BP Due To Cut North Sea Jobs As Oil Costs Dive

BP is expected to tell its 3,500 North Sea oil staff today that some are to lose their jobs as its looks to save costs amid the plunging cost of oil.

Sky sources say 300 jobs are involved. BP is due to brief workers in Aberdeen today on its plans, which it had previously said would result in $1bn (£630m) of restructuring costs this year, 

BP is keen to ensure its business in the North Sea remains competitive and sustainable for the long term as Brent crude costs hover below $50 per barrel - down from $115 last June.

The company said on Wednesday: "It has been well signalled around the industry that costs have been rising and we need to respond to toughening market conditions in line with our competitors and move our cost structure into a competitive and sustainable position."

It was due to make its announcement 24 hours after the governor of the Bank of England, Mark Carney, warned that falling oil prices represented a "negative shock" for the Scottish economy - but a "net positive" for the UK as a whole, given benefits for consumers.

Shell and Tullow Oil are among other oil firms which have scaled back their investments.

Tullow reported on Wednesday that its gross annual profits were expected to fall by more than half on 2013 - and it was taking a writedown of $600m due to asset revisions.

It also raised the prospect of major job losses - warning that: "A major internal review of Tullow's organisation is ongoing which will lead to substantial long-term cost savings and efficiencies across the group."

Tullow added that it expected to announce the details at its full-year results on 11 February.

Its share price rose 3.2% in early trading when markets opened for business on Thursday while BP saw a 2.3% boost.

While mining and energy stocks generally recovered some ground following sharp falls on Wednesday, investors tend to like news of cost-savings because they protect profits.

Unions however warned of the potential for long-term damage to the country's energy capacity as a result of falling investment.

The RMT claimed tens of thousands of jobs were at stake.

Its general secretary, Mick Cash, said: "In the wake of the current price slump, RMT is demanding that Westminster and the Scottish Parliament adopt a crisis management approach to ensure sustained production, maintenance of infrastructure, retention of skills, and a robustly regulated regime in the future.

"If immediate action isn't taken then we risk turning today's crisis into longer term damage that would threaten the very core of our offshore industry.

"This is no time for playing politics when the security of UK energy supplies is on the line."

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Caesars Casino Firm Moves To Cut $18bn Debts

A subsidiary of US casino firm Caesars has filed for bankruptcy protection with debts of $18.4bn (£12.1bn).

Caesars Entertainment Operating Company, which owns and operates most of Caesars' properties worldwide, said it intended to keep the casino-hotels running, despite the bankruptcy filing in Chicago.

It was reportedly made to stop three creditors trying to push the firm into involuntary bankruptcy. 

The division of Caesars Entertainment Corporation employs 36,000 people at 38 casino-hotels, including the flagship Caesars Palace on the Las Vegas Strip.

It had been negotiating with creditors and lenders on a reorganisation plan that would turn the division into a real estate investment trust - one to own properties and the other to lease properties - promising creditors cash or new debt.

More follows...

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Minimum Wage: Firms 'Named And Shamed'

The Government has "named and shamed" 37 employers, including high street fashion brand H&M and Welcome Break, accusing them of failing to pay the national minimum wage.

It claimed the companies collectively owed £177,000 to their workers in arrears and they faced financial penalties of more than £51,000.

Other businesses named by the Government include a childcare centre in Wolverhampton, a tanning boutique in Glasgow, a building firm in Edinburgh and a cleaning company in Worksop.

The Department for Business said each company was thoroughly investigated by HM Revenue and Customs after workers made complaints to the free and confidential Pay and Work Rights Helpline.

Business Minister Jo Swinson said: "Paying less than the minimum wage is illegal, immoral and completely unacceptable.

"If employers break this law they need to know that we will take tough action by naming, shaming and fining them as well as helping workers recover the hundreds of thousands of pounds in pay owed to them.

"We are also looking at what more we can do to make sure workers are paid fairly in the first place. As well as being publicly named and shamed, employers that fail to pay their workers the national minimum wage face penalties of up to £20,000.

"We are legislating through the Small Business, Enterprise and Employment Bill so that this penalty can be applied to each underpaid worker rather than per employer."

Almost 100 employers have now been publicly named by the Government since a new regime came into force in October 2013.

