Superfast Broadband Roll-Out Running Late

The Government programme to roll out superfast broadband to 90% of the population is running late and lacks strong competition to protect public value, the National Audit Office has reported.

It has already announced that superfast broadband will reach 95% of the population by 2017, just two years after the original target of 90%.

Just nine out of 44 local projects are expected to reach the original target, according to the report, with the delay partly attributed to the EU State Aid process taking six months longer than expected.

The NAO said that competition among suppliers had been "limited", leaving BT as the only active participant and expected to win all 44 local projects.

It warned that the Department for Culture, Media and Sport (DCMS) had "secured only limited transparency" over the costs in BT's bids.

And it said the DCMS now expected BT to provide just 23% of the overall projected funding of £1.5bn - £207m less than expected.

Amyas Morse, head of the NAO, said: "The rural broadband project is moving forward late and without the benefit of strong competition to protect public value.

"For this we will have to rely on the department's active use of the controls it has negotiated and strong supervision by Ofcom."

Public Accounts Committee chairwoman Margaret Hodge said. "The DCMS has not had a good enough grip on its rural broadband programme."

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Samsung Posts Disappointing Profits Forecast

Samsung has forecast weaker than expected profits for the last quarter, fuelling concerns about flagging demand for high-end smartphones.

The South Korean firm is predicting £5.5bn in operating profit for the period April to June.

That would be a record result for the electronics giant - but lower than the £6bn forecast by analysts.

Samsung shares dropped nearly 3% after the company issued the profit guidance on Friday.

Concerns about sales of Samsung's new phones and tablets have seen the electronic giant's share price drop almost 18% in the last month.

Mobile phones and IT account for 70% of the company's profits.

Despite robust sales of its Galaxy S4 in the first month, new rivals have emerged to eat away at its market share.

It has also become harder for the industry to impress buyers with new features in upgraded models as most smartphones offer similar functions.

Fewer wow factors in new smartphones mean people will not upgrade as quickly as they did when the devices were still a novelty, forcing device makers such as Samsung to spend more on splashy advertising and marketing.

Analysts say high marketing costs probably weighed on Samsung's mobile business despite sales of the S4 hitting the 10 million mark about 20 days faster than the previous model.

"Because of the marketing costs, the telecommunications business was probably weaker than expected," said CW Chung, an analyst at Nomura Financial Investment in Seoul.

Samsung will announce its net income and final quarterly financial results later this month.

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Slump In Pound Signals Gloom For Holidaymakers

The pound has fallen heavily against the dollar for the second time this week after key US jobs figures showed better than expected evidence of an economic recovery.

While stock markets rallied, seemingly shrugging off recent fears about US stimulus being slowly withdrawn, sterling lost two cents against the world's reserve currency when news of the positive employment data from the US emerged.

The pound, which had also dropped heavily the previous day when the Bank of England confirmed the base rate of interest was to remain at its current level for at least two years, fell below the $1.48 mark.

While such exchange rates are good news for exporters, it will hit the spending power of British holidaymakers heading to America.

The euro has also strengthened against the pound.

The US payroll rose by 195,000 in June and the jobless rate remained the same at 7.6% - raising hopes for a stronger economy in the second half of 2013. The forecast was for around 165,000.

Hiring was more robust in the two previous months than earlier estimated, with some 70,000 net new jobs in May and April.

The positive data was seen as suggesting that the US Federal Reserve may start to ease off its support for the economy as early as this autumn - while quantitative easing and low interest rates will continue to push down the pound in the UK.

The US job market and the economy have proved surprisingly resilient this year. Hiring and consumer confidence have remained steady despite higher taxes and federal spending cuts.

The US economy has added an average of 202,000 jobs a month for the past six months, up from 180,000 in the previous six. That suggests businesses are growing more confident in the economy.

If the gains continue, the Federal Reserve might start to scale back its bond purchases before the year ends.

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Superfast Broadband Roll-Out Running Late

The Government programme to roll out superfast broadband to 90% of the population is running late and lacks strong competition to protect public value, the National Audit Office has reported.

It has already announced that superfast broadband will reach 95% of the population by 2017, just two years after the original target of 90%.

Just nine out of 44 local projects are expected to reach the original target, according to the report, with the delay partly attributed to the EU State Aid process taking six months longer than expected.

The NAO said that competition among suppliers had been "limited", leaving BT as the only active participant and expected to win all 44 local projects.

It warned that the Department for Culture, Media and Sport (DCMS) had "secured only limited transparency" over the costs in BT's bids.

And it said the DCMS now expected BT to provide just 23% of the overall projected funding of £1.5bn - £207m less than expected.

