CBI: UK growth slowing but healthy : BBC

The UK economy is still growing strongly, but not at the pace seen in recent months, the Confederation of British Industry (CBI) says.

The group said its growth indicator for March showed the economy growing at its slowest rate in eight months.

But the CBI said growth remains above average, as the recovery in the UK economy continues to do well.

It added the outlook for the next three months was positive, with the service sector expected to boost GDP.

The CBI based its findings on a survey of 622 manufacturing, retail and service businesses.

It found the slowdown in output growth was largely due to the retail, business and consumer and professional services sectors.

Growth pick up
Anna Leach, CBI’s head of economic analysis, said: “Although growth has slowed from record levels last month, it remains strong, and firms are optimistic it will pick up again in the next quarter.

“As this year progresses, we expect further increases in business and consumer confidence. Productivity and earnings should also start to recover.

“However, global developments continue to pose a risk to UK growth, not least the risk of renewed problems in the eurozone.”

Meanwhile, a survey of 8,737 small businesses carried out at the end of last year has indicated that Britain’s small businesses are feeling increasingly confident.

Two-thirds of the firms polled by the Federation of Small Businesses (FSB) said they were planning to expand in the next 12 months.

FSB members aged 35 or under also reported increased profits, with 43% saying they had seen growth in 2013.

 

H&M Q1 profit misses forecast as heavy investment weighs Reuters

STOCKHOLM (Reuters) – Hennes & Mauritz (STO:HM B), the world’s second biggest fashion retailer, posted weaker-than-expected first-quarter profits as it invested heavily in areas such as online services and faced a still-challenging economic environment in many markets.

The Swedish budget fashion group posted a pretax profit of 3.5 billion crowns (£326 million), well short of average analyst forecasts for 3.8 billion and below even the lowest estimate in a Reuters poll of analysts.

The gross margin came in at 54.9 percent, below a forecast 55.3 percent and down from 60.8 percent in the previous quarter.

H&M, which had already reported quarterly revenues for the December through February quarter, said sales rose by 12 percent during most of March in local currencies after rising 11 percent in February.

“Sales have got off to a good start with an increase of 12 percent in local currencies in the first quarter in a fashion retail market that in many places is still characterised by a challenging macroeconomic situation, and we have continued to gain market share,” Chief Executive Karl-Johan Persson said in a statement.

It said substantial long-term investments in IT and online – it launched online services in France this month – weighed on its results in the quarter.

An unusually cold and snowy winter in the United States disrupted economic activity at the end of 2013 and the start of this year, weighing on the retail sector.

The first quarter is traditionally the weakest quarter for the retailer.

H&M is targeting Australia, the Philippines and India as its new markets this year and it plans to roll out online services in Spain, Italy and China.

It said its recently launched sports line was well received in selected H&M stores while COS and & Other Stories will open stores in several new countries this year, including the United States.

Ukraine: IMF Agrees $18bn Bailout Fund Sky News

 

The International Monetary Fund has agreed rescue funds of up to $18bn (£10.8bn) for Ukraine in return for strict economic reforms.

More follows…

Sources : Yahoo Finance

China’s rare earth trade limits break global rules, WTO says AFP

China has broken the rules of global commerce by restricting exports of rare earths, tungsten and molybdenum, a move that benefited domestic industries, a World Trade Organization panel said on Wednesday.

A WTO disputes settlement panel said that Beijing’s deployment of export duties and quotas, plus limits on who could trade in what are key raw materials for making electronic goods, skewed global commerce unfairly against fellow nations.

China accounts for 95 percent of the global production of rare earths, a term covering 18 metals which are vital for many industrial and high-tech processes such as the production of smartphones and low-energy light bulbs.

The panel, made up of independent trade and legal experts, largely backed a WTO complaint filed by the United States, the European Union and Japan.

China had fiercely denied the plaintiffs’ claims that the measures it imposed in 2011 all about market advantage for domestic producers who had privileged access to the raw materials.

Beijing insisted that its goal was to conserve its exhaustible natural resources and reduce pollution caused by mining, and argued that it was allowed to do so under WTO rules.

But the WTO panel ruled that permitted exceptions to rules banning trade-restraining measures were “not available to justify a breach of the obligation to eliminate export duties”.

“Under the circumstances, China’s imposition of the export duties in question was found to be inconsistent with China’s WTO obligations,” it said.

The panel rejected China’s use of export quotas, saying that they were “designed to achieve industrial policy goals rather than conservation”.

“‘Conservation’ does not allow members to adopt measures to control the international market for a natural resource, which is what the challenged export quotas were, in the view of the panel, designed to do,” it said.

