

The CFTC accused Taylor of fabricating trades to conceal a huge, unauthorised position in e-mini Standard & Poor's futures contracts, which bet on the direction of the S&P 500 index.

The court heard that Taylor's trading position at the firm exceeded risk guidelines set by his supervisors "on the order of 10 times."

He also admitted to making false statements to Goldman Sachs personnel who questioned him about the position.

In total, Taylor's actions led to a $118m (£78m) monetary loss for Goldman Sachs.

"I am truly sorry," Taylor told the court.

Taylor outside court in Manhattan on April 3

Taylor, who joined Goldman in 2005, worked in a 10-person group called the Capital Structure Franchise Trading (CSFT), and was responsible for equity derivatives trades.

After his trading profits plunged in late 2007, his supervisors told Taylor his bonus was going to be cut and instructed him to reduce risk-taking.

Instead, he "amassed a position that far exceeded all trading and risk limits set by Goldman Sachs, not only for individual traders ... but for the entire CSFT desk," court documents said.

He subsequently attempted to hide his actions by putting false information into a manual entry system.

When supervisors and other employees confronted him about discrepancies compared with his actual positions, Taylor repeatedly lied, the court heard.

Taylor said he covertly built the position in an effort to restore his reputation and increase his bonus.

At the time he earned a $150,000 (£100,000) salary and expected a bonus of $1.6m (£1m).

Prosecutors are seeking a prison sentence of 33 to 41 months and a fine of up to $75,000 (£50,000), based on remuneration and not the actual loss suffered by the bank.

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Vodafone Shares Open Down As Deal Denied

Verizon Communications has denied speculation that it was preparing to bid for Vodafone - either alone or with others.

It comes after speculation that the US telecommunications company would pair-up with its biggest rival AT&T to buy out the British mobile phone giant.

Vodafone's shares opened lower following the denial - after rising to a 10-year high and closing up almost 3% on Tuesday following rumours of the deal.

But Verizon did reiterate that it was still interested in purchasing Vodafone's share of their wireless US venture.

"As Verizon has said many times, it would be a willing purchaser of the 45% stake that Vodafone holds in Verizon Wireless," the company said in a statement.

"It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others."

Vodafone shares have risen by almost 20% since January

Verizon owns the 55% of Verizon Wireless that Vodafone doesn't and has been openly interested for years in buying out its partner.

Speculation about a deal between Vodafone and Verizon has been circling since January when the British company began exploring what to do with its US asset, which makes up about 75% of its value.

But media reports claimed a huge tax bill faced by Vodafone had held the deal back.

City AM said the British company would be left with a levy equal to the rate of corporation tax on the capital gains it has made since starting the venture if it sold its stake.

The newspaper said analysts have valued the stake at up to £100bn, which could result in a tax bill of around £20bn.

A deal that included AT&T could prove more tax efficient; with Verizon taking Vodafone's US assets, and AT&T buying the rest.

But other analysts said that although it made sense for Verizon to purchase the rest of its wireless venture, it would be risky for AT&T to take on Vodafone's foreign assets.

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Barclays 'Must Learn' From Culture Review

Barclays has revealed that an internal review of its former business practices makes for "uncomfortable reading in parts".

More follows...

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SSE Fined £10.5m By Ofgem Over Mis-Selling

Energy provider SSE has been fined £10.5m by industry watchdog Ofgem for repeated mis-selling to householders.

The regulator said the proposed penalty is the largest it has made against an energy firm.

It relates to failures at "every stage" of the sales process for telephone, in-store and doorstep activities.

Ofgem said: "The level of fine reflects the seriousness and duration of breaches, the likely substantial harm that they have caused and the likely gain to SSE."

Ofgem found that a failure of SSE's management arrangements meant that insufficient attention was paid to ensuring compliance with obligations.

The watchdog said this enabled misleading and unsubstantiated statements to be made by sales agents to potential customers about savings.