Amyas Morse, head of the NAO, said: "The rural broadband project is moving forward late and without the benefit of strong competition to protect public value.

"For this we will have to rely on the department's active use of the controls it has negotiated and strong supervision by Ofcom."

Public Accounts Committee chairwoman Margaret Hodge said. "The DCMS has not had a good enough grip on its rural broadband programme."

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Rolls-Royce Accused Of Hiding Engine Defects

Two former Rolls-Royce employees have alleged the engine maker "cut corners on quality control requirements" and "lied to" customers.

Thomas McArtor and Keith Ramsey have also accused the company of hiding internal records of defects in engines it sold to commercial and military clients.

They claim that the company collated these alleged defects into a "secret set of books".

The ex-quality control officers in the United States are challenging a court order that prevents them from releasing information they say reveals potentially serious defects in its manufacturing processes, according to reports in The Financial Times and The Daily Telegraph.

Rolls-Royce has denied the claims and said the lawsuit is "without merit", adding that a US district judge had already thrown out two of the four claims before the "discovery" phase of the litigation had been entered.

"This lawsuit is entirely without merit," a Rolls-Royce spokesman said.

"Judge Lawrence did not find that Rolls-Royce engaged in any wrongdoing, failed to follow its quality system, concealed anything from the US government or even that a jury is entitled to hear the allegations.

"Rolls-Royce categorically rejects the other claims and will defend itself vigorously. Any and all facts of the case will be presented in court, where we are confident it will be found the lawsuit is without merit."

The lawsuit comes at a difficult time for the firm.

Last month an Australian safety regulator reported that Rolls-Royce had failed to identify a defect that caused one of its engines to explode on a Qantas Airways Ltd flight over Indonesia in November 2010.

In its final report on the incident, the Australian Safety Transport Bureau (ASTB) said the company missed multiple opportunities to detect a faulty component.

Rolls-Royce is also the subject of an investigation by the Serious Fraud Office (SFO) into claims that company representatives paid bribes to win airline engine contracts in China and Indonesia.

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Samsung Posts Disappointing Profits Forecast

Samsung has forecast weaker than expected profits for the last quarter, fuelling concerns about flagging demand for high-end smartphones.

The South Korean firm is predicting £5.5bn in operating profit for the period April to June.

That would be a record result for the electronics giant - but lower than the £6bn forecast by analysts.

Samsung shares dropped nearly 3% after the company issued the profit guidance on Friday.

Concerns about sales of Samsung's new phones and tablets have seen the electronic giant's share price drop almost 18% in the last month.

Mobile phones and IT account for 70% of the company's profits.

Despite robust sales of its Galaxy S4 in the first month, new rivals have emerged to eat away at its market share.

It has also become harder for the industry to impress buyers with new features in upgraded models as most smartphones offer similar functions.

Fewer wow factors in new smartphones mean people will not upgrade as quickly as they did when the devices were still a novelty, forcing device makers such as Samsung to spend more on splashy advertising and marketing.

Analysts say high marketing costs probably weighed on Samsung's mobile business despite sales of the S4 hitting the 10 million mark about 20 days faster than the previous model.

"Because of the marketing costs, the telecommunications business was probably weaker than expected," said CW Chung, an analyst at Nomura Financial Investment in Seoul.

Samsung will announce its net income and final quarterly financial results later this month.

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Miliband Summons Top Bankers For Reform Talks

By Mark Kleinman, City Editor

Ed Miliband held talks on Wednesday with senior bankers just days after the industry faced fresh criticism for lobbying senior politicans and regulators.

Sky News has learnt that the Labour leader met a delegation from the British Bankers' Association (BBA) including representatives of major high street lenders including HSBC and Lloyds Banking Group.

Sir Nigel Wicks, the BBA chairman, who was a former aide to Lady Thatcher, and Anthony Browne, the lobbying group's chief executive, were also present at the meeting.

The meeting, described by one person who attended as "lively", saw Mr Miliband reiterate Labour's support for the establishment of a network of local banks as well as a new British Investment bank.

Others who were at the summit included James Leigh-Pemberton, a senior executive at Credit Suisse's UK operations, and Colin Grassie, chief executive of Deutsche Bank's UK business. Chris Leslie, the shadow City minister, was also present.

Mr Miliband has been a consistent critic of the banking sector since he became Labour leader in 2010, but is keen to build more constructive relations with industry executives ahead of the next general election, according to one insider.

The meeting, however, came just days after MPs and regulators outlined criticisms of the banking industry for its intensive lobbying in an effort to slow the pace of reforms.

