Dreamliner Safety And Design Review Ordered

America's aviation watchdog has ordered a comprehensive review of the Boeing 787 Dreamliner after a spate of incidents involving the aircraft.

The head of the Federal Aviation Administration (FAA) said he is confident the Boeing 787 is safe, but he remains concerned about recent events, including a fire and a fuel leak earlier this week.

Michael Huerta, the FAA administrator, said there is nothing in the data the agency has seen to suggest the plane is not safe.

The watchdog announced it is undertaking a comprehensive review of the 787 to include "critical systems, including design, manufacture and assembly".

The manufacturer responded to fears over the plane and said: "Boeing is confident in the design and performance of the 787. It is a safe and efficient airplane that brings tremendous value to our customers and an improved flying experience to their passengers.

"The airplane has logged 50,000 hours of flight and there are more than 150 flights occurring daily."

Boston fire crews attend the JAL plane after it filled with smoke

The move by the US aviation authority was prompted after a fifth Dreamliner fault this week was reported on Friday morning.

Oil was discovered leaking from the left engine of a Boeing 787 Dreamliner flight operated by All Nippon Airways (ANA).

An ANA spokeswoman said the leak was found after the domestic flight landed safely at Miyazaki airport in southern Japan.

It came on the same day another Japanese 787 suffered a cracked cockpit window while in flight on a domestic route.

ANA said crew noticed a spider web-like crack in a window in front of the pilot's seat about 70 minutes into Friday's flight, which was close to its destination.

The Dreamliner, the world's first carbon-composite airliner, which has a list price of $207m (£128m), has been beset by problems this week.

The plane was designed to use power plants made by General Electric and Britain's Rolls-Royce.

On Wednesday, a domestic flight was halted by ANA because brake parts to the rear left undercarriage needed replacing, a spokesman at Yamaguchi Ube Airport said.

An investigator in the US examines a Boeing 787

A Japan Air Lines (JAL) jet was also grounded at Boston Logan International airport in the US following an engine fuel leak.

About 40 gallons of fuel spilled from the jet that was supposed to be bound for Tokyo.

That event followed the first incident of the week, which also occurred at Boston, on Monday.

Emergency services had been called after another JAL 787 filled with smoke shortly after passengers and crew had disembarked.

Firefighters used infrared cameras to locate the fire in a battery pack in the belly of a different Boeing 787 and extinguished the blaze within 20 minutes.

Sky sources revealed that if the battery fire had occurred during a transocean flight the aircraft may have been brought down.

The 787 Dreamliner made its first commercial flight in late 2011, after a series of production delays put deliveries more than three years behind schedule.

By the end of last year, Boeing had sold 848 Dreamliners, and delivered 49. JAL and ANA operate 24 of the planes.

After the Boston events, British carriers including BA, Virgin Atlantic and Thomson Airways reaffirmed their plans to integrate 787s into fleets this year and next.

In India - where state-owned Air India has taken delivery of six Dreamliners and has more on order - a senior official at the aviation regulator said there was concern at the recent spate of 787 glitches.

Meanwhile, an Air India spokesman said the airline's debut Dreamliner flight from India to Paris on Thursday went without a hitch.

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Jessops Close All Stores - 1,370 Jobs To Go

Administrators say camera chain Jessops is to close all its 187 stores with the loss of 1,370 jobs

PricewaterhouseCoopers (PwC), which was appointed to the group on Wednesday, has begun the process of shutting the firm's entire network of outlets.

The administrators said further job losses are likely at the group's head office in Leicester.

Jessops is the first high-profile retail casualty of 2013, after suffering from online competition and a boom in camera phones in recent years, hitting demand for digital cameras.

Administrator Rob Hunt said PwC had held "extensive discussions" with suppliers, but it was apparent that Jessops could not continue to trade.

He said stock would be collected from the shops and taken to a warehouse, where it would be returned to suppliers.

As a result of the closure of the shops, Mr Hunt added that customers would not be able to return products.

Jessops was forced to call in the administrators this week after talks between the company and its lender and suppliers broke down following a poor Christmas.

Jessops had struggled since 2007, when it underwent a major overhaul with a swathe of store closures.

It came close to collapse two years later, before being rescued by its main lender HSBC in a controversial debt-for-equity swap that saw it taken off the stock market.

