Next Shares Surge After Xmas Sales Growth

Next has reported it enjoyed strong sales growth in the run-up to Christmas and has now raised its annual profits guidance.

The retailer confirmed it was to pay a fourth special dividend of the year while announcing a 2.9% increase in full price sales between 28 October and Christmas Eve - with total sales for the year to 24 December rising 7.7%.

Next Directory, which incorporates its online and catalogue offerings, drove the performance with sales in the division rising 7.5% in the pre-Christmas period alone.

The company said it now expected its full-year profit guidance "to be within £10m either side of £775m" - a £5m increase on the midpoint range it had expected in October.

Surplus cash would again be returned to investors, Next said, with its fourth special dividend of the year worth 50p per share.

That development and the wider Christmas cheer boosted its shares by as much as 4% in early trading on the FTSE 100 and gave a lift to rival Marks & Spencer too.

Retailers are on track for a record December following the success of Black Friday sales the previous month, but there are signs that cold weather and some stock shortages may have hit high street sales since Boxing Day.

Next warned that it remained "very cautious" about the year ahead.

The firm said the outlook for UK consumers appeared "relatively benign" with low inflation, wages starting to recover, available credit and strong employment painting a "somewhat more positive picture than recent years".

But the group said it faced comparisons with a strong spring and summer in 2014 while uncertainty in the UK and global economy - with a general election looming - presented risks.

It is expecting sales growth for 2015/16 of between 2.5% and 7.5%, compared with the latest expectations for 2014/15 of 6-8%.

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House Prices Rise At Slowest Pace For A Year

UK house price growth eased to its weakest annual pace for 13 months in December, according to Nationwide.

The building society's monthly index showed that property prices lifted by 7.2% annually this month to reach £188,559 on average, slowing from an 8.5% annual rate of growth in November.

The average cost of a home edged slightly lower from the record high of £189,388 measured the previous month.

Nationwide's report named London as the UK's "top performer" for price growth in 2014, with prices there up by 17.8% year on year, reaching £406,730 typically.

Wales was the weakest-performing region, with values having increased by 1.4% annually to reach £141,631 on average.

Activity in the housing market slowed following the introduction of tougher mortgage affordability checks but Nationwide forecast a return to stronger growth in 2015 because of stamp duty reforms and improved levels of construction.

Its chief economist Robert Gardner said: "The slowdown in housing market activity is surprising given further steady gains in employment, a pickup in wage growth (albeit from low levels) and the continued low level of mortgage rates.

"Moreover, surveys suggest consumers remain in high spirits – a view reinforced by robust retail spending growth in November, which was at its highest for over a decade.

"If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead.

"Supply side developments will be crucial in determining the trajectory for prices."

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City Link Confirms Thousands Of Jobs Lost

The administrators of courier firm City Link have announced 2,356 job losses after a bid to buy the company failed.

Many workers found out about the firm's collapse on Christmas Day and had been warned to expect "substantial redundancies".

Announcing the job losses on New Year's Eve, the administrators at EY said an offer that was made for City Link had not been acceptable.

The bid, made by a consortium, "offered no money up front and significantly undervalued the assets to be acquired", the administrators said.

They said: "The administrators proposed an alternative structure that would be acceptable and common in these situations.

Video: Dec 29: Workers Protest At Depots

"The consortium, despite attempts to make them reconsider, declined to amend their original offer."

Coventry, where the firm has its head office, faces the highest number of redundancies, with 350 jobs lost.

There have also been more than 100 job losses in Hatfield, Heathrow and Warrington.

The administrators said 371 people have been retained to deal with remaining parcels and to help with winding down its operations.

Hunter Kelly, joint administrator of City Link Limited, said: "The company endured substantial losses, which ultimately became too great for it to continue as a going concern, and City Link Limited entered administration following an unsuccessful sale process."

RMT union general secretary Mick Cash said: "The confirmation from the administrators that they have just sacked 2,400 staff and are pulling the plug on any efforts to save City Link is a disgraceful and cynical betrayal that will wreck the lives of our members, many of whom are owed thousands of pounds.

"RMT does not believe that those pulling the strings had any interest in saving this business and were happy to cut and run leaving a trail of human misery in their wake.

