US Economy Misses Forecasts In Last Quarter

The US economy has expanded at a rate below that forecast by economists, the latest official figures have shown.

Although economic growth regained speed in the first quarter, it was not as much as expected, heightening fears the already weakening economy could struggle to handle deep government spending cuts and higher taxes.

Gross domestic product (GDP) expanded at 2.5% annualised rate in the first three months of 2013, according to the Commerce Department.

The figure was up on the previous quarter, after growth nearly stalled at 0.4%.

The latest increase, however, missed economists' expectations for a 3% growth pace.

Part of the acceleration in activity reflected farmers' filling up silos after a drought last summer decimated crop output.

Removing inventories, the growth rate was reduced to a tepid 1.5%.

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Spain Slashes Economic Growth Forecasts

The Spanish government has forecast that the economy will contract by more than expected in 2013, but will return to growth next near.

The country's deputy prime minister said its gross domestic product (GDP) would shrink by 1.3% in 2013 - down from the 0.5% contraction previously forecast.

But Soraya Saenz de Santamaria said Spain's economy is expected to return to growth of 0.5% in 2014, and will expand by 0.9% in 2015.

At a press conference following the adoption of a new economic plan for the country, she said that no major new reforms, tax hikes and spending cuts were needed to meet the new targets.

The forecasts come a day after protestors took to the streets of Madrid

She added that the government - which had to backtrack from its promise to cut taxes next year - was still aiming to cut some taxes in 2015.

The economy minister, Luis de Guindos, said the deficit-reduction strategy had been agreed with the European Commission and other eurozone officials.

"2014 will be the year of recovery," he said.

The deficit is now forecast to reach 6.3% of GDP in 2013 - well above earlier targets - but would fall to 2.7% by 2016, Mr de Guindos added.

The unemployment rate - which hit a record high of 27.2% in the first quarter of this year - is expected to fall back to 26.7% in 2014, and 25% in 2015.

It comes as protests broke out in Madrid on Wednesday following the release of the latest jobs data.

Around 1,000 people took to the streets in the latest demonstration against the country's austerity measures and tax hikes that have left many without jobs.

The country's economy has been struggling to show signs of recovery since the collapse of its once-booming property market in 2008.

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Winston Churchill To Appear On New £5 Notes

Former British prime minister Sir Winston Churchill is to appear on the next banknotes, it has been announced.

Bank of England Governor Sir Mervyn King revealed the image of Churchill which will be used to members of his family at his former home, Chartwell, on Friday.

Sir Mervyn said: "Our banknotes acknowledge the life and work of great Britons. Sir Winston Churchill was a truly great British leader, orator and writer.

"Above that, he remains a hero of the entire free world. His energy, courage, eloquence, wit and public service are an inspiration to us all. I am proud to announce that he will appear on our next banknote."

The Churchill banknote is due to be issued as a £5 note for use during 2016.

The design on the reverse of the note will include a portrait of Churchill from a photograph taken in Ottawa by Yousuf Karsh on December 30, 1941 and a view of Westminster and the Elizabeth Tower from the South Bank looking across Westminster Bridge.

The image of the Elizabeth Tower will feature the hands of the Great Clock at 3pm - the approximate time on May 13, 1940 when Churchill declared in a speech to the House of Commons: "I have nothing to offer but blood, toil, tears and sweat." This declaration is quoted beneath the portrait.

In the background, there will be the Nobel Prize medal which Churchill was awarded in 1953 for literature, together with the wording of the prize citation.

Sir Mervyn King with Lady Soames, Churchill's only surviving child.

Sir Mervyn, due to retire later this year, suggested the new note could become known as a "Winston" - and that the spirit of Churchill's inspirational "blood, toil, tears and sweat" speech was just as important during today's times of economic difficulty as during the War.

He said: "We do not face the challenges faced by Churchill's generation. But we have our own.

"And the spirit of those words remains as relevant today as it was to my parents' generation who fought for the survival of our country and freedom under Churchill's leadership."

Churchill's image replaces that of Elizabeth Fry, the philanthropist and penal reformer, who appears on current notes first issued in 2002.

These will be phased out over two or three years, leaving no notes featuring the face of a famous woman - other than the Queen.

The choice of Churchill reflects the fact that, though a political figure, he is widely revered across the spectrum as the man who saved Britain in its darkest hour from the fearful advance of Nazism across Europe.

