Current Account Switching Up In New Scheme

A growing number of consumers have taken advantage of a new regime making it easier to switch banks.

More than 600,000 current account customers moved to new providers in the last six months, since the week-long switch guarantee was launched.

The number of customers switching rose by 14% compared to the same period last year, according to the Payments Council.

Under the rules, a customer's new bank takes charge of the transfer.

The Payments Council said increased awareness of improved switching and growing consumer confidence was behind the spike.

It said 67% of people in the UK are now aware of being able to switch more easily, up from 59% at the end of 2013.

It added that customer confidence in the scheme had also risen, rising 9% to 65%.

The switching guarantee promises that a customer's new bank or building society is responsible for transferring all existing incoming and outgoing payments.

It also automatically closes old accounts as part of the process.

Prior to the new scheme it took up to 30 working days for a transfer to occur.

The Payments Council scheme also ensures that if the switch fails any charges are not levied against the customer.

It said that the data transfer system was operating efficiently and 99% of all transfers were conducted within the seven-day window.

Payments Council managing director Gary Hocking said: "By making the current account switch service quick, hassle-free and removing the fear factor we've taken away the barriers customers told us they had when it came to switching.

"Six months in and the latest figures suggest people clearly seem to be getting the message that things have changed for the better."

High street banks and building societies have launched a series of new accounts since the short-switch period was brought into force, as a way of enticing new customers.

Mr Hocking added: "There's also been a noticeable surge of advertising activity from current account providers big and small, suggesting that the new service is helping foster competition and choice for customers.

"As time goes on and the track record of the new service builds, we look forward to these encouraging results continuing."

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Wet February Wipes £270m From Building Sector

Woolly weather in February caused a sharp decline in UK construction, wiping more than a quarter of a billion pounds from the sector.

The Office for National Statistics (ONS) said output fell to £5.8bn, down 2.8% from January.

Output is defined as the amount charged by construction companies to customers for value of work in the period, excluding VAT and payments to sub-contractors.

It said new work dropped to 2.6% - equivalent to £160m - while the repair and maintenance sub-sector fell by 3.1% to £110m.

The ONS said: "While most private indicators of construction activity picked up throughout 2013 and 2014, a number were seen to temporarily depart from this trend in February 2014.

"Many also cited adverse weather conditions as the primary reason for lower activity levels, especially in the house building sector."

The ONS said the February dip caused construction to stay virtually flat over the quarter.

It said between December and February, the total sector grew by only 0.3%, compared to the September to November period.

The small amount of growth over the three-month winter period was due to a 1% increase in new construction work.

During the same period repair and maintenance decreased by 0.8%, despite a slight rise of 0.3% in work for public housing.

It said the level of construction was an eighth below the best monthly peak, which was recorded in June 2011 at £6.6bn.

Construction in the housing industry was particularly affected in February because of the weather.

It fell 6.3% on January's figure and was the biggest monthly drop since March last year, when below average temperatures and snow hit the country.

But overall, while public housing was down, private new housing was up 15.3% compared to February last year.

The ONS said damage to property in February caused by storms, wind and flooding is yet to be recorded in monthly data and is expected to be reflected when March's figures are released.

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Co-op Bank In Record £1.3bn Annual Loss

The struggling Co-operative Bank has reported a pre-tax annual loss of £1.3bn and said it would not return to profit for at least two years.

The bank also confirmed it would not make £4.97m deferred annual bonuses to its former bosses.

Chief executive Niall Booker said an overhaul plan known as the liability management exercise (LME) had "kept the bank alive".

Taking into account a profit made by the LME, it said the loss was reduced to £586m for the year ending December 31.

Mr Booker said: "The results today reflect the magnitude of the issues that have come to light since I jointed the Co-operative Bank ten months ago.

"It is early days but initial progress on our business plan is encouraging and we remain enthusiastic about the long-term potential for the bank."

The embattled parent mutual, the Co-operative Group, lost overall control of its banking arm to US hedge funds in December as part of its rescue plan. It now holds a 30% stake.

The Co-operative Group consists of a number of divisions

The £1.5bn funding 'black hole' was added to in March when it revealed a further £400m gap, forcing it to seek further investor funds.

The institution, which continues to market itself as having "ethical principles", said it cut assets last year by £2.1bn and reduced staff levels by 14% - around 1,000 employees.

It said it would try to restore its capital position, and refocus attention on being a bank for householders and small to medium-sized businesses.

Part of the plan includes reducing its product range, along with improving digital and branch-based banking services.

Although former executives would miss out on deferred bonuses, Mr Booker is to receive a £1.2m salary and benefits package and £1.7m bonus - dependant on the bank's future performance.

A further £1.2m is part of a long-term incentive plan that is payable over three years.

The bank's annual results were published on Friday after two earlier delays to the release.

