Written By Unknown on Sabtu, 21 Maret 2015 | 16.01
The FTSE 100 Index has risen to more than 7,000 points for the first time in its history.
World markets were cheered by a small recovery in the price of oil as well as signs of a breakthrough in the Greek debt crisis.
London's top-flight index was also buoyed this week by the prospect of UK and US interest rates remaining lower for longer.
It closed at 7,022.5 as the price of a barrel of Brent crude edged above $55 - still less than half its value last summer.
The FTSE had been on the brink of the landmark after a Budget-inspired rally earlier in the week.
Video:FTSE 100 Hits An All-Time High
It has never before breached the 7,000 mark, which makes the combined value of London's top companies nearly £1.8tr.
In February it passed a record high of 6,950, set at the time of the dotcom boom in 1999.
Peter Cameron, assistant fund manager at Ecclesiastical Investment Management, said: "After 15 long and bumpy years, the FTSE 100 has finally clawed its way back to the levels of the late 1990s and unlike then, when the market was gripped by an irrational technology bubble, this new high should not cause alarm amongst investors.
"A backdrop of inflation tailwinds from declining food and fuel prices, falling unemployment and signs of wage growth finally returning, create a benign outlook for the UK economy in 2015."
The rise boosted Royal Dutch Shell and BP - which feature in many UK pension funds - by about 1%, with exploration firm Tullow Oil climbing nearly 3% and rival BG Group up 2%.
Video:FTSE Plunges
Irish cement firm CRH advanced 6% after Holcim and Lafarge salvaged a planned multi-billion-pound merger to create the world's biggest cement firm.
CRH has agreed to buy €6.5bn worth of assets, which would give anti-trust clearance for the Holcim-Lafarge deal.
The new assets would transform CRH into the world's third biggest building materials supplier.
UK bank TSB also rose 2.2% after agreeing to a £1.7bn takeover by Spanish lender Banco Sabadell in one of the biggest cross-border banking deals since the financial crisis.
Lloyds, which was ordered to sell TSB as a condition of its £20bn bailout during the banking meltdown of 2008, agreed to sell a 9.99% stake to Sabadell. It also says it will sell its remaining 40.01%.
TSB is recommending its shareholders accept a Spanish takeover of the bank, with Lloyds confirming it has agreed a price for its remaining stake.
The announcements clear the way for a deal, first reported by Sky News last week, which will value TSB at £1.7bn as Banco Sabadell will pay 340p-per-share though it remains subject to regulatory clearance.
It means investors who bought the stock at the offer price of 260p when TSB floated nine months ago will receive a 31% premium.
Lloyds stands to net £850m from the 50% of TSB is currently holds but it has agreed to provide £450m in support of transition efforts.
It was required to divest of its remaining stake by the end of this year under a European state aid ruling, imposed because of its taxpayer bailout at the height of the financial crisis.
Lloyds chief executive Antonio Horta-Osorio said: "I am delighted to confirm we have agreed terms for the sale of our remaining stake in TSB to Sabadell.
"This is a significant and positive step for the group and will enable us to meet our commitments to the European Commission, well ahead of its mandated deadline".
The deal with Sabadell provides Lloyds with a clean exit from TSB, handing it a further boost just weeks after it was given the green light to pay a dividend for the first time since its 2008 rescue as the taxpayer's stake in the group is gradually sold off.
TSB chief executive Paul Pester will continue in his current role under the agreement, which will also see him join the management committee of Sabadell.
He has been in charge of TSB since 2013 and led its separation from Lloyds Banking Group.
The European Commission ordered TSB's split in a move that was code-named Project Verde.
The branches were to be sold to the Co-operative Group but that deal collapsed after the emergence of a £1.5bn hole in the Co-op Bank's balance sheet.
The heads of the City watchdog will be severely criticised next week by a panel of MPs over its handling of a briefing which wiped billions of pounds from the value of British insurance companies.