Another war hero, the Duke of Wellington, is the only other prime minister to have featured on a banknote image - the old £5 phased out in the 1990s.

Speaking in the grounds of Chartwell, Sir Winston's grandson, Mid Sussex Tory MP Nicholas Soames, said featuring on a bank note would have given the former wartime prime minister great pleasure.

He said: "He was an extraordinary man and his ability to capture the mood and the people's mood was one of his great gifts as a statesman.

"The design of the bank note, the quotation and the whole idea behind it is so appropriate and fitting, and my grandfather would have been truly very proud."

Churchill had a long parliamentary career during which he served as home secretary and chancellor before a spell in the political wilderness in the 1930s when he warned of the increasing threat of German rearmament.

In May 1940, he replaced Neville Chamberlain as prime minister in the newly-formed National Government. His leadership and brilliant oratory were credited with helping to steer Britain to victory.

Defeated by Labour in the 1945 general election, he served again as prime minister from 1951 to 1955, when he retired aged 80. Churchill died in 1965 and was given a full state funeral, the first commoner to receive such an honour since Gladstone in 1898.

He was also the first commoner to feature on a British coin - the 1965 crown or five-shilling piece.

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Spain's Jobless Rise 'Worse Than Feared'

Spain's unemployment rate soared to 27.2% in the first quarter of the year, worse than economists had predicted.

The official figures revealed that the number of those without jobs surpassed six million for the first time - with 237,400 people added to the grim unemployment statistics over the period taking the total to 6.2 million.

Economists had expected the unemployment rate to grow from 26% in the final quarter of 2012 to 26.5%.

The figures were released by the country's National Statistics Institute against a backdrop of recession, which is expected to continue throughout 2013.

The Spanish economy, the eurozone's fourth biggest, contracted by 1.4% last year, the second worst yearly slump since 1970

The Bank of Spain has predicted a 0.5% fall in GDP during the first three months of 2013 while the International Monetary Fund's recent World Economic Outlook report expects a contraction of 1.6% over the 12 months.

Spain's problems stem from the collapse of its once-booming real estate sector in 2008, which resulted in a facility of up to 100 billion euros (£85bn) in rescue funds being made available by its eurozone partners.

The government has launched a series of financial and labour reforms and pursued a raft of spending cuts and tax increases that have managed to reduce a swollen deficit but been blamed for choking economic growth.

Despite the measures, Spain had the highest budget deficit among the 17 European Union countries that use the euro in 2012.

Its Budget, due to be announced on Friday, is expected to focus less on austerity and include more measures to stimulate activity in the economy.

A key fear behind Spain's soaring unemployment crisis is that it is damaging the country's prospects by consigning a generation of young people to financial hardship.

The official statistics agency for the European Union, Eurostat, said earlier this month that youth unemployment in Spain had topped almost 56%.

Analysts expect the Budget to try and address the issue, despite the spending constraints faced by Mariano Rajoy's government, as he took office in December 2011 on the back of a core pledge to create jobs.

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Samsung Galaxy S4: Supply Chain Problems

Samsung has blamed "unexpectedly" high demand for supply problems that are delaying the roll out of its latest smartphone.

Mobile networks Sprint and T-Mobile said the Galaxy S4 would go on sale later than expected because of a delay in shipments.

In a statement, Samsung said: "Due to overwhelming global demand of Galaxy S4, the initial supply may be limited.

"We expect to fulfil inventory to meet demands in the coming weeks."

T-Mobile said online orders for the phone will start on April 29 - not Wednesday as planned - because of "an unexpected delay with inventory deliveries."

Sprint said it would take orders on the internet from Saturday, but the phone would be sold at stores only when it becomes available.

The US' largest carrier Verizon said it does not plan to sell the new smartphone until May 30.

Samsung's head of sales and marketing said the global roll-out of the S4, which is sold in South Korea on Friday, would go ahead as expected the following day.

"Demand is far stronger than we had expected and as a result we are having difficulties in fully meeting initial supply requests," Mr Don-joo said.

The much-anticipated model was unveiled last month in New York, as Samsung attempts to boost its presence in the US and better compete with rival Apple.

The new Galaxy is thinner and lighter than the popular S3 model, and has a high-definition five-inch screen.

The South Korean company overtook Apple to become the world's top smartphone maker, and in January said it had shipped more than 40 million Galaxy S3 units since its launch in May.

