US Jobless Rate Now At Lowest Since July 2008

The unemployment rate in the United States has dropped to 5.9%, the lowest level since July 2008.

The jobless rate dropped by 0.2% from the August figure.

Official data showed that the US economy created 248,000 non-farm jobs in September.

The Labor Department said employers added 69,000 more jobs in July and August, higher than the government had previously estimated.

It said job creation was strongest in the restaurant industry, health care, food and beverage stores and administrative services.

More modest additions were recorded in construction and government hiring.

The improved figures come after President Barack Obama touted his administration's economic achievements in a speech on Thursday.

The economy is one of the top issues in voters' minds as the November mid-term elections near.

The lower jobless rate, combined with the surge in hiring, could ratchet up pressure on the Federal Reserve to raise its benchmark interest rate earlier than expected.

Most economists have predicted that the Fed would start raising rates in mid-2015.

"This number will continue to support the notion that the economy is growing ... (but) isn't so strong that the Fed will raise rates anytime soon," Kingsview Asset Management portfolio manager Paul Nolte said.

With rate hike expectations mounting, the dollar pushed higher on foreign exchanges after the figures were published at 1.30pm BST.

Markets across Europe except Germany's DAX, which was closed for the day, jumped on release of the new data.

In broader economic news, officials said the US trade gap narrowed in August to $40.1bn (£25bn).

The Commerce Department said the revised figure was $200m (£125m) down on the first estimate.

Economists had expected the trade gap to have grown to $40.9bn.

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Labour Peer McFall Joins Digital Bank Atom

By Mark Kleinman, City Editor

Lord McFall, a former chairman of the Treasury Select Committee, is joining the board of Atom, the first British digital-only bank that hopes to launch next year.

Sky News understands that the Labour peer is among a crop of directors being appointed by the new venture, which is being set up by the co-founder of Metro Bank and former boss of First Direct.

Lord McFall, who will become Atom's senior independent director, was also previously a director of NBNK Investments, which was set up after the banking crisis to buy assets from the UK's bailed-out banks.

NBNK was trumped in the auction of 630 Lloyds Banking Group branches by the Co-operative Group, a deal which collapsed as the mutually-owned lender came close to implosion amid the scandal over Paul Flowers, its former chairman.

Lord McFall's appointment will be announced shortly, according to an insider, alongside those of Jon Hogan, a former executive at ANZ Bank and First Direct; and Bridget Rosewell, a director of Ulster Bank and Network Rail.

Atom is awaiting regulatory approval from the Financial Conduct Authority and the Prudential Regulation Authority but hopes to launch next year.

The new business will not have any physical branches and will be primarily accessible through the internet and digital apps.

Anthony Thomson, Atom's chairman, and Mark Mullen, its chief executive, are understood to be planning to offer a full range of products aimed at personal and small business customers.

These will include current and savings accounts, as well as loan products.

It is not clear whether the pair have secured external financial backing for Atom, which headquartered in northeast England, close to the Newcastle base of Virgin Money, which this week announced plans to float on the stock market.

The plans for Atom come amid an explosion in the demand for digital banking services and a commensurate decline in footfall at thousands of retail bank branches.

Earlier this year, the British Bankers' Association (BBA) published research showing that UK-based customers conducted almost 40 million mobile and internet banking transactions each week last year.

The BBA insisted that branches would "remain at the heart of banking in the 21st century", but it emerged just days later that the taxpayer-backed Royal Bank of Scotland was closing 44 branches, sparking a fresh political row.

Under revised rules aimed at bolstering competition, the FCA has pledged to decide on banking licence applications within six months.

The process historically took several years, frustrating Treasury officials in the aftermath of the 2008 banking crisis, which sparked the merger of Lloyds TSB and HBOS, and the disappearance of several other UK banks.

Some applicants, such as Home & Savings Bank, a telephone and internet-based lender, were effectively forced to abandon their plans because of difficulties securing regulatory approval.

Metro Bank's launch in 2010 as the first new high street bank for more than a century came after a similarly tortuous process.

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BP Appeals 'Gross Negligence' Oil Spill Ruling

Oil giant BP has asked for a court ruling that it was "grossly negligent" for the Gulf of Mexico spill to be overturned.

BP made the request to a US court to reconsider a judgment handed down last month, which increases its potential liabilities by about $18bn (£11.1bn).

It said Louisiana district court Judge Carl Barbier's ruling was based on evidence he had agreed to exclude from the ongoing trial.

The company said he should therefore review his decision or give it a new trial over the 2010 spill, which saw millions of barrels of oil spread in the gulf.

The evidence in question surrounds expert testimony about how the Macondo well's casing was weakened and breached, part of a series of eight alleged errors linked to the blowout.

"BP respectfully requests that the court eliminate its theory that this series of acts amounted to gross negligence," the company said in its motion.