"The City Link collapse has blown the lid off the cosy relationship between bandit capitalism and the political elite."

Business Secretary Vince Cable said: "This is very sad news for the City Link workers and their families at a particularly difficult time of year.

"The Government has put arrangements in place to help employees who are made redundant and we stand ready to help."

Around 30,000 parcels are waiting to be collected from City Link depots.

Administrators say they expect depots to remain open until "approximately" 6 January.

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Next Shares Surge After Xmas Sales Growth

Next has reported it enjoyed strong sales growth in the run-up to Christmas and has now raised its annual profits guidance.

The retailer confirmed it was to pay a fourth special dividend of the year while announcing a 2.9% increase in full price sales between 28 October and Christmas Eve - with total sales for the year to 24 December rising 7.7%.

Next Directory, which incorporates its online and catalogue offerings, drove the performance with sales in the division rising 7.5% in the pre-Christmas period alone.

The company said it now expected its full-year profit guidance "to be within £10m either side of £775m" - a £5m increase on the midpoint range it had expected in October.

Surplus cash would again be returned to investors, Next said, with its fourth special dividend of the year worth 50p per share.

That development and the wider Christmas cheer boosted its shares by as much as 4% in early trading on the FTSE 100 and gave a lift to rival Marks & Spencer too.

Retailers are on track for a record December following the success of Black Friday sales the previous month, but there are signs that cold weather and some stock shortages may have hit high street sales since Boxing Day.

Next warned that it remained "very cautious" about the year ahead.

The firm said the outlook for UK consumers appeared "relatively benign" with low inflation, wages starting to recover, available credit and strong employment painting a "somewhat more positive picture than recent years".

But the group said it faced comparisons with a strong spring and summer in 2014 while uncertainty in the UK and global economy - with a general election looming - presented risks.

It is expecting sales growth for 2015/16 of between 2.5% and 7.5%, compared with the latest expectations for 2014/15 of 6-8%.

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House Prices Rise At Slowest Pace For A Year

UK house price growth eased to its weakest annual pace for 13 months in December, according to Nationwide.

The building society's monthly index showed that property prices lifted by 7.2% annually this month to reach £188,559 on average, slowing from an 8.5% annual rate of growth in November.

The average cost of a home edged slightly lower from the record high of £189,388 measured the previous month.

Nationwide's report named London as the UK's "top performer" for price growth in 2014, with prices there up by 17.8% year on year, reaching £406,730 typically.

Wales was the weakest-performing region, with values having increased by 1.4% annually to reach £141,631 on average.

Activity in the housing market slowed following the introduction of tougher mortgage affordability checks but Nationwide forecast a return to stronger growth in 2015 because of stamp duty reforms and improved levels of construction.

Its chief economist Robert Gardner said: "The slowdown in housing market activity is surprising given further steady gains in employment, a pickup in wage growth (albeit from low levels) and the continued low level of mortgage rates.

"Moreover, surveys suggest consumers remain in high spirits – a view reinforced by robust retail spending growth in November, which was at its highest for over a decade.

"If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead.

"Supply side developments will be crucial in determining the trajectory for prices."

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Thatcher Was Warned 'Big Bang' Would Go Bad

Margaret Thatcher was warned about the dangers of deregulating the banks prior to the Big Bang of 1986, according to files released by the National Archives.

Sir Robert Armstrong, the Cabinet secretary, expressed fears of "unscrupulous" money-making and "a bubble that will be pricked in a year or two".

The Big Bang was a super-lucrative revolution in the financial sector which introduced electronic screen-based trading and opened up the Square Mile to international banks.

The reforms ensured London's place at the heart of global financial markets, but critics say they paved the way towards the great banking sector crash of 2008.

Seven months before the event, Sir Robert, Margaret Thatcher's most senior official, wrote a memo saying: "There is increasing disquiet about the things that people think are going on in the City.

"I do not just mean the levels of remuneration; a lot of people, including some from inside the City, think that is a bubble that will be pricked in a year or two.

Some people believe the Big Bang paved the way for the 2008 financial crash

"They think more about the way in which corners are being cut and money is being made in ways that are at least bordering on the unscrupulous.

"It tends to be summed up by the people saying that they doubt whether it really is good enough any more to leave the policing of the City to self-regulation."

