TSB Shares Up 11% On First Day Of Trading

Shares in retail bank TSB jumped more than 11% in value after public trading in the Government-back lender started.

The list price of 260p was quickly up to more than 290p, 11.5%, within minutes of trades commencing at 8am.

In early afternoon trades on Friday the price had climbed further, to 294p, before easing back to 290p at the close.

The initial pricing of 260p, slightly above the mid-range estimate, valued the new retail bank at £1.3bn.

Lloyds Banking Group originally planned to offer 25% of TSB shares but upped the figure to 35% after keen interest was shown by investors.

A total of 175 million shares have now been offered to the public.

Lloyds is still 25%-owned by the British taxpayer after a multi-billion bailout in the financial crisis.

Lloyds chief executive Antonio Horta-Osorio said: "The successful initial public offering of TSB is an important further step for Lloyds Banking Group as we act to meet our commitments to the European Commission.

"The significant investor demand for shares in TSB, which reflects investors' confidence in the prospects for the business, has meant that we have been able to set the offer size at 35%.

"TSB has a national network of branches, a strong capital base, robust liquidity and significant economic protection against legacy issues."

EU regulators ordered to Lloyds to sell 631 branches in 2009 over competition concerns, and must now sell the remaining holding by the end of 2015.

The original buyer of the branches was to be the Co-op Bank, until a £1.5bn capital black hole was discovered in the mutual's books.

The share price range was initially set at between 220p and 290p, on June 9.

At the time, Lloyds said in a statement that the float would commence around June 24.

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TNT Plan 'Cuts £200m From Royal Mail Revenue'

Royal Mail has warned that delivery plans by rival TNT could reduce its revenue by £200m in coming years.

It said TNT Post UK's expansion strategy would cost it £200m in the 2017/18 financial year.

It told regulator Ofcom that "absent intervention" would risk damaging its ability to reach a pre-tax profit margin of 5% to 10%.

Direct deliveries from rivals undermine the universal service because of "cherry picking", according to the Royal Mail, because they are not bound by similar stringent requirements.

In the formal submission to Ofcom, Royal Mail requested an immediate review of direct delivery in Britain.

It also asked the watchdog to impose any necessary regulatory changes to safeguard the universal service to households and businesses.

The submission to the regulator follows on from previous statements made by Royal Mail.

It says it is already trying to manage an annual decline in letter volumes of around 5%.

TNT has grown local market share of 14% in areas of operation and plans to cover 42% of UK addresses by 2017, the submission said.

The iconic red delivery service was privatised last autumn and the Government maintains a 30% stake.

An Ofcom spokesperson said: "We will consider the report Royal Mail has given us carefully.

"Protecting the universal service is at the heart of Ofcom's work, and our current evidence clearly shows that the service is not currently under threat.

"We would assess any emerging threat to the service quickly, in the interests of postal users."

In response, Communication Workers Union deputy general secretary Dave Ward said: "Ofcom's primary duty is to protect the universal service which allows us to send a letter to Belfast, Bristol or Brighton all for the same price.

"If Ofcom does not carry out an immediate review of the impact of direct delivery on universal service, it will have failed in its duty."

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Cashless High Street Ditches Notes And Coins

By Becky Johnson, North of England Correspondent

Shoppers will find their cash is worthless in one Manchester suburb as only cards will be accepted by stores on the high street.

As part of a social experiment, shops along fashionable Beech Road in Chorlton will only take payments on plastic.

It comes as research shows people are increasingly using cards instead of notes and coins.

Many of the shops, bars and restaurants on the road are independently owned.

Mary Paul, of the Beech Road traders' association, said: "Businesses can see the way things are going with more money being taken on cards across the board, so this is a very interesting glimpse into the future for all of us."

This month the British Retail Consortium (BRC) revealed cash use has fallen by 14% in the last five years.

Card use is increasing rapidly, with debit cards currently being used for 32% of transactions compared to 30% last year.

