High Street Crisis: Chain Closures Accelerating

The bloodbath on Britain's high streets has accelerated dramatically with the rate of major chain store closures increasing ten-fold, hitting 20 per day in 2012.

Analysis by PwC and the Local Data Company found that year-on-year, the net reduction in the number of stores climbed from 174 closures in 2011 to 1,779 closures in 2012 with the pace intensifying even further since.

A combination of factors - from the consumer spending squeeze to poor business models - is being blamed.

The rate of closures among independent shops is not even included in the figures.

2012 was a year in which a string of retail chains collapsed including Comet, JJB Sports, Ethel Austin and Peacocks.

Camera chain Jessops has been among the failed firms

They were joined, mostly after poor Christmas sales, by the likes of HMV, Jessops and Blockbuster.

Many were accused of being too tied to costly high street operations and failing to overcome strong supermarket and internet competition by selling attractively online.

The data also revealed that across multiple retailers in 500 town centres card, computer games, clothes, banks, health foods, jewellers, travel agents, recruitment agencies and sports goods shops were among the hardest hit in 2012.

Pound shops, pawnbrokers, charity shops, cheque cashing (payday loans), betting shops, supermarkets and coffee shops bucked the trend of a dying high street and actually showed growth during the year.

Additionally, analysis of the three months between December 2012 and February 2013 shows that the potential rate of closures - principally through administrations- would accelerate to 28 per day for this period.

Mike Jervis, insolvency partner and retail specialist at PwC said: "2012 saw more retail chains go into insolvency than ever before.

"The failed chains generally shared two problems - too many stores and too little multi-channel activity.

"A number of them had failed to deal with their underlying issues by hiding behind light touch restructuring processes, especially Company Voluntary Arrangements.

"2013 has seen the downward trend become even worse," he said, adding: "If underperforming retailers are to avoid becoming part of these statistics for next year, their shopping baskets should contain an acute knowledge of their customers and their customers' needs."

Those were, Mr Jervis said; "Robust cashflow planning; honest analysis of the performance of existing and potential new stores; the bravery to admit mistakes regarding products and stores before dealing with them; clinical attention to costs; early engagement with banks, landlords and suppliers; appropriate debt and capital structures."

18.56 | 0 komentar | Read More

RBS Boss: Spring Cleaning Drives £5.16bn Loss

The Royal Bank of Scotland boss has said "spring-cleaning" continues after his firm reported a pre-tax loss in 2012 of £5.16bn.

RBS chief executive Stephen Hester said: "This company is going through a pretty thorough spring-cleaning. It is a pretty dusty job.

"We are spring-cleaning this house and it is looking shinier."

The significant loss was in part due to provisions RBS has made for customer redress for payment protection insurance (PPI) mis-selling and other so-called bad practices.

It said the annual return was impacted heavily by a £4.64bn "accounting charge for improved own credit".

However, the firm's bankers will still share a bonus pool of £607m - including £215m for investment bankers.

In 2011 the total bonus pot was around 25% higher, at £789m.

Boss Stephen Hester said RBS must be "cleaned up"

When asked to justify the £607m payout, Mr Hester said: "We are a very big company so the numbers end up being substantial, but they are much smaller than other banks.

"We believe that we are doing a responsible job on bonus restraint while acknowledging our staff are badly needed."

The bonus reduction was done to help recoup cash to pay for its recent Libor-rigging settlement with UK and US authorities.

Last month RBS reached an agreement with the Financial Services Authority and US authorities over Libor and other rate fixings to include penalties of £381m.

Mr Hester admitted 2012 had been a "chastening" year to "put right past mistakes", with losses up significantly from £1.2bn in 2011.

The company revealed it took a £450m charge in the last three months of 2012 over PPI mis-selling, taking its cumulative provision to £2.2bn.

By December 31 a total of £1.3bn had been paid out in redress over the scandal.

The disgraced ex-boss Fred Goodwin reigned over the previous RBS regime

The bank said: "Our target is for 2013 to be the last big year of restructuring. There will be important work still to do, but an increasingly sound base from which to work.

"As the spotlight shifts to the 'new RBS' post restructuring, we are determined that it will show a leading UK bank striving to be a really good bank."

RBS saw changed fortunes in its core business, with retail and commercial sector income down 6% but markets up 68%.

The bank added: "RBS is four years into its recovery plan and good progress has been made. We are a much smaller, more focused and stronger bank.

"By serving customers well RBS can become one of the most respected, valued and stable of banks. That is our goal."

In its annual report the bank, which was bailed-out in Britain's biggest ever corporate disaster, said there is an intention to float an estimated 25% of its stake in US banking arm Citizens.

This move was welcomed by Chancellor George Osborne who said: "The Government's strategy is for RBS to be a stronger and safer bank, which in time can be returned to full private ownership.

"I have been very clear that I want to see RBS as a British-based bank, focused on serving British businesses and consumers, with a smaller international investment bank to support that activity rather than to rival it."

18.56 | 0 komentar | Read More

Sports Direct To Buy 116 Republic Stores

Sports Direct is to buy 116 stores and the website from the administrators of fashion retailer Republic.

Joint administrators from Ernst & Young confirmed the sale, which would include the head office in Leeds.

The deal is expected to save more than 2,100 jobs for Republic workers.

Joint administrator Hunter Kelly said: "In what has been a very challenging time and volatile climate for retailers, it is particularly pleasing to have completed the successful sale of Republic (Retail) Limited, saving 2,100 jobs across the UK high street and at its Leeds-based headquarters.

"The brand Republic is well recognised and well respected by customers for offering quality, high fashion goods and it is a testament to its strength that Sports Direct has made this investment to secure its future and high street presence."

Republic was originally established as a men's denim retailer in 1986 under the Best Jeans brand, in Leeds.

It currently offers casual fashion, under multiple brands to young adults, including the Jack Jones and SoulCal labels.

More follows...

18.56 | 0 komentar | Read More

British Gas Sees Profit Up 11% To £606m

British Gas has reported a profit increase for the full year of 11% to £606m.

The company said it performed well in the 12 months until December 31, despite a weak economy and energy cost increases.

It said: "This is having a real impact for both residential and business customers and, against this backdrop, it is important that we continue to focus on improving customer service and reducing costs."

British Gas is the UK residential arm of energy giant Centrica.

Overall, group adjusted operating profits rose 14% to £2.7bn, but Centrica, which employs around 40,000 people, said it paid more than £1bn in tax and invested £2.7bn in 2012.

Centrica said the sharp profit increase at British Gas residential came after last year's colder-than-normal weather saw gas use leap 12%, despite a fall in customer accounts.

The company said the number of residential customers dropped 1% in the year to 15.7 million, compared to 15.9 million in 2011.

It said customer "churn" was at its lowest rate ever.

British Gas raised its tariff costs late last year ahead of January's snow

The results are likely to raise questions over the fairness of energy bill increases after British Gas raised tariffs by 6% for around 8.4 million households at the end of last year.

To help thwart criticism the company provided a breakdown of the average customer bill, which it said totalled £1,188 a year.

It said the average wholesale energy cost for a customer was £568, delivery to the home was £283, environmental and social policies £112 and tax of £72.

The company said its own operating costs were £104, leaving a profit of £49.

Chief executive Sam Laidlaw also addressed the issue of corporate tax responsibility, amid the public furore over multinational tax avoidance.

He said: "It's important that Centrica makes a fair and reasonable return so that we can continue to make our contribution to society and invest."

Centrica is the parent energy company of British Gas

British Gas said the growth of online accounts was 20% last year, with 3.4 million customers using web access.

More than a third of all energy bills are now sent electronically. Some 70% of customers' meter readings are now sent online.

It also revealed that it has struggled to lure new customers to the maintenance arm, British Gas Services, and boiler installation services dropped by 10%.

It said: "The economic impact was seen more clearly in British Gas Business, leading to lower profitability and a reduction in the number of accounts served in a highly competitive market."

On Tuesday Sky's City Editor revealed that the company would announce its ambitions to become a big player in North America and the global energy sector.

He revealed that Mark Hanafin, the executive who runs Centrica Energy, the division focused on exploiting UK and Norwegian gas reserves, will head a new unit focused on broader international upstream effort.

Centrica also confirmed that British Gas' managing director Phil Bentley would leave the company this year.

18.56 | 0 komentar | Read More

Apple 'To Pay £66m' Over Kids' App Downloads

Apple is set to pay out around £66m ($100m) to settle a US lawsuit which claims children were improperly charged while playing iPad and iPhone games.

It is alleged that poor safeguards meant kids were easily able to buy extra features for the free games without their parents' knowledge or permission.

Court papers claim: "Apple failed to adequately disclose that third-party Game Apps, largely available for free and rated as containing content suitable for children, contained the ability to make In-App Purchases."

The case dates back to 2010 and 2011, with Apple updating its software to put in more secure controls on in-game purchases from March 2011.

It has now agreed to give a £3.30 ($5) credit to an estimated 23 million people who were affected. However, if parents can show they were charged more than £20 ($30) then cash refunds will be offered.

The games that were downloaded were designed for children as young as four, claims the lawsuit - which was started by five parents.

One of the parents, Garen Meguerian, says his young daughter spent several hundred dollars on "game currency" while playing "highly addictive" apps like Zombie Cafe and Treasure Story.

Apple previously required a password to be entered for any download or purchase which was valid for 15 minutes without needing to be re-entered.

The system changed in 2011 to make the password mandatory for every transaction, and to warn users that free games might contain the option to buy extra features.

Some technology writers have said that parents should be more aware of the consequences of giving children access to their gadgets and passwords.

Lawyers bringing the case also want Apple to pay their legal fees of £860,000 ($1.3m). The proposed settlement needs court approval and will go before judges on March 1.