Sky News has learnt that the Financial Conduct Authority (FCA) will be accused of a "dereliction of duty" in a report to be published by the Treasury Select Committee.
John Griffith-Jones, the FCA chairman, and Martin Wheatley, its chief executive, are expected to be singled out for criticism by the MPs, a source said on Friday.
The regulator's handling of news of a planned inquiry into the sale of millions of closed-life insurance policies last March sparked chaos in the London stock market, with shares in companies such as Aviva, Friends Life and Legal & General falling sharply.
The story in The Daily Telegraph, which sparked fears of a draconian regulatory clampdown, was subsequently clarified by the FCA but not until more than six hours of trading had elapsed.
George Osborne, the Chancellor, and Andrew Tyrie, the TSC chairman, expressed disquiet over the incident, while the FCA's non-executive directors immediately ordered an inquiry to be led by Simon Davis, a partner at the law firm Clifford Chance.
Mr Davis' report, published in December, criticised the FCA's approach to information disclosure and made a string of recommendations that the watchdog subsequently agreed to implement.
It said that the regulator's briefing had been "high risk, poorly supervised and inadequately controlled. When it went wrong, the FCA's reaction was seriously inadequate and fell short of the standards expected of those it regulates."
The source said the TSC report would echo many of Mr Davis's criticisms and recommendations, including a prohibition on the disclosure of potentially market-sensitive information until its general dissemination.
Next week's report will not directly call for the resignation of either Mr Griffith-Jones or Mr Wheatley, they added.
However, they said there had been some disagreement between TSC members, with some calling for a tougher rebuke of the FCA's leadership.
Since Mr Davis's report, a number of senior FCA executives have left the organisation, including Clive Adamson, the former head of supervision, and Zitah McMillan, the former communications and international director who has since resurfaced in a senior role at a major payday lender.
The FCA said in December that their departures were the result of a restructuring rather than Mr Davis's report.
Mr Adamson, Mr Wheatley and Ms McMillan were all criticised in Mr Davis's report, alongside David Lawton, the FCA director of markets.
All four forfeited their bonuses for last year as a result, while any discretionary payouts for the current year are also under threat because of the £3.8m cost of the inquiry.
Mr Tyrie said in December that the report's findings illustrated a regulator "pursuing the wrong strategy in the wrong way".
"The Committee will, among many other things, examine whether these errors were a one-off or whether they reveal something amiss, perhaps seriously amiss, with the standards and culture of the FCA. We will also examine remedies, both those proposed or already announced, and others."
A TSC spokesman and the FCA both declined to comment.
Written By Unknown on Jumat, 20 Maret 2015 | 16.01
Tesco and British Land have completed a property exchange deal worth a combined £733m as both companies look to strengthen their core businesses.
Britain's biggest retailer, which remains the subject of probes over its £263m profits overstatement scandal last year, has been implementing a separate UK recovery strategy under new chief executive Dave Lewis.
Tesco said it had regained sole ownership of 21 superstores, which it did not identify, that were part of a joint venture with the property firm and were all subject to rent increases linked to retail price index (RPI) inflation.
In exchange for the superstores, British Land will take over Tesco's stake in three shopping centres, three retail parks and three standalone stores which are held in two other joint ventures between the two firms.
Tesco will continue to lease the stores at these sites at market rents which are not subject to RPI-indexed increases and the chain was to also receive £96m from British Land.
Mr Lewis said: "Last year we identified the opportunity to increase the proportion of our stores we own as freehold.
"This transaction with British Land allows us to increase our ownership and thereby insulate more of our businesses from indexed rent reviews.
"We have a long way to go but it's a transaction which takes us in the right direction. This agreement makes our business simpler and stronger".
Since joining Tesco in September last year, he has had to overcome the fallout from the scandal over supplier payments and arrest a decline in market share on the shop floor.
His plans to combat the challenge offered by hard discounters are to result in big cost savings including thousands of job losses.