The parent Co-op Group, which is expected to report an even larger loss later this month, also continues to struggle to find its way in an increasingly competitive environment.

 Earlier this week the former City minister, Lord Myners, quit the board amid opposition to his planned reforms of the business.

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M&S Finally Arrests Fall In Clothing Sales

Marks & Spencer has confirmed it avoided an eleventh-consecutive quarter of declining clothing sales amid intense turnaround efforts.

In its results for the 13 weeks to 29 March, the retailer stripped its clothing sales away from General Merchandise for the first time to highlight a 0.6% increase on a like-for-like basis during the quarter.

Total clothing sales rose 1.3%.

Chief executive Marc Bolland, who recently confirmed an expansion of its operations abroad to help boost profitability, said: "We delivered another quarter of improvement in General Merchandise.

The firm's expansion plans include food growth in Paris

"We are encouraged by Womenswear, which is showing clear signs of improvement and performed ahead of Clothing."

The trading statement added: "Customers are responding well to our re-focus on quality and style.

"Sales of M&S Collection in Womenswear, which was re-launched last Autumn, were notably up on last year.

"Our new Spring/Summer collection has been well received, with customers noticing the improving style credentials."

But M&S warned the performance was achieved against a backdrop of continued high levels of discounting in its General Merchandise market.

Mr Bolland continued: "Our Food business had another great quarter, especially considering the later timing of Easter.

"This marks our 18th consecutive quarter of growth. We continued to outperform the market with record sales around key events including Valentine's Day and Mother's Day."

Total Group sales rose 1.9% in the quarter though, on a like-for-like basis, UK sales fell slightly by 0.2%.

Shares opened more than 2% higher today in the wake of the resilient sales performance, despite being offset by continued pressure on margins.

M&S annual results are due to be published on May 20, with City expectations ahead of today's update pencilling in a 6% fall in profits to £623m.

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British Gas Business To Pay £5.6m Penalty

Ofgem has fined the arm of British Gas which serves business customers for a series of failures including blocking firms from switching to other suppliers.

The energy regulator said British Gas Business would pay a total penalty of £5.6m.

It said £800,000 of that sum would be in fines, on top of £1.3m already paid to 1,200 customers who ended up paying higher bills because they were not notified when their contracts were due to expire.

A further £3.45m would go to an energy efficiency fund, Ofgem said.

It blamed a computer error for the blocking of customers wanting to switch and said the company failed to communicate properly with those affected.

The regulator found customers lost out financially

The watchdog said it meant 5.6% of objections British Gas Business made to customers switching suppliers between 2007 and 2012 were "invalid".

Firms can be stopped from switching if they have outstanding balances on their accounts.

Ofgem concluded that the additional failure - to notify 1,200 customers when their deal expired - had denied them the opportunity to shop around for a better package.

Some were even rolled over onto more expensive standard tariff rates.

British Gas Business has now pledged to help firms reduce their bills

The regulator's enforcement partner, Sarah Harrison, said: "The ability for consumers to switch easily and fairly is key to a well-functioning energy market.

"In these cases British Gas Business failed these consumers who were wrongly blocked from switching, many of them small businesses, and denied others the chance to switch to a better deal at the end of their contract.

"British Gas Business fully accepts its failings, has stopped the practices and corrected its processes to prevent this happening again.

"The company has taken responsibility for its actions and this package strikes a balance of penalty for the company and redress for affected consumers."

Ofgem said British Gas Business cooperated fully throughout its inquiry, which began in 2012, and that was reflected in the level of the settlement package which would have been much higher had that not been the case.

Stephen Beynon, managing director of British Gas Business, responded: "We're sorry these errors occurred and have worked swiftly to change our computer systems and processes, putting controls in place to stop this happening again.

"We take any failure to meet our obligations very seriously and will ensure that the new energy efficiency fund we have set up will be a real help to hundreds of small businesses.

"It will provide free expert advice and energy efficiency measures, such as new boilers, lighting and renewable energy, to help firms to manage their energy consumption and bills over the long term."

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Athens Bomb Fails To Dent Greek Bond Sale

Greece is tapping the bond markets for the first time since its bailout in 2010 as deep anger remains over severe austerity in the debt-ridden nation.

A bomb blast outside a Bank of Greece building preceded the sale.

The device detonated in a car before dawn but there were no injuries and it was unclear whether the attack was related to the sale of five-year bonds, which analysts said aimed to raise up to €3bn and was up to seven-times oversubscribed.

The bombing followed a 24-hour public sector strike in Greece in protest against the continuing austerity demanded of it by its international bailout lenders.

German chancellor Angela Merkel - a hate figure among unions in Greece because of her demands for deeper spending cuts in the country - is due in the Greek capital for talks on Friday.