Apple has not yet commented on the case.

18.56 | 0 komentar | Read More

Barclays Imposes £450m Libor Bonus Hit

By Mark Kleinman, City Editor

Barclays is imposing more than £450m of financial penalties on its employees in relation to the Libor-rigging scandal which last year triggered the departure of its chief executive.

I understand that the bank will disclose details in its forthcoming annual report of moves to reduce variable pay for staff by far more than the £291m in fines levied by UK and US regulators.

The disparity between the two figures underlines the determination of Antony Jenkins, Barclays' chief executive, to demonstrate accountability across the bank for the reputational crisis that engulfed it last summer, according to insiders.

Investors said the move was a step in the right direction but questioned why Barclays had still decided to award £1.8bn in bonuses to its  staff given the scale of the misconduct-related fines and charges taken by the bank during 2012.

The £450m cut to bonuses comprises about £290m derived from reductions to the 2012 bonus pool and at least £160m which has been clawed back from employees' deferred share awards from earlier years, according to people close to Barclays.

In total, somewhere in the region of £300m was clawed back by Barclays' remuneration committee in 2012, with Libor accounting for roughly half the total. The rest was accounted for by Barclays' ongoing exposure to the payment protection insurance (PPI) mis-selling scandal and other misconduct-related charges.

The details will be highlighted in Barclays' annual report, which could be published as soon as next week. The Guardian reported this morning that the report would disclose that more than 600 Barclays employees were paid more than £1m last year.

The additional disclosure follows the appointment of Sir David Walker as Barclays' chairman last autumn. Sir David was the author of a key report on corporate governance in the banking sector in which he advocated the publication of the number of employees earning specific salary brackets.

Last year, the bank faced a huge revolt from leading investors over the pay deal awarded to Bob Diamond, its former chief executive. Shareholders were also furious that the bank paid out three times more in bonuses to employees than it did in dividends to Barclays' owners.

Mr Jenkins has pledged to address this imbalance, and in this month's annual results significantly reduced the ratio.

Barclays declined to comment.

18.56 | 0 komentar | Read More

Horsemeat: Whitbread In Food Standards Offer

Horsemeat: Pub Chain Promises Change

Updated: 8:38am UK, Tuesday 26 February 2013

After horsemeat was found in two food products sold in its pub chains, Whitbread's chief executive Andy Harrison released a statement of what measures his firm would take to prevent a repeat of the scandal.

Whitbread is the proud owner of great brands including Premier Inn, Beefeater, Table Table and Brewers Fayre.

We aim to put the customer at the heart of everything we do and our teams are dedicated to delivering a great experience for each of the 21 million customers who visit our brands, time and time again.

We have been dismayed by the recent discovery of equine DNA in two of our restaurant products (lasagne and beef burgers). This is not just a Whitbread problem, but a wider issue of quality control within parts of the processed meat supply chain, which supplies a number of restaurants and retailers.

This situation is totally unacceptable and, as a leader within our industry, we are taking a wide range of actions to fix the problem and to ensure that it does not happen again. Let me tell you about the steps we are taking.

As soon as the horse meat problem arose, we carried out urgent tests on processed beef products and immediately removed the two affected from our menus. This was over and above seeking assurances from our suppliers.

We are extending our testing to all of the processed meats we buy from our suppliers, to ensure that all deliveries meet our demanding product specification.

We shall then introduce a completely new system of certification for all of our processed meat suppliers, to guarantee the quality and specification of our products, which will help to ensure that this problem does not happen again.

Whitbread will also be working with the Food Standards Agency to assist them in setting tougher standards and controls to apply right throughout the restaurant industry.

Finally, I would like to apologise sincerely if this issue has caused you any concern and I very much hope I have given you the confidence to trust in the integrity and quality of our food in the future.

Andy Harrison, Chief Executive

18.56 | 0 komentar | Read More

Burger Sales Plunge 43% Amid Horsemeat Scare

Frozen beef burger and ready meal sales have plunged dramatically, according to the first retail sales data since the horsemeat scandal erupted.

Kantar Worldpanel said that in the four weeks ending February 17, frozen burger sales plunged by 43% while frozen ready meals dropped 13%.

While some of the decline can be directly attributed to consumers rejecting the products, there has also been an availability reduction as affected lines were progressively withdrawn by retailers.

Last week Birds Eye withdrew 15 beef products in four European nations

Horsemeat contamination was first revealed on January 16 after analysis was undertaken by Irish food officials. The scandal has since spread across Europe.

A Nielsen consumer survey conducted two weeks ago showed that 96% of UK adults were aware of the horsemeat scandal and 74% were concerned about it.

According to Kantar, the latest research indicates a significant change in shopping habits as a result of the contamination.

The data also indicated changing fortunes of supermarkets during the 12 weeks to February 17.

It said out of the so-called Big Four supermarkets - Asda, Morrisons, Sainsbury's and Tesco - only Sainsbury's increased market share in the quarter.

Horsemeat is still highly regarded in some European countries

Sainsbury's saw a growth rate of 4.6% in the period, while Tesco saw its market share drop from 30.1% a year ago to 29.7% now.

Tesco was the first major retailer to withdraw its frozen burgers, after equine DNA was discovered in products produced by its meat processors.

"It might seem natural to attribute this decline to the horsemeat contamination; however, Tesco undertook heavy promotions this time last year, where consumers received a £5 voucher when they spent £40, and not repeating this offer will have adversely affected its share," Kantar Worldpanel director Edward Garner said.

Morrisons was the only retailer to post a sales decline in the 12 weeks, due in part to easing Christmas demand, a lack of convenience stores and no online presence.

It has since announced a decision to buy a swathe of Blockbuster video stores to convert into metro outlets.

Morrisons is also expected to bolster sales in the coming months as it is the only major UK supermarket with its own abattoir division, assuring meat supply chain integrity.

Brand name Findus was also found to have used horse in its beef products

Meanwhile, there appears to be a growing split in the upper and lower edges of the market.

"Waitrose and Aldi deliver all-time record shares this period of 4.8% and 3.3% respectively indicating that market polarisation and the 'two nations' consumer climate continues," Mr Garner said.

"Iceland records 10.1% growth confirming that the frozen food category as a whole remains robust."

Research now shows that the total grocery market is growing at a rate of 3.7%, which lags behind grocery price sector inflation of 4.3%.

As a result, pressure continues on shoppers who are using 'coping strategies' to reduce their effective personal inflation rate.

These strategies include switching products and retailers to seek out offers.

18.56 | 0 komentar | Read More

Lord Woolf Aids Barclays Ethics Probe

By Mark Kleinman, City Editor

The former Lord Chief Justice who led a probe into ethical standards at BAE Systems, the defence contractor, has been enlisted to assist with a review of the culture and business practices of Barclays as it seeks to repair its battered reputation.

I have learnt that Lord Woolf, who retired as Britain's most senior judge in 2005, is among hundreds of people who have participated in an inquiry being led by Anthony Salz, a former partner at the City law firm Freshfields, on behalf of the Barclays board.

Mr Salz was appointed by the bank's directors last summer, in the wake of its £291m fine for manipulating the interbank borrowing rate Libor. He is expected to deliver his report in April ahead of Barclays' annual meeting.

Lord Woolf is one of the most prominent legal figures in the world, having led inquiries for the International Cricket Council about the sport's governance, and into the London School of Economics' relationship with the Libyan government under Colonel Gaddafi. In 2007, he was commissioned by BAE Systems to examine the company's business practices following allegations that it had been involved in bribery and corruption in relation to the Al-Yamamah arms contract with Saudi Arabia.

Mr Salz's team has interviewed hundreds of people as part of his inquiry, including Bob Diamond, the bank's former chief executive (http://news.sky.com/story/999309/ex-barclays-chief-gives-culture-evidence). Current and former Barclays executives, as well as the bosses of other companies, fund managers and lawyers have all given evidence during the course of the probe.

The report is expected to make a series of recommendations about improving the culture of Barclays and the wider banking industry, although some people close to Barclays have begun to question its relevance following a string of changes announced by Antony Jenkins, Mr Diamond's successor as chief executive.

Mr Jenkins has warned Barclays' 140,000 staff around the world that they must adhere to a strict ethical code of conduct or leave the bank. At his inaugural results presentation a fortnight ago, he confirmed plans to close the unit of Barclays' investment bank which helped companies minimise their tax liabilities, saying it was "incompatible" with the "new purpose and values" he wanted to instil.

Barclays could not be reached for comment.

18.56 | 0 komentar | Read More

Exclusive: BBA Members Back Libor Handover

By Mark Kleinman, City Editor

The British Bankers' Association (BBA) today moved a step closer to relinquishing its role in setting interbank borrowing rates as regulators seek to restore their credibility following the Libor scandal.

I have learnt that the banking industry trade body held an extraordinary general meeting this morning to approve a rule-change that will enable it to hand over ownership of Libor following a tender process that could last for much of this year.

Baroness Hogg, a member of the Treasury's board, is overseeing the moves to select a new party to administer the Libor-setting regime. Few details have emerged about the process, despite a pledge by the Treasury to publish information about it.

In a statement confirming the move, a BBA spokesman told Sky News: "An Extraordinary General Meeting of BBA members has given its formal approval to the Board to deliver the transfer of BBA Libor to a new operator which will be selected by the Hogg Committee.

"The absolute priority is to ensure the provision of a reliable benchmark which has the confidence and support of all users, contributors and global regulators."

Baroness Hogg's appointment followed a report last autumn by Martin Wheatley, Britain's new chief financial conduct regulator, which said that stripping the BBA of its role was vital to restore trust in Libor and other benchmark rates.