Charles Maudsley, British Land's head of retail, said of the deal: "This mutually beneficial transaction clearly demonstrates the great relationship we enjoy with Tesco.
"It plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio.
"We see significant opportunity to add value and drive returns through asset management and development".
The company said it had taken control of three shopping centres including Peterborough's Serpentine Green and three retail parks.
They were the Kingston Centre in Milton Keynes, York's Clifton Moor and the Woodfields Retail Park in Bury.
Citizens Advice is calling for an overhaul of rules governing mobile phone contracts, warning that consumers can be "taken to the cleaners".
Its 'Calling The Shots' report found users are facing charges of up to £800 to leave maximum two-year contracts that fail to deliver on coverage or features.
The charity examined the 21,500 mobile phone complaints it dealt with last year, finding the most common problems concerned faulty phones (39%), poor service and exiting contracts (17%), misleading sales practices (16%) and bill disputes (12%).
It said most phone contracts failed to specify a reasonable minimum service they could expect from their phone, meaning customers did not have the right to cancel contracts that did not deliver what was advertised.
It cited examples of people who had paid for contracts that included 3G or 4G but were unable to get coverage - being told, in some cases, to honour full contracts or pay the remainder of as much as £800 to end it early.
Citizens Advice said some customers reported being charged the full amount of their contract to cancel it before they had even received their phone.
It also calculated that the failure of phone providers and Government to put in place a cap on mobile phone bills run up by thieves had resulted in consumers, who had sought help from Citizens Advice, losing a total of £140,000.
It also cited confusion among consumers on who to contact if a phone was faulty, insisting it was the retailer's legal responsibility, and questioned how networks handled people in arrears.
Citizens Advice chief executive Gillian Guy said: "Consumers can be taken to the cleaners for ending a mobile phone contract that doesn't deliver.
"Consumers should only be paying for the service they receive. For consumers to be guaranteed a good deal from their mobile phone providers, clear minimum standards of service and better contract exit rights are needed.
"Nobody should be left to fall through gaps in regulation, so the Government should now look into simplifying how mobile phone users can get redress when they are treated badly."
It advised those stuck with poor service to speak directly to the supplier, with evidence, if possible, to explain why it should be possible to leave the contract.
Sky News is attempting to contact major suppliers for comment on the Citizens Advice report.
TSB is recommending its shareholders accept a Spanish takeover of the bank, with Lloyds confirming it has agreed a price for its remaining stake.
The announcements clear the way for a deal, first reported by Sky News last week, which will value TSB at £1.7bn as Banco Sabadell will pay 340p-per-share though it remains subject to regulatory clearance.
It means investors who bought the stock at the offer price of 260p when TSB floated nine months ago will receive a 31% premium.
Lloyds stands to net £850m from the 50% of TSB is currently holds but it has agreed to provide £450m in support of transition efforts.
It was required to divest of its remaining stake by the end of this year under a European state aid ruling, imposed because of its taxpayer bailout at the height of the financial crisis.
Lloyds chief executive Antonio Horta-Osorio said: "I am delighted to confirm we have agreed terms for the sale of our remaining stake in TSB to Sabadell.
"This is a significant and positive step for the group and will enable us to meet our commitments to the European Commission, well ahead of its mandated deadline".
The deal with Sabadell provides Lloyds with a clean exit from TSB, handing it a further boost just weeks after it was given the green light to pay a dividend for the first time since its 2008 rescue as the taxpayer's stake in the group is gradually sold off.
TSB chief executive Paul Pester will continue in his current role under the agreement, which will also see him join the management committee of Sabadell.
He has been in charge of TSB since 2013 and led its separation from Lloyds Banking Group.
The European Commission ordered TSB's split in a move that was code-named Project Verde.
The branches were to be sold to the Co-operative Group but that deal collapsed after the emergence of a £1.5bn hole in the Co-op Bank's balance sheet.
Written By Unknown on Kamis, 19 Maret 2015 | 16.01
There are two main takeaways from this Budget.