SSE is one of Britain's "big six" energy suppliers and has admitted its selling procedures were below an adequate level.

On its website, SSE said: "We've been busy making lots of practical changes to make it simpler, fairer and easier for you to deal with us.

"We're building a better way to do business, and we believe the changes we are making will improve the energy industry for good."

Many consumers struggled to understand firms' complex tariff structures

The watchdog said the company's various selling techniques had brought the company into disrepute.

"Ofgem found failings at all stages of SSE's sales processes, from the opening lines on the doorstep, in-store or over the phone through to the confirmation process which follows a sale," the regulator said.

"In particular, SSE consistently failed, over a prolonged period of time, to conduct its sales activities in a way that would provide clear and accurate information on prices and potential savings to enable customers to make an informed decision about whether to switch suppliers."

Although SSE terminated doorstep sales in July 2011, the failures in telephone and in-store sales persisted, Ofgem said.

"Today's fine sends a clear message to suppliers that Ofgem will hold to account those companies which fail to treat consumers fairly.

"It is time for the energy industry to take note and get behind Ofgem's reforms to rebuild trust and make the market simpler, clearer and fairer for consumers."

Ofgem does not have legal power to require companies to award consumer compensation.

It has argued for powers of redress and said it was encouraged that the Government has backed its call over new powers.

The regulator said the when the Energy Bill powers come into force they will further strengthen Ofgem's ability to take more targeted action against companies that are found in breach of their licence.

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Bank Of England Powers Increase Amid Overhaul

The Bank of England is to become one of the world's most powerful central banks as the biggest overhaul of financial regulation for 16 years takes effect.

Sweeping changes are undoing the system set up by former Prime Minister Gordon Brown when he was Chancellor in 1997.

The Financial Services Authority (FSA) is being replaced by three new bodies - the Financial Policy Committee (FPC), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

The new system comes instead of the so-called Tripartite structure of the FSA, Treasury and Bank of England, which was blamed for being "asleep at the wheel" during the 2008 financial crisis.

George Osborne hopes the new system will fix financial regulation

With both the FPC and the PRA sitting within the BoE, it will take on vast new powers and responsibility not just for regulating lenders, but also spotting and preventing possible financial shocks.

It marks a return of regulatory powers to the central bank, which were taken away from it on gaining independence in 1997.

Chancellor George Osborne is hoping the shake-up will plug the gap that previously existed in the Tripartite system, with no one taking responsibility for monitoring risks to the financial system as a whole, such as the lending boom.

He has previously criticised the structure for being "incoherent" and "without clear lines of accountability".

This perceived lack of oversight was blamed for excessive lending that sparked a sub-prime mortgage crisis and in turn the credit crunch and banking meltdown.

The system brought in by ex-PM Gordon Brown will be swept away

The changes also hope to address the FSA's self-proclaimed "light touch" regulation, which saw the watchdog fail to rein in the banks.

It has since admitted mistakes were made in the run up to the collapse of Northern Rock, while it appeared woefully inept in preventing the banking scandals that have emerged in recent years - such as the Libor interbank rate-rigging affair and the mis-selling of payment protection insurance (PPI).

As the pillar of the incoming regime, the FPC will take the broadest overview of financial regulation.

The PRA will ensure banks and insurers have enough capital and liquidity, while the FCA will protect consumers by promoting effective competition and regulating all financial services firms.

PRA chief Andrew Bailey has already promised a more intrusive approach to regulation of the 1,700 financial institutions under his remit.

Incoming bank chief Mark Carney recently outlined his thinking for MPs

His counterpart at the FCA, Martin Wheatley, has also pledged to clean up the sector with new powers to suspend or ban products and issue fines.

But there are concerns the BoE will become too powerful, given that it also has responsibility for monetary policy in the UK.

In a stark warning, the former head of Germany's central bank said recently it risked impacting its independence.