Andrew Bailey, chief executive of the Prudential Regulation Authority, said this week that rules defining appropriate lobbying were desirable, while Andrew Tyrie, chair of the Parliamentary Commission on Banking Standards and Treasury Select Committee, said the extent of their lobbying underlined the need for independent rules on issues such as capital and leverage ratios.

A BBA spokesman said: "It is important that there is a dialogue between industry and politicians of all parties, just as consumer groups and trade unions quite properly speak to elected representatives on a regular basis."

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Twitter To Show Users Tailor-Made Adverts

The social networking site says it will be experimenting with a way to make adverts on Twitter more useful.

It plans to display promoted content from brands and businesses a user has shown interest in.

According to a post on its blog, the company - which allows people to send public messages of up to 140 characters - said: "Users won't see more ads on Twitter, but they may see better ones".

It said the move - which technology experts say will bring Twitter in line with other social networking sites that tailor adverts - will be trialled in the US "soon".

A spokesman said: "The ad pilot is US-only and we don't have a timescale for roll-out more widely."

Twitter will tailor adverts to the individual user's browsing information - although their personal email addresses will be unreadable, Twitter said.

It also confirmed it will not receive browser-related information from its ad partners for tailoring adverts if users have DNT (Do Not Track) technology enabled.

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Stronger Economy 'Puts Brakes On Carney'

Evidence that the UK's economic recovery is gathering pace is widely expected to result in the Bank of England maintaining its support at current levels today.

The Monetary Policy Committee (MPC), which has been meeting for the first time under the leadership of new bank governor Mark Carney, announces its decisions on the base rate of interest and quantitative easing (QE) at midday.

While the base rate has not been changed since March 2009 - and will not be adjusted today - there has been a school of thought that Mr Carney may have favoured extending QE, also known as asset purchases, in the nearer term to help support growth efforts.

But recent economic data has suggested in unison that the speed of recovery has accelerated - with the British Chambers of Commerce the latest group to upgrade its growth expectations for the second quarter of the year and 2013 as a whole.

The closely-watched Purchasing Managers' Index surveys also pointed to growing output in manufacturing, construction and the crucial service sector - which recorded its fastest rise in activity in two years last month.

The slew of positive news is likely to have dispelled any immediate pressure for the bank to increase its QE programme beyond its £375bn level - allowing Mr Carney some breathing room.

Other members of the nine-strong MPC repeatedly thwarted his predecessor Sir Mervyn King's efforts to boost QE by £25bn during his final months, as five times he was defeated by a 6-3 majority.

Despite his aim to achieve "escape velocity" for the economy, it is thought that Mr Carney will not want to go out on a limb and face a defeat just four days into the job.

Sir Mervyn pointed out last week that while his Canadian successor may be more "persuasive", he only holds one vote on the MPC.

Some economists expect that Mr Carney will begin to take action to pull the UK out of the doldrums from August.

Vicky Redwood of Capital Economics said he was likely to introduce "forward guidance", which helps reassure markets that interest rates will remain low in the future while she predicted there was a 50% chance of QE also being resumed.

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RBS Orders Lending Review Over Untapped £20bn

Royal Bank of Scotland (RBS) is reviewing its small business lending practices and standards after uncovering £20bn in untapped cash.

The excess money, RBS said, was a result of having £20bn more in small business deposits than being loaned out to such firms.

The group - which is 81% owned by the taxpayer - said it wanted to put this surplus to use by supporting small and medium-sized companies and playing its part in "securing the recovery".

The investigation - to be led by former Bank of England deputy governor Sir Andrew Large and management consultancy Oliver Wyman - will take in both RBS and Natwest and follows widespread criticism that the lenders are not doing enough to support economic recovery.

The banking sector is subject to a separate probe by the Office of Fair Trading into small business lending.

It was demanded by the Parliamentary Commission on Banking Standards which found that a lack of competition was leaving firms with little or no choice in accessing finance.

The bank's net lending fell by £1.6bn in the first quarter of 2013, despite tapping the State's Funding for Lending Scheme (FLS) for £750m worth of cheap finance.

Sir Andrew said: "There is a disconnect between what the bank says it is doing on lending, and what many businesses say they experience on the ground.

"That is why we have been asked to conduct an independent review to establish what is going on, and what steps can be taken."

Banks have been arguing that small business lending levels have continued to shrink due to low demand, but it is thought that firms are struggling to secure reasonable terms and cheaper rates in spite of the boost from the FLS.

Chris Sullivan, head of UK corporate banking at RBS, said: "Demand for lending remains a challenge, but we want to do more than just wait for demand to materialise.

A dedicated website will be set up for the duration of the RBS inquiry through which small business customers can provide their perspectives and experiences on the group's lending.

The review's recommendations are due to be published in the autumn.

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