Rics, BRC And Deloitte Boost Growth Hopes

Optimism about Britain's recovery outlook have grown after a trio of surveys flagged rising house prices, improved business confidence and steady growth in retail sales.

The Royal Institution of Chartered Surveyors' (Rics) house price balance jumped to +21 in June from +5 in May - the best reading since January 2010 and the biggest improvement in a single month since 2009.

A survey from Deloitte also showed Britain's top firms are more willing to expand than at any point over the past two years, while the British Retail Consortium (BRC) reported healthy growth in sales last month.

The treble of promising forecasts comes ahead of an updated UK outlook announcement for 2013 and 2014 from the International Monetary Fund at 2.30pm today.

The Bank of England indicated last week it wanted monetary conditions to remain stimulative, mindful that higher bond yields could still snuff out Britain's burgeoning recovery.

But it does appear that new bank governor Mark Carney has taken the helm just as the economy is picking up.

"It is particularly encouraging to see the move towards growth among UK-facing companies," Deloitte chief economist Ian Stewart said.

"These companies have been consistently more defensive than their international-facing peers in the last two years."

The Deloitte survey showed that expectations for hiring and investment were at a two-year high, with a quarter of the chief financial officers polled saying they had shifted their focus from cutting costs to expansion.

The Rics survey showed a net balance of 45% of surveyors expect home sales to rise over the coming three months, up from 36% in May and the highest reading since the survey began more than a decade ago.

In another sign that market confidence is returning, new buyer enquiries rose for a sixth consecutive month and at a pace not seen since August 2009.

The survey chimes with data from mortgage lenders Halifax and Nationwide in suggesting the government's Funding for Lending and Help to Buy schemes are breathing new life into the market.

"After what has seemed like a very long wait we are finally starting to see what looks like the beginning of a recovery in the housing market," Rics global residential director Peter Bolton King said.

The BRC survey showed British retail sales grew in June, boosted by purchases of clothes and shoes as warmer weather tempted shoppers onto the high street.

Some two-thirds of households own their homes in Britain and rising house prices have typically gone hand-in-hand with rising consumer spending.

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M&S Clothing Sales Continue To Unravel

Retailer Marks and Spencer has seen a continued decline in its troubled clothing department, according to its latest trading update.

It said like-for-like clothing sales declined by 1.6% during the 13 weeks to the end of June.

Clothing sales have been a particularly disappointing area for the retailer in recent years.

It overhauled key staff in the department in an attempt to reconnect with shoppers but has been unable to halt the section's decline for eight straight quarters.

Meanwhile, like-for-like food sales increased 1.8% in the quarter and total UK like-for-like sales were up 0.3%.

The food business contributes over half of M&S sales.

The retailer's annual general meeting is to be held at 11am today.

The performance will ratchet up the pressure on management to deliver a swift turnaround when new season ranges start hitting the shops on July 25.

In May, the company revealed a pre-tax annual profit of £665.2m for 2012/13, down 6% on a reported profit for 2011/12 of £705.9m.

At the time boss Marc Bolland said: "In a challenging market, M&S sales grew by 1.3%. Three of the four parts of the business made strong progress.

"We are working hard to get the general merchandise performance back on track."

The 129-year-old group serves 21 million customers a week from 766 UK stores.

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Miliband Set To Reform Labour Ties To Unions

Ed Miliband will later take one of the biggest gambles of his leadership by vowing to radically reform Labour's relationship with the unions.

In a move that could cost his party millions in funding and lost membership, Mr Miliband will unveil steps to weaken union influence.

Under his proposals, sparked by the Falkirk ballot-rigging scandal, union members will no longer be automatically affiliated to Labour when they join.

Members will instead be given the chance to "opt in" to a £3 donation which currently goes straight to the party, Mr Miliband will announce this lunchtime.

"I do not want any individual to be paying money to the Labour Party in affiliation fees unless they have deliberately chosen to do so," he will say.

Mr Miliband is battling to head off a crisis sparked by events in Falkirk, where Unite is accused of trying to use its members to secure selection of a particular candidate.

Labour has given evidence to police in Scotland related to the claims but it has sparked wider questions and put the leader under major pressure to curb union influence.

On Monday, the Tories called on the Met Police to investigate the selection in two more constituencies - this time in Greater London.

Unite, which has given Labour more than £8m since 2010, denies any wrongdoing and branded the move an "obscene" political stunt which would waste police time.

Unite boss Len McCluskey

Party sources insist Mr Miliband had always intended to deliver reforms but there was no attempt to deny that the timing of the announcement was linked to the Falkirk scandal.

Crucially, however, it was emphasised that the changes would need to be "carefully implemented in detail and over time" and no explicit timetable has been given.

And even before the speech was delivered, Unite boss Len McCluskey - who is at the centre of the row - indicated he would oppose the proposals.

He said: "Switching to an 'opt-in' for the political levy wouldn't work. It would require Labour to unite with the Tories to change the law, would debilitate unions' ability to speak for our members and would further undermine unions' status as voluntary, and self-governing, organisations."

