Osborne Issues Legal Challenge To EU Bank Tax

By Ed Conway, Economics Editor

George Osborne has launched an unprecedented legal challenge against European plans for a financial transactions tax.

The move, which will be seen as a further sign of fraying relations between the UK and the rest of the continent, is designed to force the European Commission to reconsider the levy on Europe-related financial activity.

The Chancellor revealed the details on the fringes of the International Monetary Fund meetings in Washington.

Mr Osborne told Sky News: "What I am against is the European Commission coming up with a financial transaction tax that damages Britain. I want to make it clear Britain doesn't want to be a part of that and doesn't want to be affected by a European financial transaction tax even if we're not directly part of it.

"And so we've mounted a legal challenge in the European Court of Justice - that is the correct way to handle these things - the challenge went in yesterday."

According to insiders, this is the first time the UK has challenged legislation of this kind. Under the Commission's current plans, there will be a small charge (0.1% for shares and bonds and 0.01% for derivatives) on all financial transactions within the 11 members of the European Union which have signed up to the tax.

This alone is forecast to knock 0.25% off economic growth according to the Commission's official assessment, although some economists fear this could be an understatement.

It is feared the EU tax plans will adversely affect banks in the UK

The Chancellor said the reason for the legal challenge was that the tax will also hit Britain itself in two ways: first because it will affect any euro-denominated transactions – many of which happen in London.

Second, the tax will apply to all transactions of banks with headquarters in the signed-up EU nations, even if they are in London or outside Europe.

Treasury insiders said the worry was that it could knock significant value off British pension funds and investments.

They characterised the legal challenge, which may take years to be heard, as an important insurance policy in the legislative battle to get the tax amended.

However, analysts said that the move marked a significant escalation in tension between the UK and the Commission.

Mats Persson of think tank Open Europe said: "The economic, legal and political implications of this move for future EU-UK relations are huge… Legally, it could set out the parameters for how a 'flexible Europe' involving different levels of participation in the EU – which Prime Minister David Cameron has said he champions – will be governed.

"Politically, it's a test of the extent to which the UK – as a non-eurozone member - can halt or change EU measures with a profound impact on its national interest. Therefore, it will be a key issue in the on-going debate about the UK's continued EU membership."

The Chancellor also defended Britain's economic reputation, which has been dealt a blow this week by comments by the IMF chief economist Olivier Blanchard that Mr Osborne is "playing with fire" with his fiscal policy.

The Fund is due to come to the UK next month to carry out its annual survey of the economy. It is expected to advise the Chancellor to slow the pace of his austerity program.

"When the IMF comes to town we will make it absolutely clear that what we're doing is both enhancing the credibility of the United Kingdom by dealing with our debts and deficits but also supporting the British economy,"  Mr Osborne said. 

"For example, through the new housing scheme - the help to buy scheme which I launched at the Budget, through the work we're doing on funding for lending, through the work we've done on tax, for instance to increase the personal allowance."

Asked about criticisms of the Help to Buy scheme, under which the Government will guarantee mortgages for homebuyers, Mr Osborne said: "We are at a period of real weakness in the housing market, so the risks of a housing bubble are pretty non-existent.

"The key thing is that this scheme is time limited and we've given the keys to it to the [Bank of England's] Financial Policy Committee so it can turn it off in the future."

16.01 | 0 komentar | Read More

Virgin Active Eyes £2bn David Lloyd Merger

By Mark Kleinman, City Editor

Virgin Active is mulling a takeover bid for David Lloyd Leisure that would create a £2bn health and fitness empire, and entrench Sir Richard Branson as the industry's most important British stakeholder.

I have learnt that Virgin Active has been undertaking detailed work on the structure of a possible offer for David Lloyd, which has been put up for sale by its consortium of shareholders.

The Virgin-backed chain is now deliberating over whether to submit a formal offer for the tennis-based network of fitness clubs ahead of a new deadline, which is thought to have been set for next month.

If successfully completed, a deal would create a group of more than 200 venues in the UK, with many more in a host of overseas markets, including Belgium, Ireland and South Africa.

People close to the process said that Virgin Active did not participate in the initial round of bidding for David Lloyd earlier this month, and cautioned that it may yet decide not to make an offer at all.

David Lloyd's advisers at UBS, the investment bank, are said to be seeking a sale worth £900m, although some insiders suggested on Friday that a lower valuation was likely.

Virgin Active, which is chaired by the former Boots boss Richard Baker, would have little trouble financing a deal.