Unions have been pressing for larger fines against firms found to be paying less than the statutory rate of £6.50 an hour for adults, £5.13 for 18 to 20-year-olds, £3.79 for 16 and 17-year-olds and £2.73 for apprentices.

Sky News is contacting firms identified by the Government for their response.

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Why Record Inflation Fall Is Not All Good News

How low is too low? That's the question economists are asking today after the Consumer Price Index (CPI) inflation rate dropped from 1% to 0.5%.

It's the lowest official inflation number for a decade-and-a-half, and the first time it has halved in the space of a month.

Moreover, with oil prices continuing to fall – now below $50 a barrel on the Brent crude international measure – the likelihood is that the CPI will only continue to fall.

At the very least it will drop to the lowest level since comparable records began in 1989. It may even drop into negative territory.

Should consumers be concerned? No. In the short term, this fall is good news – the equivalent of a tax cut for most consumers.

In fact, according to calculations by Capital Economics, the fall in petrol prices alone should put £455 back into the average household's pockets.

The fact that lower energy prices also push down a host of other costs should continue the 'tax cut' in coming months.

Moreover, with inflation at 0.5% it is now comfortably below the rate at which wages are increasing (1.6%, excluding bonuses) – so the longest squeeze on living standards since Victorian times is now at an end.

Finally, because inflation is well below the Bank of England's 2% target, it is even less likely to raise interest rates in the near future.

Market expectations for the date of a rate increase have now shifted from this summer to next spring. And the expected level in five years is now 1.4%, compared with 2% expected a couple of months ago.

That means more impetus for consumer spending in the coming months and, perhaps, an even stronger recovery later this year (though the near-term turbulence in Russia and elsewhere caused by falling oil prices might weigh on growth in the immediate future).

However, it's not all good news. There is good deflation and bad deflation. Good deflation, of the kind depicted above, is a temporary cut in prices – a temporary boost to consumers' real incomes.

No one changes their behaviour or spends less as a result – quite the contrary. Bad deflation is the kind witnessed in the US in the 1930s when prices fell for a prolonged period of time along with wages.

Because this deflation lasts longer, and is associated with weaker growth, it is trickier to shake off.

There are serious concerns this kind of deflation is taking hold in Europe – quite apart from recent oil-led falls. Indeed, in certain countries, such as Greece, this 1930s-style deflation is already quite evident.

Prices are now falling across the Eurozone, and if economists' forecasts are to be believed, they could stay low for some time.

That's why the European Central Bank looks likely to engage in full-blown quantitative easing either this month or soon afterwards.

The only question is quite how it has managed to structure the programme so it doesn't fall foul of the inflation hawks at the Bundesbank.

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Osborne: No Need To Fear Low Inflation Rate

Britain should celebrate the low inflation rate and not be frightened by it, Chancellor George Osborne is to insist.

He will say the slump in the headline rate to just 0.5% is due to external factors - and the benefits for consumers should be welcomed.

The comments, in a speech to the Royal Economic Society on Wednesday, come as Mr Osborne and Bank of England governor Mark Carney seek to calm nerves over the issue.

Bank of England chief Mark Carney

The Consumer Prices Index (CPI) hit its joint lowest level in December, thanks mainly to cheaper food and petrol.

Economists said the continued plunge in the oil price meant it was likely to fall further and a brief period of negative inflation was "not entirely out of the question".

Video: Consumers Welcome Price Drops

Mr Carney - who is due before the Treasury Select Committee later - has conceded deflation is now "possible", but insists Britain has the tools to deal with it.

Mr Osborne is expected to say: "The low inflation we see here in the UK is much more welcome than in the eurozone where inflation has been very low for some time and is now negative.

"There the debate has understandably turned to the dangers of deflation - the risk of a self-reinforcing spiral where economic activity falters, consumers defer purchases as prices fall and nominal debt burdens become ever harder to manage."

Mr Osborne will suggest the European Central Bank's inflation target could be changed so it is obliged to take action when inflation is below 2% - as well as above it.

Video: Low Inflation - Good Or Bad?

"In the UK our system is well equipped to deal with negative inflation shocks just as it dealt with the surge in commodity prices in 2010 and 2011," he will say.

He will add: "Of course we will always remain vigilant to ensure that inflation is low for the right reasons.