“The overall effect of the foreign and domestic restrictions is to encourage domestic extraction and secure preferential use of those materials by Chinese manufacturers,” it added, saying that such measures could “not be justified”.

China also restricts the right of companies to export such raw materials, but the panel found that Beijing had “not satisfactorily explained” why such measures could be permitted.

“Accordingly, the panel concluded that China’s trading rights restrictions breach its WTO obligations,” it said.

The Geneva-based WTO polices respect for global trade accords in an effort to offer its 159 member economies a level playing field.

Its disputes settlement body has the power to authorise retaliatory trade measures against a country found at fault and which fails to fall into line.

Sources : Yahoo Finances.

Britain sells 7.8% of Lloyds bank for £4.2 bn AFP

The government has sold a second block of its shares in Lloyds Banking Group overnight raising £4.2bn.

Lloyds shares fell almost 5% in early trading, falling to 75.5p, the price at which the 7.8% block was sold.

The sale cuts the government’s holding in the bank to 24.9%, down from an original 39% .

The price remains above the average 73.6p a share the government paid to rescue the bank in the autumn of 2008.

The sale price is only 0.5p a share more than the price achieved in September when it sold a 6% stake raising £3.2bn.

Profits
The chancellor said the sale was “good value” for the taxpayer, and the money would be used to cut the national debt.

“It is another step in repairing the banks, in reducing our national debt and in getting the taxpayer’s money back,” George Osborne said.

Last month, Lloyds reported profits of £415m for 2013 against losses of £606m the year before – its first bottom-line profit since 2010.

The government originally spent about £66bn in bailing out Lloyds and RBS in the 2008 financial crisis.

UKFI is expected to try to sell off all the remaining shares it holds in Lloyds before the general election in 2015.

Sources : yahoo finance

Bank branches to close in overhaul : Sources BBC

Clydesdale and Yorkshire Banks are to close 28 “unsustainable” branches and invest £45m in customer improvements under plans to reshape their retail banking operations.

Clydesdale and Yorkshire, part of National Australia Bank (NAB), expect to save £5m by the branch closures.

The banking group said that frontline jobs would be safeguarded.

New posts are being created at their busiest branches, while support will be given to displaced branch managers.

The banks said their network of 320 branches would be reshaped over the next nine months as part of a £25m branch investment programme.

Six “flagship” branches will be developed, including the Glasgow head office of the Clydesdale Bank and the newly-refurbished London Piccadilly branch, along with four new large branches in Aberdeen, Sheffield, Edinburgh and Leeds.

‘Positive change’
More than £20m will also be spent on improved mobile and internet banking services as part of the programme to “replace, renew, relocate and reinvest” across the retail branch network.

The Clydesdale branches which will close before the end of the year include: Aberdeen Bridge of Don, Aberdeen Woodside, Auchterarder, Blairgowrie, Bothwell, Bridge of Allan, Bucksburn, Cupar, Edinburgh West End, Glasgow Govanhill, Haddington, Kinross, Kirkcaldy and Whitburn.

David Thorburn, chief executive of Clydesdale Bank and Yorkshire Bank, said: “There’s a lot of positive change being driven forward for our customers and there needs to be more as we build a better bank.

“Here we are making a significant investment to meet the changing needs of customers now and in the future.

“But to deliver what are fundamentally necessary changes, we have to face difficult decisions. No branch closure is welcomed by customers or staff, I understand that, which is why we are working to minimise the effects these changes have on them.

“Our resources must now be focused on where they can deliver the best results for customers, moving with them as their demands change.”

‘Less choice’
He added: “A branch network remains at the core of what we do, and we are investing in it, but we must balance that against the investment we need to make in the services customers now expect and are using more – online and mobile banking services that give customers control of their finances when and where they want it most.”

Rob Macgregor, Unite union national officer, said: “The bank is cutting costs and eroding community banking which we believe leaves customers with less choice.
Unions said they would oppose any compulsory redundancies
“Customers are being short-changed by high street banks replacing counter staff with machines, yet, according to our own poll, nearly three-quarters of people want the human touch, not just a machine in their local bank branch.

“Unite will oppose compulsory redundancies and we expect the company to do everything possible to make redeployment an option and allow workers to move to neighbouring branches wherever possible.”

Last month, Clydesdale Bank’s Australian owner said it was setting aside further funds to meet the costs of rising customer complaints and regulatory challenges in the UK.

Its UK operation – the Clydesdale Bank, including the Yorkshire Bank brand – saw improved cash earnings during the fourth quarter of 2013.

This was helped by lower costs, having shed staff.