A controlling stake in the business was sold in 2011 to CVC Capital Partners, the buyout firm behind Formula One motor racing, in a deal thought to have valued the gyms chain at £900m.

According to unaudited results published last summer, Virgin Active recorded a profit of £127m in 2011, up 11% on the previous year.

The company is understood to have concluded that a takeover of David Lloyd, which made around £100m last year, would not raise significant competition concerns.

The health and fitness market remains reasonably fragmented, with other significant players including a diminished Fitness First, which now operates around 80 clubs following a financial restructuring that saw many sites sold or closed.

A number of other gym chains are also on the market, with several private equity firms looking at a combination of Pure Gym and the Gym Group at the value end of the sector.

Even if Virgin Active does decide to pursue an offer for David Lloyd, it will face stiff competition to secure a deal. Private equity firms including Blackstone and KSL Capital Partners, which owns the Belfry golf resort, are reported to have submitted offers.

David Lloyd is controlled by London & Regional, the vehicle of the property tycoons Ian and David Livingstone, and Caird Capital, a firm created by former HBOS bankers responsible for many of the bank's biggest corporate deals before it required a rescue in 2008.

Virgin declined to comment, while David Lloyd could not be reached for comment.

16.01 | 0 komentar | Read More

Fitch Strips UK Of AAA Rating On Debt Outlook

Ratings agency Fitch has stripped the UK of its AAA rating, citing a "weaker economic and fiscal outlook".

The agency placed the UK on an AA+ rating, following Moody's downgrade of UK debt in February.

A Fitch statement said: "The downgrade of the UK's sovereign ratings primarily reflects a weaker economic and fiscal outlook and hence the upward revision to Fitch's medium-term projections for UK budget deficits and government debt."

The downgrade will place further pressure on the Government ahead of next week's first quarter GDP figures, which will reveal if Britain has managed to avoid an unprecedented triple-dip recession.

The agency now expects Government debt to peak at 101% of GDP in 2015-16, only declining gradually in 2017-18. That is worse than its previous forecast of debt peaking at 97% of GDP and declining in 2016-17.

Fitch, which waited until stock markets had closed before announcing the downgrade, had already warned that Government failure to stabilise debt below 100% of GDP and set it on a firm downward path would trigger a downgrade.

Chancellor George Osborne had pledged to retain the UK's AAA status

The statement said: "Despite the UK's strong fiscal financing flexibility underpinned by its own currency with reserve currency status and the long average maturity of public debt, the fiscal space to absorb further adverse economic and financial shocks is no longer consistent with an AAA rating."

Fitch slashed the UK's growth forecast to 0.8% this year, from its earlier expectation of 1.5%. Next year it expects the UK economy to grow by 1.8%, down from its previous 2% forecast.

Earlier this week, the International Monetary Fund also cut the UK's growth forecast growth from 1% to 0.7% this year and 2014's projection from 1.9% to 1.5%, noting the recovery was "progressing slowly".

IHS Global Insight economist Howard Archer said the downgrade was "no surprise" and is likely to have minimal market impact.

"Nevertheless, Fitch's move is another slap in the face for the government - particularly as the Chancellor (George Osborne) made keeping the AAA rating a key focus for the UK," he said.

Fellow ratings agency Standard & Poors held the UK's debt rating steady at AAA earlier this month, but warned over the economy's "negative outlook".

16.01 | 0 komentar | Read More

Retail Sales Drifted As March Snow Fell

The coldest March since 1962 stopped shoppers hunting down spring ranges, resulting in a 0.7% fall in overall retail sales.

The Office for National Statistics (ONS) figures said that left sales 0.5% lower on the year.

Despite the early Easter holiday, non-food sales tumbled by 4% in March and this was only partly offset by the biggest rise since March 2009 in non-store retailing, which includes online shopping.

Online sales accounted for 10.4% of all spending, compared with 8.8% a year earlier.

The information suggests that consumers stayed away from stores, especially those with DIY, gardening and spring clothing offerings, and carried out only essential food shopping.

Other earnings reports - and those of individual retailers - have been mixed.

While the British Retail Consortium found 3.7% annual growth in the value of retail sales, the ONS measured it at just 0.1%.

Meanwhile, Debenhams blamed snow in January for a 5.4% dip in profits in its first half.

Debenhams stock is up sharply on Thursday

Britain's second biggest department store group forecast a better second half of the year after making a pre-tax profit of £120.3m in the 26 weeks to March 2.