Some experts predict physical currency will cease to exist within 20 years.

Shops on Beech Road in Chorlton are trialling plastic-only payments

Helen Dickinson, director general of the BRC, said: "Customers are taking advantage of new ways to shop and pay. The availability of contactless cards, handy express stores and self-service tills, as well as online sales, has increased the use of debit cards for smaller payments in place of cash."

Mark Latham, product and innovation director at Handepay, the card payment provider behind the idea to trial a cashless high street, added: "Britain is at the forefront of countries heading towards becoming cashless because the public are always eager to embrace new technology.

"Recent research showed most Londoners would welcome a cash-free society as they're so used to paying for everything with cards.

"There's now an expectation that card payment is available everywhere - it takes us aback as consumers if it isn't.

"Business owners love it too as it cuts down on queues, reduces lost sales and gives them more time to interact with their customers.

"All evidence shows consumers spend more too, as they're no longer limited to just the cash in their pockets."

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Tax Blunder By HMRC Means Millions Owe Money

By Darren McCaffrey, Sky Politics Reporter

Millions of people will be forced to hand money to the Government after paying the wrong amount of tax because their bills were miscalculated.

The blunder by HM Revenue and Customs (HMRC) relates to the Pay As You Earn system (PAYE) last year.

Around 3.5 million people are thought to have paid too little tax as a result of the errors and will now have to pay the money over the coming years.

A further two million paid too much and will be able to claim it back by the end of the tax year, next April.

The estimated average mistake for individuals is around £300.

While errors are made every year, 2013-14 has seen an increase on the previous year with 5.5 million people affected compared to 5.2 million the year before.

This is despite the introduction of a £270m scheme designed to make the tax system more effective.

The HMRC's new Real Time Information (RTI) programme allows employers to report wage changes on a weekly or monthly basis.

This should ensure the process of making tax payments is more accurate.

A spokesman for HMRC defended the current system: "Most people pay the right tax throughout the year, but there will always be a small percentage of the 41 million people in PAYE who have underpayments or overpayments at year end."

He added: "The effect of Real Time Information is not reflected yet as it has not bedded in but, over time, RTI will help to reduce the number of cases that have to be reconciled."

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TSB Shares Up 11% On First Day Of Trading

Shares in retail bank TSB jumped more than 11% in value after public trading in the Government-back lender started.

The list price of 260p was quickly up to more than 290p, 11.5%, within minutes of trades commencing at 8am.

The initial pricing of 260p, slightly above the mid-range estimate, valued the new retail bank at £1.3bn.

Lloyds Banking Group originally planned to offer 25% of TSB shares but upped the figure to 35% after keen interest was shown by investors.

A total of 175 million shares have now been offered to the public.

Lloyds is still 25%-owned by the British taxpayer after a multi-billion bailout in the financial crisis.

Lloyds chief executive Antonio Horta-Osorio said: "The successful initial public offering of TSB is an important further step for Lloyds Banking Group as we act to meet our commitments to the European Commission.

"The significant investor demand for shares in TSB, which reflects investors' confidence in the prospects for the business, has meant that we have been able to set the offer size at 35%.

"TSB has a national network of branches, a strong capital base, robust liquidity and significant economic protection against legacy issues."

EU regulators ordered to Lloyds to sell 631 branches in 2009 over competition concerns, and must now sell the remaining holding by the end of 2015.

The original buyer of the branches was to be the Co-op Bank, until a £1.5bn capital black hole was discovered in the mutual's books.

The share price range was initially set at between 220p and 290p, on June 9.

At the time, Lloyds said in a statement that the float would commence around June 24.

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Shire Pharmaceuticals Rejects £27bn AbbVie Bid

Management for Shire Pharmaceuticals has unanimously rejected a £27bn ($46bn) informal bid from US drug giant AbbVie.

The London-listed drug firm rejected the takeover bid because it undervalued the group.