Ex-Bundesbank boss Axel Weber, who currently chairs Swiss group UBS, said he "flatly refused" taking on a regulatory remit when he was head of the bank due to concerns over independence.

The man wielding the BoE's new powers will soon be Mark Carney, who is currently Canada's top central banker. He takes over from governor Sir Mervyn King in July.

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Apple Says Sorry Over China Customer Service

Apple's chief executive has been forced to apologise for its after-sales service in China following weeks of criticism in the country's media.

Government-controlled media across the country had attacked the technology giant's "arrogance" and accused it of "throwing its weight around".

Tim Cook has spoken about the importance of the Chinese market in the past

Critics said faulty iPhones were only repaired under its one-year service policy - not replaced as in other countries - and its warranty was shorter than elsewhere.

China is Apple's second-largest market after the US.

Tim Cook said on the company's Chinese website: "We are aware that owing to insufficient external communication, some consider Apple's attitude to be arrogant, inattentive or indifferent to consumer feedback.

"We express our sincere apologies for causing consumers any misgivings or misunderstanding."

Apple would now offer full replacement of iPhone 4 and 4S devices in China, along with a new one-year warranty, Mr Cook said.

The iPhone 5 already has a similar warranty in place.

He added that he has "much to learn about operating and communicating in China."

Mr Cook has previously spoken about the importance of the Chinese market to the company.

In the first quarter of the year, revenue from Greater China - which includes Taiwan and Hong Kong - hit $7.3bn (£4.8bn) - up 60% from a year before.

The popularity of Apple products flies in the face of China's attempts to push its own brands and develop internationally competitive companies.

Apple's opened its flagship Asia store in Beijing in October

Following the anti-Apple campaign, thousands of Chinese people defended the company on the internet.

They accused the media of hypocrisy for keeping silent when Chinese companies were implicated in other scandals.

China's state broadcaster CCTV was also accused of paying celebrities to post online comments against Apple, in what appeared to be a grass-roots campaign.

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PRA Covers Cypriot Deposits In UK Accounts

Britain's new banking watchdog has said that local deposits in an ailing Cypriot bank would be transferred and given protection for up to £85,000.

The Bank of England's new Prudential Regulation Authority (PRA) said UK deposits in the Cyprus Popular Bank UK, operating under the name of Laiki Bank UK, would be moved to the Bank of Cyprus UK (BoC UK).

The transfer would allow the BoC UK to offer deposit protection under Britain's banking rules.

The switch in accounts follows a bailout for the government of southern Cyprus and restructuring of its banking sector, amid an unprecedented two-week closure of branches.

"The agreement does not affect access to bank accounts," the PRA said in a statement.

"And therefore all customers who had an account with Laiki Bank UK will be able to access funds as normal and do not need to do anything."

As a result customers, including those with current accounts in credit, will not be hit by any Cypriot levy on their accounts - potentially as high as 60% for large depositors - after the transfer and will be able to access their accounts as normal.

But customers who have allowed their Laiki savings or deposit accounts enter overdraft status will not be transferred to BoC UK and see their accounts are to be frozen.

The PRA has been working on plans for a resolution to protect UK branch customers of Laiki after Cypriot authorities announced it would shut and merge with Bank of Cyprus.

Account holders in southern Cyprus were locked out of banks for two weeks

Deposits of more than 100,000 euros (£85,000) at the Bank of Cyprus will lose 37.5% under a bank levy being imposed across the country, but a second raid on these accounts could see depositors lose up to 22.5% more to prop up the bank's reserves.

UK Chancellor George Osborne said last week in a hearing with MPs on the Treasury Select Committee he wanted a solution for customers of the UK arm of Laiki.

Laiki operated as a "branch" in the UK, which meant customers would have been subject to the levy, but today's transfer will see them become part of Bank of Cyprus UK - a UK subsidiary fully regulated under British rules.

Cyprus has agreed to make local depositors contribute to a financial rescue in order to secure 10bn euros (£8.5bn) in loans from the eurozone and the International Monetary Fund.

