Official: Average Earnings Outpace Inflation

Average UK earnings increased by 1.7% in the year to February, above the inflation rate of 1.6%, according to official figures.

The Office for National Statistics (ONS) said it was the first time since spring 2010 that the consumer price index for inflation had not exceeded pay increases.

It said pay increases averaged 2% in the private sector and 0.9% in the public sector.

It added the number of people out of work in the UK fell by 77,000 between December and February.

The unemployment rate of 6.9% is the lowest for five years.

Business Secretary Vince Cable said: "Throughout the economic crisis, and now in the recovery, our labour market has shown itself to be resilient and flexible.

"These latest employment figures show that conditions are continuing to improve rapidly."

The improving statistics have eroded Labour's stance on the economic policies at the heart of the coalition Government.

Sky News Economics Editor Ed Conway said: "There are likely to be quibbles with the data and the timing, and many of them are perfectly legitimate.

"What's less in doubt is that wages and inflation are converging meaningfully for the first time since 2010.

"That implies the squeeze on incomes is in the process of coming to an end."

He added: "By the same token, families have had to withstand a whole five-year period of falling real wages, so in real terms they remain significantly less well-off than they were before the crisis.

"That damage will take some years to mend."

The ONS said the total jobless in the period stood at 2.24 million, with a record 30.3 million people in work.

A total of 691,000 people have gained employment in the last year, taking the rate to 72.6%.

It added the number of people claiming Jobseeker's Allowance last month fell by 30,400 to 1.14 million.

Meanwhile, the number of people in Britain defined as economically inactive, including those caring for relatives or withdrawn from the job market, fell by 86,000 in the latest quarter to 8.8 million.

Those out of work for more than 12 months was also cut by 32,000, down to 807,000.

The jobless figure for 16 to 24-year-olds has also continued to fall, down by 38,000 to 881,000 - the lowest for five years.

The ONS said 1.42 million people are working part-time on the basis of not being able to find full-time employment.

It was a drop of 17,000 over the three months, although still 10,000 higher than the same time last year.

Esther McVey, the minister for employment, told Sky News: "More young people are in work, more women are in work, wages are going up and more and more businesses are hiring.

"It's a credit to them that Britain is working again."

12.07 | 0 komentar | Read More

Co-op To Unveil £2.5bn Losses As Crisis Deepens

By Mike McCarthy, Sky News Correspondent

The Co-operative Group is set to announce losses of up to £2.5bn after a series of "catastrophically inept decisions".

It is coming under increasing pressure to reform as it faces the biggest crisis in its history.

Former city minister Lord Myners, who was brought in help push through reform, has accused managers of making catastrophically inept decisions.

However he is is set to step down amid internal resistance to his plans.

One Co-operative insider told Sky News he was in doubt where responsibility lay for the group's latest ills.

Jim Lee, an active member for 25 years, said:  "The blame lies ultimately with the board.

"Clearly we have to look again at how that board came to be put together.

"Clearly we have to look at the personnel on that board and clearly we have to change those things in the future."

Elections to the board are based on a complex three-tier structure with area committees and regional boards.

Critics say it is an outdated system which is ill-equipped to function in a globalised 21st century business environment.

There has been no evidence so far of Co-operative customers switching to other brands, but the series of crises do seem to be affecting confidence.

Outside one Co-op bank in the Lancashire town of Rochdale, where it was founded in the mid-19th century, customers told Sky News they were growing concerned.

One woman said:  "I've always been a Co-op member. My mother was and my grandma was and we've always dealt with the Co-op."

But asked if she would consider banking elsewhere, she said:  "Well we've got money in other places but it just depends how it goes.  I'll be watching - let's put it that way."

Financial analyst Brenda Kelly said apparent differences at the top of the Co-operative Group were hampering the chances of recovery.

"To reform the Co-op will take time, but ultimately having agreement within Co-op itself will help shareholders get some confidence that they might get back on the front foot."