In April 2012, it announced plans to reduce staffing from 8,300 to 6,900, while shrinking its commercial lending activities.

 

Jobs slashed as Honda axes shift : Sources BBC

Carmaker Honda is planning to cut production at its Swindon factory, with 500 jobs under threat.

Workers were told on Monday that car plant two would be closing with the loss of 340 jobs, along with up to 160 temporary positions.

The Japanese carmaker, which opened in Swindon in 1992, made 38 compulsory and 554 voluntary redundancies last year.

Ian Howells, from Honda, said: “Over the last 12 months, we haven’t seen the growth we’d anticipated.”

The cuts come as the plant changed from three shifts a day to two.

About 3,000 workers are based at the South Marston plant, building the Civic, Jazz and CR-V for the UK and European markets.

‘Too many cars’
But Mr Howells, senior vice president of Honda Motor Europe, said with “no increase forecast” for the next couple of years, the company must “scale our manufacturing activity accordingly”.

“We’ve looked very closely at alternatives but we’re faced with a market which at best is growing very, very slowly and we’re just producing too many cars at the moment for that demand,” he said.

“It’s been a very difficult decision to take but we’re starting with a release programme that is voluntary and if that does not progress in the way we hope we may be looking at statutory or compulsory redundancies.”

According to Mr Howells, 340 “permanent associates” will go over the next two to three months along with a number of temporary staff, who were already “phased to be fully released by the end of the year”.

‘Very sad news’
Unite union spokesman, Jim D’Avila, said it was a “blow” that would be “very, very deeply felt”.

“It’s very sad news,” he said.

“We were able, 18 months ago, to deal with those surpluses with just a minimum of compulsory redundancies but the likelihood is we won’t be able to achieve that this time round.”

As well as cutting shifts, Honda is also planning to move production to one line in an attempt to “improve production flexibility and efficiency”.

The company said it will be entering into consultation on the proposed job cuts.

 

Royal Mail plans to cut 1,600 jobs : sources BBC

Royal Mail is planning to cut 1,600 roles as part of a drive to cut costs, mainly among its head office managerial staff.

The postal delivery service says the net effect will be 1,300 job losses, as it plans to create 300 new or enhanced roles at the same time.

It says the cuts are part of its aim to make cost savings of £50m a year.

Unite, a union which represents 7,000 Royal Mail managers, warned the cuts could spark industrial action.

Royal Mail – which currently employs about 150,000 people in total – said it would start consultations on the job cuts with both Unite and CWU on Tuesday.

It emphasised that the cuts would have “no impact” on frontline employees including postmen and women.

The company said it expected the job cuts to reduce costs by about £25m in 2014-15.

Union warning
Royal Mail chief executive Moya Greene said the cuts were necessary for it to “effectively compete in the letters and parcels markets”.

The company, which floated on the London Stock Exchange last year, said 50,000 of its employees had left since 2003.

The Unite union described Royal Mail’s proposals as “ruthless”.

“Royal Mail’s primary reason for existing is now about making profits rather than serving the nation,” said Brian Scott, Unite officer for Royal Mail.

“Unite is demanding a commitment to no compulsory redundancies on fair terms and an effective method for redeployment within the restructured organisation. If Royal Mail refuse we will have no alternative than to consider a ballot for industrial action.”

Royal Mail said making the cuts would cost it about £100m, taking its cumulative “transformation” costs for 2013-14 to £230m.

It had originally expected transformation costs for the period to be £160m.

Despite the costs, it said it still planned to invest about £1.2bn into the business between 2013 and 2015.

Fraud ‘costing NHS £5bn a year’ : Sources BBC

Fraud is costing the NHS £5bn a year, with a further £2bn lost to errors, the former head of its anti-fraud section says.

The amount lost to fraud alone could pay for nearly 250,000 new nurses, a report seen by Panorama suggests.

The NHS must “get on with tackling the problem”, said Jim Gee, co-author of the Portsmouth University study and ex-director of NHS Counter Fraud Services.

The Department of Health said it “did not recognise” the figures.

The amount estimated by Mr Gee, who led the NHS anti-fraud section for eight years, is 20 times that recorded in the government’s annual fraud indicator report.

“We need to not be embarrassed, or in denial, about the possibility of fraud taking place in the NHS,” said Mr Gee.

“We need to get on with tackling the problem, minimising its cost, maximising resources available for proper patient care.”

The report, by the University of Portsmouth and accountancy firm BDO, is due to be published on Tuesday.

It found that the biggest areas of fraud are in payroll and procurement budgets.

For example a consultant doing private work on NHS time or procurement wise; an optician charging for glasses which the patient never received or needed.