"But we should not confuse this welcome news for Britain's households as a result of falling oil prices with the threat of damaging deflation that we see in the eurozone.

"Rising real incomes, a recovery spreading to all parts of our economy, and family budgets that can stretch that little bit further - let's celebrate these effects of low inflation, not fear them."

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Global Economy 'Running On One Engine'

The World Bank has cut its growth forecast for 2015 and next year, declaring that the world's economy is "running on a single engine."

Its twice-yearly Global Economic Prospects report said that weakness in the eurozone, Japan and in some major emerging economies offset the benefit of lower oil prices.

The global development lender predicted the global economy would grow 3% this year - falling from its previous forecast of 3.4% in June last year.

GDP growth would achieve 3.3% in 2016, it predicted.

World Bank chief economist Kaushik Basu said: "The global economy is at a disconcerting juncture.

"The global economy is running on a single engine, ... the American one. "This does not make for a rosy outlook for the world."

The body said strong growth prospects in the United States and Britain separated them from other rich nations.

It warned on the potential impact of deflation in the countries using the euro and in Japan and said that among emerging market economies Brazil and Russia in particular weighed on its predictions.

Russia, which is heavily dependent on oil revenues, is suffering amid a 60% plunge in world oil prices - coupled with sanctions imposed by the West over its actions in Ukraine.

The resulting weakness of the rouble has stoked inflation leaving the country facing the prospect of recession.

Growth has slowed in China but it is more a managed slowdown as it transitions away from an investment-led growth model.

The report said that while lower oil prices should be a  net positive for the world economy, it would increase short-term market volatility and reduce investments in unconventional oil such as shale and deep sea oil.

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Energy Bills: E.ON Cuts Gas Prices By 3.5%

E.ON, one of the so-called 'Big Six' energy firms, has confirmed it is to reduce its standard gas charge by 3.5% with immediate effect.

The company said the decision, coupled with a new one-year fixed dual fuel product it was also launching, represented a "risk" given Labour's pledge to introduce an energy price freeze should the party win May's election.

It insisted it had passed on to customers as much as it could, with wholesale costs having plunged by around 30% in the past year.

E.ON said the average reduction to its standard gas price was equivalent to two weeks' gas use or £24 off an annual gas bill.

The household supplier, which has 4.5 million residential customers, claimed the fixed product was the best on offer in the market at an average £923 annually and was available from today, saying it was open to new and existing customers.

Chief executive Tony Cocker said: "Today's 3.5% cut to our standard gas price and the launch of the UK's cheapest energy tariff, our one year fixed product,  demonstrate that we fundamentally believe in doing the right thing for our customers.

"This is further evidenced by the fact we are the first supplier to reflect through our standard tariff the overall drop in wholesale gas prices this winter but also that, when our prices had to increase at the start of 2014 to reflect cost increases, for the second year running we announced later than any other major supplier and, on that occasion, at a lower average percentage increase level than any other major supplier.

"While oil prices have slumped, the gas price has remained volatile - some days up, some days down - and many of the other non-energy costs that we don't control but make up a customer's bill have increased and are set to increase further.

"However, today we've taken steps so we can make a price cut on our standard gas tariff at the same time as offering customers, existing and new, the chance to sign up to the UK's lowest priced energy tariff.

"As we have always said where it is possible we will try to pass savings on to our customers."

Wholesale gas costs fell 26% between the third quarter of 2013 and and the same period in 2014 and have fallen further since.

The plunging costs have prompted political parties, with the election in mind, to pass on the reductions to households.

Sky News reported at the weekend that firms were reluctant to slash standard bills before May, given the fact that raw energy had been purchased at higher prices over years to ensure supply and the prospect of a looming price freeze.

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Debenhams Shares Take 9% Hit On Trading Woes

Investors headed for the exit door after Debenhams reported a fall in first quarter sales, despite an improved Christmas performance.

The country's second-largest department store chain said UK like-for-like sales fell 0.8% in the 19 weeks to 10 January.

However the firm, which has 240 stores and trades across 28 countries, said that over the four weeks to 10 January underlying sales were up 4.9%, with revenues boosted by less discounting and an improved online delivery offer.

Debenhams said trading was at record levels over Christmas week.

Chief executive Michael Sharp said: "I am pleased with our performance in the critical Christmas trading weeks, driven by our strength in a diverse range of product categories and a strong marketing campaign focussed on gifting.