Mr Wheatley's inquiry came in the wake of Barclays' £291m fine for rate-rigging, since when UBS and Royal Bank of Scotland have also been fined heavily for their roles in what authorities say was an international conspiracy.

Today's EGM at the BBA's offices in the City was a legal technicality, but an important one, according to insiders.

The motion to hand over control of Libor, already approved by the BBA governing council last year, was passed unanimously, according to people familiar with this morning's EGM.

Bloomberg is among the organisations which have expressed an interest in taking on the Libor-setting role.

18.56 | 0 komentar | Read More

Reaction To Downgrade? Apocalypse No

Let's get this straight: on Friday night Moody's downgraded Britain's credit rating for the first time since it started giving official ratings to the UK back in 1978.

This means as far as it is concerned Britain is statistically more likely to default in the coming years.

On Monday, the capital markets where the Government turns to borrow, where it is constantly judged by the people who in this case really matter (investors), gave their reaction, and it can be summed up in two words: "so what?"

As of about 10am, the rate investors charge the Government to borrow was actually lower than just before the downgrade (having ticked up a touch in early trading).

The pound actually strengthened in comparison with where it was immediately after the downgrade. It's still close to a three-year low against the dollar, but it's been heading south for weeks. 

The FTSE 100 index of leading UK shares was up by 0.5%, and even banking shares, which plunged after Moody's first warned of a potential downgrade this time last year, were stable.

In other words, if you were looking for any palpable reaction to the downgrade, you would be hard-pressed to find it.

This shouldn't be particularly surprising: the notion that a downgrade would provoke economic and financial oblivion evaporated in 2011 when markets entirely ignored the US credit rating downgrade.

All of which brings us back to George Osborne.

You might be tempted to portray today's markets damp squib as good news for the Chancellor. Losing your AAA crown is not, it turns out, the end of the world. However, it's also a reminder of one of the biggest mistakes of his political career.

There was no need for Mr Osborne to tie his economic record so explicitly with the country's credit rating (particularly given the credibility of the agencies themselves).

Had he promised instead to keep the Government's cost of borrowing low, he would have been able to boast that the interest rate has almost halved since he took office.

Whether this political miscalculation deals him a lasting blow remains to be seen, but it's clear that the downgrade is no financial disaster for Britain.

However, that shouldn't distract us from what does matter: the underlying reasons for the downgrade.

It is striking that the major explanation the ratings agency gave came down to Britain's growth prospects.

It said, quite simply, that this recession has been unlike any other of recent memory. The enormous amount of debt still hanging over households and businesses (let alone the Government) has meant that the UK economy is still, even five years on, smaller than it was before the crisis.

To put that another way, this country and its citizens are generating less wealth, taking home less income and spending less than in 2008. That's why the deficit is still climbing and why the squeeze on household incomes is returning. In spite of all the money the Bank of England has thrown at the problem, and a massive of extra borrowing from the Treasury, Britain is in a serious economic pickle.

You don't need a credit ratings agency to tell you that. And it turns out the markets didn't either.

18.56 | 0 komentar | Read More

Pound Under Pressure After Rating Downgrade

Market Reaction: Apocalypse No

Updated: 10:58am UK, Monday 25 February 2013

By Ed Conway, Economics Editor

Let's get this straight: on Friday night Moody's downgraded Britain's credit rating for the first time since it started giving official ratings to the UK back in 1978.

This means as far as it is concerned Britain is statistically more likely to default in the coming years.

On Monday, the capital markets where the Government turns to borrow, where it is constantly judged by the people who in this case really matter (investors), gave their reaction, and it can be summed up in two words: "so what?"

As of about 10am, the rate investors charge the Government to borrow was actually lower than just before the downgrade (having ticked up a touch in early trading).

The pound actually strengthened in comparison with where it was immediately after the downgrade. It's still close to a three-year low against the dollar, but it's been heading south for weeks. 

The FTSE 100 index of leading UK shares was up by 0.5%, and even banking shares, which plunged after Moody's first warned of a potential downgrade this time last year, were stable.

In other words, if you were looking for any palpable reaction to the downgrade, you would be hard-pressed to find it.

This shouldn't be particularly surprising: the notion that a downgrade would provoke economic and financial oblivion evaporated in 2011 when markets entirely ignored the US credit rating downgrade.

All of which brings us back to George Osborne.

You might be tempted to portray today's markets damp squib as good news for the Chancellor. Losing your AAA crown is not, it turns out, the end of the world. However, it's also a reminder of one of the biggest mistakes of his political career.

There was no need for Mr Osborne to tie his economic record so explicitly with the country's credit rating (particularly given the credibility of the agencies themselves).

Had he promised instead to keep the Government's cost of borrowing low, he would have been able to boast that the interest rate has almost halved since he took office.

Whether this political miscalculation deals him a lasting blow remains to be seen, but it's clear that the downgrade is no financial disaster for Britain.

However, that shouldn't distract us from what does matter: the underlying reasons for the downgrade.

It is striking that the major explanation the ratings agency gave came down to Britain's growth prospects.

It said, quite simply, that this recession has been unlike any other of recent memory. The enormous amount of debt still hanging over households and businesses (let alone the Government) has meant that the UK economy is still, even five years on, smaller than it was before the crisis.

To put that another way, this country and its citizens are generating less wealth, taking home less income and spending less than in 2008. That's why the deficit is still climbing and why the squeeze on household incomes is returning. In spite of all the money the Bank of England has thrown at the problem, and a massive of extra borrowing from the Treasury, Britain is in a serious economic pickle.

You don't need a credit ratings agency to tell you that. And it turns out the markets didn't either.

18.56 | 0 komentar | Read More

AAA Credit Rating Lost: Osborne Defiant

George Osborne has come under attack over what Labour calls his "catastrophic economic policy failure" after the UK lost its top-grade AAA credit rating.

International agency Moody's downgraded it by one notch to AA1, citing slow growth and a rising debt burden.

The Chancellor said the coalition would not "run away" from its economic problems and it was determined to stick by its plan for recovery.

The downgrade is a major blow for Mr Osborne, who has been coming under increasing pressure to take action to stimulate the economy.

In the last election, Mr Osborne made safeguarding Britain's credit rating one of his key pledges.

He has used maintaining the rating for government bonds as one of the main arguments for the Government's austerity programme.

The Chancellor insisted the Government was delivering on its commitment to tackle the UK's debt.

He said: "We have a stark reminder of the debt problems facing our country - and the clearest possible warning to anyone who thinks we can run away from dealing with those problems.

"We are not going to run away from our problems, we are going to overcome them."

He added: "In the end, the test of our credibility as a country is there every day in the markets when we borrow money on behalf of this country from investors all around the world.

Moody's said it did not expect Britain's slow recovery to change

"At the moment we can do that very cheaply with very low interest rates precisely because people have confidence that we have got a plan, we've got to stick to that plan and we are going to deliver that plan."

Labour's shadow chancellor Ed Balls told Sky News: "They (the Government) are paying the price for an absolute catastrophic failure of economic policy and everybody can see that now pretty much other than the chancellor and the prime minister.

"Until they face up to reality, we're just going to have more of the same."

Moody's said Britain's recovery was proving to be significantly slower than previous rebounds from recession and it did not expect the situation to change.

"(There's) increasing clarity that, despite considerable structural economic strengths, the UK's economic growth will remain sluggish over the next few years," it said.

Moody's is the first of the major credit rating agencies to knock the UK off of its top rating.

The ratings agency also cut the Bank of England's AAA rating by one notch, also to AA1. The US' top credit rating was downgraded by one notch in 2011.

Sky's Economics Editor Ed Conway said: "The fact that Britain has lost its AAA crown for the first time since credit ratings were given to the UK back in the 1970s, is a really big blow to Britain's reputation.

"It's something of an economic blow, but in a way it's more of a political problem for George Osborne. He made a key part of the Conservative election pledge to safeguard Britain's credit rating."

Moody's said that the British economy is constrained both by the troubled global economy and the drag from businesses and the Government slashing its debt burdens.

"Moreover, while the Government's recent Funding for Lending Scheme has the potential to support a surge in growth, Moody's believes the risks to the growth outlook remain skewed to the downside," it said.

Labour has insisted that withdrawing demand from the economy has put it more at risk by stunting growth.

Mr Balls said: "This credit rating downgrade is a humiliating blow to a prime minister and chancellor who said keeping our AAA rating was the test of their economic and political credibility.

"In the Budget the government must urgently take action to kick-start our flatlining economy and realise that we need growth to get the deficit down. If David Cameron and George Osborne fail to do so and put political pride above the national economic interest we face more long-term damage and pain for businesses and families."

18.56 | 0 komentar | Read More

Exclusive: RBS Mis-Selling Bill To Add £1.1bn

By Mark Kleinman, City Editor

The state-backed Royal Bank of Scotland (RBS) will next week set aside another £1.1bn to compensate customers for mis-selling products to consumers and small businesses.

I can reveal that the bank is preparing to say in its full-year results announcement next Thursday that it is increasing its provision for mis-selling interest rate swaps by roughly £700m, which will take its cumulative bill to £750m.

City sources say that RBS will also announce that it is raising its payment protection insurance (PPI) mis-selling bill by just over £400m, meaning it will have put aside just over £2.1bn for its part in the industry-wide scandal.

The new provisions will further elevate the total bill for Britain's biggest banks from two of the sector's biggest mis-selling episodes. RBS's new PPI charge will mean that the four major lenders have had to provide more than £11bn for compensation, while its hit on interest rate hedging products will enlarge the industry bill to £1.6bn.

Neither of those figures will, however, include imminent upward revisions in both categories by both HSBC and Lloyds Banking Group, which also report full-year results in the next ten days.