The PRA said customers in overdraft will need to contact Laiki Bank UK, while those who had an overdraft but were in credit will need to contact Bank of Cyprus to apply for a new facility.

Mortgage borrowers and loan customers will instead be transferred to Bank of Cyprus in Cyprus and will be contacted in due course, but should continue making repayments as normal.

The move by the PRA means insured and uninsured deposits of £270m in some 15,000 accounts now come under the added protection of UK law.

:: On April 1 the PRA took responsibility from the Financial Services Authority for regulation and supervision of some 1,700 banks, building societies, credit unions, insurers and major investment firms.

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Cyprus Bank Deposits 'To Lose 60% Of Value'

Savers with more than 100,000 euros in the Bank of Cyprus could lose up to 60% of their deposits, two senior officials have warned.

The Central Bank official and the Finance Ministry technocrat said sums held at the country's largest lender will  lose 37.5% of their value after being converted into bank shares.

And the pair said the deposits could lose up to 22.5% more in value, depending on an assessment by officials who will determine the exact figure aimed at restoring the troubled bank back to health.

Both figures were speaking to the Associated Press on condition of anonymity because they are not authorised to publicly discuss the issue.

Cyprus' President Nicos Anastasiades

It comes after Cyprus agreed on Monday to make depositors contribute to a financial rescue in order to secure 10 billion euros (£8.5 billion) in loans from the eurozone and the IMF.

Cypriot President Nicos Anastasiades defended the bailout deal, saying it had contained the risk of national bankruptcy.

"We have no intention of leaving the euro," the conservative leader told a conference of civil servants on Friday in the capital, Nicosia.

"In no way will we experiment with the future of our country," he said.

Cypriots have expressed anger at the price attached to the rescue - the winding down of the island's second-largest bank, Cyprus Popular Bank, also known as Laiki, and an unprecedented raid on deposits over 100,000 euros.

Under the terms of the deal, the assets of Laiki bank will be transferred to Bank of Cyprus.

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Cyber Currency Surge Amid Eurozone Crisis

By Siobhan Robbins, Sky News Reporter

As the eurozone is rocked by the crisis in Cyprus, a cyber currency called Bitcoin has seen a surge in popularity from people looking for an alternative place to invest their money.

Bitcoins are basically virtual money which can be earned or bought. They were created four years ago by a hacker who remains anonymous.

There are no banks to control them, people just exchange them directly with each other over the internet. That makes them difficult to tax, trace or freeze.

In the last month, the Bitcoin has more than doubled in value.

It is claimed the surge is partly down to people in cash-strapped countries including Spain and Greece turning to Bitcoins in the hope of protecting their money.

Amir Taaki has helped develop the Bitcoin since it was created by a hacker

Amir Taaki, who has helped to develop it in the UK, told Sky News he believes it is a purer alternative to traditional banks.

"There are so many things that are wrong and broken with banks. Primarily, the biggest problem is I have to trust them and I have no other option.

"Bitcoin is a basic system where I can choose how much trust I put in other people.

"There is no central bank or central authority controlling it. Everyone that participates in the network is upholding the network and it's not a theoretical concept but a billion dollar market with charts and graphs and people are using it.

"Because it's decentralised and runs off a mathematical algorithm it means it can't be corrupted."

The premises where the digital currency is being developed

The huge spike in value makes it an attractive investment for some, but currency experts like Simon Smith from FxPro warns against that.

"It's totally unsafe. They might as well burn their money in a pile as far as I'm concerned. Yes, Bitcoin has doubled in value over the last month but it has every sign of being a bubble."

Bitcoin has reached an all-time high, trading at almost £60. Its market value is now more than £500m.

Some restaurants and shops already accept Bitcoin as payment and its supporters claim that in the future it will be dispensed from ATMs like pounds and euros.

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Bank Of England Powers Increase Amid Overhaul

The Bank of England is to become one of the world's most powerful central banks as the biggest overhaul of financial regulation for 16 years takes effect.