‘Absolute sense’

The £2bn cost of errors relate to when the NHS makes overpayments by mistake to suppliers or staff.

Although the NHS has a budget of about £100bn, it is having to make significant savings and should prioritise fighting fraud, said Mr Gee.

“I think fraud is one of the last great unreduced healthcare costs. And to me, putting money into it makes absolute sense,” he said.

“It’s one of the least painful ways of cutting costs. It makes absolute sense to cut the cost of fraud before you cut the quality, or extent of patient services.”

Mr Gee left the NHS’s Counter Fraud Service in 2006 and has spoken out now because of the publication of the report.

He reached the £7bn figure by basing his research upon loss measurement exercises looking at the total cost of fraud.

Mr Gee says it is the most rigorous data that’s available about healthcare fraud in the world.

He believes his figure is so much higher than the government’s because their annual fraud indicator report only relates to pharmaceutical and dental services, and does not include losses taking place in payroll and procurement expenditure, for example

The Department of Health declined to be interviewed but in a statement said “it did not recognise” the figure or “speculate on levels of losses”.

Panorama also found that NHS Protect, the national body that investigates fraud in England for the Department of Health, has had its budget cut by around 30% since 2006.

The operating budget for NHS Protect in 2013-14 is £11.38m, the equivalent budget in 2006-07 was £16.29 million.

NHS Protect has replaced NHS Counter Fraud Services in England.

A Freedom of Information request by the BBC shows that NHS Protect employs 27 counter-fraud specialists, with a further 294 investigators working at a local level.

By contrast, the Department for Work and Pensions employs six times the number of investigators – but if Mr Gee’s figures are accurate, they face less than half the amount of fraud.

The Department of Health said NHS Protect had a “significant budget” and “protects and safeguards frontline NHS services”.

NHS anti-fraud teams investigate cases ranging from hundreds to millions of pounds.

Among their cases was that of dentist Joyce Trail, from Birmingham, who was one of the most prolific fraudsters in NHS history.

Trail charged the NHS for work she had never actually carried out.

She visited care homes offering to check residents’ teeth and then used their personal details to claim payment from the NHS.

Trail even claimed payment for the false teeth for patients who had died.

She was jailed in 2012 for £1.4m worth of fraud.

Other fraudsters investigators have prosecuted include NHS employees selling stolen products on eBay and dentists charging the NHS for gold crowns while fitting patients with cheaper ones.

One investigator, Barry Hards, said the lack of money for investigators means that now is a good time to be a fraudster in the NHS.

“How can you have confidence that there’s a likelihood you’ll be found out, when there’s very few people looking at you?” he said.

“I think it’s a genuinely held concern that some people in senior positions have just taken their eye off the ball on this.”

 

Exclusive – Major Moroccan banks, BMCE, BCP, plan Islamic offshoots – sources Reuters

RABAT (Reuters) – Two of Morocco’s biggest banks, BMCE (CAS:BCE) and BCP (CAS:BCP) are preparing to launch Islamic subsidiaries as the Moroccan parliament discusses a bill regulating Islamic banks and sukuk issues, banking sources said.

Parliament’s approval will be the last step before fully-fledged Islamic banks can be established in Morocco, whether they are subsidiaries of domestic banks or foreign owned, a measure which could attract more Gulf Arab investment.

Morocco’s central bank has also started talks with a body of Islamic scholars on establishing a central sharia board to oversee the country’s developing Islamic finance industry.

Sources from the two banks said initial investments in the new subsidiaries would be at a minimum pending market reaction, regulation, and foreign investor interest.

“Even though analysts don’t really expect a huge rush for Islamic products after the bill’s approval, we should take part in the battle. We never know,” one senior bank source told Reuters. “We have to prepare ourselves.”

The sources declined to be named as they said official announcements will come later when the bill regulating Islamic finances is approved.

Islamic finance, which follows the principles of Sharia law such as a ban on interest payments, is a growing sector in the Middle East, North Africa and Southeast Asia, but also in European countries with large Muslim communities.

Islamic finance banks are called participative banks under Moroccan legislation.

BMCE Bank and BCP are following in the footsteps of Attijariwafa bank (ATW.CS), controlled by the royal family’s investment holding company SNI, which has been the first Moroccan bank to create an Islamic subsidiary in Morocco.

In 2010, Morocco began allowing conventional banks to offer a limited set of Islamic financial services.

But the country’s Islamic finance drive accelerated after a moderate Islamist-led government took power through elections in late 2011, and as the government has struggled with a big budget deficit. Sukuk, or Islamic bond, issues could attract money from wealthy Islamic funds in the Gulf.