Both RBS and Lloyds, which are 82% and 39% owned by British taxpayers respectively, will report losses for 2012.

RBS is also expected to confirm that it is examining a separation of its US retail banking business, Citizens, through a stock market listing in the US, in a move that over time could raise billions of pounds for the British lender.

George Osborne, the Chancellor, is likely to welcome the move when he appears in front of the Parliamentary Commission on Banking Standards on Monday.

Both Mr Osborne and David Cameron have been increasing the pressure on RBS's management, led by chief executive Stephen Hester, to accelerate the group's restructuring.

Mr Hester is expected to respond next week by pointing to a further retrenchment of its investment banking operations. RBS, he is understood to be preparing to say, will continue to reshape its operations into a British retail bank that is also able to support the international business objectives of core UK clients.

The new provisions for PPI and swaps mis-selling will reflect ongoing claims trends and the recent agreement between the major banks and the Financial Services Authority to offer redress to small business customers according to a defined framework.

Barclays added another £1bn to its own mis-selling tab when it reported its full-year results earlier this month.

The major banks have grudgingly accepted the swaps settlement with the City regulator although they have argued that many of the cases for which they will have to pay compensation should not be categorised as mis-selling.

They have also pointed to the vast numbers of bogus PPI claims they have received, many of which have been paid out anyway. The industry has been discussing the imposition of a time limit on PPI mis-selling claims although at least one major bank is lukewarm about the idea.

18.56 | 0 komentar | Read More

Myners: Ex-Minister Courted For Tabloid Role

By Mark Kleinman, City Editor

Lord Myners, former chairman of The Guardian's parent company, has been approached about chairing a new venture that is targeting a foothold in Britain's cut-throat tabloid newspaper market.

I understand that the board of Phoenix Newspaper Publishing has sounded out Lord Myners about chairing the company, which is in talks with Trinity Mirror about a deal to take control of the Sunday People.

Friends of Lord Myners said today that he was "flattered" by the interest from Phoenix but suggested that he was likely to reject the invitation to chair the company.

A City Minister in the last Labour administration, Lord Myners has rebuilt an extensive boardroom career since the 2010 general election.

He is a non-executive director of MegaFon, the London-listed Russian telecoms group, and chairman of the UK activities of Cevian Capital, a well-known activist shareholder.

Among the companies where he has previously held directorships are Land Securities, the property company, and Marks & Spencer.

Phoenix has been trying for more than a year to raise millions of pounds in funding to support the development of a new tabloid title that would target the vacuum left by the demise of the News Of The World.

Dozens of potential investors have been approached about putting money into the vehicle, and insiders say that Phoenix is optimistic that it will secure the necessary backing in the coming months.

The executives behind the venture, who include Sue Douglas, the former Sunday Express editor, and Rupert Howell, the former ITV commercial director, plan to relaunch Trinity Mirror's title as News of the People.

They believe there is an opportunity to pick up many of the estimated 1.3m News Of The World customers who stopped buying a Sunday newspaper when News International closed it during the phone-hacking scandal in 2011.

Last month, Trinity Mirror confirmed the talks with Phoenix, saying: "Trinity Mirror plc confirms that it has been approached by a group of investors who have expressed an interest in working with the Group to invest in and develop the Sunday People.

"Discussions are at a very preliminary stage and there is nothing further to report. A further announcement will be made as and when appropriate."

Phoenix and Lord Myners both declined to comment.

18.56 | 0 komentar | Read More

Exclusive: Lloyds Set To Pay Boss £1.4m Bonus

By Mark Kleinman, City Editor

Lloyds Banking Group is finalising plans to pay its chief executive an annual bonus of approximately £1.4m, although he will not receive it until taxpayers' stake in the bailed-out bank breaks even.

I have learnt that directors of Lloyds will meet early next week to sign off on the plan, which will be announced alongside the full-year results of Britain's biggest mortgage lender next Friday.

Sky News revealed earlier this month that Antonio Horta-Osorio's bonus would be approximately £1.5m, and that he would not receive it until the taxpayer's 39% stake returns to the black, which it will do if Lloyds' share price reaches 73.6p. The shares were trading on Friday morning at around 54p.

People close to Lloyds said that the final figure for Mr Horta-Osorio's bonus, which will be paid entirely in shares, would not be decided until next week and that it was still subject to adjustment, but added that £1.4m was broadly the number proposed by Lloyds' remuneration committee.

Wary of a potential political backlash, Lloyds is understood to have submitted its proposal to pay Mr Horta-Osorio a bonus to UK Financial Investments (UKFI), the body which manages the taxpayer's stake in the bank, in recent days. George Osborne, the Chancellor, has also been informed of the plan.

Lloyds' concern stems from the fact that it was forced to set aside just over £2bn in 2012 to compensate customers who were mis-sold payment protection insurance (PPI) policies.

That figure is certain to increase when Lloyds unveils full-year results next week, with another substantial provision expected to be taken for the fourth quarter of the year.

Although the PPI mis-selling itself took place long before Mr Horta-Osorio was poached from Santander UK, Lloyds was this week fined more than £4m by the Financial Services Authority for shortcomings in the way it handled complaints.

Lloyds is also expected to announce a "material" provision for the mis-selling of interest rate swaps to small businesses in next week's results.

Last year, the Lloyds chief executive waived his annual bonus after taking several weeks of leave as a result of fatigue.

Under the terms of his contract, Mr Horta-Osorio is eligible for an annual bonus worth 225% of his £1.061m salary, equating to about £2.3m. If Lloyds does pay the anticipated figure of about £1.4m, it would equate to roughly 60 per cent of the maximum potential award. The chief executive is also eligible for a long-term share award worth up to £3m, subject to deferral periods, for each year of service.

They added that it was still possible that he would waive the payout although a political backlash looked unlikely, one insider said.

In awarding Mr Horta-Osorio his bonus, Lloyds directors are expected to point towards the progress he has made in reshaping the bank since he took over nearly two years ago. Bad debt charges are expected to have fallen again, with customer service targets also having been met.

Last year, Lloyds announced a statutory loss for 2011 of £3.5bn, a figure which included £3.2bn of PPI compensation provisions. Analysts expect that the bank will report a loss for 2012 of £544m on the same basis, while the underlying performance of Lloyds' business, which strips out one-off charges such as PPI, is forecast to have been profitable to the tune of more than £2bn.

Allies of Mr Horta-Osorio pointed out that Lloyds' shares were the top performer in the FTSE-100 last year, rising by 85 per cent, and among the leading risers in the European banking sector.

The bosses of Barclays and Royal Bank of Scotland have waived their bonuses for 2012 amid various reputational crises. The chief executives of HSBC and Standard Chartered are expected accept their payouts, while the boss of Santander UK has already accepted her multimillion pound award.

Lloyds declined to comment.

18.56 | 0 komentar | Read More

Food Bills May Rise Amid Growing Meat Tests

By Tom Parmenter, Sky News Correspondent

Consumers are being warned that food bills may rise if high demand for meat testing continues.

Since the start of the horsemeat scandal, laboratories all over the UK have been inundated with requests to test different meat products.

At Worcestershire Scientific Services laboratory staff have been working early mornings, late nights and weekends to keep up with demand.

Even some of the equipment has been unable to keep up with almost continual testing.

Laboratory manager Paul Hancock told Sky News that funding is tight, explaining: "The FSA do support the laboratory to a degree but things are very very difficult.

"If the consumer wants quality food they have to be prepared to pay for a degree of policing that."

Checking a meat sample for DNA from other species takes three days and costs between £75 to £100 per sample.

The number of labs capable of carrying out proper testing though has fallen over recent years due to funding cuts. In April, Somerset County Council will close its lab.

Those that remain open operate as competitive businesses rather than sharing information, equipment and practices with each other.

Mr Hancock added: "Ten or 15 years ago the labs used to work closely together that relationship has broken down because of commercial activity and that makes life a whole lot more difficult as well."

Meanwhile, France's agriculture ministry has confirmed that horse carcasses from the UK containing the drug Phenylbutazone - known as bute - have probably ended up in the human food chain.

A spokesman for the French agriculture ministry said it was alerted by British authorities that six carcasses had been exported to France in January but that the meat had already been processed.

Some of the meat was recalled but the equivalent of three carcasses have "probably" been eaten, according to officials - although they insist the health risk is "minor".

Bute is an anti-inflammatory treatment for horses which is potentially harmful to humans and is banned from the food chain.

The latest Food Standards Agency results showed six positive results for horse DNA out of 1,133 tested beef products, but so far no UK sample has been found to contain bute.

18.56 | 0 komentar | Read More

AAA Credit Rating Lost: Osborne Defiant

George Osborne is coming under pressure over what Labour calls his "catastrophic economic policy failure" after the UK lost its top-grade AAA credit rating.

International agency Moody's downgraded it by one notch to AA1, citing slow growth and a rising debt burden.

The Chancellor said it was a "stark reminder" of the country's debt problems, but said the coalition was determined to stick by its plan for economic recovery.

In the last election, Ms Osborne made safeguarding Britain's credit rating one of his key pledges.

And he has used maintaining the rating for government bonds as one of the main arguments for the Government's austerity programme.

The downgrade is a major blow for Mr Osborne, who has been coming under increasing pressure to take action to stimulate the economy.

He said: "We have a stark reminder of the debt problems facing our country - and the clearest possible warning to anyone who thinks we can run away from dealing with those problems.

"We are not going to run away from our problems, we are going to overcome them."

Labour's shadow chancellor Ed Balls told Sky News: "They (the Government) are paying the price for an absolute catastrophic failure of economic policy and everybody can see that now pretty much other than the chancellor and the prime minister.

"Until they face up to reality, we're just going to have more of the same."

