Delicate Diplomacy On Cameron Gulf Arms Tour

David Cameron is attempting to cement major UK arms sales and bolster relations with allies on a three-day tour of the Gulf and Middle East.

The Prime Minister will personally spearhead a push to persuade the United Arab Emirates to buy 60 of BAE's Typhoon jets over French rivals in a deal reported to be worth upwards of £3bn.

On Tuesday, he will travel to Saudi Arabia - Britain's biggest trading partner in the region - which is also considering adding to its fleet of aircraft.

Downing Street said the visit - Mr Cameron's second to each country as premier - was part of a wider effort to build a "reinvigorated partnership" between Britain and the region's leaders.

Reinforced military ties are seen as crucial amid continued fears over Iran's nuclear ambitions and the threat Tehran could seek to badly disrupt oil supplies by blocking the Straits of Hormuz.

Mr Cameron has first flown to a military airbase near Dubai, where a number of RAF Typhoons, are stationed to promote the aircraft to military and political figures from the UAE.

He will also hold talks with the Crown Prince of Abu Dhabi and Prime Minister of the UAE on the potential for a joint work on the next generation of military aerospace equipment.

David Cameron having breakfast with troops in Dubai

The Government hopes to secure deals for 100 Typhoons to be sold to the region in the coming year - worth at least £6bn to British firms.

Mr Cameron faces a tough balancing act, however, as he attempts to secure billions in investment from the oil-rich states while addressing concerns about the human rights records of their regimes.

The Arab Spring has led to an increased focus on largely autocratic rule in many states, including crackdowns on pro-democracy and other protest movements.

The Government has been criticised for failing to condemn abuses and accused of continuing to sell military equipment with insufficient guarantees it would not be used in repression.

But Saudi officials reacted angrily to an "insulting" inquiry into it by the Commons foreign affairs committee, warning it would be "re-evaluating" relations.

"We want to work together with the Gulf countries towards a future that is rich in prosperity, strong in defence and open in its handling and pursuit of political and economic reform," Downing Street said ahead of the visit.

On Wednesday, Mr Cameron will make a short visit to the Middle East before flying home for talks with German Chancellor Angela Merkel at Downing Street ahead of the crunch EU budget summit.

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Ryanair Sees Profit Soar 10% In First Half

Ryanair has reported an after-tax profit of 596m euros (£477m) for the first half of 2012, up 10% on the same period last year.

The budget airline's results beat analysts' expectations thanks to a surge in passenger numbers over the summer and a lower fuel bill. 

It said traffic was up 7% - 48m passengers flew with Ryanair over the period - and fuel costs were lower than forecast because of a saving programme.

The Dubin-based company, known for its low cost tickets, added that average fares were up, helping to boost revenue by 15% to 3.1bn euros (£2.48bn).

Chief executive Michael O'Leary said: "Profits exceeded our expectations driven by a combination of strong summer bookings, particularly post the Olympics, a 6% rise in average fares, and lower than forecast fuel bill due to the successful implementation of our fuel savings programme."

Ryanair, which accounts for around 12% of all European short-haul flights, said business in the region "remains tough" because recessions, Government cuts, high fuel costs and taxes.

But it said continues to see growth opportunities in Europe, following the collapse of a number of rival airlines. 

Mr O'Leary , who has discussed launching long-haul flights for years, said they were still "two or three years away yet".

"It's unlikely you'll see a Ryanair transatlantic (flight) for the next three or four years," he told Sky News. 

Last month, the company said it would not be bidding for London's Stansted airport, after the airport's owner BAA excluded it from the process.

It is waiting to hear whether European Union (EU) antitrust regulators will approve its takeover of Aer Lingus.

In a recent update on its bid, Ryanair said it had offered concessions to the regulators in an attempt to secure regulatory clearance.

It has a deadline of February 6 for its decision on the 700m euro (£560m) deal.

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HSBC Sees 52% Profit Drop For Third Quarter

HSBC has announced a 52% fall in third quarter profit, as the bank taking further hits on US anti-laundering fines and mis-selling insurance in the UK.

It confirmed setting aside another $800m (£500m) to cover fines from US authorities, taking the total bill to $1.5bn (£937m).

Sky City Editor Mark Kleinman exclusively reported the £500m hit over laundering fines on Sunday.

More follows...

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RBS Confirms £1.2bn Loss After PPI Hit

RBS has confirmed it made a loss before tax of £1.2bn in the third quarter, compared with a profit of £2bn for the same period last year.