That was in line with guidance given in a March profit warning, when the firm said snow in January had dented sales.

Chief executive Michael Sharp said: "We expect to make further progress in the second half, despite consumer sentiment remaining weak and challenging market conditions."

Many retailers have been finding trading tough as consumers, whose spending generates about two-thirds of gross domestic product, continue to face a squeeze on incomes at a time of record household energy prices and other higher costs.

The soggy summer of 2012 followed by the cold winter also held back sales - although most economists are now tipping the UK to avoid a triple-dip recession.

16.01 | 0 komentar | Read More

Lagarde: IMF May Urge Osborne Over Austerity

By Ed Conway, Economics Editor

Christine Lagarde has given her firmest signal yet that the International Monetary Fund is on the brink of issuing George Osborne with detailed advice on changing his austerity plans.

The IMF managing director warned that Britain's economic growth performance is "not particularly good", reinforcing suspicions that the fund will ask the Chancellor to moderate the severity and speed of his austerity plans.

The fund's chief economist, Olivier Blanchard, was more forthright earlier this week, telling Sky News that Britain's economic policy plans were "playing with fire".

Ms Lagarde refrained from passing detailed judgement ahead of the fund's official Article IV annual survey of the country, which takes place next month.

But she said: "We have repeatedly said in the last couple of years that should growth abate and be particularly low there should be consideration to adjusting by slowing the pace (of fiscal consolidation).

"Looking at numbers - without having dwelt under the skin - the growth numbers are not particularly good. This is a continuum of (our) position. What has changed is the quality of the numbers."

The comments came as the incoming Bank of England Governor, Mark Carney, said that Britain should be considered one of the world's "crisis economies".

In comments at an event on the fringes of the IMF meetings, he said: "There are three classes of economy. There's the crisis economies, including the United States, which is breaking out of that pack; it includes the Eurozone, the UK and Japan."

Mr Carney also dismissed hopes that central banks such as the Bank of England or the Bank of Canada, where he is currently Governor, could single-handedly generate growth.

He said: "Can they deliver sustainable growth? The answer is no. They can help with balance sheet repair and, for instance, transition to more sustainable euro area.

"But they can't deliver the long term growth necessary. That needs to come through full fiscal adjustment and fundamental structural reforms."

Ms Lagarde's comments on the fiscal situation in the UK will set up one of the most-eagerly awaited IMF annual surveys in recent British history, with the fund expected to set out precisely how far it expects the Government to change its position on tax and spending.

Although the IMF's advice is not binding, a negative judgement would be highly embarrassing for the Chancellor, even beyond the already critical comments of the fund.

Ms Lagarde also addressed the news that she has been summoned to appear in court in France over her handling of a scandal when she was the country's finance minister.

She said: "There is nothing new under the sun. Ever since 2011 I had known very well that I would be heard by the investigating commission of the Courts de Justice.

"I'll be very happy to travel for a couple of days to Paris but it's not going to change my focus, my attention and my enthusiasm for doing the work that I do."

16.01 | 0 komentar | Read More

Tech Giants Boosted By New Strategies

Tech firms Google and Microsoft have reported strong quarterly growth amid shifting strategies for both.

Google's core internet business net revenue grew 23% in the first quarter as profit climbed to $3.35bn (£2.2bn), despite a trend toward cheaper ads on smartphones and tablets.

"We had a very strong start to 2013, with $14bn (£9.1bn) in revenue, up 31% year-on-year," Google chief executive Larry Page said

Shares of Google, which reached an all-time high of $844 (£550) in March, were up 1.5% to $777.75 (£505) in after hours trading on Thursday.

Microsoft was revenue rise in the quarter by 18%, year-on-year

Meanwhile Microsoft's strategy of selling more long-term software contracts to big business customers cushioned the blow from plummeting PC demand and lacklustre demand for Windows 8.

Net income was $6.1bn (£4bn) for the fiscal third quarter, which ended in March, up 18% from $5.1bn (£3.3bn) the same period last year. Revenue was $20.5bn (£13.3bn), up 18% year-on-year.

The boost comes as personal computer sales fell 14% in the first three months of the year, just as Microsoft tried to ramp up sales of the latest iteration of Windows.

But the company's ability to keep hold of big customers rescued its third-quarter results.

"Microsoft has successfully transitioned into an enterprise software company and these results show that," Fort Pitt Capital analyst Kim Caughey Forrest said.

"Because the strength of server and tools and the actual way they sell licences to business is making up for the missing PC sales."