Moody's said it did not expect Britain's slow recovery to change

Moody's said Britain's recovery was proving to be significantly slower than previous rebounds from recession and it did not expect the situation to change.

"[There's] increasing clarity that, despite considerable structural economic strengths, the UK's economic growth will remain sluggish over the next few years," it said.

Moody's is the first of the major credit rating agencies to knock the UK off of its top rating.

The ratings agency also cut the Bank of England's AAA rating by one notch, also to AA1. The US' top credit rating was downgraded by one notch in 2011.

Sky Economics Editor Ed Conway said: "The fact that Britain has lost its AAA crown for the first time since credit ratings were given to the UK back in the 1970s, it's a really big blow to Britain's reputation.

"It's something of an economic blow, but in a way it's more of a political problem for George Osborne. He made a key part of the Conservative election pledge to safeguard Britain's credit rating."

Moody's said that the British economy is constrained both by the troubled global economy and the drag from businesses and the Government slashing its debt burdens.

"Moreover, while the Government's recent Funding for Lending Scheme has the potential to support a surge in growth, Moody's believes the risks to the growth outlook remain skewed to the downside," it said.

Labour has insisted that withdrawing demand from the economy has put it more at risk by stunting growth.

Mr Balls said: "This credit rating downgrade is a humiliating blow to a prime minister and chancellor who said keeping our AAA rating was the test of their economic and political credibility.

"In the Budget the government must urgently take action to kick-start our flatlining economy and realise that we need growth to get the deficit down. If David Cameron and George Osborne fail to do so and put political pride above the national economic interest we face more long-term damage and pain for businesses and families."

18.56 | 0 komentar | Read More

Exclusive: Lloyds Set To Pay Boss £1.4m Bonus

By Mark Kleinman, City Editor

Lloyds Banking Group is finalising plans to pay its chief executive an annual bonus of approximately £1.4m, although he will not receive it until taxpayers' stake in the bailed-out bank breaks even.

I have learnt that directors of Lloyds will meet early next week to sign off on the plan, which will be announced alongside the full-year results of Britain's biggest mortgage lender next Friday.

Sky News revealed earlier this month that Antonio Horta-Osorio's bonus would be approximately £1.5m, and that he would not receive it until the taxpayer's 39% stake returns to the black, which it will do if Lloyds' share price reaches 73.6p. The shares were trading this morning at around 54p.

People close to Lloyds said today that the final figure for Mr Horta-Osorio's bonus, which will be paid entirely in shares, would not be decided until next week and that it was still subject to adjustment, but added that £1.4m was broadly the number proposed by Lloyds' remuneration committee.

Wary of a potential political backlash, Lloyds is understood to have submitted its proposal to pay Mr Horta-Osorio a bonus to UK Financial Investments (UKFI), the body which manages the taxpayer's stake in the bank, in recent days. George Osborne, the Chancellor, has also been informed of the plan.

Lloyds' concern stems from the fact that it was forced to set aside just over £2bn in 2012 to compensate customers who were mis-sold payment protection insurance (PPI) policies.

That figure is certain to increase when Lloyds unveils full-year results next week, with another substantial provision expected to be taken for the fourth quarter of the year.

Although the PPI mis-selling itself took place long before Mr Horta-Osorio was poached from Santander UK, Lloyds was this week fined more than £4m by the Financial Services Authority for shortcomings in the way it handled complaints.

Lloyds is also expected to announce a "material" provision for the mis-selling of interest rate swaps to small businesses in next week's results.

Last year, the Lloyds chief executive waived his annual bonus after taking several weeks of leave as a result of fatigue.

Under the terms of his contract, Mr Horta-Osorio is eligible for an annual bonus worth 225% of his £1.061m salary, equating to about £2.3m. If Lloyds does pay the anticipated figure of about £1.4m, it would equate to roughly 60 per cent of the maximum potential award. The chief executive is also eligible for a long-term share award worth up to £3m, subject to deferral periods, for each year of service.

They added that it was still possible that he would waive the payout although a political backlash looked unlikely, one insider said.

In awarding Mr Horta-Osorio his bonus, Lloyds directors are expected to point towards the progress he has made in reshaping the bank since he took over nearly two years ago. Bad debt charges are expected to have fallen again, with customer service targets also having been met.

Last year, Lloyds announced a statutory loss for 2011 of £3.5bn, a figure which included £3.2bn of PPI compensation provisions. Analysts expect that the bank will report a loss for 2012 of £544m on the same basis, while the underlying performance of Lloyds' business, which strips out one-off charges such as PPI, is forecast to have been profitable to the tune of more than £2bn.

Allies of Mr Horta-Osorio pointed out today that Lloyds' shares were the top performer in the FTSE-100 last year, rising by 85 per cent, and among the leading risers in the European banking sector.

The bosses of Barclays and Royal Bank of Scotland have waived their bonuses for 2012 amid various reputational crises. The chief executives of HSBC and Standard Chartered are expected accept their payouts, while the boss of Santander UK has already accepted her multimillion pound award.

Lloyds declined to comment.

18.56 | 0 komentar | Read More

Birds Eye Ready Meal Recall Over Horse Fears

The owner of Birds Eye is recalling 15 ready meals across western Europe after horsemeat was found in a Belgium-made product.

In the UK and Ireland the products being withdrawn are the brand's traditional spaghetti bolognese 340g, shepherd's pie 400g and beef lasagne 400g.

They are made by supplier Frigilunch NV, which also produces a branded chilli con carne sold in Belgium that has tested positive for traces of horsemeat.

Birds Eye said: "We want to reassure you from the testing we have completed that all Birds Eye beef burgers, beef pies and beef platters do not contain horse DNA.

"Whilst this is not a food safety issue, it is clearly unacceptable. In accordance with our high standards, we are immediately withdrawing this product from sale in Belgium."

Iglo Foods Group, the parent company of Birds Eye, said it was pulling a total of 15 Frigilunch products as a precaution.

In addition to the three product recalls in Britain and the same meals in Ireland, it was withdrawing eight products in Belgium and one in the Netherlands.

A number of UK supermarkets have also recalled products from shelves

The Continental food recall also affects ox tongue, mince, meat balls and hamburgers.

In recent weeks it has emerged European meat supply chains had been contaminated with horsemeat, which forced a number of British supermarkets to recall products.

The France-based Findus food company has also been hit by the scandal.

The Birds Eye revelation comes after it initiated a Europe-wide testing programme for horse DNA of its suppliers and on its finished beef products.

In addition to owning the Birds Eye brand, Iglo also owns the rights to Findus in Italy.

Iglo produces and markets frozen food products in 11 countries and it also distributes food across additional countries in central and eastern Europe.

It said the company has introduced an ongoing DNA test programme to prevent further contamination scandals.

Iglo said: "This will help us ensure that we continue to reach the standards that all our consumers expect from our products.

"We want to apologise to consumers and reassure them that we will keep them fully informed and that we are taking action to deal with this issue."

:: Birds Eye placed a product recall statement on its website for UK and Ireland residents and provided customer care contact telephone numbers for concerned consumers.

18.56 | 0 komentar | Read More

Eurozone Economy Will Shrink Again, Warns EU

The EU has warned that the eurozone's economy will remain in recession for longer than expected.

In its winter economic forecast, the European Commission (EC) said the economy of the currency bloc - which consists of 17 countries - would shrink by 0.3% this year.

This follows a 0.6% contraction last year, and marks a reversal from the EC's previous prediction of 0.1% growth in 2013.

But it stressed that the eurozone would return to growth in 2014 - when the economy would increase by 1.4%. 

Not all economists were convinced by the EC's forecast, however.

"I'm a little sceptical about their forecast of a pronounced recovery next year," Ken Wattret, European economist at BNP Paribas, told Sky News.

"I think the headwinds to growth in the euro-area from the banking system, from fiscal policy, from political uncertainty - I think they're rather persistent."

The EC predicted that Germany's economy would grow by 0.5% this year, but France, - Europe's second-largest economy - will post growth of just 0.1%.

Italy's economy is expected to contract by 1%, and Spain's by 1.4%.

The extended recession will see millions more people lose their jobs, the EC said, with the level of unemployment across the region expected to continue to rise.

Unemployment in the eurozone is forecast to hit 12.2% in 2013 - up from 11.4% last year - which could take the number of people without a job to more than 20 million.

The European Commissioner for Economic and Monetary Affairs Olli Rehn said "decisive" policy actions are "paving the way for a return to recovery."

18.56 | 0 komentar | Read More

BAE Systems' Profit Falls Amid Defence Cuts

BAE Systems has reported a fall in global sales and warned of a "constrained" outlook in both the US and UK - two of its key markets.

The defence, aerospace and security company, which employs around 93,500 across the world, said its underlying profit fell 6% to £1.89bn in 2012.

US defence cuts - as well as reduced military activity in Iraq and Afghanistan - hit BAE's US business, which accounts for 40% of the group's sales.

It said military spending is expected to remain lower "in response to reducing overseas operations and measures to address federal deficits."

Europe's largest defence contractor also warned of tougher trading conditions in Britain.

"Growth opportunities in some segments of the US and UK markets are identified, but the overall outlook in both countries is expected to continue to be constrained," it said.

In 2010, the UK Government said it would slash defence spending by 8% by 2014, and the US already has plans in place to cut $487bn (£321bn) from its defence budget over the next decade.

These reductions hit total sales in 2012, which fell 7% to £17.83bn.

Unresolved discussions with Saudi Arabia over the pricing of its key Salam contract - supplying Typhoon aircraft - also hit sales, the company said.

BAE stressed that outside of US and UK markets it was performing well, with orders from other countries up to £11.2bn from £4.8bn the year before.

On Tuesday, the company warned that almost 3,600 jobs were at risk in its US shipyards.