As revealed by Sky's City Editor, the bank has set aside a further £400m for the mis-selling of payment protection insurance, meaning the scandal has cost it £1.7bn to date.

This provision took the total compensation bill for Britain's four largest lenders past the £10bn mark.

The 82% taxpayer-owned bank also said it had taken a further hit of £50m to cover costs relating to the summer's massive IT failure - which saw many RBS, NatWest and Ulster Bank customers locked out of their accounts.

It takes its bill for the meltdown to £175m.

The bank also expects to face "material fines" in relation to how Libor and other interest rates were set, it added.

RBS is under investigation by US and UK authorities over the rate-rigging scandal and is expected to be one of the next banks to settle after Barclays was fined £290m in June.

"The group expects to enter into negotiations to settle some of these investigations in the near term and believes the probable outcome is that it will incur financial penalties," RBS said.

It added that it had dismissed "a number of employees for misconduct" after investigations into rate setting.

But the group's core banking operations - if the mis-selling and IT charges are stripped out - performed well, with operating profit for the three months reaching £1bn.

A decline in charges on bad debt helped boost performance at the bank, which said its restructuring would be complete in the next 18 months.

As part of this plan, the number of employees was down by 9,900 from a year earlier, resulting in a 5% fall in staff costs compared to the previous quarter.

The bank described the collapse of the sale of 316 branches to Santander as "disappointing".

As a condition of RBS' state bailout, the European Union ordered it to offload the branches by the end of next year. RBS said it did not expect this to change and so had restarted efforts to sell them.

The group's chief executive, Stephen Hester, said it now needed to focus on improving its reputation.

"The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully," he said in a statement.

"The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank's safety and soundness has advanced so well."

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Car Insurance Cost Fall 'Will Not Last'

Car insurance premiums are said to have gone into reverse gear by £360 (13.6%) for young drivers - but there are concerns costs could rise dramatically after next month's EU gender ruling.

Insurance comparison site Confused.com has advised 17 to 20-year-old drivers to take advantage of "today's preferential rates" but warned them to avoid 2013's predicted price hikes by "shopping around".

Average comprehensive car insurance prices now stand at £757 as of this year's third quarter, compared to £843 for last year's third quarter - a significant year-on-year fall of £87 (10.3%).

Car insurance prices actually fell for all age groups, particularly young female drivers, but predictions from the Treasury indicate that young female drivers could see rises of up to 24% after the EU gender ruling becomes law on December 12.

After this date women and men cannot be priced differently for insurance meaning women will no longer directly benefit from being statistically less risky drivers as far as insurers are concerned.

This predicted insurance price rise could affect female drivers throughout various age groups, according to the Treasury data.

Sharon Flaherty, editor of Confused.com, told Sky News: "At the moment women pay less than men and statistically this is because on average they are less of a risk on the roads than young male drivers.

"However the bad news is that on December 21 the law change will mean that men and women have to be judged as exactly the same on the roads.

"Women will effectively be charged more because statistically they will no longer be allowed to be rated as safer on the roads."

Women aged 26-30 years are forecast an 18% price hike once the gender directive takes effect. Female drivers aged 31-35 are expected to suffer a 10% price rise.

Smaller price rises are expected for women aged 36-40 who are predicted to experience a 3% rise, and 41 to 45-year-old female drivers are only expected to receive a 1% price rise for their future car insurance policies.

Women on average saw their premiums shrink by 11.7% over all in the third quarter.

For spouses of either gender the average premium cost for a joint insurance policy is a lot less than average costs for solo drivers.

Male drivers insured plus spouse are quoted on average £432, compared to £907 as insured only driver, for women it costs an average of £787 for insured only driver cover, but just £418 for women who have a spouse on their policy.

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Comet Collapse: Gift Vouchers Suspended

Gift vouchers for stricken electrical retailer Comet have been suspended, the chain's administrator has confirmed.

Deloitte, which was appointed on Friday, has launched an "urgent" search for a buyer to protect some 6,600 jobs at the 236-outlet chain.

But, as a consequence, of administration gift vouchers have been suspended even though all Comet stores remain open and the group's staff will continue to be paid.

A spokesman for Deloitte said: "We are assessing the position with regard to gift vouchers, to establish whether it is possible for the company to accept them in future.

"But in the meantime stores have been instructed not to accept payment by means other than credit card or cash.

"If ultimately it is not possible for customers to redeem gift cards at Comet, then they will have an unsecured claim against the company, and the administrators will be pleased to provide the appropriate forms for customers to make such a claim if and when that eventuality arises."