In effect, Microsoft no longer relies on a new PC to make money from software - only 20% of the company's product revenue comes from computer makers paying fees to put Windows on their machines.

Google's Android operating system is used on Samsung smartphones

About 45% comes from multiyear agreements with customers - generally big companies - paying millions for three-year access to Windows and Office software.

The software giant is also working with manufacturers to produce a line of small touch-screen devices powered by Windows, apparently intended to compete with tablets like the iPad Mini and Amazon Kindle Fire.

Google has also stepped up its strategic shift, to mobile advertising spurred by its Android operating system leaping past Apple iPhone and iOS software to power some 70% of devices.

Google improved its cost-per-click (CPC), a critical metric that refers to the price advertisers pay the search giant, in the first quarter.

The CPC rate declined 4% year-on-year in the first quarter, following a 6% decline in the fourth quarter.

"It's classic Google. There's plenty of things to like and some things not to like," BGC Partners analyst Colin Gillis said.

16.01 | 0 komentar | Read More

'Quick House Sale' Market Investigated

The Office of Fair Trading (OFT) is investigating fears people desperate for money are being preyed on by firms offering "quick house sales".

Fifty unidentified companies operating in the market have been contacted by the watchdog for details on their business models while consumers are being urged to contact the OFT with information on their experiences.

Firms in the sector offer to buy a house themselves or find someone else to snap it up, often for less than the full market value of the property.

The OFT said that while such companies may offer a "valuable service" for people who need fast access to cash, it is concerned that stressed and vulnerable home owners looking for a way out of financial difficulties could be misled into selling for far less than their home is worth.

There have been suggestions that some customers have been told at the final stage of the 'quick sale' process that the price they were getting had been considerably reduced.

Other practises the watchdog is watching for include firms hiding their fees behind initial valuations which appear to offer a good price and severe penalties for breach of contract.

The number of 'quick sale' operators has grown as the tough economic climate has continued.

More than 157,900 UK households had fallen behind on their mortgage payments at the end of 2012 and over 110,000 couples divorced in 2011 in England and Wales.

The OFT plans to publish a report on the quick house sale sector in July.

The new regulator, the Financial Conduct Authority, welcomed the investigation and said it will work with the OFT to tackle any concerns.

Peter Bolton King, global residential director of the Royal Institution of Chartered Surveyors, said that anyone considering a quick house sale should take a step back and consider other options.

He said they should get an estimate of what their house could sell for on the open market, even if their house is priced for a quick sale.

Mr Bolton King said: "Naturally, people feel under financial pressure. You think: 'I can sort out my problems in one fell swoop'.

"But you should take a breath, take a step back and make sure you totally understand what it will mean."

16.01 | 0 komentar | Read More

Apple Share Value Peels Away On Demand Fears

Apple shares fell below the $400 mark on Wednesday for the first time since December 2011 amid fears about weakening demand for its iPhone and iPads as competition intensifies.

A surprise warning about disappointing revenue at Cirrus Logic, which makes audio chips for both products, sparked the sell-off.

The US firm's forecast added to market speculation that sales of the iPhone - which make up more than half of Apple's revenue - are slowing more quickly than expected as Samsung and other rivals flood the market with cheaper devices.

It also threw the spotlight on Apple's quarterly earnings announcement due out next week, with some analysts saying the results could miss already reduced estimates.

"This is a tough environment. Apple is in transition between products," said Michael Yoshikami, a portfolio manager at California-based Destination Wealth Management which owns about 50,000 Apple shares.

Cirrus Logic had warned of a reduced product forecast from one customer - which it did not name - but at least 90% of its business comes from Apple.

Apple shares dipped below $400 on the Nasdaq before closing 5.5% lower at $402.80.

The drop wiped more than $22bn (£14.4bn) off its market value.

Since its September 2012 peak, Apple has lost 40% of its market value - slightly more than Google's entire capitalisation.

The drop has been fuelled by worries about the effect on Apple's industry-leading margins if it is forced into faster updates of its products to keep up with rivals.

Some say Apple will not be able to sustain its high gross margins as competition in the tablet and smartphone markets leads to lower prices.

Analysts expect Apple to report a 9% increase in quarterly revenue on April 23, with net profit expected to be down 17%.

16.01 | 0 komentar | Read More

Retail Sales Drifted As March Snow Fell

The coldest March since 1962 stopped shoppers hunting down spring ranges, resulting in a 0.7% fall in overall retail sales.

The Office for National Statistics (ONS) figures said that left sales 0.5% lower on the year.