BAE told affected employees that their jobs could be lost if the US Navy carried out its "intent to cancel" a number of ship maintenance contracts as a result of unresolved negotiations between Congress and the White House.

"BAE Systems is working closely with our Navy customers and members of Congress to mitigate the impact of or avoid the proposed cancellations," it said on Tuesday.

"We are hopeful that Washington can soon reach an agreement and prevent these job losses."

The results come after a year in which the company's proposed merger with European plane manufacturer EADS, which would have created the biggest aerospace and defence group in the world, collapsed.

Strong opposition from Germany, among other countries, brought down the deal.

18.56 | 0 komentar | Read More

Nike Drops Pistorius Amid Murder Charge

Nike has suspended its sponsorship contract with Oscar Pistorius as the athlete fights a charge of premeditated murder.

The company announced its decision as the double-amputee runner appeared in court for the third day of a bail hearing over the shooting of Reeva Steenkamp on Valentine's Day.

In a brief statement, Nike said: "We believe Oscar Pistorius should be afforded due process and we will continue to monitor the situation closely."

Sunglasses maker Oakley had already ended its contract with the sprinter, significantly cutting his estimated annual sponsorship income of more than £1.3m.

In the wake of the shooting and his arrest, Nike took the decision to drop an advertising campaign featuring Pistorius which contained the slogan "I am the bullet in the chamber."

The sporting goods to fashion brand has a host of top sports stars on its books - some of them who have been in the spotlight for reasons other than their sporting glory.

Nike dropped cyclist Lance Armstrong in October 2012 in the wake of his doping revelations but stood by Tiger Woods after the golfer admitted infidelities and went to rehab for sex addiction.

18.56 | 0 komentar | Read More

Public Finances Ease Some Pressure On Osborne

Better tax revenues and profits from the Bank of England's quantitative easing (QE) scheme helped the public finances record their best surplus for five years in January.

But the £11.4bn figure still leaves the Chancellor George Osborne facing a tough task to meet his borrowing target for the 2012/13 financial year and convince the markets that Britain is worthy of its triple-A credit rating.

January is a month that traditionally shows a surplus, thanks to seasonal inflows of income and corporation tax revenues.

Total receipts, including taxes, rose 7% or £4.5bn to £65.8 bn - with VAT income rising 4% alongside capital gains and income taxes.

There was a 13% decline in earnings from other taxes such as corporation tax.

But a £3.8bn transfer of funds from the Bank of England - essentially profits through interest from its asset purchases to pump money into the economy - helped ease the borrowing burden and it is expected that there will be a further £2.6bn of interest due by the end of the financial year.

Bank governor Sir Mervyn King favours more QE to boost the economy

Economists had expected a surplus of £8.7bn for January and the Treasury said the £11.4bn figure showed an improvement in the country's fiscal situation although the way ahead for the economy remained tough.

A spokesman said: "They underline what the governor of the Bank of England said last week: the road ahead will be difficult, but the economy is on the right track."

However Mr Osborne, who has already had to push back his main deficit reduction goal by two years, has been hampered on the borrowing front by a weaker than expected economy which depressed tax receipts and pushed up benefit costs.

Since the start of the 2012/13 financial year, borrowing has now totalled £93.8bn, excluding a one-off boost from the transfer of Royal Mail pension assets.

This is 1.6% higher than at the same point in 2011/12.

The Chancellor had also budgeted for a £3.5bn injection from the 4G auction but it was confirmed on Wednesday that the sale had only raised £2.3bn from mobile providers.

Chris Leslie, Labour's Shadow Financial Secretary to the Treasury, responded to today's figures by calling on Mr Osborne to change course.

He said: "Strip away the smoke and mirrors, like the transfer of cash from the Bank of England, and underlying borrowing so far this year is rising and is £5.3bn higher than the same period last year.

"A flat-lining economy means the Government is borrowing more to pay for economic failure as the welfare bill is up. By failing on growth and jobs, David Cameron and George Osborne are failing on the one test they set themselves - to get the deficit and debt down."

Some analysts have also suggested January's borrowing surplus was flattering.

Martin Beck of Capital Economics said: "Excluding one-offs, underlying borrowing in 2012/13 is still likely to come in 3 to £5bn pounds above the OBR (Office for Budget Responsibility) forecast of £119.9bn.

"So with borrowing still very high and fiscal progress appearing to have ground to a halt, the dilemma faced by the Chancellor at next month's Budget over whether to tighten fiscal policy, or loosen and go for growth, remains acute."

Chris Williamson, chief economist at Markit, estimated an overshoot of up to £10bn and  warned that the UK's AAA credit rating was "looking increasingly at risk".

He said: "The spring Budget will need to address the concern that more stimulus is needed besides central bank action in order to get the economy on a sustainable recovery path.

"Without a credible plan from the Government to break the vicious circle of a sluggish economy, low tax revenues and rising public sector borrowing, the credit rating agencies are likely to lose their patience."

18.56 | 0 komentar | Read More

New 4G Phone Operators Announced By Ofcom

Telecoms watchdog Ofcom has granted permits for more mobile phone firms to operate faster 4G networks.

The four new winners are Hutchison 3G, a division of BT called Niche Spectrum, Telefonica O2 and Vodafone.

Existing 4G operator Everything Everywhere was also given expanded bandwith.

The auction raised £2.34bn for the taxpayer but the Government had hoped for a total of £3.5bn.

Britain's last big mobile phone spectrum auction was in 2000 for 3G services and it raised £22.5bn.

In real terms, the 3G windfall would be worth more than £30bn today - more than 12 times the revenue raised on 4G.

Ofcom said the purpose of the auction was to "promote strong competition in the 4G mobile market".

It said in a statement: "This is expected to lead to faster mobile broadband speeds, lower prices, greater innovation, new investment and better coverage.

"Almost the whole UK population will be able to receive 4G mobile services by the end of 2017 at the latest."

New entrants in the sector, including Chinese-owned firms, failed in their bids.

The regulator said that was simply because their bids were too low.

Ofcom also revealed that it was "planning now to support the release of further spectrum for possible future '5G' mobile services".

It said that by 2030, demand for mobile data could be 80 times higher than it is in 2013.

Future development of 5G would be needed to meet this demand and avoid a feared "capacity crunch".

Ofcom added: "More mobile spectrum is needed over the long term, together with new technologies to make mobile broadband more efficient."

Initial 4G operator EE has already rolled out coverage to 28 towns and cities, to more than 46% of the population.

Demand for the new services has extended as penetration of smartphones has increased in recent years.

4G can supply data stream feeds typically five times faster than 3G.

18.56 | 0 komentar | Read More

Pound Plunges As King Loses QE Vote

The pound has plunged against key economies after it was revealed that the Bank of England boss lost a vote for an increase in monetary stimulus.

Sterling fell to fresh multi-month lows against the euro and the dollar after minutes from the BoE showed governor Sir Mervyn King wanted an increase of quantitative easing (QE) to £400bn.

The notes showed that unexpectedly three out of the nine BoE policymakers voted for an increase in asset purchases under the bank's QE programme, which currently sits at £375bn.

However, they were outvoted by the six others who preferred to keep policy unchanged.

The minutes also show that the Monetary Policy Committee (MPC) considered cutting interest rates below the current historic low of 0.5%.

The pound slid to an 8-1/2-month low against the dollar and the euro jumped to a near 16-month high, a rise of nearly 0.9% on the day.

The FTSE 100 index peaked above 6409 after news of the MPC minutes was released.

James Knightley, economist at ING bank, said it was "significant" that Sir Mervyn voted for more QE.

"Clearly, if the data disappoints, more QE will be on its way," Mr Knightley said.

Governor Sir Mervyn King is to leave the Bank of England soon

The MPC meeting was held on February 6 and 7, with the governor being supported by BoE economist Paul Fisher and Professor David Miles.

The British economy has been stagnant for the past two years, and the central bank only sees sluggish future growth.

But concerns about inflation and how effective more buying of bonds or other assets would be have stayed the bank's hand.

However, the swing in the governor's views provided the sharpest divergence in views since June last year, when a split vote was followed the next month by a majority in favour of an extra £50bn of purchases.

"A case could ... be made for undertaking additional asset purchases at this meeting," the minutes said.

"The degree of slack in the economy, and the likely positive response of supply capacity to increased demand, meant that higher output growth would not necessarily lead to any material additional inflationary pressure."

More broadly, the MPC said it was willing to allow longer for inflation to fall to its target, and to consider measures to boost lending from sources other than banks.

Most economists have seen it as unlikely that the BoE would opt to try and pump yet more cash into the economy, due to persistently high inflation and doubts from King among others about further asset purchases.

The meeting was only the fourth time that the governor has been outvoted since he took office in 2003.

18.56 | 0 komentar | Read More

Royal Mail Staff 'Will Have To Keep Shares'

By Mark Kleinman, City Editor

Tens of thousands of Royal Mail staff could be forced to hold onto shares in the company for months after a potential stock market listing as Government ministers attempt to avoid an instant mass share sale.

I have learnt that the scheme is being drawn up by the Government to try to avoid the process of 'stagging', which blighted the huge privatisations of the 1980s under Margaret Thatcher. Stagging is the term given to those who buy or receive shares at the offer price of a flotation and then sell them immediately into the market.

Under plans enshrined in legislation passed last year, the Government is to hand Royal Mail staff a 10 per cent stake in the company as part of a project to inject private capital. That could take the form of a sale to a single buyer or, more likely, a stock market listing that would place Royal Mail on the cusp of the FTSE-100.

A team of officials from the Department for Business, Innovation and Skills (BIS) and the Shareholder Executive, which oversees the management of state-owned companies, is working on the employee share offering.