"Our performance steadily improved following the well documented challenges in the clothing market in the autumn.

"We now have a competitive online proposition with next day delivery to home and next day click and collect, which customers took full advantage of and which performed well over Christmas.

"I would like to thank the whole Debenhams team for their tremendous efforts in delivering this performance."

Shareholders did not seem to agree that the trading update was positive, with Debenhams' value down 9% in early trading.

Among other retailers reporting Christmas trading updates on Tuesday was ASOS, the online fashion specialist.

It said there was a 15% increase in like-for-like sales for the six weeks to 9 January - helping its share price grow 12% when the market opened following a tough 2014 that saw it hit by a damaging warehouse fire.

Greggs, the bakers, raised its full-year profit guidance while reporting an 8.1% rise in like-for-like sales for the five weeks to 3 January.

Its share price rose 6% when trading began.

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Morrisons Boss Quits After Festive Sales Fall

By Mark Kleinman, City Editor

The chief executive of Wm Morrison is to step down after a slump in Christmas sales led the grocer's board to conclude that a new leader was required to transform its fortunes.

Confirming an exclusive report on Sky News, Morrisons said that Dalton Philips would leave the company following its full-year results, with a search underway for his successor.

News of the change came as Morrisons reported Christmas trading figures which underlined its status as the also-ran among the big UK supermarket chains, with a like-for-like sales fall for the six weeks to January 4 of 5.2% including fuel.

Mr Philips said he would be leaving "a great company", adding that during his five-year tenure "many improvements [have been made] to the business and given Morrisons strong foundations for the future".

Morrisons also confirmed that Andrew Higginson, a former Tesco executive, would take over as its chairman from Sir Ian Gibson in January.

Mr Higginson said: "In the next chapter of Morrisons development, we need to return the business to growth. The board believes this is best done under new leadership. I would like to thank Dalton for his contribution as CEO. 

"He has brought great personal qualities and values to his leadership of the business, having had to manage against a background of considerable industry turmoil and change."

Mr Philips deserved "particular credit for facing into and dealing with the pricing issues that have now become evident, for taking the business into the convenience and online channels, and for the steps he has taken to modernise the company's operating systems," Mr Higginson added.

Morrisons' like-for-like trading performance was worse than the City had forecast, and placed the company firmly in the foothills of the battle for growth, with J Sainsbury and Tesco both reporting superior figures last week.

Mr Philips, a former executive at Loblaw, Canada's biggest food retailer, became Morrisons' boss in March 2010, and also sits on the board of the Department for Business, Innovation and Skills.

During his tenure, Morrisons has struggled to modernise its business in the face of tough competition from supermarket discounters and established rivals.

Last autumn, Morrisons announced thousands of job cuts and the introduction of a new loyalty scheme in a bid to stem the decline in sales.

When asked about Mr Philips' departure on Monday night, Morrisons said it did not comment on management changes.

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Samsung Forecasts Annual Profit Fall Of 32%

Strong smartphone competition is set to push annual profits down for the first time in three years at Samsung Electronics.

The South Korean firm forecast a 32% fall in operating profit to $22.6bn (£15bn), ahead of the publication of its financial results later this month when it will also give a breakdown on the performance.

Fourth quarter profits were expected to drop 37% from a year earlier - with analysts suggesting the figure could have been worse but for strong demand for memory chips within its semiconductor division.

Total quarterly sales dropped 12%.

Samsung is hunting new revenue streams from the so-called Internet of Things - connectivity with everyday electronic items - to reduce its recent reliance on smartphones.

It had previously pledged that by 2017 all Samsung televisions would be Internet connected and that within five years all Samsung hardware products would be ready for the Internet of Things.

The company is taking its software, which is designed to challenge Google's Android operating system, to television sets.

Samsung said its all-new internet-connected televisions this year will run on Tizen, its own operating system.

Its Galaxy smartphones led the market in 2012 and 2013, pushing past Nokia, Motorola and Apple in terms of sales volume.

But that growth ground to a halt last year as its new models disappointed and it was squeezed on price in the low and mid-end phone markets by Chinese smartphone makers such as Xiaomi, which overtook Samsung in China and India.

Samsung responded by saying it was to reduce the number of models it produces to lower costs and help boost innovation.

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