The first is that there has been a significant change, since the Autumn Statement in December, in George Osborne's public spending plans should he remain Chancellor for another five years.
In the Autumn Statement, Mr Osborne was assuming the Government would be running a surplus of £23.1bn in 2019-20.
He has now forecast that the Government would have a surplus of just £7bn in that year.
Austerity is going to come to an end, in the next parliament, a year earlier than expected.
Video:Budget: Consolidation Or Loss?
The reason, one must assume, is that the frequent claims by the Shadow Chancellor Ed Balls that Mr Osborne intended to "return Britain back to the 1930s" have hit home.
Certainly the Government now plans to shrink the state to no smaller than it was in 2000 - when Tony Blair was in 10 Downing Street and Gordon Brown was Chancellor.
The other big takeaway is just how small this Budget has been in its scope.
The largest single Budget measure is the changes Mr Osborne has announced to the taxation of savings and the new flexibility introduced to ISAs.
These will total just over £1bn during the 2016-17 financial year.
Video:Budget 2015: Video Highlights
Overall, though, this Budget is fiscally neutral. The new tax year will see a net tax increase of just £745m, which is tiny in the overall scope of a £1.9trn economy.
Many of the measures were small scale.
It is hard to imagine some of Mr Osborne's illustrious predecessors, such as Stafford Cripps, Rab Butler, Roy Jenkins, Geoffrey Howe or Nigel Lawson, padding out a Budget speech with pettifogging measures about Wi-Fi in public libraries, Agincourt anniversary celebrations - has a joke in a Budget speech ever cost £1m before? - and church roof funds.
Commanding heights of the economy, it ain't.
The measures aimed at helping business, in so far as they go, will be welcomed.
Video:Analysis: Your Budget Need-To-Know
The most significant of these is the cut in taxation for North Sea oil producers and the increased investment allowances they will receive.
But they will only help those North Sea producers who actually pay tax and are unlikely to address the wider structural issues faced by such producers.
And, of course, they will not bring back the jobs of the many hundreds of North Sea oil workers who have already lost their jobs.
Of the other measures aimed at supporting business, the previously-announced cut in corporation tax to 20p will be welcomed, as will the abolition of Class 2 National Insurance contributions for the self-employed - many of whom are small business owners.
There was also a lob for farmers, many of whom may have been flirting with voting for UKIP, while boosts for transport infrastructure will also have pleased business.
Video:Miliband's Response To The Budget
However, the Chancellor is also bashing some parts of business, with the banks hit with an increase in the annual levy.
This is partly a reflection of the fact that the banking levy is raising less money for the Government because the banks are - at the behest of Government regulators - having to shrink their balance sheets.
And some moves are downright unwelcome.
Mr Osborne presented the decision to cut the lifetime allowance for pensions savings from £1.25m to £1m as a move that only hits rich savers - but that sum, when turned into an annuity, buys a pensioner and their spouse an annual income of barely £22,000 apiece.
People taking home that sum every year can scarcely be described as "rich". It was a measure all about hobbling Labour - which wants to raid pensions tax relief for better-off savers to fund a cut in tuition fees - rather than anything more considered.
Video:Yorkshire 'Beats France' In Growth
Such savers, along with the pensioners whom the Chancellor has spared having to buy an annuity, are now likely instead to pour a larger part of their retirement savings into areas such as buy-to-let property.
This places them in direct competition with the first-time-buyers Mr Osborne purports to want to help with his new Help to Buy ISA.
In essence, then, this was a Budget with no huge pre-election giveaways - there is just not the scope for that - but plenty of small ones, relatively thinly spread.
Few Budgets are more political than a pre-election one - but there is still a fair bit of economics underneath the surface.
So let's ignore the verbiage and have a look at the story of the Budget told through some of the charts in the documentation that have been released by the Treasury and Office for Budget Responsibility.