The collapse of Comet marks one of the biggest high street casualties since the demise of Woolworths in 2008 and comes a month after the failure of JJB Sports.

Neville Kahn, joint administrator and restructuring services partner at Deloitte, said on appointment: "Our immediate priorities are to stabilise the business, fully assess its financial position, and begin an urgent process to seek a suitable buyer which would also preserve jobs.

"We appreciate the co-operation and support from the management, staff, customers, landlords and suppliers at what is clearly a very difficult time."

Deloitte said Comet had been hit by weak high street trading conditions, competition from online rivals and being unable to secure the trade credit insurance needed to safeguard suppliers.

"The inability to obtain supplier credit for the peak Christmas trading period means that the company had no realistic prospect of raising further capital to build up sufficient stock to allow it to continue trading," Deloitte added.

In particular, it was knocked by the lack of first-time home buyers, which had been key customers for Comet.

Its administration comes just months after Comet was taken over by investment firm OpCapita, which bought the chain in February.

The UK's high street electrical market has come under huge pressure as cash-strapped shoppers put off purchases of big-ticket items such as TVs and large appliances, as online rivals take a bigger slice of the sector.

The spokesman said extended warranties previously purchased remain unaffected by the administration and remain valid.

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RBS Confirms £1.2bn Loss After PPI Hit

RBS has confirmed it made a loss before tax of £1.2bn in the third quarter, compared with a profit of £2bn for the same period last year.

As revealed by Sky's City Editor, the bank has set aside a further £400m for the mis-selling of payment protection insurance, meaning the scandal has cost it £1.7bn to date.

This provision took the total compensation bill for Britain's four largest lenders past the £10bn mark.

The 82% taxpayer-owned bank also said it had taken a further hit of £50m to cover costs relating to the summer's massive IT failure - which saw many RBS, NatWest and Ulster Bank customers locked out of their accounts.

It takes its bill for the meltdown to £175m.

The bank also expects to face "material fines" in relation to how Libor and other interest rates were set, it added.

RBS is under investigation by US and UK authorities over the rate-rigging scandal and is expected to be one of the next banks to settle after Barclays was fined £290m in June.

"The group expects to enter into negotiations to settle some of these investigations in the near term and believes the probable outcome is that it will incur financial penalties," RBS said.

It added that it had dismissed "a number of employees for misconduct" after investigations into rate setting.

But the group's core banking operations - if the mis-selling and IT charges are stripped out - performed well, with operating profit for the three months reaching £1bn.

A decline in charges on bad debt helped boost performance at the bank, which said its restructuring would be complete in the next 18 months.

As part of this plan, the number of employees was down by 9,900 from a year earlier, resulting in a 5% fall in staff costs compared to the previous quarter.

The bank described the collapse of the sale of 316 branches to Santander as "disappointing".

As a condition of RBS' state bailout, the European Union ordered it to offload the branches by the end of next year. RBS said it did not expect this to change and so had restarted efforts to sell them.

The group's chief executive, Stephen Hester, said it now needed to focus on improving its reputation.

"The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully," he said in a statement.

"The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank's safety and soundness has advanced so well."

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Japan Tech Firms Need Revamp To Topple Korea

Japan's top electronic firms have been told to change their business model, amid plunging share prices and booming competition from South Korea.

Shares in Sharp fell on Friday as worries about the TV and display maker's future deepened, a day after it warned of a £3.5bn net loss for the year and said it might not be able to survive on its own.

Panasonic's shares have steadied after a slide to their lowest in more than 30 years, while in August Sony reported a £202m first quarter loss as it pinned its hopes on new TV technology.

Sharp, which makes displays used in Apple's iPads and iPhones, has lost three-quarters of its share price since the start of the year.

Meanwhile, South Korea's Samsung has cemented its place as the world's leading smartphone seller after setting a record for the most units shipped in the third quarter.

Samsung sold 56 million smartphones between July and September, representing 31.3% of the global market - more than twice as much as rival Apple's 15% share.

Japan's giants have been urged to target high value goods, such as cars

"What it is telling us is that the Japanese should be focusing on a lot more on higher value goods – automobiles are going very fine, mechatronics and machinery," Mizuho International director Seijiro Takeshita told Sky News.

"The vertical integration model that the Japanese are very strong at, at least on commoditised products such as televisions, is wearing thin as far as competitiveness is concerned."

"The Koreans are doing a very good job following that model."