David Willetts, who was then working in the No 10 policy unit but went on to be a Tory minister, co-authored a paper for the Prime Minister on the likely impact of the Big Bang.

The report expressed concern about "unethical behaviour" and that financial deregulation could lead to "boom and bust".

But he concluded that while there might be "individual financial failures" he did not expect "a systemic problem".

The correspondence, released after 30 years in the archives, show ministers were mindful of the risks but most dismissed them, fearing the greater danger was the City becoming less competitive.

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Will Greece's Crisis Mean Tragedy For The Euro?

If, as now looks quite possible, far-left party Syriza wins next month's snap elections, plunging Greece back into chaos, there will be more than a smidgeon of irony about the whole affair.

For one thing, the elections mark almost exactly five years since the Greek economic crisis first exploded onto the world stage.

In late January 2010 the then-prime minister George Papandreou stood up on the main plenary stage at the World Economic Forum in Davos and declared that his country was under attack by speculators. The country sought a bailout three months later.

But, more significantly, 2015 was supposed to be the year of the Greek recovery.

Yes, the country is still regrouping following the deepest post-war recession of any developed country. More than a quarter of the eligible working age population are still out of work - and around half of all those under the age of 25.

The number of years a Greek citizen can hope to live in a healthy state has fallen from 67.4 in 2007 to 64.9 in 2012.

And yet Greece seemed to have turned the corner. Unemployment was starting, very gradually, to fall. The Government's austerity plans were coming to an end. The country had attained a primary surplus, meaning that when debt interest was ignored it was finally earning enough tax revenues to finance its spending.

And, to cap it off, the International Monetary Fund expected it to be the fastest-growing economy in the eurozone next year (after Ireland).

So the return of the jitters around Greece could hardly have come at a less opportune moment. But does this episode mean a full-blown euro crisis is in prospect? Well, yes and no.

On the one hand, remember that the euro crisis was as much a political one as an economic one. All it takes is for a country to elect a government which is steadfastly against either the euro or the terms of its bailout and it could cause major disruption in the single currency area.

That's what could happen if Syriza wins the election. It could well happen in Spain if Podemos, the fast-growing new anti-bailout party wins the country's elections at the end of the year.

Moreover, the real problem in the single currency - that there is a massive gulf in performance between its member states and few, if any, mechanisms to adjust for that - still hasn't been addressed.

Although there is now the skeleton of a banking union taking shape, there are no plans for a proper fiscal union (so that taxes from, for instance, Germany, could help support the Greek economy). Until one is created, the likelihood is that Europe will continue to limp from crisis to crisis.

However, even if Greece were to start threatening to renege on its bailout commitments or leave the currency, a widespread crisis beyond Greece's borders may not be a foregone conclusion.

Stock markets across Europe have been relatively sanguine about what's happening in Athens. Bond yields on other leading European economies remain low.

In other words, markets are betting that a Greek crisis could be contained. That won't prevent some nervous moments in the coming months as the country prepares for the polls again.

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Online Shoppers To Break Xmas Day Records

Christmas Day online shoppers are predicted to set a new spending record splashing out an estimated £636m today.

Shoppers are expected to make 142 million visits to retail sites today - a 25% increase on last year.

Research by Experian and online retailing trade association IMRG found Britons will spend around £441,000 a minute.

"The ease of shopping online via connected devices raises the prospect of a very large amount of shopping activity on Christmas Day itself," said Experian general manager of consumer insight Giles Longhurst.

Dominic Trigg, managing director for Europe of digital advertising technology company Rocket Fuel, said: "Shopping online on Christmas Day is now a normal part of UK consumers' holiday experiences every year.

Video: The Year In Retail

"It is clear that UK consumers now see shopping from the comfort of their own home, following Christmas Day dinner, as much of a tradition as a turkey and ham dinner."

Shoppers have already been enjoying heavy discounting as some stores began their traditional Boxing Day sales up to two days early.

Britain's retail sector has already been celebrating a record-breaking year as official figures are projecting an all-time high for sales in 2014.

Video: Annual Retail Sales To Reach £342bn

The forecast from the Office of National Statistics shows that sales for the year are expected to reach £342bn - a £48bn increase since 2010.