Supply issues have affected other global launches of popular smartphones - with some customers waiting weeks to receive new iPhones in the past.

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UK Economy Avoids Triple-Dip Recession

The UK economy returned to meagre - but better than forecast - growth in the first quarter of 2013, averting the prospect of a triple-dip recession.

According to the first estimate of GDP by the Office for National Statistics (ONS) there was overall growth of 0.3% in the period - driven by the service sector though construction remained in the doldrums.

A contraction in GDP would have given the UK two consecutive quarters of negative output and plunged the UK back into recession, delivering a savage political blow to the Chancellor George Osborne.

GDP had shrunk by 0.3% in the final three months of 2012 but the ONS pointed today to a recovery in services output, with the motor industry particularly strong.

It measured growth in the sector at 0.6%, driven by 1.1% growth in the wholesale and retail distribution, hotels and restaurant trades sector.

Industrial output was lifted by the biggest rise in the mining and quarrying sector since 2002 as some North Sea oil and gas platforms came back on line after repairs that had depressed production in the final quarter of 2012.

The figures also showed that the impact of the cold winter was not as bad as feared, with weather-hit trading on the high street offset by a boost in energy demand as households ramped up their heating.

However, manufacturing output remained weak at -0.3% in the period while construction contracted by 2.5%.

Mr Osborne took to Twitter to give his reaction: "Today's figures are an encouraging sign the economy is healing. Despite a tough economic backdrop, we are making progress.

"The deficit is down by a third, businesses have created over a million and a quarter new jobs and interest rates are at record lows.

"We all know there are no easy answers to problems built up over many years, and I can't promise the road ahead will always be smooth but by continuing to confront our problems head on, Britain is recovering and we are building an economy fit for the future."

The performance will relieve some of the pressure on the Chancellor to rethink his austerity policy, following recent warnings that the UK is a "crisis economy" and last week's ratings downgrade.

IMF chief economist Olivier Blanchard told Sky News last week that Mr Osborne was "playing with fire" with his economic strategy.

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Barclays Profits Fall 25% Amid Restructuring

Barclays endured a 25% fall in first quarter profits as £514m of restructuring costs weighed heavily.

The bank reported an adjusted pre-tax profit for the three months to March of £1.79bn, down from £2.4bn a year ago, just below analysts' expectations.

The investment bank made a profit of £1.3bn in the first quarter, up 11%, and accounted for almost three-quarters of group profit.

Barclays said group profits were dented by the charge to cover Project Transform - new CEO Antony Jenkins' plan to axe 3,700 jobs, prune the investment bank and reform the bank's culture after a series of scandals.

Investment bank chief Rich Ricci is the best-rewarded at Barclays

He is aiming to make the lender the 'Go-To' bank on the high street following the PPI and interest rate swap scandals and Libor interbank lending rate-rigging.

Mr Jenkins confirmed an additional £500m in restructuring costs were expected to be found over the remainder of the year.

He said: "While there remains much to do to build a stronger and more resilient Barclays, we are completely focused on executing our Transform programme and are making good early progress."

Most of the costs incurred so far were in its European operations, where it has cut almost 2,000 jobs, and the investment bank, where it is axing 1,800.

The bank last week announced a fresh shake-up of its senior staff, including the departure of its head of investment banking, in the wake of last year's Libor scandal.

Rich Ricci and Tom Kalaris, who runs its wealth-management arm and US business, were both appointed by former boss Bob Diamond.

Under their watch, the Libor system was found to have been open to abuse, with some traders lying about borrowing costs to boost trading positions or make the bank seem more secure.

Barclays was later fined £290m by regulators for manipulating the rate.

Mr Ricci - Barclays' best-paid banker - recently revived the debate about remuneration in the sector when it was confirmed he was getting a £17m share payout under the terms of his contract.

It was part of a £40m windfall to be shared between nine executives.

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Chinese Hacking Suspects 'Back In Business'

By Alistair Bunkall and Mark Stone, Sky News

A group of Chinese hackers suspected of being behind a cyber-attack on the New York Times earlier this year may be restarting their campaign.

BAE Systems, the defence contractor, says it has unearthed evidence that indicates the group is active for the first time since February, when the hackers were accused of being linked to a Chinese military unit in Shanghai.