The plans are not yet finalised but senior Government sources confirmed that an 'anti-stagging' clause was likely to be included in the scheme to avoid the prospect of millions of pounds-worth of additional shares being dumped in the market as soon as the listing takes place. It is unclear exactly how long staff would be asked to hold onto their share awards.

The process to privatise Royal Mail, which has eluded previous secretaries of state including Lord Mandelson, is being overseen by Michael Fallon, the business minister.

Mr Fallon told the Financial Times earlier this week that the conditions were ripening for an injection of external capital into the company.

"You have got a business that is profitable, doesn't have a pension deficit, will be operating in a clear regulatory environment and would no longer be competing with schools and hospitals for scarce capital," he told the newspaper.

Under Moya Greene, its Canadian chief executive, Royal Mail's management team has been discussing the company's prospects with potential investors in the UK, Canada and the US as it tries to familiarise fund managers with its financial performance.

Ms Greene, who joined about two years ago, has been cutting tens of thousands of jobs as part of a plan to automate many of Royal Mail's processes and modernise the company. Her actions have caused some tensions with trade unions, but their hostility to a privatisation process appears to have eased in the context of previous efforts.

The company's efforts have begun to pay off, with operating profit increasing from £12m to £144m in the six months to September 2012, on the back of a surge in demand for sending parcels as consumers switch their buying habits to online retailers.

A BIS spokesman declined to comment.

18.56 | 0 komentar | Read More

Energy Bills 'Set To Rise' Ofgem Warns

Britain's fossil fuel energy supplies are on a rollercoaster and heading downhill fast, according to the head of industry regulator Ofgem.

Chief executive Alistair Buchanan issued the stark warning to consumers and businesses to prepare for higher prices as power plants close, foreign gas supplies shrink and increasing demand tightens the British energy market.

Mr Buchanan, writing in The Daily Telegraph, said: "We have to face the likelihood that avoiding power shortages will also carry a price.

"If you can imagine a ride on a rollercoaster at a fairground, then this winter we are at the top of the circuit and we head downhill - fast.

"Within three years we will see reserve margin of generation fall from below 14% to below 5% - that is uncomfortably tight."

Mr Buchanan also said that in addition to no new nuclear or clean coal capacity increase, there would be no new "carbon capture" before 2020.

As a result, gas will increase as an energy source for power stations - from 30% now up to a possible 70% in the next seven years.

But he said Ofgem would not let companies take advantage of consumers.

Renewable energy still only makes up a small portion of the UK energy mix

"Just when we need more gas, world demand for gas is set to rise while our own supplies are predicted to fall by another 25% by 2020," Mr Buchanan explained.

The Government said it was acting to prevent any possible "looming energy gap".

But a spokesman for the Department of Energy and Climate Change (DECC) said: "Our energy system faces significant challenges over coming years, including the closure of around one-fifth of our ageing power stations.

"So as Ofgem highlights, we cannot afford to be complacent and may face a looming energy gap.

"The reforms we are making to the electricity market through the Energy Bill and through our gas generation strategy are aimed at plugging this gap in order to keep the lights on.

The DECC spokesman added: "We have legislated to introduce a capacity market that will help guard against blackouts and ensure there is sufficient supply when margins get tight.

"We are opening up the electricity market to incentivise a record £110bn of private sector investment in new clean power generation - in renewables, new gas, nuclear and carbon capture and storage.

"We can't put all our eggs in one basket, we need a diverse energy mix - this is the best solution to guard against high price of wholesale gas which drives up consumer bills."

18.56 | 0 komentar | Read More

Lloyds Fined £4.3m For Delayed PPI Payouts

Lloyds Banking Group has been fined £4.3m by the City watchdog for failings that resulted in up to 140,000 customers receiving delayed payment protection insurance (PPI) redress.

The Financial Services Authority (FSA) fined three firms owned by Lloyds over "failings in their systems and controls".

The three firms punished by the FSA over their behaviour are Lloyds TSB Bank, Lloyds TSB Scotland and Bank of Scotland, known collectively as LBG.

The FSA said: "Between May 2011 and March 2012, LBG sent 582,206 decision letters to PPI complainants agreeing to pay redress to them.

"FSA rules state that redress must be paid promptly and, in line with that, LBG aimed to make payment within 28 days of these decision letters.

"However, a series of failures at LBG meant that not all customers were paid redress within that time frame."

The customers were not paid redress within 28 days of receiving a decision letter and almost 9,000 had to wait more than six months for their compensation, the FSA said.

The payments were identified as a result of aggrieved customers calling to chase payment from Lloyds and media attention highlighting the plight of affected customers.

The FSA added: "Further, when customers telephoned LBG to enquire about the non-receipt of expected PPI redress payments, deficiencies in its process meant LBG was unable to fast-track the payment to the customer, inform them when payment would be made, or explain why it had been delayed."

Britain's high street banks have been hit by massive claims over PPI mis-selling.

As a result, the banks have made provision for more than £10bn being paid out to those affected customers.

Approached by Sky News after the FSA announcement was made, Lloyds said: "When we took the lead in 2011 to compensate customers on PPI, we had not fully anticipated the volume of complaints to be processed at the outset and experienced some administrative errors as we scaled up our systems and processes.

"We acknowledge that this led to some customers not being compensated on time and we apologise to those customers whose payments were delayed.

"It is important to note that almost all customers who were due redress during the review period have now been paid in full and, as the FSA notes, we have taken steps to ensure customers have not been financially disadvantaged."

18.56 | 0 komentar | Read More

RBS Considers 'Hybrid' Branches Sale

By Mark Kleinman, City Editor

Royal Bank of Scotland (RBS) is mulling a hybrid sale of more than 300 branches to private equity firms and institutional investors in an attempt to jump-start the flagging auction.

The state-backed lender is drawing up proposals to sell a minority stake in the branch network to an outside investor before attempting to list the business on the stock market, according to insiders.

Under the plan, one or more of the private equity firms currently showing an interest in acquiring the branches - which include Apollo Management and JC Flowers - could buy a stake of around 20% in the business.

The idea could offer RBS greater certainty that it can achieve a full sale of the branch network, which it is supposed to have completed by the end of the year under a deal with the European Commission.

Bidders expect to be told about RBS's preferred option for disposing of the network at around the time the bank reports full-year results next week.

The network, which RBS has codenamed Project Rainbow, has to be sold as part of the bank's state aid package that saw it rescued with £45bn of taxpayers' money in 2008.

It comprises RBS branches in England and a handful of NatWest branches in Scotland.

Sky News revealed last month that a group of City institutions including Schroders and Threadneedle Investments were exploring a bid for the branches.

That project would not be incompatible with the sale of an initial minority stake to one or more private equity groups, people familiar with the situation said.

RBS had lined up the sale of the Rainbow business to Santander UK, but that deal collapsed last autumn amid recriminations about the state of the branches' associated IT systems.

The sale of the branch network is one of many challenges facing RBS and its chief executive, Stephen Hester.

David Cameron, the Prime Minister, told newspapers today that he would like the bank to accelerate reforms as the Government prepares to sell its stake in the coming years.

RBS executives interpreted that as a signal that it should shrink its investment bank further, although one pointed out that it had already shed thousands of jobs and reduced the size of its balance sheet by hundreds of billions of pounds.

RBS declined to comment.

18.56 | 0 komentar | Read More

Reader's Digest Files For Bankruptcy Over Debt

The publisher of Reader's Digest has filed for bankruptcy as it seeks to cut its debt burden of $465m (£300m).

RDA Holding Company, which owns the 91-year-old magazine, launched the action in a New York court on Sunday.

It is the second time in nearly four years that the venerable journal, once a mainstay in doctors' surgeries and grandmothers' homes, has sought to stave off closure.

The publisher has struggled to remain relevant in the digital age amid a shift by consumers from print to electronic media.

It has also tried to sell-off non-core elements as it tries to focus on its US market.

"We have had an ongoing process to simplify and rationalise our international business by licensing our local markets to third parties, to other publishers, to other investors," Reader's Digest boss Robert Guth said.

"And that has been a big part of our effort to streamline the company and bring in proceeds to bring down debt."

The eponymous title has relied on a lucrative subscription customer base and is estimated to be read by 26 million people, with 55 million copies sold annually in North America.

The headquarters of Reader's Digest in New York state

The firm publishes 75 titles worldwide, including 49 editions of the digest and three other titles.

The owners of Reader's Digest first floated the firm in 1990 and it was bought by private equity firm Ripplewood Holdings in 2007 for $1.6bn (£1bn), which included some $800m in debt.

The purchasers were subsequently hit by a massive drop in advertising spends and subscriber drop off amid the global financial crisis.

The Chapter 11 filing was made in the US bankruptcy court in White Plains. The firm listed assets of more than $1bn (£645m) and debts of around $1bn ahead of equity restructuring agreed with Wells Fargo bank.

The final outstanding debt of $465m is forecast to be reduced by more than 80% to $100m by the end of the bankruptcy.

Chapter 11 allows US firms to reorganise under bankruptcy laws when it is unable to pay its creditors or service its debt repayments and empowers the trustee to operate the business.

If a separate Chapter 11 trustee is not appointed the debtor acts as trustee of the business.

As it seeks new life in the digital domain, the company said there had been over 450,000 downloads of its iPad app and cited its high ranking on the Kindle as positive signs.

"The much more modest debt level puts us in a position to continue to really execute these plans and push these brands forward well into the future, so it's a very good new lease on life," Mr Guth said.

"The Chapter 11 process, which will facilitate a significant debt reduction, will enable us to continue to redefine our business by focusing our resources on our strong North American publishing brands, which have shown a new vitality as a result of our transformation efforts, particularly in the digital arena."

