Cyber Attack 'To Hit In Next Two Weeks'

Computer users are being urged to protect their machines from malware which allows hackers to steal financial data.

British investigators have been working with the FBI to trace the hackers behind ongoing attacks, and the botnet system used by the targets has been temporarily disrupted.

But the UK's National Crime Agency says people have just two weeks before the system could be functioning again, and urged people to protect their computers from an expected "powerful computer attack".

Bogachev is said to use the online monikers 'lucky12345' and 'slavik'

Between 500,000 and one million machines have so far been infected worldwide, according to court documents.

US officials have accused a Russian hacker of masterminding the scam - and prosecutors say those involved have already raked in more than $100m (£60m).

The NCA is urging people to back up important files and make sure their security software and operating system are up to date.

Two pieces of malware software known as GOZeuS and CryptoLocker are responsible for the alert.

They typically infect a computer via attachments or links in emails.

If a user clicks on GOZeuS, it silently monitors activity and tries to capture information such as bank details.

"(The links or attachments) may look like they have been sent by genuine contacts and may purport to carry invoices, voicemail messages, or any file made to look innocuous," the NCA warned.

"These emails are generated by other victims' computers, who do not realise they are infected, and are used to send mass emails creating more victims."

The Cryptolocker malware is activated if the first attack is not profitable enough.

It locks a user from their files and threatens to delete them unless a "ransom" of several hundred pounds is paid.

Some 234,000 machines were hit by Cryptolocker - bringing in $27m (£16m) in payments - in its first two months, the US Justice Department said.

Computers running Windows software are said to be most vulnerable

More than 15,500 computers in the UK are infected and "many more" are at risk, according to the NCA.

Stewart Garrick, a senior investigator with the NCA, told Sky News the threat was mainly against individuals or businesses running Windows-based computers.

Thirty-year-old Russian Evgeniy Bogachev is the alleged leader of the gang behind the attacks, FBI executive assistant director Robert Anderson told a news conference in Washington DC.

US and other agents seized servers around the world this weekend and freed 300,000 computers from the infection.

"They (the FBI) have disrupted the network and taken control of it," said Sky's Tom Cheshire.

"So when the hackers try to speak to the computer that's affected, that line of communication has been cut off.

"You now have a chance to clean up. The first thing you should do is update your operating system - especially if you're on Windows, then look to scan your computer for viruses and it should be able to find it."

For more information visit www.getsafeonline.org/nca.

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Mortgage Rules 'Hit Housing Market Activity'

UK house prices have risen for the thirteenth month in a row but activity may be slowing as greater restrictions are placed on mortgage lending.

The findings, released by Nationwide in its monthly house price index, recorded a 0.7% increase in average prices in May.

Nationwide said it meant that the annual pace of price growth edged up to 11.1% from 10.9% the previous month - its strongest level since June 2007 - with first-time buyers driving the recovery.

The report was released against a backdrop of fierce debate about whether the market is overheating - particularly in London.

Mr Cable will hold talks with housebuilders on Tuesday

Sky News learned on Monday that the Business Secretary Vince Cable and the Chancellor were separately to meet the bosses of major building firms this week over the continuing problem of historically low supply failing to meet the need for new homes.

Separate figures released on Tuesday morning also raised fears the housing industry was struggling to rebuild itself in the wake of the financial crisis to match demand, with activity in the construction sector measured by Markit at a seven-month low in May.

The European Union also called on the UK to build more properties to help stabilise the market.

Nationwide said it believed the biggest factor behind the steep rise in property prices was the improving economy.

Its chief economist Robert Gardner said: "There have been tentative signs that activity in the housing market may be starting to moderate, with mortgage approvals in April around 17% below January's high.

"It is too early to say whether nationally this is indicative of a cooling trend in the wider market.

"The slowdown may partly be the result of the introduction of Mortgage Market Review (MMR) measures, which may take a few months to bed down.

"The underlying pace of activity should become more evident as we move through the summer months and the impact of MMR becomes clearer.

"However, with mortgage rates close to all-time lows and labour market conditions continuing to improve, underlying demand for homes is likely to remain strong."

Nationwide believed first-time buyers were driving the recovery, though the controversial Help to Buy scheme was unlikely to be the biggest factor behind the surge.

Mr Gardner continued: "First-time buyers accounted for 48% of house purchase activity in March, a record high well above the long run average of 38%.

"Data from DCLG suggests that the Help to Buy scheme is providing support to first time buyers, who accounted for over 80% of Help to Buy loans to date.