Although the connection has not been proven, the hacking group went immediately quiet on the day the allegation was made. Now analysts believe the hackers are ready to strike again.

David Garfield, managing director of cyber security at Detica, a BAE Systems subsidiary, told Sky News: "The activity we have detected indicates that the espionage group was lying low until the attention around their activities died down, before getting back to 'business-as-usual'.

"Detica researchers have obtained a copy of malware that has all the hallmarks of being crafted by this espionage group.

"This malware was created in the last week and contains a PDF which contains the agenda of an upcoming US defence conference which is consistent with the mode of operation of these particular attackers.

"The conference, taking place at the end of this month, fits with the style of event which is commonly used as a 'lure' for this group, and others of its kind."

Informal hacking groups operate differently to state-sponsored cyber units

For four months, towards the end of 2012 and into early 2013, hackers repeatedly infiltrated the New York Times, obtaining staff passwords among other things.

Security consultants found that some of the attacks were being routed through US universities to divert the blame away from the source, a method commonly associated with Chinese hackers.

The newspaper said the attacks were probably motivated by work reporters had been carrying out concerning senior figures in the Chinese government.

In February the American computer security company Mandiant published several years of research which it claimed pinpointed the hacking to one building in the Pudong district of Shanghai.

The building was reportedly the headquarters of the People's Liberation Army Unit 61398.

Mandiant represents the cyber-security interests of several major multinational companies, all of whom believe they are the victims of Chinese hackers.

The HQ said by Mandiant to be the source of much hacking (Pic: City8.com)

On Monday, the Chinese army's chief of the general staff, General Fang Fenghui, was asked about cyber security at a rare news conference with the visiting US chairman of the joint chiefs of staff, General Martin Dempsey.

General Fang issued an alarming warning on the dangers of hacking.

"Cybersecurity, if it is uncontrolled, the effects can be, and I don't exaggerate, at times no less than a nuclear bomb," General Fang said.

General Fang also reiterated a longstanding Chinese government assertion that China is also a victim of cyber attacks and that it is "strongly against any kind of cyber attacks".

China is not the only country connected with cyber attacks - the US, Russia, Israel and Iran are all suspected of developing cyber weapons. Most Western countries are believed to be doing the same.

Both BAE Systems Detica and Mandiant have commercial interests in highlighting the dangers of cyber crime.

The Chinese government has not responded to the latest allegations.

:: The Syrian Electronic Army has made an uncorroborated claim that it hacked the Twitter feed of the Associated Press news organisation. On Tuesday, the AP feed falsely stated that an attack on the White House had left the US president injured.

:: Australian police have arrested the self-proclaimed leader of non-state global hacking group LulzSec, which its members have said was responsible for breaching the CIA's external website.

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Co-Op Deal To Buy Lloyds Branches Collapses

Lloyds Banking Group's sale of more than 600 branches to the Co-operative Group has fallen through.

The Co-op - which pulled out of the £800m deal - said it was "not in the best interests of the Group's members" at the present time.

"This decision reflects the impact of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general," the company said in a statement.

It comes after Sky's City Editor Mark Kleinman highlighted doubts about the takeover plans in February.

If the deal had gone ahead, the Co-op bank would have doubled in size

The UK's financial regulator had concerns over the Co-op Bank's capital position, he said.

Lloyds is being forced to dispose of the branch network - known as Project Verde - by European regulators in return for the £20bn of state aid it received at the height of the 2008 banking crisis.

The part-nationalised bank now intended to sell the network through an initial public offering (IPO).

Lloyds' chief executive, Antonio Horta-Osorio, said the company was disappointed by the Co-Op's decision.

"However, we are well advanced in our plans to bring the Verde business to the UK high street during the summer through the TSB Bank, and will now proceed with the option to IPO the business, subject to the necessary approvals," he said.

"The TSB Bank will be an attractive retail and commercial bank that will have around 630 branches across the UK, a strong management team and will be a real challenger on the high street."

If the deal had been completed, the Co-op would have doubled in size with around 1,000 bank branches across the UK - making it a viable competitor to the "Big Four" lenders - Lloyds,HSBC, Barclays and Royal Bank of Scotland (RBS).

Its collapse comes after Santander UK withdrew from a deal to buy 316 RBS branches in October last year.

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Cyber Attacks On UK Businesses 'Soaring'

The number of cyber attacks hitting businesses has soared in the past year, Government-commissioned research has revealed.