12.06 | 0 komentar | Read More

House Price Concern As Wider Inflation Eases

There has been more good news for household budgets with confirmation that price growth eased further in March though property costs accelerated.

The Office for National Statistics (ONS) charted a fall in the Consumer Prices Index (CPI) measure of inflation to an annual rate of 1.6% - down from 1.7% in the previous month - which marked a new four-year low.

This was driven, the ONS said, by falling pressures from fuel costs.

Petrol prices were unchanged between February and March

Furniture and clothing also made downward contributions - with discounting in women's fashion leading the way.

Upward contributions to inflation came from factors including higher bills for overnight hotel stays and more expensive alcoholic spirits.

The figures raised hopes that a milestone in the UK's economic recovery could be reached as early as Wednesday, when the ONS releases the latest unemployment and wage statistics.

Many economists believe they will show pay packets rising at a faster level than inflation.

George Osborne has welcomed easing inflation figures

Earnings have not increased at a higher rate than inflation since a brief spike in March and April 2010 and have not consistently been improving since 2008.

However, separate ONS figures on Tuesday pointed to a steep rise in annual house price inflation of 9.1% over the 12 months to February.

It represented the biggest increase since June 2010 and was up sharply on the 6.8% rise measured in January as London's rapid price growth started to be mirrored outside the capital.

The performance renewed fears the UK housing market is at risk of overheating though policymakers have repeatedly pledged to remain vigilant.

The housing charity Shelter said: "Today's figures are yet more evidence that house prices are spiralling out of control.

"Apart from the lucky few who can rely on the bank of mum and dad, our runaway housing market is forcing a generation to watch a home of their own become an increasingly distant dream, no matter how hard they work or save."

European economist at Schroders, Azad Zangana, told Sky News he expected the Bank of England to intervene on house price inflation in the summer.

The TUC leader Frances O'Grady says a cost of living crisis remains

The wider inflation numbers - which strip out housing costs - were welcomed by the Chancellor.

George Osborne said: "Lower inflation and rising job numbers show our long term plan is working, and bringing greater economic security."

The general secretary of the union organisation the TUC, Frances O'Grady, said workers remained £40-a-week worse off than before the financial crisis.

UK economist at Scotiabank, Alan Clarke, said the latest CPI reading was likely to mark the low point in UK inflation as a rebound is likely to come from the impact of Easter holidays on airfares.

However, he saw real-terms wage growth accelerating to counter that effect.

He said: "At the moment, consumer spending growth is being boosted by falling savings and rising borrowing.

"If real incomes continue to improve over the coming quarters (as we expect), then spending growth will be increasingly underpinned by solid fundamentals rather than the feel-good factor associated with a booming housing market."

12.06 | 0 komentar | Read More

Imperial Tobacco To Close Nottingham Factory

Up to 900 jobs are to be lost under plans by Imperial Tobacco to close factories in Nottingham and Nantes in France.

The company said it wanted to shut both its production plant and distribution centre in Nottingham, which together employ around 540 people - almost a third of its UK workforce.

The move would represent an end to cigarette production in the UK.

Its statement blamed "declining industry volumes in Europe, impacted by tough economic conditions, increasing regulation and excise and growth in illicit trade".

Imperial, whose brands include Golden Virginia and Lambert & Butler, said the Nottingham factory has capacity to make 36 billion cigarettes a year but will only produce 17 billion in 2014.

It said production would be moved to other European factories and distribution outsourced.

The Nantes plant, which employs 320 staff, would suffer the same fate while its research facility at Bergerac was also under threat.

The company said it was working on the proposals with unions.

Chief executive Alison Cooper said: "These projects are an essential part of securing the sustainable future of the business.

"The prospect of job losses is always regrettable and we will be doing all we can to support employees and ensure that they are treated in a fair and responsible manner."

The company, which has 46 manufacturing sites worldwide, closed a cigar factory in Bristol in 2010.