Despite Greek bonds being rated as 'junk' by major ratings agencies, the apparent success of the sale followed a steep decline in the country's borrowing costs from the darkest days of the eurozone crisis.

More follows...

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IMF Sees UK Growth Remaining Fastest In G7

By Ed Conway, Economics Editor, In Washington DC

The International Monetary Fund (IMF) has raised its forecast for Britain's economic growth more than any other major economy for the third time in a row, in a boost to the Chancellor's fortunes.

The Fund said it expected Britain's economy to expand by 2.9% this year – faster than any other G7 economy, and a significant upgrade from the 2.4% rate it predicted only three months ago.

The upgrade, which is likely to be seized on by the Chancellor as further evidence of British success, comes one year on from the IMF chief economist's warning that George Osborne was "playing with fire" with his austerity policies.

At that stage, Britain was facing the prospect of a possible triple-dip recession.

Now, the Fund says that not only is growth strong in the UK, there is a significant chance of an "upside risk" - in other words even stronger growth than its central prediction.

George Osborne was accused of 'playing with fire' by the IMF a year ago

However, the Fund added that the growth was being fuelled by the same imbalanced elements - consumer spending and credit - that contributed to the crisis.

"Growth has rebounded more strongly than anticipated in the United Kingdom on easier credit conditions and increased confidence," the report said.

"However, the recovery has been unbalanced, with business investment and exports still disappointing."

It pointed out that as a result, interest rates would be likely to rise sooner in the UK than in the US or Europe.

The Fund recommended that the Bank of England keep monetary policy "accommodative" - keeping rates low for the time being.

It added that "the Government's efforts to raise capital spending while staying within the medium-term fiscal envelope should help bolster recovery and long- term growth."

Labour's Ed Balls has accused the Government of complacency

The benign tone of the report, which forecast only slightly milder growth of 2.5% in 2015, is likely to be regarded within the Treasury as a victory over the Fund and Olivier Blanchard, who repeatedly urged the Chancellor to change course on austerity in recent years.

However, the Fund itself is likely to point towards the fact that the pace of Mr Osborne's spending cuts has been reduced in recent years - such that by some accounts he has already adopted a "plan B" on austerity.

A Treasury spokesperson responded: "The IMF forecast the UK to be the fastest growing major advanced economy this year.

"This is further evidence that the Government's long term economic plan is working, providing economic security for hardworking people.

"But the job is not done. Budget 2014 set out the next stage of the plan that is creating a more resilient economy through support to businesses, savers, and exporters.

"The biggest risk now to the recovery would be abandoning the plan that's delivering a brighter economic future."

Ed Balls, Labour's shadow chancellor, said: "These forecasts are welcome news after three damaging years when the economy flatlined and growth forecasts were repeatedly downgraded.

"Yet millions of working people, who are on average £1,600 a year worse off since 2010, are still not feeling any recovery at all.

"The IMF is right to warn about an unbalanced recovery and it is concerning that growth is expected to slow down next year.

"The Government should also heed the IMF's warnings about surging house prices by taking action to boost housing supply, as we have called for. 

"Instead of complacently trying to claim that everything is going well, we need a Government which understands that there is a deep-seated cost-of-living crisis and will act to tackle it."

The Fund said it expected the world economy to grow by 3.6% this year and 3.9% in 2015.

Among the countries facing a downgrade was Russia, whose growth prospects were cut by 0.6%, reflecting the economic impact of its involvement in Ukraine.

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Toyota In Global Recall Of 6 Million Vehicles

Toyota has issued a global recall of millions of vehicles because of safety issues.

The Japanese company said the announcement covers three issues affecting RAV4, Hilux, Yaris and Urban Cruiser models.

A total of 35,124 UK-registered vehicles are affected by the recall.

The carmaker said: "Worldwide, there have been no reports of any accidents or injuries relating to these issues.

"Toyota is conducting the recalls according to Driver and Vehicle Standards Agency (DVSA) code of practice."

The firm said it would provide a "prompt inspection and repair programme" without charge to owners.

Customers can check if their vehicle is affected by using a registration number look-up function on its website.

It said a spiral cable assembly issue had been identified on airbag modules of some RAV4 and Hilux vehicles.

There is a risk that when the steering wheel is turned damage may occur to the circuitry.

"If connectivity is lost, the airbag warning light will illuminate on the instrument panel and the driver's airbag may be deactivated," Toyota said.

The RAV4 and Hilux vehicles were manufactured between June 2004 and December 2010.

The world's largest carmaker also found a fault in the seat adjustment rail for Yaris and Urban Cruisers could fail after repeated usage.

Toyota's Prius Hybrids were recalled last February

It said: "Should the spring break, the seat may not lock into its adjusted position, and could move in the event of a crash."

The affected Yaris and Urban Cruiser models were built between January 2005 and August 2010, covering 10,339 UK-registered cars.