Mr Miliband's plans to end the "politics of the machine" would see millions of trade union members decide individually whether they wanted to be affiliated to the party.

Spending caps would apply in domestic and European parliamentary elections, covering both would-be candidates and any organisation backing them.

There would also be a new code of conduct for aspiring candidates, with the prospect of disqualification if they break the rules.

And standard constituency agreements with unions would aim to ensure no one involved in the selection process could be subjected to "undue local pressure".

Mr Miliband will also announce plans to use a system of US-style primaries to pick Labour's next candidate for mayor of London.

The approach could be extended to the selection of parliamentary candidates where the local constituency party is weak.

The Labour leader is expected to say: "What we saw in Falkirk is part of the death-throes of old politics. It is a symbol of what is wrong with politics. I want to build a better Labour Party - and build a better politics for Britain."

Officials acknowledge ending automatic affiliation will represent a financial "hit" for the party but Mr Miliband will argue it is also an opportunity to mobilise union members.

"I believe this idea has huge potential for our party and our politics. It could grow our membership from 200,000 to a far higher number, genuinely rooting us in the life of more people of our country," he will say.

Conservative Party Chairman Grant Shapps claimed the plans were meaningless.

"Under Ed Miliband's weak proposals, including a code of conduct that already exists, it would still be the same old Labour Party - bankrolled by the unions, policies rigged by the unions and candidates chosen by the unions," he said.

"The reality is Ed Miliband cannot change Labour because he cannot stand up to the union barons who elected him. That means he's too weak to stand up for hardworking people and too weak to run the country."

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Retailers Agree Bangladesh Factory Inspections

Leading names in European retail have backed plans for co-ordinated inspections of factories in Bangladesh, in an attempt to prevent a repeat of the building collapse that killed 1,129 people in April.

The collapse of Rana Plaza, a factory built on swampy ground outside Dhaka, ranked among the world's worst industrial accidents and galvanised brands to look more closely at their suppliers.

The new accord led to the creation of a team of inspectors to evaluate fire, electrical, structural and worker safety in factories supplying signatory brands.

Crowds gathered when news of the collapse spread on April 24

In a report published on Monday, the implementation team said the brands now had to provide full details of the Bangladesh factories from which they source goods - the first time such data would be collected or shared in such a comprehensive way.

The world's two biggest fashion retailers, Zara-owner Inditex and H&M, have agreed to accept legal responsibility for safety at their Bangladesh factories.

The scale of the disaster overwhelmed rescuers

But a number of US chains, including Asda parent firm Wal-Mart, Gap, Macy's, Sears and JC Penney have shunned the deal, saying that it gives labour unions too much control over ensuring workplace safety and have proposed a non-binding initiative.

Under the accord, every factory will undergo an initial inspection within the next nine months, with repairs initiated where necessary.

Relatives were desperate for news on their loved ones

"Brand signatories are responsible to ensure that sufficient funds are available to pay for renovations and other safety improvements," the report said.

Tesco, the world's third-largest retailer and one of the accord's backers, said last month that it had stopped sourcing clothes from a Bangladesh site because of safety concerns.

Some were lucky to make it out of the building alive

European, Bangladeshi and US officials will meet in Geneva on Monday for talks aimed at improving safety conditions and discussing the country's trade benefits, which the EU has threatened to suspend without greater action from the Bangladesh government.

Bangladesh has pledged to improve safety, but it has not offered new money to relocate dangerous buildings.

An estimated 3.6 million people work in Bangladesh's clothing sector, employing mostly women on wages as little as £30 a month.

Tax concessions offered by Western countries and the low wages paid by the manufacturers have helped to turn Bangladesh's garment exports into a £12.7bn a year industry, with 60% of clothes going to Europe.

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Jobs Market 'Soaring' In UK, Report Says

Recruitment firms say they are placing the highest number of people into permanent jobs for two years, amid strong evidence of rising wages.

The report by the Recruitment and Employment Confederation (REC) and professional services group KPMG found that demand for staff was at a three-year high, with vacancies also accelerating.

Pay for permanent staff rose at the fastest pace for two years, the survey suggested, while the position was even healthier for temporary and contract workers.

Bernard Brown of KPMG said: "The latest figures reveal permanent placements enjoying their highest growth rates for over two years and temporary roles being filled at the quickest pace since Christmas.

"Perhaps the sun has finally come out to shine on the jobs market and economy at large."

REC chief executive Kevin Green added: "The UK jobs market has been agile enough to weather the recession and emerge with more people in work than ever before and has performed considerably better than our European counterparts.

"Our main concern is that the soaring success of the jobs market and signs of economic recovery could be undermined if the Government does not do more to address the growing skills gap.

"Roles in engineering and IT are in ever increasing demand as recruiters struggle to source the talent that businesses need to succeed.