Despite the early Easter holiday, non-food sales tumbled by 4% in March and this was only partly offset by the biggest rise since March 2009 in non-store retailing, which includes online shopping.

The information suggests that consumers stayed away from stores and carried out only essential food shopping, preferring to stay indoors in the warm.

Other earnings reports - and those of individual retailers - have been mixed.

While the British Retail Consortium found 3.7% annual growth in the value of retail sales, the ONS measured it at just 0.1%.

Early on Thursday, Debenhams blamed snow in January for a 5.4% dip in profits in its first half.

Britain's second biggest department store group forecast a better second half of the year after making a pre-tax profit of £120.3m in the 26 weeks to March 2.

That was in line with guidance given in a March profit warning when the firm said snow in January had dented sales.

Chief executive Michael Sharp said: "We expect to make further progress in the second half, despite consumer sentiment remaining weak and challenging market conditions."

Many retailers have been finding trading tough as consumers, whose spending generates about two thirds of gross domestic product, continue to face a squeeze on incomes at a time of record household energy prices and other higher costs.

The soggy summer of 2012 followed by the cold winter also held back sales.

More follows...

16.01 | 0 komentar | Read More

Npower: Energy Firm Denies Tax Avoidance

Npower has admitted it has not paid corporation tax in the UK for three years - just months after increasing prices by around 9%.

The company made the admission to the Energy and Climate Change select committee - but its boss said they had invested billions in new power stations and wind technology.

Chief Executive Paul Massara said: "Effectively we have invested £5bn in the last five years building power plants, creating jobs, creating employment and helping to keep the lights on.

"If we had not made that investment we would not have the deductibility that we would be allowed. That is a simple accounting UK rule."

Npower reported a 34% rise in profits to £413m last year.

The admission came as the "big six" energy companies were questioned by MPs over topics including profits and how they treat their customers.

A company statement added: "Looking at RWE npower specifically, our investment programme since 2008 has amounted to almost £3bn, which means we have seen a large increase in tax relief.

"This is in no way tax avoidance, and all of our business is taxable in the UK. We've not paid corporation tax because we've been investing hundreds of millions to keep the UK's lights on."

Prime Minister David Cameron's official spokesman said: "I wouldn't comment on an individual taxpayer.

"More broadly, the Prime Minister's view is that it is important that companies pay the tax that is due."

16.01 | 0 komentar | Read More

Tesco Confirms US Exit And Profit Fall

Tesco has confirmed its first fall in annual profits for 20 years and writedowns totalling more than £2.5bn.

The retailer confirmed the closure of its loss-making Fresh & Easy business in the United States, with a resulting £1.2bn writedown a major factor behind its 51.5% fall in pre-tax profit to £1.96bn in the year to February 13.

Tesco was also hit by costs related to its turnaround plan for the UK while its bank's exposure to the payment protection insurance scandal grew to £115m.

A writedown of £804m was also confirmed on the value of its UK property portfolio as it scrapped more than 100 store developments to focus on store revamps, convenience stores and improved delivery to online customers.

A £495m 'goodwill impairment' relating to its operations in Poland, the Czech Republic and Turkey was announced too.

Tesco's Chief Executive Philip Clarke said that the actions would put the company "back on the right track" to deliver long-term growth for shareholders though its share price took a 2.8% hit when trading opened in London.

He continued: "The large stores we have are great and we are doing a lot of work to make them more vibrant and relevant for today's customers, but we won't need many more of them because growth in future will be multi-channel - a combination of big stores, local convenience stores and online."

The group said fourth quarter sales at British stores open over a year, excluding fuel and VAT, grew 0.5% - a slowdown from growth of 1.8% in the six weeks to January 5.

Mr Clarke admitted that sales over the past few months had been impacted by the horsemeat scandal as customers steered clear of frozen meat products.

Tesco had to withdraw four products from sale amid the crisis, but said the effect on overall sales was minimal and stressed that trading was now "back to normal".

While still well ahead of its supermarket rivals in terms of market share, Tesco has been facing a greater challenge from the likes of Asda, Morrisons and Sainsbury's.

They had been investing in their UK operations at a time when Tesco had concentrated on diversifying its business.

Last year, Mr Clarke pledged a £1bn investment to upgrade its stores and customer service offering - at one stage taking personal charge of the turnaround plan.

Capital expenditure fell by 19% or £0.7bn to £3bn in the financial year.