"However, the modest numbers involved so far suggest that Help to Buy is unlikely to be the main factor behind the recent pickup in the wider housing market."

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Europe Calls On UK Govt To Increase Taxes

The European Commission has urged the UK Government to raise taxes and rein in its Help To Buy scheme.

The European Union's executive body called on the Government to increase the amount it collects in taxes to help it cut the deficit, saying policy had so far been "heavily skewed" to spending cuts.

Setting out their 2014 economic policy recommendations for the UK, commissioners said the coalition should be "prioritising capital expenditure" to boost the "fragile" recovery.

Many of the recommendations concern the housing market, including a call for more houses to be built and for adjustments to Help To Buy, which many have warned is causing a potentially damaging housing bubble.

The "regressive" council tax system was also in the Commission's sights.

Mr Cameron has said the EU is "too bossy"

The Commission said: "At the moment, increasing property values are not translated into higher property taxes as the property value roll has not been updated since 1991 and taxes on higher value property are lower than on lower value property in relative terms due to the regressivity of the current rates and bands within the council tax system."

The Commission broadly praised action on extending childcare provision and reforming welfare, but said more must be done on apprenticeships and skills.

Recommendations on economic policy have been made for all countries. It comes after the European elections were dominated by anti-EU sentiment, with people protesting about the powers of the unelected European Commission.

Prime Minister David Cameron described the EU as "too big, too bossy, too interfering" last week, but a Treasury spokesman said the recommendations were "in line" with the Government's approach.

Mr Cameron is currently battling moves to appoint arch federalist Jean-Claude Juncker to president of the Commission, as he tries to renegotiate Britain's deal with the EU.

The Prime Minister reportedly warned at the weekend that the UK could quit the union if Mr Juncker was appointed.

The Commission's economic suggestions have provoked anger among politicians and some campaigners.

Matthew Elliott, chief executive of Business for Britain, said: "This is further evidence that the EU should be let nowhere near tax policy of its member states.

"Leaders in Brussels appear not have taken on board the resounding message from the recent elections that Britain wants less interference from the continent, not more."

 A Treasury spokesman said: "The Government's long-term economic plan is working, delivering economic security for hardworking people.

"The European Commission continues to support the UK Government's strategy including its commitment to deficit reduction. The Commission's recommendations are in line with the Government's approach."

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Ian King Presents Sky News' New Business Show

By Ian King, Business Presenter

Business news should be for everyone. It affects everyone, after all, not just those who read the business pages avidly.

So I hope Ian King Live will demystify business, strip away the jargon and make the worlds of business, economics and markets accessible and understandable to as wide an audience as possible.

In the process, we will aim to bring Sky News viewers interviews with some of the biggest names in business, both from Britain and the rest of the world.

Ian King will present the show from The Gherkin, Monday to Thursday

There will be packages and graphics that will help clearly explain often complex subjects and the breaking news stories of the day, plus regular appearances from the unrivalled team of specialists in the Sky News team, such as Mark Kleinman, Ed Conway and Poppy Trowbridge.

Viewers will also get regular updates from Wall Street and business centres around the world.

And with the general election now less than a year away and the economy, jobs, the cost of living and the deficit all set to be key debating points, viewers can also expect plenty of interviews with the key voices in the campaign - as well as hearing from leading City experts who can help sort fact from fiction.

It all starts this Monday, 6.30pm, only on Sky News.

:: You can follow the programme on Twitter @SkyIanKingLive

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Scots Independence: BAE Systems Chief's Fears

The boss of Britain's biggest defence company has become the latest business leader to warn against Scottish independence.

BAE Systems chief executive Ian King said that a "yes" vote would damage the "certainty and stability" necessary for investment.

Mr King's comments were made on a company blog, as the official campaign over independence was launched.

The defence giant currently employs 3,600 people in Scotland.

He said the company was pinning its hopes on an official decision for naval procurement, as it overhauls shipbuilding operations in Glasgow.

Mr King voiced concerns about staff pensions post-independence

Mr King said the company was "investing in facilities for the future" in Scotland "based on an expectation that the Government will make their major production decision for the next generation Type 26 frigate by the end of this year".

He said: "If Scotland became independent, we would no longer have that certainty and stability.

"We would then have to talk to our major UK customer, the Ministry of Defence, and jointly work out a plan for the future."

Supporters of the "yes" vote in the forthcoming referendum insist Scotland will be better off as an independent state within the EU.