18.56 | 0 komentar | Read More

Heathrow Profits Soar Amid Fee Hike

Heathrow Ltd, the airport operator formerly known as BAA, has posted an 11.6% rise in full year profits amid a rise in airline charges.

Earnings hit £1.26bn from revenue of £2.46bn during 2012 following an average 12.5% increase in airport tariffs since April 2011.

The company said passenger traffic at London's Heathrow, Europe's busiest airport, rose 0.9% to 70 million during the year, while traffic at Stansted fell 3.2% to 17.5 million.

Heathrow is operating at close to capacity and it warned this would limit the UK's ability to trade with emerging economies. There were 471,341 flights during 2012, just below its limit of 480,000 a year.

The group, owned by Spain's Ferrovial, last week announced a £3bn five-year investment plan for Heathrow, which could see passengers facing a rise in ticket prices.

The proposals include the opening of the new Terminal 2 next year, improved check-in and baggage facilities and more customer service training for staff.

The airport needs regulators to approve the plan, which will see the fees it charges airlines to use the airport rise over the period 2014 to 2019.

If approved, the charges would increase from the equivalent of £19.33 per passenger for 2012/13 to as much as £27.30 in 2018/19 - extra costs airlines have opposed.

Heathrow has been at the centre of a debate on the UK's aviation future, with a Government review led by Sir Howard Davies due to report in 2015 on the country's airport capacity amid opposition to the prospect of a third runway.

It is examining whether Heathrow or an alternative site would best serve the UK's needs.

18.56 | 0 komentar | Read More

Tax: HMRC Sends Out 850,000 Penalty Notices

By Pete Norman, Sky News Online

The Tax Office is sending nearly one million penalties to taxpayers who failed to file self-assessment returns by the end of January, Sky News has learned.

By February 20, HM Revenue and Customs (HMRC) will have completed a mail-out of £100 fixed fines to around 850,000 taxpayers.

The letters are being sent to those registered for self-assessment (SA) but who failed to file personal 2011-12 tax year returns online by January 31.

The penalty payments will boost HMRC coffers by around £85m. The late filing figure is down on the penalty number for the 2010-11 tax year.

But the final figure is expected to grow significantly as those who fail to pay the penalty and file returns by the three-month cut-off incur additional daily fines.

Around 60,000 late tax returns have already been lodged between February 1 and 15 - but those taxpayers are still liable to pay the £100 penalty.

An HMRC spokesman told Sky News: "Anyone who hasn't yet sent their 2011-12 tax return to HMRC will have already incurred a £100 late-filing penalty.

"Non-filers have to file online now to avoid further penalties or contact us to ask to be taken out of self-assessment, and provided they meet the criteria, we will take them out of SA and cull any penalties incurred."

The Tax Office expects to have finished processing all 850,000 penalty letters by February 20.

Most of those hit by the late filing penalty are expected to receive their letters within seven days.

HMRC has so far received approximately 9.76 million returns, both paper and online, for the 2011-12 tax year.

In the previous tax year, 80.9% of the 10.5 million SA taxpayers filed on time for the January cut-off.

Taxpayers who fail to file returns after three months are hit with a daily £10 fine up to a maximum of £900, along with the initial £100 fine.

Those who allow the filing delay to extend beyond six months are also hit with another £300 fine or 5% of the tax due, whichever is higher.

HMRC is then entitled to hit those who fail to file within 12 months to a tax demand up to 100% of the tax due instead.

18.56 | 0 komentar | Read More

Home Ownership '£1,440 Cheaper' Than Renting

The cost of buying a home has become £1,440 a year cheaper than renting, according to new research.

Halifax found the average monthly costs associated with buying a three-bedroomed house stood at £621 in December, which is £120 cheaper than the typical monthly rent of £741 on a similar property.

The latest figures are an about-turn from December 2008, when buying a home was £217 a month more expensive than renting.

In recent years the gap has widened amid house price falls and record low interest rates which have made borrowing cheaper for those who can get access to a mortgage.

Meanwhile, increased demand in the rental sector from those struggling to raise a deposit or meet lenders' borrowing criteria has pushed up rental costs.

Home buying costs have declined by one third (34%) over the past four years, while average monthly rents have been pushed up by 14%, the study found.

The gap between buying and renting has widened by £21 a month over the past year. At the end of 2011, the monthly cost of home buying was £99 lower than renting.

Buying was found to be more affordable than renting in every UK region.

Buying is most affordable compared with renting in London, where the monthly difference is £193, while in Yorkshire and the Humber buying is just £1 a month cheaper than renting, Halifax found.

Martin Ellis, housing economist at Halifax, said that while the "financial attractiveness" of buying a home has improved in recent years, the tough economy is still holding would-be home buyers back.

He said: "Concerns over job security and raising a deposit are the main obstacles to people buying their own home. However, it is worth noting that once home buyers are on the first rung of the ladder, their monthly costs are notably lower."

18.56 | 0 komentar | Read More

Osborne Plays Down Talk Of RBS Share Giveaway

By Katie Stallard, Moscow correspondent

George Osborne has played down claims he plans to give British taxpayers up to £400 in Royal Bank of Scotland shares before the next election.

The Chancellor, speaking to Sky News at a G20 meeting in Moscow, said it was too early to consider handing out shares and returning the bailed out bank to the private sector.

His intervention came after reports that Economic Secretary to the Treasury Sajid Javid was exploring plans to sell the Government's stake by 2015.

The Chancellor insisted a sell-off could not happen soon because it would mean a huge loss to the taxpayer, but he notably did not rule out such a move.

Mr Osborne said: "It is just a premature discussion about what to do with the shares when we get to the point where they are worth what the country paid for them.

"Gordon Brown bought them at a price that they are not worth today and we have got to get the Royal Bank of Scotland to a point where it is worth what the taxpayer paid.

"Then we can have a no doubt big national discussion about what to do with the shares and how to return it to the private sector."

RBS was bailed out with £45bn in public funds in 2008 at the height of the financial crisis and is now 81% owned by the state.

Royal Bank of Scotland is 81% state-owned after a £45bn bailout

In Moscow for the finance ministers' meeting, Mr Osborne also renewed his call for a global tax crackdown and issued a warning about international "currency wars".

There is increasing concern about competitive devaluations between major exporting economies as they struggle to recover from the global downturn.

Japan has been criticised for weakening the Yen, which is down 15% against the dollar since September, to give its exporters a price advantage in the short term.

"These so-called currency wars are what in previous decades have led to huge problems in the international economy," the Chancellor said.

"I think people will be pleasantly surprised by the strong statement that you'll see from the G20 today that currency is not a tool of economic warfare.

"What we want to do in our own countries is put our own houses in order and make our economies competitive and our currencies will reflect that rather than being used as a weapon to achieve it."

On tax, Mr Osborne said current rules are out of date and that Britain would lead efforts to stop companies shifting their profits around the globe to avoid large bills.

"The international rules on taxes haven't kept pace with changes in the world economy, changes in the way we shop online and use the internet so we're taking action with countries like France, Germany, and the United States," he said.

"Britain is leading the way in getting a set of rules that mean that businesses can come to Britain, and Britain is one of the best places to do business, but also when they come to Britain  - they pay their taxes.

"It means that big international companies that may have their headquarters in one country, their shops in many other countries, may locate their so-called intellectual property in another country altogether, perhaps a low tax place like Bermuda or the Cayman Islands.

"They'll find that a more difficult arrangement because the international tax rules will change and they will have to pay taxes much more where the profits are generated - that's the objective."

But he acknowledged  that Britain could not act alone and that they needed global consensus to make it happen.

Just getting agreement on the need for a crackdown from the 20 countries represented in Moscow on Saturday would represent significant progress in itself.

Mr Osborne said: "There is no single law Britain can pass that will make this happen.

"This has to be done internationally and so we are working with other countries to make sure it does happen and that the tax laws which were actually created about a 100 years ago are appropriate for an economy of the 21st century rather than the 20th century."

18.56 | 0 komentar | Read More

Michael Fallon Eyes £65bn Kazakh Trade Deals

By Mark Kleinman, City Editor

Michael Fallon, the Business Minister, will fly to Kazakhstan on Sunday in an attempt to help British companies win a share of $100bn (£65bn) in new trade deals.

Mr Fallon, who was promoted in last autumn's Cabinet reshuffle, will visit resource-rich Kazakhstan aiming to bang the drum for companies with a big presence there, including BG Group, the gas producer, and Rio Tinto, the mining group.

Trade ties between Britain and Kazakhstan are relatively modest in scale, with UK exports to Kazakhstan in 2011 standing at £530m, and UK imports just £459m.

British companies have won $7bn (£4.5bn) in contracts in Kazakhstan in the last ten years, but Mr Fallon believes the opportunity is much more substantial than that, with up to 15 times that sum available in contracts during the next decade.

"The French and the Germans are already there, on the ground, and we have to be relentless in pursuing opportunities for British trade," he said.

His trip will be the first by a business minister since the last general election to the central Asian country.

During talks with ministers and government officials, Mr Fallon is also expected to discuss the operations of GlaxoSmithKline and HSBC, which also have a presence in Kazakhstan.

Tens of millions of Britons do already have an exposure to the Kazakh economy through investments made by pension funds in companies such as ENRC, the FTSE-100 miner.

Mr Fallon's trip to Kazakhstan will come in the same week that David Cameron travels to India accompanied by the biggest-ever business delegation to visit the country.

The Prime Minister is expected to promote access to the vast Indian market for British retailers as well as discuss a string of major defence and aerospace deals.

His visit takes place amid deepening concerns that the UK's trade ties with India are faltering, placing the Coalition's target of doubling trade by 2015 in doubt.

18.56 | 0 komentar | Read More