1. The road away from Wigan Pier
Perhaps the most eye-catching of all the charts in the Autumn Statement was one showing the Government was determined to get total spending down to the lowest level since the 1930s, prompting comparisons with George Orwell's depression-era Road to Wigan Pier.
This politically awkward chart was deemed so damaging ahead of the election that the Chancellor has scaled it back.
So one of the biggest stories in this Budget is that the guilty chart has been effectively amended.
You'll have to look very closely indeed to see the difference. Previously the Government was planning to reduce total spending to 35.2% of gross domestic product by 2020.
Now it will only hit 36% - which is what's on the blue line in this chart (which I've adapted from OBR data). Yes, it might seem like a small difference, but it is all-important as it is a touch higher than the lows in 1999/2000 and 1957/58.
2. Biggest spending cuts are still to come
How did the Chancellor achieve this? Not, it seems, by reducing austerity all that much. Instead, the cuts are planned to continue for the next few years, but there will be one almighty splurge in 2019/20. You can see the story in this chart:
As you can see, the biggest spending cuts are still yet to come in 2016/17 and 2017/18. So plenty more pain on the way.
3. Not a giveaway
Remarkably, this was not a giveaway Budget in the style of many pre-election Budgets. In fact, the Chancellor didn't even commit to a temporary splurge of tax cuts to try to persuade voters the good times were on the way.
On the contrary, the measures in the Budget actually amount to a fiscal tightening (eg a tax rise/spending cut) in the first three years, followed by a small fiscal stimulus (eg a giveaway) in the following years. I was so struck by this I scrawled all over my copy of the Budget book.
4. Falling net debt
One of the Chancellor's promises when coming into office was to get the national debt falling by the end of the Parliament. He then said in subsequent Budgets that he was likely to miss this target but today, out of nowhere, he declared that he would meet it.
It's partly thanks to the early sell-off of bank shares and other assets, but he will still see it as a political victory. Whether it makes people feel any better off will remain to be seen.
5. But the economy is still damaged
One striking thing that hasn't been much remarked on is that the economic growth numbers in the Budget were a little underwhelming. It seems the economy is still in recovery mode after the crisis, something underlined by this slightly depressing OBR chart:
6. House prices
Moreover the OBR also expects house price inflation to fall a touch faster than expected in the coming years. It's hardly a crash, but nor is it as healthy a forecast as was seen as recently as December.
7. Debt nation
Perhaps the most shocking of all the forecasts in the Autumn Statement was portrayed in this graph. It shows you household debt levels, which were expected to rise very sharply in the coming years.
The takeaway was that in order to sustain economic growth, the Government was relying on a sharp increase in borrowing - not by itself but by households.
8. Oil and the impossibility of forecasting
This final chart is noteworthy for two reasons. The first is that North Sea oil revenues are expected to collapse, effectively, in the coming years.
That is largely a result of the fall in oil prices around the world, but it is a reminder: Alex Salmond and the Scottish National Party were reliant on big bumper oil receipts to support their case for independence. Had they won the referendum there is no way they would have been able to meet their economic forecasts - not by a long shot.
Second, the chart is a useful reminder of just how difficult it is to forecast something as volatile as the oil price. You have been warned.
George Osborne dismissed fears over spending cuts to public services raised by the Office for Budget Responsibility.
Speaking on Sky News, Mr Osborne said the cuts were necessary but did not pinpoint exactly where the axe would fall.
He said: "People know that we have been careful with public money, we want to go on doing that at the same pace we have been doing that over the next couple of years."
It comes as the Lib Dems prepare to unveil their own Budget to distance themselves from their coalition partner's Budget.
George Osborne's no-gimmicks, no-frills Budget has set the dividing lines between the parties ahead of May's election.
Video:Budget 2015: Video Highlights
He claimed Britain was "walking tall again" after five years of austerity.
But Labour politicians highlight a section of the Office for Budget Responsibility (OBR) report which says the Conservatives' cuts leave "a rollercoaster profile of implied public services spending through the next parliament".