"In the alternative, BP would be entitled to a new trial."

The ruling last month assigned BP 67% of responsibility for the spill, while drilling rig owner Transocean Ltd was assigned 30% of blame, and cementing contractor Halliburton 3%.

The legal action is the latest motion by BP to curb fines stemming from the case, however Judge Barbier has rejected most of them.

The company has already set aside more than $42bn (£26bn) in provisions for the worst offshore spill in US history, which killed 11 workers.

The additional $18bn fines may come when the judge assigns damages under the federal Clean Water Act, next year.

BP's shares are now trading at around 30% lower than before the accident, and have never fully recovered.

On Thursday, Brent crude was trading at a 27-month low, putting more pressure on the industry with price cutting.

The company's shares are now trading at virtually the same price as this time last year.

The oil major is an important part of many UK pension fund portfolios.

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EasyJet Helped By Lengthy Air France Strike

EasyJet has lifted its annual profit forecast, as a result of lower fuel costs and a lengthy strike at competitor Air France-KLM.

The budget carrier said its full-year pre-tax profit is now expected to be around £577.5m, up from guidance given during July's third quarter of around £557.5m.

The new full-year estimate is above analysts' expectations.

"EasyJet has continued to execute its strategy," chief executive Carolyn McCall said.

"This has enabled easyJet to deliver record profits for the fourth year in a row."

The company now intends to reward shareholders as a result.

"This will also lead to our largest every ordinary dividend payment as we are also proposing to increase the proportion of our profits after tax paid in dividends from 33% to 40%," Ms McCall said.

EasyJet said it expect the two-week strike by Air France in September would add around £5m to its revenue.

The strike cost easyJet's rival hundreds of million of euros in lost revenue.

The travel industry has long been squeezed by rising fuel costs, however in recent months benefits have been seen.

Crude oil prices have dropped around 20% since June, which has helped those with shorter hedging strategies.

On Thursday, Tui Travel cited dropping fuel prices as a factor in its improved results.

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Singapore Swoop In £1bn UK Airports Deal

By Mark Kleinman, City Editor

A state-backed Singaporean investment fund is poised to participate in a £1bn takeover of the UK's biggest regional airports that will be announced within days.

Sky News has learnt that the Government Investment Corporation of Singapore (GIC) is expected to take a slice of the equity in Aberdeen, Glasgow and Southampton airports, alongside Ferrovial, the Spanish infrastructure giant, and Macquarie, the Australian bank.

GIC's involvement is understood to be in the process of being finalised although it may not be publicly named as an investor when the deal is announced early next week, according to insiders.

The three airports, which collectively handle approximately 13 million passengers annually, are being sold by Heathrow Airport Holdings (HAH), the parent company of Britain's busiest airport.

Sky News revealed Ferrovial's interest in buying the three airports nearly ten months ago, with HAH's board keen to offload the regional sites as it concentrates on securing backing for a third runway.

The debate about Britain's aviation policy will reach a crucial stage next year, when Sir Howard Davies's commission makes a recommendation about the most appropriate location for new runway capacity.

The Commission's verdict will be made after the general election, and is effectively now a two-way fight between Heathrow and Gatwick, with the London Mayor, Boris Johnson, having seen his concept of a new hub airport in the Thames Estuary rejected by Sir Howard.

The three regional airports owned by HAH are the last remnants of the former BAA's monopoly over the UK's aviation infrastructure.

Next week's deal has been held up because of the complexity of HAH's own shareholder structure, with Ferrovial, which took over BAA in 2006, having steadily reduced its investment in Heathrow in recent years by selling small chunks of shares to sovereign wealth funds in China, Qatar and Singapore, including GIC.

Last year, the Universities Superannuation Scheme, one of the UK's biggest pension fund managers, bought an 8.65% stake in Heathrow's holding company, a move which saw Ferrovial's shareholding lowered to 25%.

Shortly after Ferrovial's takeover of BAA, competition authorities ordered the company to break itself up by selling Stansted, Gatwick and either Glasgow or Edinburgh, the latter of which was offloaded two years ago.

Heathrow accounts for more than 95% of HAH's annual profits, making the sale of the other regional assets "inevitable" within the next three years, said one.

HAH declined to comment on Friday.

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Virgin Money Confirms Stock Market Flotation

Virgin Money has confirmed a planned stock market flotation, with trading due to begin later this month.

Sky News City Editor Mark Kleinman first reported the float, with an expected valuation of up to £2bn.

Sir Richard Branson: "This is a huge day for Virgin Money. We started this company 20 years ago with Jayne-Anne Gadhia when we set out to challenge the financial services industry.

"Our wonderful team have come a long way since then and have built a strong and valuable business, which offers great value products and services and a real challenge to the established players.