12.06 | 0 komentar | Read More

Barclays Hires Gillies As New Board Pay Chief

By Mark Kleinman, City Editor

Barclays is to take an important step towards defusing an ongoing pay row with shareholders, with the appointment of a City heavyweight to chair its board remuneration committee.

Sky News has learned Crawford Gillies, who holds directorships at Standard Life, Scottish Enterprise and Mitie Group, will join Barclays' board as a non-executive director in the coming weeks.

Mr Gillies, who will immediately become a member of the bank's remuneration committee, will take over its chairmanship later this year from Sir John Sunderland, sources said.

His appointment is expected to be announced to the stock market on Tuesday, just nine days before a potentially stormy annual meeting at which Barclays is braced for significant opposition over pay and bonuses.

It will follow weeks of recriminations from major Barclays investors, who were infuriated by the bank's decision to increase its bonus pool by 10% to £2.4bn in February despite a slide in pre-tax profits.

The pay hike was described by Barclays' chief executive Antony Jenkins as being necessary to prevent a "death spiral" of defections of leading investment bank employees to rivals.

Shareholders were especially annoyed by the move because the bank was forced to raise almost £6bn through a rights issue last year.

City sources said Barclays' search for a new pay committee chief had been initiated last autumn, with Sir John now entering his tenth year on the board, and that it had taken several months to identify the most appropriate candidate.

A staunch supporter of the lavish pay packages enjoyed by Bob Diamond, Mr Jenkins' predecessor, Sir John will seek re-election at this month's AGM but is expected to retire from the board later this year.

He will continue to oversee the search for Sir David Walker's successor as chairman in the meantime, a City insider said.

Some influential shareholder advisory groups, such as Pirc, have recommended opposing Sir John's re-election, while Glass Lewis, a proxy voting adviser, has urged opposing the non-binding pay report.

Separately, the Association of British Insurers has issued so-called 'amber-top' notices on both the 2013 report and Barclays' future pay policies, which means that shareholders should consider carefully before deciding how to vote.

Barclays hopes that the appointment of Mr Gillies will persuade floating investors that it is serious about reducing pay levels over the long term.

Mr Gillies will assume responsibility for the 2014 remuneration round, which will include role-based allowances for hundreds of Barclays staff as the bank seeks to cope with new European Union pay rules.

Sky News has also learned that Jupiter Asset Management, which holds a small stake in Barclays, is among the institutional shareholders expected to vote against the directors' remuneration report.

Some of these could, however, be persuaded to rethink in the light of Tuesday's news.

12.06 | 0 komentar | Read More

Economy Fragile As High Street Spending Falls

By Gerard Tubb, North of England Correspondent

A fall in high street spending for the second month in a row has underlined the fragile nature of the long-awaited economic recovery.

Figures from the British Retail Consortium show like-for-like sales dropped by 1.7% in March compared with the same period in 2013, with the later timing of Easter this year blamed for the fall.

Online sales rose 12.8% last month, helped by the lack of Easter holidays, which tend to drive consumers out of the house and to the shops.

Meanwhile, for the three-month period to March, food sales were down 2.7% on the year before.

The figures come a few days after economic forecasters EY ITEM Club predicted consumer spending will lead the recovery in 2014.

They expect wages to rise in real terms for the first time in six years, with pay up by 1.7% and inflation falling to 1.6%.

Consumer spending is predicted to drive the economic recovery

The conflicting reports are echoed at Browns department store in York where managing director Nick Brown says he is selling more big ticket items like furniture.

But customers are increasingly taking the option of interest free credit which reduces profit margins.

Many shoppers in the store said they did not feel any better off than they did this time last year.

Economist Nida Broughton from the Social Market Foundation warned consumers are still suffering after losing a decade of growth.

"Real wages have taken a cut of 7% since 2008 so we're nowhere near where we were.

"We're still poorer than we were. In fact real wages are at the level they were at in 2004, so we've got a lost decade to make up for."

12.06 | 0 komentar | Read More

Wet February Wipes £270m From Building Sector

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

12.06 | 0 komentar | Read More

Osborne Jail Threat For Offshore Tax Evaders

Wealthy people who stash money in offshore accounts to evade paying tax could be sent to jail, the government has said.