Toyota said there was a potential fault in the tilt or telescopic steering column of some second generation Yaris and Urban Cruisers.

It said: "Toyota is aware that the weld which connects the steering column bracket to the instrument panel on some Yaris and Urban Cruiser models might break when the steering wheel is repeatedly turned with full force.

"The driver may hear an abnormal noise from the bracket area and if the vehicle continues to be driven, it is possible that the bracket will fail, causing the steering column to tilt out of position. However, the driver will not lose steering control."

The potential steering issue affected 1,293 UK cars built between September 2005 and February 2009.

The company said: "Vehicle owners will be contacted by Toyota within the coming weeks by post or telephone and asked to make an appointment to bring their car to their nearest Toyota Centre, in accordance with DVSA guidelines."

Tokyo-listed shares for the company were down more than 3% on the Nikkei after the news was announced on Wednesday.

Some of the affected vehicles were made in France, with the majority built in Japan.

Toyota was once renowned for impeccable build quality but that reputation has been hit in recent years.

In 2012, it recalled more than 3 million vehicles over safety issues and last February 1.9 million Prius Hybrids were recalled.

The Toyota announcement is the latest in a series of high-profile recalls to hit the sector.

General Motors recently recalled more than 2.4 million North American vehicles over ignition switch issues - with its CEO grilled by politicians in Washington DC - while the world's second biggest carmaker, Volkswagen, recalled 2.6m vehicles late last year.

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Wonga Advert Banned By Watchdog As Misleading

A television advertisement for payday loan firm Wonga has been banned by the advertising watchdog.

The Advertising Standards Authority (ASA) ruled that it led to confusion about interest rates charged by the firm.

The ASA received 31 complaints about the commercial but Wonga denied it was misleading, and insisted it followed industry regulations.

It upheld the complaints and said the advertisement must not reappear in its current form.

The advert was based on a discussion about short-term loan costs between two puppets.

The script downplayed the full-year annual percentage rate (APR), giving an example that if £50 was borrowed for 18 days it would cost £33.49 in interest payment.

The ASA said: "Whilst we acknowledged that viewers taking out and repaying the loan within the stated time period would not repay 5,853% of the loan, we were nevertheless concerned that viewers would be left without a clear understanding of how the information in the on-screen text could be applied to a Wonga loan, given the ad's assertion that the representative APR was not indicative of the cost of the loan.

"We considered that, though it attempted to clarify the costs associated with a Wonga loan, the ad created confusion as to the rates that would apply.

"On that basis, we concluded that the ad was misleading."

The payday loan sector has come under increasing scrutiny.

On April 1, the Financial Conduct Authority (FCA) assumed oversight responsibility for the consumer credit market.

The City regulator's role was started after it was revealed 60% of complaints to the Office of Fair Trading were about how debts were collected.

Previous analysis by the Competition Commission found that firms issued around 10.2 million loans a year, worth £2.8bn.

Research also showed that more than a third of all payday loans are repaid late or not at all annually.

FCA said new rules such as limiting the number of times a payday loan can be rolled-over to two, the banning of misleading adverts and compulsory affordability checks for all loan applicants would be implemented.

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Samsung Pins Profit Hopes On New Galaxy S5

Samsung Electronics has admitted it is expecting to confirm its second consecutive quarter of declining profits, just days ahead of the global launch of its new smartphone.

The South Korean firm estimated its January-March operating profit at $7.96bn (£4.8bn) - a fall of 4.3% - in its guidance to investors ahead of the release of its full quarterly figures, due on April 25.

The figure was slightly below that expected by analysts who said the company's efforts to stave off the threat of a decline in annual profits would depend on its cost-saving measures but also the success of the Galaxy S5 - launched worldwide on Friday.

The S5 counts a pedometer and heart monitor among its features

It got off to a weak start at home, with its South Korean debut marred by a temporary ban on mobile carriers selling handsets and criticism that it lacks eye-catching new features.

Underscoring the challenges, Samsung has priced the S5 about 10% cheaper than the S4 even though main rival Apple is not widely expected to update its line-up until September.

It also dialled back on marketing glitz to keep margins stable.

Pricing has become a major issue given the growing pressure from cheaper Chinese rivals in the Asian market particularly.

Its share price is nearly 12% off the record high it hit in January last year, weighed by worries over high-end market saturation and the competition from low-end phones made by the likes of Huawei.

Such headwinds may increase pressure on the company to use its cash holdings to boost languishing share prices.

The firm said in January that it would raise dividend payouts after hiking them by 79% last year.

IM Investment analyst Lee Min-hee said: "High dividends give the impression that the company is no longer growing, and the most important thing for technology companies is growth.

"Samsung has repeated this message. Given that fact, I don't think there will be a major share buyback or a dramatic increase in dividend payout."

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