16.01 | 0 komentar | Read More

Jobless Total Up As Income Squeeze Tightens

The unemployment total has risen for the second month in a row while average pay increases were found to be at their weakest on record.

The Office for National Statistics (ONS) said the number of people without work rose 70,000 in the three months to the end of February to reach 2.56 million - pushing the jobless rate up to 7.9%.

The number of people in work fell by 2,000 over the period to just under 30 million - the first time the figure has dipped since autumn 2011.

There were 900,000 out of work for more than a year, an 8,000 increase on the three months to November, while the number of unemployed 16 to 24-year-olds rose by 20,000 to 979,000.

However, those claiming unemployment benefit fell by 7,000 in March.

While the jobless figures suggested a reversal in the resilience of the UK labour market amid the UK's weak economic growth, it was the pay statistics that will most worry those who are seeking a pick-up in consumer spending to boost output.

Pay, excluding bonuses, rose by 1% between November and February compared to a year earlier which was the smallest on record, the ONS said.

With CPI inflation currently measured at an annual rate of 2.8%, the pay figure demonstrates that prices are continuing to rise at a faster pace than wage growth at a time when energy bills and many other costs have soared.

Employers have been limiting pay increases as a way of keeping hold of staff amid the flat-lining economy.

The move has been cited by some economists as a key reason why unemployment levels fell last year: companies wanting to be ready for when recovery came.

More follows...

16.01 | 0 komentar | Read More

New EasyJet Chair: Next's Chairman In Frame

By Mark Kleinman, City Editor

John Barton, the chairman of fashion retailer Next, has emerged as a leading candidate to chair easyJet, the FTSE-100 low-cost airline.

I understand that Mr Barton is on a shortlist of contenders vying to replace Sir Mike Rake, who is due to step down from the role this summer and who will assume the presidency of the CBI, the business lobby group.

The board of easyJet has yet to make a decision about Sir Mike's successor and insiders said on Monday that at least one other person was still in the frame alongside Mr Barton.

"His is one of the names in the mix but it isn't the only one," said one insider.

A decision about easyJet's new chairman, which could come as soon as this week, will be significant because of the fractious relationship that Sir Mike and his predecessors have had with Sir Stelios Haji-Ioannou, the airline's founder and largest shareholder.

Sir Stelios has called on easyJet's management to slow the pace of new aircraft deliveries and focus on improving shareholder returns.

Many independent shareholders have, though, backed Sir Mike and Carolyn McCall, easyJet's chief executive, following a surge in profits and its share price, which have propelled the company into London's blue-chip index.

The easyJet founder has fought a long-running battle against Sir Mike, accusing him of having too many corporate roles and being complicit in the lavish pay culture at Barclays, where he is deputy chairman.

He has threatened to further reduce his stake in the airline if the company places a large order to expand its fleet in the coming months.

Among the other candidates to replace Sir Mike is Charles Gurassa, who already sits on easyJet's board as its deputy chairman and senior independent director.

Mr Barton, who is 68, would probably be viewed by easyJet shareholders as a safe option to take on the role. He has chaired Next since 2006 and would be expected to hand over the reins at some point in the next couple of years.

He has also chaired companies including Brit Insurance, Cable & Wireless Worldwide and Jardine Lloyd Thompson.

An easyJet spokesman declined to comment.

16.01 | 0 komentar | Read More

Boston Blasts Knock Stock Market Values

The apparent terrorist attack on the Boston Marathon has intensified the recent 'run for cover' on world stock markets.

There had already been a rush to dump gold before the blasts while oil took a fresh tumble amid an earlier world sell-off on fears of slowing economic recovery.

The Dow Jones closed 1.8% lower while Asian markets also lost value overnight as commodity stocks fell. European markets also opened lower.

In London, the FTSE 100 dropped 0.5% at the start of trading.

The effect of the attack on Boston, while seen to be a temporary shock, added to the gloom as fears grew that an end was in sight for Federal Reserve support for the US economic recovery.

Prices Correct At 9.20am

The sell-off in markets was triggered by the Chinese government's report on Monday that annualised growth in the world's second-largest economy slowed to 7.7% in the first quarter from 7.9% in the final quarter of last year.

Growth was expected to accelerate slightly to 8%.

Gold endured its sharpest drop in price over two days since 1983 on Monday, with the cost of a troy ounce falling to $1,350 before recovering slightly early on Tuesday.

Brent crude oil tumbled below $100 a barrel overnight as weaker Chinese growth was seen as hitting demand.