Shire said in a statement: "The board of Shire decided unanimously to reject the proposal on the basis that it fundamentally undervalued the company and its prospects."

AbbVie had earlier revealed a 4626-pence-per-share proposal.

Shire has no single controlling shareholder and has been seen as a likely takeover target for US drugmakers.

It specialises in the treatment of rare diseases business and has an attractive tax base, by being domiciled in Ireland.

Early London trading in Shire shares were up more  than 13% after news of the AbbVie bid was announced.

Shire said the offer denied shareholders full benefits of its future strategy.

The firm said it expected to more than double its 2013 annual product sales to £5.8bn ($10bn) by 2020 and told shareholders not to take action in relation to the takeover bid.

It also warned about concerns of the US firm shifting its tax domicile in the UK.

The concerns mirror those raised about the recent failed attempt by Pfizer to buy UK rival AstraZeneca.

Industry experts said they believed Abbvie would need to boost its offer to above £50-per-share for a deal to take place.

Jefferies analysts said in a briefing note: "We see limited product portfolio synergies, hence assume cost savings, tax benefits, diversification, and Shire's attractive growth to be the merger and acquisition drivers."

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GM Ignition Fault 'May Have Killed 100 People'

Up to 100 deaths could be linked to a faulty ignition switch in GM cars that the firm failed to rectify for more than a decade, says a US lawmaker.

Representative Diana DeGette, a Colorado Democrat, mooted the figure as she grilled GM chief executive Mary Barra at a congressional hearing on Wednesday. 

The number is higher than the 13 people the company says died in crashes linked to the problem, and nearly double the death toll of 53 cited in lawsuits.

GM engineers had known about the defective switch since 2001, but the firm did not recall the vehicles until this year.

Wheelchair-bound Trenton Buzard was paralysed in a GM crash

The US government fined GM $35m (£20m) last month, but critics pointed out that amounted to less than a day's revenue for the car-maker.

In her second appearance on Capitol Hill over the scandal, Ms Barra told the House committee lessons had been learned.

"I never want anyone associated with GM to forget what happened," she said in her prepared remarks.

A Wisconsin car crash, linked to the GM fault, that killed two teenagers

"This is not another business challenge. This is a tragic problem that should never have happened and must never happen again."

Earlier this week the car-maker announced a new recall of 3.36m vehicles because of ignition switch problems, on top of the 2.6m Chevrolet Cobalts, Saturn Ions and other cars recalled in February.

The House Energy and Commerce Subcommittee on Oversight and Investigations asked why it had taken GM so long to act.

Rep. Diana DeGette holds up the faulty switch at a hearing in April

Its members questioned whether the company's culture could change, and if this month's dismissal of 15 employees was really enough.

The lawmakers also said that a report paid for by GM into the scandal had failed to answer key questions.

The 315-page report, made public on June 5, blamed the faulty ignition switch on a rogue engineer.

Family members of a GM crash victim wipe away tears at a news conference

"It does not fully explain why stalling was not considered a safety issue within GM," Ms DeGette said. 

"And most troubling, the report does not fully explain how this dysfunctional company culture took root and persisted."

The lawmaker said senior executives, including Ms Barra, should have acted sooner.

Representative Fred Upton read a 2005 email from a GM employee who recommended a "big recall".

Family members of victims in front of GM's Detroit headquarters

The firm also failed to act on reports it received in 2007 and 2010 about the malfunction.

The defective ignition was prone to turning off, causing the engine to shut down and disabling the air bags.

Ms Barra told the hearing that she had been encouraging people to speak up about potential safety issues.

The company had issued 44 recalls of 18 million cars in the US this year, she added, as part of a tougher approach to safety.

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Fed Cuts Asset Purchases Amid Inflation Fear

The US Federal Reserve has cut the pace of monthly asset purchases by $10bn (£5.8bn), as it dampens fears of inflation rising.

The Fed said its quantitative easing programme would now be set at $35bn (£20.6bn) a month.