First Minister Alex Salmond said independence will make Scottish homes £2,000 richer, while the Treasury says Scots will be £1,400 richer if they stay in the union.

But Mr King also voiced concerns about staff pensions post-independence.

He said: "If Scotland became independent and subsequently joined the European Union, our pension schemes, along with many other UK company schemes, may be caught up in EU regulations relating to cross-border pensions.

"The reality today is we can't say how our pension schemes would be affected.

"There would be a number of possible outcomes and we would use our consultation processes to discuss the options."

His comments come amid a growing business chorus questioning Scottish independence.

On Friday Kingfisher chief executive Sir Ian Cheshire, the boss of B&Q's parent firm, said there were too many uncertainties around tax, currency and Scottish EU membership.

Last month, the British Chambers of Commerce, which itself remains impartial in the debate, surveyed close to 2,500 of its members, and whilst 11% said Scotland should vote yes, some 85% preferred the union to remain.

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Blair: 'Dangerous To Ignore' EU Poll Results

Tony Blair has warned Europe it would be "complacent and dangerous" if it fails to reform itself and "reconnect" with people following a surge by anti-immigration and eurosceptic parties.

He warned UKIP's victory in the UK and that of Marine Le Pen's far-Right National Front in France was a "wake-up call" on the need for change and "cannot be ignored".

Voters last month dramatically altered the make-up of the European Parliament by increasing the number of MEPs from the populist, eurosceptic Right.

In a speech to the Confederation of British Industry (CBI) in London, the former British prime minister said: "The victories of UKIP in the UK and the National Front in France and the election of parties across the continent on explicitly 'anti-the-status-quo in Europe' platforms signify something. They cannot be ignored.

"The election results matter. They are a wake-up call to Europe and to Britain. Our response in Europe, as in Britain, should be to lead, not follow."

He went on: "So when some European politicians say that despite the showing of the far-right nonetheless there is still a majority for a pro-Europe position, that is true, but it is also complacent and dangerous."

British prime minister David Cameron has promised to overhaul Britain's relationship with Europe.

David Cameron and Jean-Claude Juncker at a budget meeting in 2012

Mr Blair also appeared to criticise Mr Cameron's plans for a renegotiation and in-out referendum on Europe by 2017 and said "a new approach" should involve "minimum treaty change".

He called on pro-Europeans to "make the debate more than about the repatriation of certain competencies and rules".

Mr Blair said: "The moment is right for Europe to think carefully about where it goes from here, and how it reconnects with the concerns of its citizens and how it changes in order better to realise its ideals in a changing world.

"It has to be a debate elevated to a Europe-wide level, with Britain playing a leading role, not just a negotiation of Britain's terms of membership.

"It has to be about what is good for Europe as well as what is good for Britain."

The intervention came with Mr Cameron embroiled in a row over who should take over as the next president of the European Commission.

He has reportedly said Britain could quit the EU if Jean-Claude Juncker - the former leader of Luxembourg who he sees as a symbol of Europe's past - is elected.

According to German publication Der Spiegel, he is reported to have said: "A figure from the 1980s cannot resolve the problems of the next five years."

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Retailers' Credit Union To Defy Payday Lenders

By Mark Kleinman, City Editor

Some of Britain's biggest high street names, including New Look and Next, are forming a credit union that will offer staff an alternative to the sky-high interest rates charged by payday lenders.

Sky News has learnt that RetailCure, which has also received backing from entrepreneurs such as Rymans owner Theo Paphitis, is drawing up plans to launch later this year.

The new venture has received start-up funding of £1m and will eventually be accessible to the 4.8 million people who work directly in retail or in related sectors of the economy, half of whom earn less than £8 an hour.

It will be chaired by John Lovering, a veteran retailer who has led buyouts of companies including Debenhams, Homebase and Somerfield.

Mr Lovering is also chairman of the Retail Trust, an industry charity which has been working on plans for the new credit union for some time.

Speaking to Sky News, he said: "The industry feels that we have to find a way of providing a source of cheap, reliable credit for our people.

"The three million in retail and the nearly five million in the wider industry do have a need for low-cost, value-for-money, short-term borrowing facilities, and that's what we as an industry are trying to provide."

Booker and Matalan have also agreed to support RetailCure, while John Lewis Partnership and Wm Morrison have been approached and are expected to provide financial assistance.

The launch of RetailCure comes amid a still-intense political debate about the business model employed by payday lenders, which charge interest rates that work out at more than 5,000% on an annual basis.