"There is still plenty to do and I am really excited about the future.

"Our intention to float is not the end of our journey, but the beginning of the next one. I really look forward to being on that journey with our customers and our staff in years to come".

Some £50m will be returned to the taxpayer as a result of the float, after the company took on the 'good bank' assets of ailing Northern Rock in 2011.

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Wonga Writes Off 330,000 Customers' Debts

Payday lender Wonga said it would write off the debts of 330,000 customers whose loans would not have been approved under new affordability guidelines.

Sky sources said the cost of writing off the debt will be £35m.

There is £220m debt outstanding for the customers affected, at an average loan value of £667.

The short-term lender said it would contact the borrowers by 10 October.

City watchdog the Financial Conduct Authority (FCA) said the 330,000 customers who are currently in excess of 30 days in arrears will have the balance of their loan written off and therefore owe Wonga nothing.

And some 45,000 customers who are between zero and 29 days in arrears will be asked to repay their debt without interest and charges and will be given an option of paying off their debt over an extended period of four months.

The news comes just days after the company reported a massive drop in earnings.

Wonga's annual profit has dropped by 53%, after the payday lender came under fire for the tactics it uses to reclaim money from borrowers in default.

It said full-year pre-tax profit in the 12 months to 31 December were £39.7m, down from £84.5m a year earlier.

The company came under fire over its previous tactic of sending customers in default fake legal letters.

FCA director of supervision Clive Adamson said: "We are determined to drive up standards in the consumer credit market and it is disappointing that some firms still have a way to go to meet our expectations.

"This should put the rest of the industry on notice - they need to lend affordably and responsibly.

"It is absolutely right that Wonga's new management team has acted quickly to put things right for their customers after these issues were raised by the FCA."

The announcement was made after new Wonga chairman Andy Haste completed discussions with the FCA.

Mr Haste said: "It's clear to me that the need for change at Wonga is real and urgent.

"Our regulator is determined to improve standards in consumer credit and I share that determination.

"There is much to do in order to make Wonga a sustainable and accepted business, and today's announcement is a significant step forward in that process."

He added: "We want to ensure we only lend to those who can reasonably afford the loan in question and during my review, it became clear to me that this has unfortunately not always been the case.

"I agreed with the concerns expressed by the FCA and as a consequence of our discussions we have committed to taking these actions."

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BoE Wants Powers To Cap Loan To Value Ratio

The Bank of England (BoE) has said it wants legal power to cap the loan-to-income ratios for mortgages.

The bank's plan is to expand its ability to curb mortgage lending for homes and buy-to-let properties.

Lenders are currently limited to not exceeding 15% of loans being above the ratio of 4.5 times the applicant's income.

In June, Chancellor George Osborne said he was willing to give expanded powers to the central bank.

On Monday at the Conservative Party conference he reaffirmed the position and said he wanted it enacted before the next election.

The BoE spelled out its position, especially for buy-to-let loans, which currently make up 12% of new mortgages.

It said this would include an 'interest coverage ratio' to provide a buffer ensuring rental income is comfortably higher than interest payments.

Professional investors' easy access to buy-to-let mortgages have been seen by some as a reason why barriers prevent prospective homeowner climbing the property ladder.

The BoE also gave a clean bill of health to the Government's Help To Buy mortgage guarantee scheme.

The scheme was considered controversial by critics, who said it risked pushing up house prices.

But the bank said Help To Buy was not to blame for rising values, as it only accounted for some 5% of purchases.

It was also most commonly used in areas where price increases have been modest.

More follows...

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Vauxhall Recall: Warning Over Corsa Steering

Recalls By Carmakers On The Rise

Updated: 11:25am UK, Saturday 27 September 2014

The recall by Vauxhall of around 3,000 vehicles because of a steering problem is just the latest in a series of headaches for motor manufacturers.

Last year, manufacturers recalled 868,605 vehicles to dealerships to fix potentially life-threatening defects - up from 665,000 in 2009.

However, the increase does not necessarily mean cars are more prone to faults, but that firms are acting more quickly to deal with problems - anxious to avoid damage to their brands.

Here are just some of the major recalls seen in the past year or so.

:: Only this week US car giant Ford put out a recall on around 850,000 cars in the US over a "potential issue" with airbags.

:: Ferrari has recalled more than 3,000 of its £200,000 luxury sports cars because a fault with a latch means anyone trapped in the boot would not be able to get out.

:: General Motors recalled more than 220,000 cars to correct a brake defect that could increase the risk of fire.

:: Earlier this year, Toyota issued a recall affecting 6.4 million vehicles worldwide and 35,124 in the UK. The carmaker has learned the lessons from the past when it suffered a backlash, after being seen to have responded too slowly to a fault that caused models to accelerate without warning in 2010.