Pre-Christmas sales are up by 5.2% compared with last year.

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2,700 Jobs At Risk As City Link Collapses

By Mark Kleinman, City Editor

More than 2,700 jobs are at risk over the festive period after one of the UK's biggest parcel delivery services companies collapsed into administration.

Sky News has learnt that City Link, which has been a perennial loss-maker, called in the professional services firm EY on Christmas Eve and immediately ceased accepting parcels from customers.

A public statement confirming the move is expected to be circulated on Friday.

City Link, which is owned by the investment firm headed by Jon Moulton, the veteran venture capitalist, is understood to count John Lewis among its largest clients.

John Lewis said it has transferred all its business with the company to alternative carriers.

"John Lewis has worked with City Link during this challenging period and provided significant support to enable them to trade," a spokesperson said.

"It is always a matter of deep regret when any of our suppliers are unable to continue with their business."

In a statement issued to Sky News, EY confirmed its appointment, saying it had put in place the ban on accepting new parcels at its Coventry head office, three other transport hubs and 53 depots across the UK.

City Link has a fleet of 1,700 vehicles, according to its website

"The company has entered administration as a result of continued substantial losses and is unable to continue accepting new parcels due to the further losses it would incur," it said.

The scale of possible job losses among City Link's 2,727 employees has not yet been identified, although EY said they were likely to be '"substantial" following an unsuccessful process to identify a new owner.

A number of staff would be retained to help return parcels to customers and assist with winding down City Link's operations, the administrator said.

Mr Moulton's firm, Better Capital, bought the courier and parcel delivery group last year, paying just £1 to its previous owner, the pest control firm Rentokil.

City Link has been loss-making for many years, suffering from poor systems and intense competition from rivals buoyed by the explosion in online shopping.

A number of competitors, such as Yodel, were the target of consumers' fury in the run-up to Christmas amid a series of delays.

Last month, Better Capital wrote down the value of its £40m investment in City Link by 50% and said that "various options to maximise the value of the (holding)".

In the wake of a £14m loss for the 2013-14 financial year, City Link's owner added that the business had "progressively deviated from its monthly profit budget during its current year to 31 December driving the conclusion that its current structure is unsustainable in the long term".

Better Capital blamed the worsening outlook on "excess (and increasing) capacity in the sector, made worse by customers developing their own delivery capabilities".

The administrators said customers who had handed over parcels to City Link on Christmas Eve should go to a depot to retrieve them on or after December 29.

The company's online parcel tracking system and helpline telephone numbers remained open to enable fulfilment of existing orders, EY added.

City Link's website said it had annual revenues of approximately £300m, a fleet of 1,700 vehicles and delivered 60m items each year.

A rival ParcelBright.com says:

"This shows the immense pressure couriers are placed under further outlining the need for retailers to have alternative delivery solutions available at all times should one of their providers fail."

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Bank Of England To Monitor Social Networks

By Ed Conway, Economics Editor

What you search for on Google and post on Facebook could soon influence what happens to interest rates.

The Bank of England has set up a special taskforce to monitor the internet and social networks for early signs of Britain's economic ups and downs.

The special team, set up by the Bank's chief economist, Andy Haldane, has been charged with exploring how new unconventional sources of data could improve its picture of Britain's recovery.

In an interview with Sky News, Mr Haldane said that the Bank had started to explore using unconventional data, including data gleaned from analysing internet activity, after it found that it could be more timely than the official data.

For instance, analysis of the frequency of internet job searches, or of prices online, can give one an insight into the prospects for unemployment and inflation.

"Official statistics tend to be lagging and tend to be revised. And what this scraping of the web can do is give us a better today read on what's going on," he said.

He added that these and other "informal sources" of data "have been somewhat more reliable in picking up the uptick in the fortunes of the economy".

Mr Haldane told Sky News that the Bank was already using new data sources, including a massive "big data" database on mortgages, which helped them decide to impose their new constraints on the housing market earlier this year.

"Some of those interventions were calibrated by analysing this big database on mortgage borrowing by pretty much everyone in the UK," he said.

"We have a new advanced analytics team who are constructing little models, algorithms and methods for extracting this data. We have a data lab. This is quite a big strategic change for the bank.

"This is going to be quite a big shift from the past."

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