The high street chains' credit union will charge interest on a sliding scale from roughly 7% to nearly 28% depending upon the borrower's credit history.

Mr Lovering expects the average loan request to be lower than £5,000, and believes that RetailCure could ultimately become Britain's biggest credit union.

"We think we can build a loan-book of £50m and attract 50,000 members relatively quickly," he said.

Assuming it receives regulatory approval, savers who deposit funds with RetailCure will be protected by the same Government guarantee as that which covers high street banks.

Labour MP Stella Creasy, who has campaigned against payday loans, told Sky News: "Anything that helps people access affordable credit as opposed to some of the legal loan sharks you see on your high streets - the payday lenders and the logbook loan companies - is a welcome move."

Earlier this week, the Church of England unveiled a pilot scheme through which a new credit union network will be piloted in three of its dioceses.

That project is being led by Sir Hector Sants, the former boss of the City watchdog, which since April has had oversight of consumer credit providers such as payday lenders.

Last year, the Archbishop of Canterbury, Dr Justin Welby, said he had told the then boss of Wonga that he wanted to "compete (the company) out of existence".

The remarks sparked acute embarrassment for the Archbishop, however, when it emerged that the Church of England's pension fund was among the investors in one of Wonga's financial backers.

In its annual report this week, the Church Commissioners said they had yet to dispose of the holding because doing so would crystallise a significant loss for its pension fund.

Some industry stakeholders were sceptical about the prospects for RetailCure.

Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents short-term lenders, said greater choice was welcome but warned that it faced significant uncertainties.

"What this body will have to do is make sure it complies with very stringent regulations that are applied to financial services.

"I would ask questions around what is going to be the collection policy, what happens if somebody leaves the retailers business still owing a debt, how are you going to collect that?"

RetailCure hopes to launch formally in November.

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Spammer To Pay Damages After Court Victory

John Lewis has been ordered to pay damages for sending "spam" emails in a privacy ruling that could open the floodgates for harassed consumers.

Roddy Mansfield, who is a producer for Sky News, brought the case under EU legislation that prohibits businesses from sending marketing emails without consent.

At a county-court hearing a judge ruled the company acted unlawfully as it could not prove Mr Mansfield had agreed to receive the emails or was one of their customers.

It is the third time Mr Mansfield has secured damages for receiving unsolicited emails but the first time an individual has won damages following a ruling on the legislation.

Spam is named after a Monty Python sketch where it is served with each meal

Previous spam cases won by default include Gordon Dick who secured £1,300 for a single email from Transcom Internet Services and Steve Higgins who was awarded £810 from a home-shopping firm.

Mr Mansfield began receiving the promotional emails after registering his details with John Lewis' website which opted-him-in for marketing using a pre-ticked consent box.

But an EU law drafted in 2003 makes it an offence to send unsolicited emails unless a customer is aware they have been opted-in.

Mr Mansfield issued proceedings under the Privacy and Electronic Communications Regulations arguing it was for John Lewis to prove he consented and after a short hearing the judge ruled in his favour.

Mr Mansfield said: "John Lewis argued that because I had not opted-out of receiving their emails, I had automatically opted-in.

"But an opportunity to opt-out that is not taken is simply that. It does not convert to automatic consent under the law and companies risk enforcement action if they use pre-ticked boxes.

Almost 100 billion spam emails are sent every day

"John Lewis' lawyers then argued that because I browsed their website I had "negotiated" with them for a sale and a business relationship existed between us which would allow them to email me. The judge threw that out too."

Some 100 billion spam emails are sent to consumers every day according to Cyren's Internet Threats Trends report for 2013.

Richard Cox, who is head of anti-spam organisation Spamhaus, said: "As the Information Commissioner cannot take action on individual breaches of the law, the only way to stop this annoying type of spam is for individuals to take action themselves.

"Only the individual in each case will know whether they consented to their details being harvested for this type of activity. Hopefully it will be a warning to other UK companies not to abuse their customers' personal data."

A spokesperson for John Lewis said the case consisted of a "very specific set of circumstances" and while they disagreed with the judge's decision they would abide by the ruling.

The company said in a statement: "Mr Mansfield voluntarily gave us his email address, set up an account online and chose not to opt-out of marketing communications when that option was available to him.

"We listen carefully to what our customers tell us about how and when we communicate with them and endeavour to do so in a manner that is convenient to them.

"We're sorry Mr Mansfield was inconvenienced by our emails."