The survey showed 87% of small firms - up 10% - experienced a security breach last year and 93% of large organisations had also been targeted.

The Information Security Breaches Survey, commissioned by the Department for Business, Innovation and Skills (BIS), found some of the attacks caused more than £1m of damage.

Affected companies experienced around 50% more attacks on average than a year ago.

The median number of breaches suffered by large organisations has risen from 71 to 113, while the figure for small firms is up from 11 to 17.

The Government has increased support for small firms to help them protect against electronic attacks.

The Technology Strategy Board has extended a scheme to allow small and medium enterprises to bid for up to £5,000 from a £500,000 pot to improve their cyber security by bringing in outside expertise.

BIS is also publishing guidance to help small firms make cyber security part of their normal risk management procedures.

Universities and Science Minister David Willetts said that keeping electronic information secure is crucial to a business's bottom line.

"Companies are more at risk than ever of having their cyber security compromised, in particular small businesses, and no sector is immune from attack," he said.

"But there are simple steps that can be taken to prevent the majority of incidents.

"The package of support we are announcing today will help small businesses protect valuable assets like financial information, websites, equipment, software and intellectual property, driving growth and keeping UK businesses ahead in the global race."

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EE Reports 'Strong Demand' For 4G

EE - which owns the Orange and T Mobile brands - has said almost 320,000 customers have signed up for its 4G services.

It is the first time Britain's largest mobile network operator has given subscriber numbers since it launched its super-fast broadband service earlier than rivals.

The company used its existing airwaves to launch 4G in October last year - but competitors have to wait until later this year, following the auction of the UK's 4G spectrum.

EE - a joint-venture owned by France Telecom and Deutsche Telekom - said it was "firmly on track" to meet its target of more than one million 4G customers by the end of 2013.

It added that the super-fast broadband services had boosted the average amount each customer paid - by 2.2% in the first quarter of the year.

Chief financial offer, Neal Milsom, said the company was making "good progress" and the results were in-line with expectations

"We're announcing 318,000 4G customers after just five months of trading, strong postpaid net adds and continued growth in our underlying average revenue per user," he said.

"We expect to strengthen our industry leadership position in the year ahead as the 4G roll out continues and we introduce double-speed 4GEE."

Average speeds will climb to 20Mbps in ten UK cities by the end of June, the company said.

The existing 4G service already offers speeds around five times faster than 3G, meaning quicker downloads and internet browsing.

EE added that it was on track to expand its 4G coverage to cover 55% of the population by the end of June, and 70% by the end of the year.

The company, which now has around 27 million customers, was formed when Orange and T-Mobile joined forces in 2010.

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Public Sector Borrowing Falls

The total amount of public sector net borrowing has fallen to £120.6bn over the last financial year, according to the Office for National Statistics.

The figure - which excludes the cost of bank bailouts and a boost from the Royal Mail pension assets - was just below the £120.9bn forecast by the independent Office for Budget Responsibility.

It was lower than the £120.9bn recorded in the previous tax year.

In March, borrowing was also lower than forecast at £15.14bn - down from £6.69bn a year earlier.

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Ofgem Changes: Warning Over New Energy Tariffs

More than three million households could be paying more than they need to under new energy tariffs proposed by Ofgem, according to new research.

The consumer group Which? estimates energy customers could face bills of an extra £55m in total.

Ofgem's proposed tariff comparison rate aims to simplify energy tariffs and allow consumers to compare tariffs across the market.

Consumers will be advised on their best deal based on medium usage of gas and electricity, but only 26% of consumers use this level of energy.

The remaining 74% will be directed to tariffs which could be unsuitable for their usage and would cost them more, Which? claimed.

Which? estimates around 500,000 low energy users, who tend to be on the lowest incomes, could be advised on the wrong tariffs.

Richard Lloyd, executive director at Which?, said: "Rising energy bills remain one of consumers' top financial concerns yet six in 10 of us have never switched supplier as people are left baffled by the vast array of complicated tariffs.

"These current proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal, with three-quarters of people being asked to compare prices that are not based on their energy usage.

"The Government should introduce single unit prices for each energy tariff so people can easily see the best deal for them at a glance. Only then will people have the confidence to switch, injecting much-needed competition into the broken energy market."