Chancellor George Osborne said new proposals could mean that people who hide their cash overseas could face criminal charges even if they did not intend to evade tax.

Mr Osborne, who is consulting on the new powers, said there would be "no safe haven" for anyone who cheats the Exchequer.

It comes after concerns that some wealthy people are costing the government millions of pounds a year by keeping money away from the glare of UK authorities.

HM Revenue & Customs will have the power to prosecute people who do not declare their foreign income, regardless of whether they intend to avoid payment.

Previously, in order to earn a conviction with a jail sentence, prosecutors had to show that individuals intended to avoid paying tax on foreign income.

Mr Osborne, who has been at the International Monetary Fund meeting in Washington, told the Financial Times: "We are changing the balance of the law so the burden of proof falls on those who are hiding their money offshore and we don't have to prove that they intended to do so."

He added: "It is totally unacceptable for people not to pay the tax that is due and the message will be clear now with this new criminal offence that if you're evading tax offshore, there is no safe haven."

HM Revenue and Customs (HMRC) has been criticised for not prosecuting enough tax evaders.

Sky News' Ecomonics Editor Ed Conway said there has been much international discussion about what can be done to clamp down on people who hide money overseas.

David Cameron has previously announced a crackdown on so-called shell companies to help combat tax evasion and corruption.

The new criminal offence and sanctions are expected to come into effect next year, but many are expected to contribute to the consultation before that can happen.

The announcement was greeted by dismay from some, with critics suggesting the law could result in people being jailed when they were genuinely ignorant of the law.

Bill Dowdell, head of tax at Deloitte, told The Times: "It's horrifying. People should not be put in prison unless you can prove intent.

"I'm shocked to find that an offence which could lead to a prison sentence could be decided on a strict-liability basis."

12.06 | 0 komentar | Read More

Wet February Wipes £270m From Building Sector

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

12.06 | 0 komentar | Read More

Osborne Jail Threat For Offshore Tax Evaders

Wealthy people who stash money in offshore accounts to evade paying tax could be sent to jail, the government has said.

Chancellor George Osborne said new proposals could mean that people who hide their cash overseas could face criminal charges even if they did not intend to evade tax.

Mr Osborne, who is consulting on the new powers, said there would be "no safe haven" for anyone who cheats the Exchequer.

It comes after concerns that some wealthy people are costing the government millions of pounds a year by keeping money away from the glare of UK authorities.

HM Revenue & Customs will have the power to prosecute people who do not declare their foreign income, regardless of whether they intend to avoid payment.

Previously, in order to earn a conviction with a jail sentence, prosecutors had to show that individuals intended to avoid paying tax on foreign income.

Mr Osborne, who has been at the International Monetary Fund meeting in Washington, told the Financial Times: "We are changing the balance of the law so the burden of proof falls on those who are hiding their money offshore and we don't have to prove that they intended to do so."

He added: "It is totally unacceptable for people not to pay the tax that is due and the message will be clear now with this new criminal offence that if you're evading tax offshore, there is no safe haven."

HM Revenue and Customs (HMRC) has been criticised for not prosecuting enough tax evaders.

Sky News' Ecomonics Editor Ed Conway said there has been much international discussion about what can be done to clamp down on people who hide money overseas.

David Cameron has previously announced a crackdown on so-called shell companies to help combat tax evasion and corruption.

The new criminal offence and sanctions are expected to come into effect next year, but many are expected to contribute to the consultation before that can happen.

The announcement was greeted by dismay from some, with critics suggesting the law could result in people being jailed when they were genuinely ignorant of the law.

Bill Dowdell, head of tax at Deloitte, told The Times: "It's horrifying. People should not be put in prison unless you can prove intent.

"I'm shocked to find that an offence which could lead to a prison sentence could be decided on a strict-liability basis."

12.06 | 0 komentar | Read More