The OBR report projects a "much sharper squeeze" on spending in 2016-17 and 2017-18, which would be followed by a sharp increase in 2019-20.
Video:The Budget In 77 Seconds
Shadow Business Secretary Chuka Umunna said: "I'm not sure that I would want my public services to be on a roller coaster, I would want to have decent provision for my constituents and all across the country."
Mathew Hancock, the Conservative Business Enterprise and Energy Minister, responded to the criticism.
He said: "We have a plan to deliver and anyone who wants to spend more money or go more slowly will see the debt rising as a proportion of GDP, and that is exactly the sort of mistake that got us into this mess in the first place."
Video:Analysis: Your Budget Need-To-Know
Mr Osborne's Budget did have some sweeteners for first time buyers and savers, including the first £1,000 of savings being tax free for a basic rate tax payer.
He also announced a help-to-buy ISA under which first-time buyers saving for a deposit will receive a 25p top-up from the Government for every pound they put aside up to a maximum of £3,000, on top of savings of £12,000.
The Chancellor has said there will be "no giveaways, no gimmicks" so what can we expect to see in today's Budget?
:: Income Tax: Personal allowance increase to £11,000. George Osborne has already announced the amount people can earn before tax kicks in will be increased to £10,600 in April but it is expected he will go further.
How to spend your pension?
:: Pensions: The Chancellor has indicated he will announce that pensioners will be able to swap their fixed annual incomes – annuity – for cash.
This is an extension of measures contained in the Autumn Statement, which saw savers given the option of drawing down cash from their pensions, rather than being forced to buy an annuity. This comes into effect in April.
Video:60-Second Economist: The Budget
:: Google Tax: Expect further tax avoidance measures to build on the so-called "Google Tax" announcement last year.
The Government wants to stop multinational companies from moving profits around the world to keep the tax bill down.
:: Something for the regions: Expect announcements of investment in infrastructure, science, energy and housing. Remember, Mr Osborne wants to create a "northern powerhouse".
:: Beer: The Chancellor is expected to either freeze beer duty or announce a 1p or 2p cut on a pint.
:: Fags: Tipped for a 28p cut on a packet of 20 but the Chancellor is also thought likely to announce a tobacco levy.
He already ordered a consultation on the issue on the grounds that smoking has a significant cost to society and tobacco firms should pay for it.
If he did it could indicate he could look to impose a levy on other industries using the same rationale.
Video:50 Years Of Pre-Election Giveaways
:: National Insurance: There have been some suggestions the Government could increase the amount of earning before National Insurance Contributions (NICs) are paid.
It would help the lowest paid and, therefore, would win favour with the Lib Dems but is an income tax/NICs double-whammy too much?
What we are unlikely to see:
:: Inheritance Tax Cuts: The Tories included this in their 2010 manifesto, agreed in coalition not to make it a priority but still want to make changes.
It has been disclosed the Treasury drew up plans to allow parents to pass homes worth up to £1m to children tax free ahead of the Autumn Statement but the Lib Dems blocked it.
David Cameron has said the proposals will not be included in the Budget – but do expect to see them in the Tory manifesto.
:: 40p Tax Rate Changes: The PM has made clear he wants to raise the level at which people start paying the 40p tax rate.
Video:The Sky News Budget Rap Battle
At the Autumn Conference he pledged to increase the threshold from £41,900 to £50,000 by the end of the next parliament.
There had been suggestions measures could appear in the Budget but given the Lib Dem opposition to tax cuts for the wealthy it is unlikely.
:: And the white rabbit?
Well this might not be quite like all other pre-election Budget giveaways, despite the fact the Chancellor has around £5bn to play with.
Remember, if the Tories look good the Lib Dems will look good and as the coalition partners are going toe-to-toe in a number of marginal seats then Mr Osborne will be keen to make sure Nick Clegg's party are not the ones left showing the rabbit.