Sweeping changes are undoing the system set up by former Prime Minister Gordon Brown when he was Chancellor in 1997.

The Financial Services Authority (FSA) is being replaced by three new bodies - the Financial Policy Committee (FPC), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

The new system comes instead of the so-called Tripartite structure of the FSA, Treasury and Bank of England, which was blamed for being "asleep at the wheel" during the 2008 financial crisis.

George Osborne hopes the new system will fix financial regulation

With both the FPC and the PRA sitting within the BoE, it will take on vast new powers and responsibility not just for regulating lenders, but also spotting and preventing possible financial shocks.

It marks a return of regulatory powers to the central bank, which were taken away from it on gaining independence in 1997.

Chancellor George Osborne is hoping the shake-up will plug the gap that previously existed in the Tripartite system, with no one taking responsibility for monitoring risks to the financial system as a whole, such as the lending boom.

He has previously criticised the structure for being "incoherent" and "without clear lines of accountability".

This perceived lack of oversight was blamed for excessive lending that sparked a sub-prime mortgage crisis and in turn the credit crunch and banking meltdown.

The system brought in by ex-PM Gordon Brown will be swept away

The changes also hope to address the FSA's self-proclaimed "light touch" regulation, which saw the watchdog fail to rein in the banks.

It has since admitted mistakes were made in the run up to the collapse of Northern Rock, while it appeared woefully inept in preventing the banking scandals that have emerged in recent years - such as the Libor interbank rate-rigging affair and the mis-selling of payment protection insurance (PPI).

As the pillar of the incoming regime, the FPC will take the broadest overview of financial regulation.

The PRA will ensure banks and insurers have enough capital and liquidity, while the FCA will protect consumers by promoting effective competition and regulating all financial services firms.

PRA chief Andrew Bailey has already promised a more intrusive approach to regulation of the 1,700 financial institutions under his remit.

Incoming bank chief Mark Carney recently outlined his thinking for MPs

His counterpart at the FCA, Martin Wheatley, has also pledged to clean up the sector with new powers to suspend or ban products and issue fines.

But there are concerns the BoE will become too powerful, given that it also has responsibility for monetary policy in the UK.

In a stark warning, the former head of Germany's central bank said recently it risked impacting its independence.

Ex-Bundesbank boss Axel Weber, who currently chairs Swiss group UBS, said he "flatly refused" taking on a regulatory remit when he was head of the bank due to concerns over independence.

The man wielding the BoE's new powers will soon be Mark Carney, who is currently Canada's top central banker. He takes over from governor Sir Mervyn King in July.

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Post Office Staff On Strike Over Closures

Thousands of staff in the country's biggest post offices are striking in a row over jobs, pay and closures.

Members of the Communication Workers Union (CWU) in around 370 so-called Crown offices were mounting picket lines in protest at plans to close or franchise 70 branches.

The union said the walkout was "solidly" supported by thousands of its members, with picket lines set up outside post offices across the country.

The Post Office said that out of the 370 Crown branches, 10 were closed all day and more than 250 closed at lunchtime.

But it said that the 166 Crown branches that have external ATMs will be fully stocked for customers to withdraw cash on Saturday.

The union organised the strike because it believes 800 jobs are at risk and also staff had not received a pay rise for two years.

The Post Office put forward the restructuring plan because Crown branches were losing £40m a year and accused the union of ignoring the "harsh realities" the company faces.

Dave Ward, the CWU's deputy general secretary, said: "Our post office members are standing up against destructive plans which would slash 20% of the Crown network and are simply asking for fair treatment and job security.

"The Post Office's plans are short-sighted and would rob the network of the most productive offices while simultaneously putting hundreds of jobs at risk and potentially damaging local economies.

"We'd like to see a better vision for a successful network which maintains services in the heart of communities alongside quality jobs."

The strike follows a ballot of workers in which 88% of those who voted demanded action.