But an Ofgem spokesman said the reforms would "deliver a simpler, clearer and fairer energy market for consumers and will make it much easier for consumers to choose the right deal for them".

He added: "Which? is misrepresenting the purpose of the tariff comparison rate and how it fits into the full scope of Ofgem's reform package. The tariff comparison rate acts as a prompt to consumers to take a look at comparative deals.

"The tool is similar to the 'typical APR' used in financial services marketing. But it is partnered with personalised consumption information necessary to make a full and accurate cross market comparison, which every supplier must provide via bills and annual statements. Ofgem's reforms will also see suppliers' cheapest deals on your bill.

"We share the desire with Which? to see an at-a-glance tariff comparison. We are taking forward our innovative proposals to put the market cheapest deal on consumers bills - even if it is from a rival supplier - and this will remove the need to compare tariffs altogether. We hope Which? will respond positively to our invite to them to join this next stage of our work."

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Dreamliner: Boeing Installs New Batteries

Boeing has begun installing reinforced lithium ion batteries in some of its grounded Dreamliner planes.

The batteries in five jets owned by All Nippon Airways (ANA) are being replaced, and Japan Airlines is installing the equipment in two of its seven Dreamliners.

The process could see the first commercial 787s ready to fly again in about a week, according to Reuters.

All 50 Dreamliner planes were grounded by regulators in January following two battery fires - one in the US and another in Japan.

On Friday, the US' Federal Aviation Administration (FAA) approved Boeing's battery modification plans.

The aerospace giant will encase the new batteries in steel box, install new battery charges, and add a duct to vent gases directly outside the aircraft that could cause overheating.

ANA - the world's biggest operator of Dreamliners with 17 planes - plans to conduct between 100 and 200 test flights of the repaired aircraft in May, a source told Reuters.

The tests will check the planes' safety and allow ANA's 180 pilots to get accustomed to flying them again after more than a three-month break.

The operator could start carrying passengers again on board Dreamliners from June, Reuters reported.

ANA has not said how much the grounding has cost it to date, but has said it lost around $900,000 (£590,660) in revenue per plane in the last two weeks of January.

The grounding of the fleet is estimated to be costing Boeing $50m (£32.8m) a week, and airlines across the world that own the planes have also been hit.

US and Japanese investigators have yet to identify what caused the batteries onboard two jets to overheat.

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Bosses Demand A Better Deal With The EU

Hundreds of British business leaders have called on the coalition to negotiate a better deal for Britain with the European Union.

David Cameron has vowed to claw back powers and then offer voters a choice of staying in the EU in a referendum by the end of 2017 if the Tories return to power in 2015.

The new Business for Britain campaign backs his approach on renegotiation and called for a cross-party "national drive to renegotiate the terms of Britain's membership of the EU".

Ocado chairman Sir Stuart Rose and Next boss Lord Wolfson are among the 500 people signed up to the campaign, who come from small companies as well as blue chip firms.

Ocado chairman Sir Stuart Rose is one of the signatories

They said: "As business leaders and entrepreneurs responsible for millions of British jobs, we believe that the Government is right to seek a new deal for the EU and for the UK's role in Europe.

"Far from being a threat to our economic interests, a flexible, competitive Europe - with more powers devolved from Brussels - is essential for growth, jobs and access to markets.

"We therefore welcome the launch of Business for Britain's campaign for real change in the EU and urge all political parties to join in committing themselves to a national drive to renegotiate the terms of Britain's membership of the EU."

The group's co-chairman Alan Halsall, boss of pram maker Silver Cross, said: "Business for Britain has been formed because many would have you believe that business doesn't want politicians to try and renegotiate a better deal from Europe.

"But we know that jobs and economic growth depend on a more flexible, looser relationship with the EU. Just as Business for Sterling stopped Britain joining the Euro, Business for Britain will get us this better deal."

JML founder John Mills added: "This campaign is not about taking political sides or backing the right horse - it's about doing what's best for British business.

"I have been a member of the Labour Party for 40 years, others supporting the campaign are supporters of different political parties or none at all.

"The important part is that the signatories to Business for Britain want to show the country that business does not fear Britain's politicians seeking a better deal from Brussels."

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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".

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Yahoo! Ditching Chinese Email Service

Yahoo's Chinese arm is shutting down its email service later this year, highlighting the brand's diminishing profile in the country.

China Yahoo! said it would close its email service by August 19, a move that will leave it with just its web portal business.