The camera giant's collapse comes after consumer electricals chain Comet hit the wall last year, sparking more than 6,000 job losses.

There was speculation that suppliers such as Canon were considering injecting cash into Jessops last year to help prop the business up, but no deal materialised.

The group last year also suffered the loss of its chief executive Trevor Moore, who left to head up HMV, as well as its chairman David Adams.

Martyn Everett was then appointed as chairman and Neil Old was promoted to lead the business as chief operating officer.

The firm began life in 1935 when Frank Jessop opened his first shop in Leicester.

Mr Hunt added that it was "an extremely sad day for Jessops and its employees".

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Exclusive: Supermarket Row Over Festive Sales

By Mark Kleinman, City Editor

Tensions between two of Britain's biggest supermarket chains have burst into the open after an executive at Sainsbury's urged City analysts to question market-leading Christmas sale figures produced by rival Tesco.

In an email sent to food retail analysts, a copy of which has been sent to Sky News, a senior member of Sainsbury's investor relations team accused Tesco of being "a bit disingenuous" when it reported UK like-for-like sales growth for the six weeks to January 5 of 1.8%.

The allegation referred to the fact that Tesco's headline sales number was based on an accounting rule that allows it to include sales where customers have used Clubcard vouchers.

"I thought it worth pointing out that the UK [like-for-like] number of 1.8pc that Tesco are reporting this morning is non-IFRIC compliant," the email said. "This is a bit disingenuous, they should be using the 1.4pc number in their headline. All of our reported numbers are IFRIC compliant, as they have to be under IAS18!"

Sainsbury's on Wednesday reported like-for-like sales growth over a longer period of 0.9 per cent. Sources said that if it had used the same accounting benchmark as Tesco and included sales using points under its Nectar loyalty scheme, its growth figure would have been 1.4%.

Tesco insiders said that Sainsbury's was attempting to "smear" its Christmas trading performance.

Philip Clarke, Tesco chief executive, declined to comment on the performance of its competitors, saying that he was focused on "building a better Tesco".

The row underlines the heightened sensitivity within Britain's biggest food retailers about their performance in a lacklustre UK economy.

It also highlights the difficulty of relying on a measurement such as like-for-like sales, which gives little clue about the profitability of a business during a given period. The numbers announced by Tesco covered 42 trading days, while Sainsbury's statement covered 98 days, further pointing to the danger of relying on comparisons which can be misleading.

The respective Christmas trading statements of Sainsbury's and Tesco contained few surprises. Analysts had expected Tesco to rebound from a dire festive period in 2011-12, when it had to issue its first profit warning for decades, while Sainsbury's has seen like-for-like sales grow for 32 consecutive quarters under the leadership of Justin King, its chief executive.

So far, Marks & Spencer, which saw clothing sales fall by nearly 4% over Christmas, and Wm Morrison, the supermarket group, have been the biggest losers from a tough Christmas. At the other end of the spectrum, Next and John Lewis Partnership registered a performance that was well-received by investors.

It is far from unusual for companies to raise questions about the performance of their competitors with City analysts, although it is less common for those suggestions to find their way into the public domain.

Tesco and Sainsbury's both declined to comment further.

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HMV Sale: Price Cuts Ahead Of Bank Deadline

HMV is holding a massive sale from Saturday after admitting it could breach crucial banking conditions at the end of January.

The 25% Blue Cross Sale on CD's, DVD's, Blu-rays, box sets and games across 230 stores and online comes just weeks after the traditional Boxing Day sale.

Last month the company admitted it is likely to breach its banking covenant - throwing the entertainment retailer's financial future into doubt.

A failure to fulfil lending requirements often signals a company is close to administration, retail analyst Robert Clark told Sky News.

"A lot becomes clear after Christmas - the sale suggests that they didn't have a good one and are trying to reel in as much cash to tie things over," he said.

"I'm not sure how much time they've got. I don't think they'll be able to sway their bankers. Financial institutions are less likely to show patience in this climate."

But HMV's chief executive Trevor Moore said in December that closing more stores or placing the business into administration was not "part of our plan" and that the firm was in "constructive discussions" with banks about its performance.

HMV spokesman Gennaro Castaldo told Sky News the Blue Cross Sale was not unusual for this time of year.