Kevin Gilliland, network and sales director at the Post Office, said: "We regret any disruption to services the CWU's call for strike action may cause to customers. Crown branches are currently losing £40m per year and this is being subsidised by public money. This cannot continue.

"The Post Office is transforming its network to improve customer experience and in turn bring in new business. We are committed to the Post Office remaining a key part of UK high streets and our plans ensure this will happen."

He said the closures - which do not apply to smaller sub-Post Offices - affect less than 1% of the total network. At the same time as closing some branches, the Post Office was planning to improve the 300 other Crown offices.

The union said it was receiving strong public support for its campaign, with petitions circulating in areas affected by the proposals.

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Cyprus Bank Deposits 'To Lose 60% Of Value'

Savers with more than 100,000 euros in the Bank of Cyprus could lose up to 60% of their deposits, two senior officials have warned.

The Central Bank official and the Finance Ministry technocrat said sums held at the country's largest lender will  lose 37.5% of their value after being converted into bank shares.

And the pair said the deposits could lose up to 22.5% more in value, depending on an assessment by officials who will determine the exact figure aimed at restoring the troubled bank back to health.

Both figures were speaking to the Associated Press on condition of anonymity because they are not authorised to publicly discuss the issue.

Cyprus' President Nicos Anastasiades

It comes after Cyprus agreed on Monday to make depositors contribute to a financial rescue in order to secure 10 billion euros (£8.5 billion) in loans from the eurozone and the IMF.

Cypriot President Nicos Anastasiades defended the bailout deal, saying it had contained the risk of national bankruptcy.

"We have no intention of leaving the euro," the conservative leader told a conference of civil servants on Friday in the capital, Nicosia.

"In no way will we experiment with the future of our country," he said.

Cypriots have expressed anger at the price attached to the rescue - the winding down of the island's second-largest bank, Cyprus Popular Bank, also known as Laiki, and an unprecedented raid on deposits over 100,000 euros.

Under the terms of the deal, the assets of Laiki bank will be transferred to Bank of Cyprus.

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Cyber Currency Surge Amid Eurozone Crisis

By Siobhan Robbins, Sky News Reporter

As the eurozone is rocked by the crisis in Cyprus, a cyber currency called Bitcoin has seen a surge in popularity from people looking for an alternative place to invest their money.

Bitcoins are basically virtual money which can be earned or bought. They were created four years ago by a hacker who remains anonymous.

There are no banks to control them, people just exchange them directly with each other over the internet. That makes them difficult to tax, trace or freeze.

In the last month, the Bitcoin has more than doubled in value.

It is claimed the surge is partly down to people in cash-strapped countries including Spain and Greece turning to Bitcoins in the hope of protecting their money.

Amir Taaki has helped develop the Bitcoin since it was created by a hacker

Amir Taaki, who has helped to develop it in the UK, told Sky News he believes it is a purer alternative to traditional banks.

"There are so many things that are wrong and broken with banks. Primarily, the biggest problem is I have to trust them and I have no other option.

"Bitcoin is a basic system where I can choose how much trust I put in other people.

"There is no central bank or central authority controlling it. Everyone that participates in the network is upholding the network and it's not a theoretical concept but a billion dollar market with charts and graphs and people are using it.

"Because it's decentralised and runs off a mathematical algorithm it means it can't be corrupted."

The premises where the digital currency is being developed

The huge spike in value makes it an attractive investment for some, but currency experts like Simon Smith from FxPro warns against that.

"It's totally unsafe. They might as well burn their money in a pile as far as I'm concerned. Yes, Bitcoin has doubled in value over the last month but it has every sign of being a bubble."

Bitcoin has reached an all-time high, trading at almost £60. Its market value is now more than £500m.

Some restaurants and shops already accept Bitcoin as payment and its supporters claim that in the future it will be dispensed from ATMs like pounds and euros.

16.01 | 0 komentar | Read More