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Taxi Law Change 'Puts Women At Higher Risk'

By Anushka Asthana, Sky Political Correspondent

Women are being placed at a higher risk of assault because of Government plans to allow minicab drivers to lend their private hire vehicles to family and friends when they are off duty, it has been warned.

The Local Government Association and charities are calling for plans - which have been introduced into the deregulation bill - to be halted.

They say the reform was slipped into the legislation at the "eleventh hour" with "little consultation". They want the clause deleted - a move being supported by the Labour party. 

The law already exists in London but this change will apply to the rest of England and Wales. 

At present minicabs outside the capital can only be legally driven by someone licensed through the council - who has undergone criminal, medical and background checks.

But under the new law, drivers will be able to loan their cars to anyone they choose. The idea is to help drivers by allowing family members to use their cars - as many can't afford a second vehicle.

But campaigners say it could be used by sexual predators to target victims. "We know that posing as a legitimate minicab driver is the preferred method of some quite dangerous sexual predators and we know that from the statistics in London where sexual assaults by bogus minicab drivers are worryingly high," said Rachel Griffin, director of the Suzy Lamplugh trust - which campaigns for better personal safety.

There are fears unlicensed drivers will target passengers

Councillor David Simmonds, of the LGA, added: "If we are seeing licenced vehicles that may be driven by someone other than the legitimate driver you won't know when you come out of a nightclub late at night perhaps after a few drinks whether the person who is driving that cab... is someone you can trust."

The fear is that unlicensed drivers will target vulnerable individuals who are frail or drunk using the vehicles.

Ministers say the change has been tried and tested in London. But the LGA says unlicensed vehicles are the scourge of the capital.

There were taxi-related sexual assaults across Britain last year including in places such as Cardiff, Birmingham and Nottingham. There were 37 in Manchester. In London there were 71 between April and November. The figures are not collected everywhere, so not available in comparable form.

Campaigners are asking why they can't simply allow drivers to nominate one other driver within their family, rather than having a free for all.

Transport Minister Baroness Kramer said: "The Deregulation Bill will not put taxi passengers at risk and drivers will continue to have their backgrounds routinely checked. Councils will have strong tools to assess drivers' and operators' suitability and to carry out enforcement activity.

"The Disclosure and Barring Service will allow licensing authorities to discover any new convictions during the lifetime of a driver's licence."

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Regional Home Price Disparity Widens In April

Help To Buy: 80% Go To First Time Buyers

Updated: 3:26pm UK, Thursday 29 May 2014

Some 80% of the Help To Buy loans granted in the mortgage scheme's first six months were given to first time buyers, the Treasury has said.

A total of 7,313 loans were issued between October last year and March this year, with a total value of £1bn.

The average value of each loan taken out under the controversial scheme was £136,742.

Only about 1% of all mortgages taken out in the period were helped by the scheme, undermining critics of the programme who have said it is prompting a house price bubble.

Most mortgage completions through the scheme were on properties outside London and in regions where prices are lower.

A high proportion of homes supported by the scheme were in the North West and the East of England.

Blackstock property expert Andrew Teacher said: "Today's figures reinforce the fact that Help to Buy has not helped to blow up the London market as numerous commentators have suggested.

"The figures show the scheme has been most effective in areas of reduced growth where prices have remained relatively flat."

The mean value of a property purchased or remortgaged through the scheme is £151,597, compared to a national average house price of £252,000.

A total of 38% of loans were for terraced houses.

The scheme's rollout in October saw only four completions, followed by 164 in November and 818 in December.

However, the monthly figure jumped significantly in the first three months of this year.

In January, completions reached 1,580, while the number rose further in February and March, to 2,090 and 2,657 respectively.

Only 5% - a total of 385 completions - were made on properties in the capital.

The Help To Buy mortgage guarantee scheme was boosted by a second phase equity loan scheme in the spring.

Data for both phases shows a total of 27,861 homes were bought under the scheme, with 85% of sales to first-time buyers.

Prime Minister David Cameron said: "Help to Buy has helped thousands of hardworking people to buy a new home and crucially it is helping to increase the number of new homes being built around the country.

"It is an important part of our long term plan to back those who want to get on and to secure a better future for Britain."

Meanwhile, net lending to small and medium sized businesses as part of the Bank of England's Funding for Lending Scheme dropped  by £723m in Q1, amid a focus on business loans.

The Bank said that between February and March lenders drew just £2bn from the scheme. It was launched in mid-2012 to encourage banks to improve borrowing facilities.

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