16.01 | 0 komentar | Read More

Inflation Sees Off Threat From Car Insurance

The headline measure of inflation remained steady in March as a reduction in the pace of rising fuel costs offset a sharp increase in car insurance.

The Office for National Statistics (ONS) said the Consumer Prices Index (CPI) stayed at an annual rate of 2.8%.

Some economists had predicted an increase to 3%.

A 5.8% rise in car insurance premiums were found to have piled further pressure on household budgets though slower rises in diesel and petrol prices helped cancel out the effect.

Rises in the cost of books and digital cameras were also offset by lower inflation for sofas and armchairs, the ONS said.

Separate ONS figures also showed that factory gate inflation rose by an annual rate of just 2%, the smallest increase since July, on the back of falling oil prices.

More follows...

16.01 | 0 komentar | Read More

Floods: UK Insurers Avoid Covering Risky Homes

By Becky Johnson, North of England Correspondent

People whose homes have been devasted by flooding fear they will be unable to get insurance in future as talks between the Government and insurers have so far failed to reach an agreement.

At present insurers are required to provide cover at reasonable rates provided the Government continues to strengthen flood defences, but this agreement - known as the Statement of Principles - is due to expire in June this year.

In St Asaph in North Wales more than 400 homes were deluged when the River Elwy burst its banks last November. So far, the majority of people have still been unable to return to their houses.

James Alcock stands in his kitchen after flood water recedes

John Wynn Jones who is a local councillor and whose own home was flooded told Sky News: "What we are finding is that because people are so concerned about getting insurance, as well as clearing up after the floods themselves, people are actually considering not moving back into their homes.

"They don't want to get back into their properties and then find out they can't get insurance or the premiums are now so high they can't afford it.

"There's one lady who was insured and ... they've told her they won't be able to renew her policy. When she's questioned it, they've told her 'you no longer fulfil our criteria'. It hasn't been explained to her why but she says the only thing that's changed is she has now been flooded.

"Another resident has had to shop around. Her existing premium had been £200 a year and the best deal she can get now is £1,200 a year. Someone else was told they'd only get a policy with a £10,000 excess.

"People are desperate to have the cover but a lot of people are saying they don't have the money to pay so they'll end up living in uninsured properties."

A fireman helps a member of the public in Aberfoyle

Aidan Kerr, head of property at the Association of British Insurers (ABI), said: "We continue discussions with Government on the model we have developed to safeguard the availability and affordability of flood insurance for those at high risk.

"With flooding the biggest natural risk the UK faces, it is important we have consensus on managing the risk going forward, which includes sustained and targeted flood defence investment and sensible planning decisions."

A spokesperson for the Department for Environment, Food and Rural Affairs told Sky News: "We want to get an agreement on insurance that provides a lasting solution and secures affordability and availability of flood insurance for policy holders.

"Constructive negotiations are ongoing and Government is meeting with the ABI regularly."

16.01 | 0 komentar | Read More

Exclusive: CVC Mulls £750m Gamble On Betfair

By Mark Kleinman, City Editor

The private equity group behind Formula One motor racing is mulling a takeover approach for Betfair, the online betting exchange which floated on the London market three years ago.

I have learned that CVC Capital Partners, one of the biggest buyout firms in the world, is in the early stages of considering a bid to take Betfair private.

The private equity group, which has reaped a handsome profit from its investment in F1, has not approached the board of Betfair, and has yet to line up financing for a bid, insiders said on Saturday.

Betfair's share price has risen sharply in recent months, largely on the back of speculation that it might be ripe for a takeover.

One person close to the situation cautioned that the company's share price "already contained a takeover premium", and warned that a further jump in the value of the stock may bring a premature end to CVC's interest in the company.

On Friday, Betfair's shares closed at 699.5p, roughly 9 per cent above a 52-week low set in January.

The authorities which govern the City's takeover disclosure regime have become increasingly fastidious in recent years and are likely to force CVC to declare its hand if Betfair's share price moves sharply on Monday.

One person familiar with CVC's thinking confirmed that it had begun contemplating an offer for Betfair but said it may yet opt to cease that work if approached by the Takeover Panel, enabling it to issue a statement saying that it was not pursuing an offer.

"We never comment on market rumour or speculation," a CVC spokesman said on Saturday.

Key to the success of any bid to take control of Betfair would be the attitude of the gambling exchange's founders, Andrew Black and Edward Wray.

Between them, they own approximately 20% of the company, with a number of big technology investors such as the Japanese firm Softbank and Balderton Capital also holding significant stakes.