The strong yen and falling prices for gadgets are only partly to blame for the ill health for some of Japan's top consumer brands.

Increasingly, Japanese companies have toyed with the idea of strategic partnerships – once anathema to the consumer powerhouse.

"I think this is an alarm bell to many of these companies, so there should be some kind of diversify move or transformational move that is needed," Mr Takeshita said.

Panasonic has said it will lose £5.9bn this business year as it writes down goodwill and assets and plans more restructuring - taking its cumulative loss over five years to nearly £15.6bn.

Sony eeked out a small quarterly operating profit for Q3, helped by the sale of a non-core chemicals business.

"A lot of Japanese companies have not reorganised or refocused. It takes time and there are a lot of political motives not to make the changes," Mr Takeshita said.

"I think it is very clear for Panasonic or Sony that they do have to make these changes."

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Car Insurance Cost Fall 'Will Not Last'

Car insurance premiums are said to have gone into reverse gear by £360 (13.6%) for young drivers - but there are concerns costs could rise dramatically after next month's EU gender ruling.

Insurance comparison site Confused.com has advised 17 to 20-year-old drivers to take advantage of "today's preferential rates" but warned them to avoid 2013's predicted price hikes by "shopping around".

Average comprehensive car insurance prices now stand at £757 as of this year's third quarter, compared to £843 for last year's third quarter - a significant year-on-year fall of £87 (10.3%).

Car insurance prices actually fell for all age groups, particularly young female drivers, but predictions from the Treasury indicate that young female drivers could see rises of up to 24% after the EU gender ruling becomes law on December 12.

After this date women and men cannot be priced differently for insurance meaning women will no longer directly benefit from being statistically less risky drivers as far as insurers are concerned.

This predicted insurance price rise could affect female drivers throughout various age groups, according to the Treasury data.

Sharon Flaherty, editor of Confused.com, told Sky News: "At the moment women pay less than men and statistically this is because on average they are less of a risk on the roads than young male drivers.

"However the bad news is that on December 21 the law change will mean that men and women have to be judged as exactly the same on the roads.

"Women will effectively be charged more because statistically they will no longer be allowed to be rated as safer on the roads."

Women aged 26-30 years are forecast an 18% price hike once the gender directive takes effect. Female drivers aged 31-35 are expected to suffer a 10% price rise.

Smaller price rises are expected for women aged 36-40 who are predicted to experience a 3% rise, and 41 to 45-year-old female drivers are only expected to receive a 1% price rise for their future car insurance policies.

Women on average saw their premiums shrink by 11.7% over all in the third quarter.

For spouses of either gender the average premium cost for a joint insurance policy is a lot less than average costs for solo drivers.

Male drivers insured plus spouse are quoted on average £432, compared to £907 as insured only driver, for women it costs an average of £787 for insured only driver cover, but just £418 for women who have a spouse on their policy.

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Lloyds Sets Aside A Further £1bn For PPI

Lloyds Banking Group has set aside a further £1bn to cover costs relating to the mis-selling of payment protection insurance (PPI) - taking its total bill to £5.3bn.

The announcement came as the 40% taxpayer-owned bank said it made a pre-tax statutory loss of £583m in the nine months to the end of September.

This compares with a £3.8bn loss over the same period last year.

If the cost of PPI is stripped from the results, the group's underlying profit hit £1.9bn for the three quarters - compared with 2011's £768m.

Lloyds had already set aside £4.3bn to repay customers wrongly sold the insurance - much more than its rivals because it had the biggest share of the PPI market.

It said it had paid out 70% of its provision by the end of September, and that the volume of claims had fallen to £250m in the last three months. 

The bank's chief executive, Antonio Horta-Osorio, said the "ultimate cost" of the PPI scandal was "going to be huge" - and the bank would not know the full extent of the damage until at least March next year.

Mr Horta-Osorio, who has been charged with turning around the bank following its 2008 bailout, said it is making good progress with its cost-cutting.

Lloyds' bad debts are expected to fall to this year to around £6bn - some £1.2bn less than it expected at the start of 2012.

"We have made further significant progress this quarter, improving underlying performance in a challenging environment, while continuing to deliver returns above the cost of equity in the core business and strengthen our already robust balance sheet." Mr Horta-Osorio said.

On a conference call following the results, he insisted retail banking in the UK was competitive, and stressed that Lloyds was continuing to boost its lending to small and medium-sized businesses and provide mortgages to first buyers.

The group's share price rose 3.6% in early trading. 

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