 "Normally we'd look to run a multi-buy campaign of some kind at this time of year, but we thought we'd freshen our promotional mix up a bit and try something a bit different that will hopefully stand out from all the other sale offers on the high street right now," he said.

The retailer has taken a huge hit in the face of competition from online retailers like Amazon and Play.

But analysts argue that HMV has failed to reinvent itself in the last 15 years and invest in its stores to keep up with the modern technology revolution.

In December, despite numerous promotions,it announced total sales had fallen 13.5%, while like-for-like sales were down 10.2% in the six months to October 27.

HMV reported a loss before tax of £37.3m - an improvement on the £48.1m loss over the same period the year before. But net debt at the 91 year-old company increased from £163.7m to £176.1m.

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Jessops Slashes Jobs And Ignores Gift Vouchers

Troubled high street photography retailer Jessops has gone into administration and will no longer accept gift vouchers or returned goods, it has been confirmed.

Sky sources earlier revealed that an application for administration was filed on Wednesday morning at the High Court, leaving some 2,000 jobs at risk.

PwC administrator Rob Hunt said: "Over the last few days the directors, funders and key suppliers have been in discussions as regards additional consensual financial support for the business.

"However these discussions have not been successful. In light of these irreconcilable differences the directors decided to appoint administrators and we were appointed earlier today.

"Our most pressing task is to review the company's financial position and hold discussions with its principal stakeholders to see if the business can be preserved.

"Trading in the stores is hoped to continue today but is critically dependent on these ongoing discussions. However, in the current economic climate it is inevitable that there will be store closures."

The company's website was still operational on Wednesday afternoon

The administrators  added: "At present Jessops is not in a position to honour customer vouchers or to accept returned goods."

The demise of the decades-old chain would be the first high street casualty of 2013, and comes soon after consumer electricals chain Comet hit the wall, sparking more than 6,000 job losses.

Jessops has struggled amid the digital photo revolution and the retail shift to online trading and camera phones.

It underwent a major overhaul in 2007 and a swathe of store closures, but came close to collapse two years later before being rescued by its main lender HSBC in a controversial debt-for-equity swap that saw it taken off the stock market.

The bank took a 50% stake in the business in return for writing off £34m of loans.

There was speculation last year that suppliers such as Canon were considering injecting cash into Jessops to help prop the business up, but no deal materialised.

Last year it also lost two key executives, chairman David Adams and chief executive Trevor Moore - who joined HMV.

Martyn Everett was then appointed as chairman and Neil Old was promoted to lead the business as chief operating officer.

The firm began life in 1935 when Frank Jessop opened his first shop in Leicester.

The company's website was still active on Wednesday afternoon and its helplines were still in operation.

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M&S Confirms Festive Clothing Slump

By Mark Kleinman, City Editor

Marks & Spencer (M&S) has confirmed that it suffered a slump in pre-Christmas clothing sales in a trading update hastily brought forward following a leak of the numbers to Sky News.

In a statement released just after 8pm on Wednesday, M&S said that UK like-for-like general merchandise sales had fallen by 3.8% in the 13 weeks to December 29, while like-for-like food sales rose by 0.3 per cent.

Overall, like-for-like sales, a measurement which strips out the effect of changes to selling space, fell by 1.8%.

The figures are expected to underwhelm the City when trading in M&S shares opens on Thursday.

But Marc Bolland, M&S chief executive, said he was confident that the group would improve its performance with the addition of a number of key executives.

"Our Food business has performed very well with record sales over the key Christmas trading period," he said.

"Our General Merchandise performance is not yet satisfactory but we are confident that the steps being taken by the new management team will address this.

"Our plan is to transform Marks & Spencer from a traditional UK retailer to an international multi-channel retailer.

"We are making good progress against this plan.

"We are pleased with our Multi-channel and International performance. I'd like to thank all of our colleagues for their exceptional hard work and commitment over the busy Christmas period."

Total sales at M&S in the UK grew by 0.3% during the period, versus the same quarter last year, but the release of the numbers confirmed that M&S was one of the losers from the 2012 high street battle for customers' wallets.

Mr Bolland warned that the outlook for the year would be challenging given the economic backdrop in the UK.