It is unclear whether CVC has approached either Mr Black or Mr Wray about its interest, although one insider said any takeover ambition would be "dead" without their support.

Betfair floated at £13-a-share, but its poor post-listing performance left investors nursing significant losses, making it one of a series of prominent companies, such as Ocadon, the online grocer, and Glencore, the commodities trader, to suffer a slump in its value after launching an initial public offering.

Betfair has endured a torrid time during its brief life as a public company, parting with a string of top executives.

The current boss, Breon Corcoran, joined in 2012 from rival gambling group Paddy Power. He has opted to reshape the company's operations, withdrawing from troubled Eurozone markets such as Greece, and selling non-core assets such as its stake in LMAX, a financial trading platform.

Like many gaming companies, it has also faced regulatory battles over tax issues, leading to a decision to pull out of the German market. It now intends to focus on regulated markets, and is attempting to turn around the fortunes of its struggling online poker business.

Last month, Betfair reported a 4% fall in unaudited revenues for the three months to January 31 against the same period a year earlier.

"Betfair performed well in the third quarter and the business is on track against our full year expectations. UK revenue was up 6% driven by the continued strength of mobile betting as well as favourable sporting outcomes," Mr Corcoran said in March.

"In line with our previous guidance, international revenues declined as a result of regulatory change and our focus on sustainable jurisdictions.

"The new leadership team is in place and has started to implement the changes required to make Betfair a more focused and leaner organisation."

A spokesman for Betfair, which is chaired by Gerald Corbett, the former Railtrack boss, declined to comment.

CVC, which owns stakes in the Virgin Active gyms chain and the parent company of Madame Tussauds, has an extensive track record in the leisure and sports industries.

16.01 | 0 komentar | Read More

Banks Slammed Over Account Complaints Handling

A fifth of complaints about current accounts at banks and building societies are not being resolved to the customer's satisfaction, a survey says.

Consumer group Which found that 26% of customers, equating to 12 million people across the country, have experienced problems in the last 12 months.

Of these, two-thirds have made a complaint and 22% of people who did so were not happy with the end result.

The findings, which come at a time when moves are under way to make it easier for people to switch current accounts and encourage competition, were made following a survey of 2,000 people across the UK in February.

Common causes for complaint included poor customer service, incorrect charges, difficulty getting through to someone and mistakes showing up on statements.

Three in 10 people who did complain said they had to do so more than once before the issue was put right.

Which? said it had found Lloyds TSB to be the bank with the highest proportion of customers saying they had experienced some sort of problem at 30%, followed closely by Lloyds' sister bank Bank of Scotland, as well as the Co-operative Bank.

Out of the 12 banks and building societies surveyed, the proportion of customers who had experienced problems tended to be lower among First Direct and Nationwide customers, according to the findings.

Which? executive director, Richard Lloyd said: "There's been a lot to complain about in banking over the last few years and to win back our trust they must sort out their complaints handling. When things go wrong it is critical that banks act swiftly and fairly to deal with the problem, identify what caused it and make sure it's not repeated.

"The way that a bank deals with complaints says a lot about the culture of the organisation. Some banks are getting this right but they all need to do more to put their customers first."

Lloyds Banking Group said it was "disappointed" to see the Which? findings, particularly as it has reduced its number of complaints last year by 28%.

A spokeswoman for Lloyds said: "Our commitment to service is central to our aim of being the best bank for our customers. To do this, we'll continue to listen to our customers' feedback, focus on their needs and fix the cause of complaints and urge any customer who has an issue with their account to contact us."

The Co-op Bank also said it was disappointed, adding that the findings do not reflect its experience with customer satisfaction surveys or complaints.

A statement from Co-op said: "Despite the very low sample size of our customers in this survey, we are not complacent about the findings or our position and we do take any feedback on our customer service extremely seriously.

"We are now working with Which? to understand the research in more detail and will be addressing those areas in which we have fallen short as a priority."

Here are the proportions of each bank and building society's customers in the Which? survey who have experienced problems with their accounts in the last 12 months:

:: Lloyds TSB, 30%
:: Co-operative Bank, 29%
:: Bank of Scotland, 29%
:: RBS, 28%
:: Barclays, 27%
:: Santander, 27%
:: Halifax, 27%
:: NatWest, 26%
:: HSBC, 22%
:: Yorkshire Bank, 19%
:: Nationwide, 12%
:: First Direct, 9%

16.01 | 0 komentar | Read More