:: Aston Martin recalled 17,590 sports cars in February due to a problem with the accelerator pedal.

:: In 2013, Mercedes recalled 2,540 M-class SUV models in the UK when it discovered a particular floor mat could impede the accelerator pedal.

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Budget Chain Aldi Sees Profit Boom In Britain

Aldi And Lidl 'Victors In Supermarket War'

Updated: 2:18pm UK, Tuesday 29 July 2014

Discounters Aldi and Lidl have seen their market share surge as Britain's four biggest outlets suffer in the ongoing bitter supermarket war.

Research firm Kantar Worldpanel said in the three months to June 20, both of the German-based retailers saw significant growth compared to the same period last year.

It said Aldi's share rose from 3.7% to 4.8%, while Lidl expanded from 3.1% to 3.6%.

Meanwhile, supermarket giant Tesco saw its share of the sector fall from 30.3% last year to 28.9% in the period ending in July.

Asda, Britain's second biggest chain, remained flat at 17%, while Sainsbury's also remained static at 16.6%.

Struggling supermarket Morrisons was the second biggest faller out of the major retailers, seeing its share fall from 11.5% last year to 11% this year.

Both Tesco and Morrisons recorded sales losses of 3.8% compared to the same period last year, researchers said.

Kantar Worldpanel director Edward Garner said: "Aldi's 32% growth rate has lifted its market share to 4.8%, and this is a new record for the retailer and means it has nearly caught up with Waitrose on 4.9%.

"Similarly, Lidl sales have grown by nearly 20% and it has held onto its record share of 3.6%."

Britain's big outlets have become increasingly embroiled in a price war during 2014 that has harmed their margins.

They have also invested heavily in convenience store and online delivery services.

The hard discounters have avoided entering the online delivery sub-sector, which is seen by analysts as costing the majors more than £100m a year.

Grocery price inflation has also fallen for the 10th consecutive periods and now stands at 0.4%.

Price slashing and deflation in staple items like milk, vegetables and bread have driven food price inflation down to its lowest level since late 2006, when the research first started.
 

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Chancellor To Abolish 'Death Tax' On Pensions

UKIP Defections: PM Did Too Little, Too Late

Updated: 10:09pm UK, Saturday 27 September 2014

By Anushka Asthana, Political Correspondent

During the 2010 election, I travelled to Rochester and Strood in Kent, where I met the Tory candidate Mark Reckless.

One thing that struck me as I watched him take to the doorsteps, was the number of constituents raising the issue of immigration.

One awkward incident involved an elderly man ranting about why he supported the far-right National Front. Mr Reckless backed off, embarrassed.

He certainly didn't share those extreme views. But it was clear then that he was a politician who was worried about immigration and angry about Europe.

I remember another conversation with Mr Reckless last year in the Commons.

Tory backbenchers were nervous about immigration, he told me. They felt David Cameron hadn't done enough, and the looming prospect of transitional controls lifted on Bulgarians and Romanians was of particular concern. 

Things could get tetchy in January 2015, he said.

Mr Cameron knew about these misgivings among his MPs and tried to act on them.

Late last year he unveiled a toughening up in the rhetoric on immigration – bringing in new rules to crack down on the access that new EU migrants would get to benefits. Then came the pledge of an EU referendum.

The hope was to appease the concerns of people like Mr Reckless, and you might have thought it was working.

After all, following the defection to UKIP of Douglas Carswell many asked the MP if he would be next. He insisted not.

When I texted Tracey Crouch, a neighbouring MP in Kent, about his decision to leave the Tories, she replied: "Nothing I can say right now would be becoming of a lady. I'm so angry. He looked me in the eye and promised he wasn't going to defect."

Others pointed out that he was openly supportive of the Conservatives as recently as yesterday.

Then he tweeted: "Good to lead coach for Team2015 campaigning in Birmingham Northfield on Sunday + will be followed by our Clacton action next Thursday."

That is why Tory sources say they are "surprised". Other MPs told me they felt "let down", "frustrated" and "fed up".

"Another battle when we should be fighting Labour," said one.

Others argued that although he had behaved irresponsibly, giving a leg-up to Ed Miliband, that a number of backbenchers were angry with the party's position on Europe.

They believe that Mr Cameron hasn't done enough to prove he can loosen Britain's ties to the EU. They want to see the issue addressed at his conference speech this week.

The problem for men like Mr Reckless is they don't share the Prime Minister's views on Europe.

Mr Cameron wants to reform the UK's relationship with the continent and then – ideally – campaign for us to stay IN.

And that is the sticking point with Mr Reckless.

The former Tory MP was clear today that he believes in an independent Britain, and wants to follow the Scotland Yes campaign with what he said was a positive, patriotic message for voters.

He wants OUT – and UKIP is the only party that is fully with him.

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