Users of the service were told they must register with AliCloud, a unit of Chinese e-commerce giant Alibaba, to prevent emails and other information from being deleted when Yahoo's mail service stops.

China Yahoo! has been operated by Alibaba since 2005.

The US internet giant has come under criticism in the past over its business in China. In 2007, executives apologised after providing evidence that was subsequently used by the Chinese authorities used to convict government critics.

The company said it was legally obliged to divulge information about its users to the Chinese government - but said it was unaware it would be used to convict dissidents.

Alibaba public relations official Zhang Jianhua said the end of the mail service would affect millions of users, although he did not have a more precise figure.

"We are not sure how long we can provide the email service under Yahoo's current technological structure," he explained.

A China Yahoo! statement added: "We will offer several options to our users to make this transition as smooth as possible, and China Yahoo! users will have four months time to migrate their accounts."

It said the migration process had already begun.

Users of China's Twitter-like microblogs expressed anger at the news.

A post under the name "Lisa's paw" said: "How can they do this? All of sudden Yahoo mail can't be logged onto and everything was moved to AliCloud. Did you ask for users' opinions?"

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George Osborne Urged To Rethink Economic Plan

Lagarde's Support For Osborne

Updated: 4:29pm UK, Saturday 20 April 2013

By Ed Conway, Economics Editor

A few weeks ago, eagle-eyed Twitter users would have noticed a rather unusual tweet from one household name to another.

"Welcome to Twitter @George_Osborne," read the public message from @Lagarde, "see you in two weeks at the 2013 IMF/WB spring meetings in Washington, DC".

It was, it turns out, the only personal tweet that Christine Lagarde sent to any other finance minister in the run-up to this past week's Spring Meetings in Washington DC.

This is no coincidence. Lagarde and Osborne really are good friends. They talk regularly (and not just on Twitter); they have a genuinely warm personal and professional relationship.

Osborne was the first major finance minister to endorse Lagarde for her post as managing director of the International Monetary Fund and she, in turn, has always been steadfastly and publicly supportive of his economic policy.

Last summer, Lagarde made a personal appearance at the UK Treasury to unveil the Fund's annual assessment of the British economy, and endorsed the Osborne economic plan.    

She memorably said that when she tried to imagine what the public finances would have looked like without the Chancellor's austerity measures, "I shiver."

Even as the Fund's professional assessment of the UK economy's health turned negative, Lagarde's support for Osborne has remained unwavering.

Earlier this week in Washington, the IMF chief economist, Olivier Blanchard (who, like Lagarde, is French) said Osborne would have to reduce the pace of his spending cuts, adding that the Chancellor was "playing with fire".

The World Economic Outlook said, in black and white, that "greater near-term flexibility in the path of fiscal adjustment" was necessary in the UK – economese for "you need to consider plan B".

And yet when asked about Britain, Lagarde offered a far more equivocal verdict: there was "nothing new" in the Fund's assessment that the UK should be ready to change course if and when economic growth disappointed - though she conceded that "the growth numbers are not particularly good."

This difference in tone has been useful for the Chancellor. When asked in a press briefing about Blanchard's criticism, Osborne quoted Lagarde's comments at length, saying that the chief economist was "just one voice".

However, the reality, according to a range of Fund insiders, is quite the contrary. They point out that the institutional IMF view is far closer to Blanchard's opinion than Lagarde's. That it is Lagarde who is the outlier.

In fact, some Fund officials were privately aghast when they heard Lagarde claim in that press conference that there was "nothing new" in the Fund's position on the UK.

One told me that within the Fund some were muttering that Lagarde's good relationship with the Chancellor - and her consequent efforts to be diplomatic - were undermining the overall message: that Britain must change course.

However, if there were any doubt about the Fund's true position, it has now been laid to rest by Lagarde's deputy, David Lipton. In an interview with Sky News, he said, explicitly, that when it comes to Britain's budget, "the pace of consolidation ought to be reconsidered".

The precise numbers, he signalled, would have to wait until the Fund's official survey begins next month, but the verdict could hardly be clearer.

The intervention is particularly significant given who it has come from. Lipton is not a household name; he is not on Twitter. But not only is he Lagarde's deputy, he is the man who will take her place to unveil the ominous findings of the IMF assessment in London next month. It's enough to make George Osborne shiver.

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