"However more roles, such as sales and digital marketing, have been added to this growing list in the last couple of months and show no signs of disappearing."

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TPG Swoops For Teachers' Bible In £400m Deal

By Mark Kleinman, City Editor

The publisher of the Times Educational Supplement is to be sold to an American buyout firm in a deal valuing the teachers' bible at around £400m.

Sky News has learnt that TPG Capital, one of the world's biggest private equity groups, is buying TSL Education from Charterhouse, another investment firm. The deal is expected to be announced later on Monday.

Charterhouse has owned TSL since 2007 and has been sounding out prospective buyers for months.

TPG is understood to have been enticed by the opportunity to exploit the global community of 52m teachers, which it believes are underserved by existing professional networks.

The American buyout firm's interest has been led by Karl Peterson, its managing partner in London and the former boss of Hotwire, the digital recruitment business.

The Times Educational Supplement was first published in 1910 as a pull-out in The Times newspaper.

Monday's deal will mark the third change of ownership for TSL in less than a decade. Previously owned by News International (now called News UK), the publisher of The Times, TSL was sold to   Exponent Private Equity in 2005.

The price of around £400m is expected to crystallise a modest loss for Charterhouse.

TPG, which declined to comment, has owned prominent British companies before, including Debenhams, the department store chain, and Spirit, the pubs group.

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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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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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Ex-Trade Minister Plots £10bn Raid On Lloyds

Lord Davies, the former trade minister, is masterminding a £10bn raid on Lloyds Banking Group that would allow the Government to offload a big chunk of its shareholding in Britain's biggest high street lender.

Sky News can exclusively reveal that Lord Davies, who served in the last Labour administration, has assembled a consortium of blue-chip City and international investors to buy as much as half of the taxpayer's 39% stake in Lloyds.

Lord Davies has been working on the plan for more than a year, according to insiders, and approached the Treasury about his proposal several months ago.

Corsair Capital, the financial services-focused private equity firm where he is a senior partner, would be part of the consortium but would not buy the stake on its own.

A former chairman and chief executive of Standard Chartered, the emerging markets bank, Lord Davies has enlisted the backing of sovereign wealth funds in Asia and major City institutions.

The deal would be structured to acquire the Lloyds stake at somewhere close to the current share price, which by one measure is now above the taxpayers' break-even price.

HSBC and JP Morgan, the Wall Street bank from which Corsair was spun out several years ago, are said to be helping Lord Davies to structure and finance a deal.

The Government paid more than £20bn to rescue Lloyds during the banking crisis of 2008, although it quickly recouped £2.5bn as a fee for the implicit guarantee the bank had enjoyed from its prospective participation in a giant scheme to insure toxic banking assets.

Lord Davies is understood to be in active dialogue with the Treasury about his proposal, which would be structured to allow the Government to share in any future rise in the Lloyds share price.

Arranging it in this way would allow George Osborne, the Chancellor, to avoid any future accusation that he had sold the Lloyds shares too cheaply.

Gordon Brown was dogged by criticism that he had sold Britain's gold reserves too cheaply, leading to broader questions about his economic competence.

The Government paid more than £20bn to rescue Lloyds

Institutions such as Standard Life Investments have been approached about participating in Lord Davies' deal, although sources played down the likelihood that Temasek Holdings, the Singaporean state-backed fund, would be involved.

The Treasury has not yet decided whether to proceed with a transaction with Lord Davies's consortium, although the former trade minister is said to be positive about the prospects of a deal.

However, one insider insisted on Saturday that it could still not happen because of competing proposals from other investors keen on buying the Government's Lloyds shares.

The exact size of the stake that the consortium would buy is unclear, although it is likely to be much larger than 10%, or a quarter of the Government's shareholding.

Lord Davies would not seek board representation as part of any deal, a source said, despite the fact that - if it bought 20% of the bank - it would become easily the biggest private sector shareholder in Lloyds.

At Friday's closing share price of 64.63p, Lloyds had a market capitalisation of £46.1bn.

Antonio Horta-Osorio, Lloyds' chief executive, will receive a larger bonus if the Treasury sells at least a third of its stake for more than 61p-a-share.

The bank's share price has recovered sharply during the last year as its underlying earnings power has become apparent.

Lloyds has been the most heavily punished of the UK banks from the scandal surrounding the mis-selling of payment protection insurance, having had to pay out well over £4bn to date.

Mr Osborne said in his Mansion House speech last month that he was actively considering proposals to sell Lloyds shares and it is conceivable that the first disposal could come as soon as  the next few weeks.

UK Financial Investments, the agency which manages the taxpayer's stake in Lloyds, is understood to be aware of Lord Davies's consortium.

The Lloyds stake is not the only state-backed banking asset for which Lord Davies is trying to make an offer. Corsair is also among three remaining bidders for more than 315 Royal Bank of Scotland branches, and has secured the backing of the Church Commissioners for England in an attempt to provide an ethical dimension to its plans.

Lloyds and Lord Davies were unavailable for comment.

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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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