The US dollar weakened against its major rivals as the Fed said it would maintain interest rates at the current low level and not quicken the pace for raising them.

Fed boss Janet Yellen said recent data shows a modest acceleration of inflation, but added that unemployment was still too high.

Speaking at a post-meeting news conference, she said there was "no mechanical formula" for when the Fed will lift rates.

It is expected to maintain benchmark rates at the current level well into 2015, averting a big rise in prices.

Ms Yellen said: "The recent evidence we have seen, abstracting from the noise, suggests that we are moving back gradually over time towards our 2% objective and I see things roughly in line with where we expected inflation to be."

She made the comments at her second news conference since taking over the chair role from predecessor Ben Bernanke.

Despite the negative reaction from foreign exchange markets, equities rallied to a record close as bond prices strengthened.

The Fed reduced its growth forecast for 2014, partially based on the harsh winter that affected US businesses.

A number of household names, including fast food chains, have previously reported first quarter resulted that were dampened by a bitterly cold winter across many parts of the US.

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Home Loan 'Slowdown' As New Rules Take Effect

There has been a "slowdown" in new home loan advances because of increased lender scrutiny, according to the Council of Mortgage Lenders (CML).

It said gross mortgage lending held steady in May at an estimated £16.5bn - identical to April's lending figure.

Tighter rules governing mortgages were initiated in late April, known as the Mortgage Market Review (MMR).

The new rules were designed to make sure borrowers had the capability to meet repayments if interest rates rise in the future.

CML chief economist Bob Pannell said: "Market indicators point to a slowdown in activity levels, in part associated with new mortgage rules, but it is unclear how lasting this will be.

"Implementation of the new regulatory regime is likely to have disrupted the normal patterns of activity, creating statistical 'fog' around the published figures.

"As this lifts over the coming months, a clearer picture as to any lasting impact of the MMR rules on lending activity should emerge."

MMR guidelines have seen prospective borrowers quizzed by lenders over their monthly outgoing expenditure.

Questions have covered gym membership fees, how much is spent monthly on toiletries, and the ratio of fresh produce to non-perishable food items.

Some applicants have spent more than seven hours on the telephone answering questions as part of the process.

The CML covers around 95% of lenders operating in Britain and it records mortgage advances.

A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property, whereas  mortgage advances are the total amount of a loan actually provided to the buyer, by the lender.

More follows...

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Zoopla To Be Valued At £919m On Flotation

Zoopla, the property website, will have a market value of £919m after it set the offer price for its share sale.

The firm - majority owned by Daily Mail And General Trust - said shares would be priced at 220p each in the Initial Public Offering (IPO).

That offer was in the lower half of the range it had previously announced of between 200 and 250p and represents 38.3% of the company's issued share capital.

No new shares are being issued and the offer is only be open to financial institutions, such as banks and pension funds, alongside estate agents and developers.

Zoopla was founded by Alex Chesterman

Conditional trading began on the London Stock Exchange at 0800 BST.

Alex Chesterman - the founder and chief executive of Zoopla - said: "We are delighted with our successful listing."

"We have received a significant level of institutional investor support in our business which once again underlines the growth potential of Zoopla Property Group."

It had initially been predicted that the sale could have valued the company at more than £1bn - a mark that attracted plenty of attention - though the decision to go for a price in the lower half of the range was seen as a cautionary nod towards rocky rides for other recent IPOs.

Zoopla, which is the UK's second-largest property website with 40 million monthly users, launched in 2008 and the bulk of its revenues come from estate agency fees.

Analysts have pointed to a potential for earnings growth at Zoopla as it currently rakes in less cash per transaction that its bigger rival, Rightmove.

But both websites are facing a potential threat from a new rival - backed by estate agencies.

More than 500 estate agents joined forces in February, planning to combat what they said was an "anti-competitive duopoly".

Agents' Mutual claim Rightmove and Zoopla keep putting their prices up and reaping huge profits against those made by small estate agents.

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