"We expect the pressure on consumers' disposable incomes to continue in 2013. As a result we remain cautious about the outlook for the year ahead," he said.

"Our plan is to transform Marks & Spencer from a traditional UK retailer to an international multi-channel retailer. We are making good progress against this plan."

In a hastily-convened conference call with journalists, Mr Bolland said that M&S's management team made the disclosure after taking advice from bankers and lawyers.

Sources said that the disclosure was made because the trading performance reported by Sky News earlier on Wednesday night was worse than the most pessimistic of the forecasts made by City analysts.

The M&S chief executive conceded there was pressure on him and his management team to deliver an improvement in the clothing business, but pointed to the arrival in stores this summer of autumn-wear collections that bear the imprint of Belinda Earl, the retailer's new style director.

M&S also disclosed a hefty one-off charge relating to the cancellation of a bond issued by the company just over five years ago.

"In December 2007 the group issued £250m of 30-year puttable callable bonds which included a coupon rate reset after five years based on a fixed underlying 25-year interest rate," the company's statement said.

"On this basis the rate was reset at 9%. In light of continued low long-term market interest rates and the successful bond issuance in December, the group has decided to buy back and cancel these bonds which will result in a one-off non underlying finance charge of circa £75m in the current financial year."

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Ofcom To Boost Hunt for Nuisance Call Firms

The telecoms watchdog is to boost efforts to hunt down companies behind nuisance calls to householders.

The move was prompted after Ofcom said a study found almost half of all adults were subjected to silent or abandoned calls within a six-month period.

The regulator announced a plan to tackle the growing problem after its own research suggested the number of those affected had increased from 24% in 2011 to 47% in 2012.

An abandoned call is one that ends when it is picked up while a silent call is where the receiver hears nothing and has no way of knowing whether there is anyone at the other end of the line.

The figures, released in the regulator's annual Consumer Experience Report, also reveal that 71% of landline customers received a live marketing call, while 63% received a recorded marketing message over the same six-month period.

Ofcom said its plan to help tackle nuisance calls would include a new study to build a clearer picture of the problems consumers experience.

It has also pledged to work closely with the industry to identify ways to trace companies behind nuisance calls when they try to hide their identity.

Ofcom issued fines totalling more than £800,000 within the last year to HomeServe and npower over silent or abandoned calls. TalkTalk is currently under investigation.

The watchdog has also received numerous complaints from consumers who have been pestered by callers acting on behalf of firms looking to payment protection insurance mis-selling compensation claim firms.

Ofcom's consumer group director Claudio Pollack said: "Nuisance calls can cause annoyance, inconvenience and anxiety to consumers.

"This is a complex and challenging area, but Ofcom is determined to work with industry and other regulators to help protect consumers. Our new research will help to understand the root cause of the problem."

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Pensions 'Plunge Over £3,000 In Five Years'

People planning to retire this year expect to be living off the lowest average incomes recorded in six years, it has been claimed.

This year's retirees expect to have a typical annual income of £15,300, making them around £3,400 a year worse off than workers who retired in 2008, according to the Prudential.

The gap becomes much worse when taking into account the effects of inflation's erosion of people's household budgets.

Someone who retired last year would have needed an annual income of £21,400 to have the same spending power as an average person who entered retirement in 2008 on a typical income of £18,700, the Prudential said.

However the average amount private employees retired on last year was £15,500, leaving them £5,900 worse off in real terms than workers who retired in 2008.

Across Britain there is also a £5,700-a-year difference between the regions with the highest and the lowest anticipated incomes for people retiring this year.

Londoners expect to retire on an annual income of around £18,200 this year, while retirees in the West Midlands have the lowest anticipated incomes, at £12,500.

Post-financial crash, annuity rates have dropped 33% and wiped thousands of pounds off retirees' incomes in recent years, while pensioners have faced a perfect storm of high living costs and low returns on their savings.

Pensioners face high living costs and low returns on their savings

Experts also warned that possible changes to the way that Retail Price Index (RPI) is worked out could lead to more people being forced to put their retirement on hold due to the squeeze on their incomes.

Tom McPhail, head of pensions research at financial services company Hargreaves Lansdown, said: "For people approaching retirement, that is a huge blow to their expectations at a time when it is probably too late for them to do anything about it."

Hargreaves Lansdown said that a 65-year-old man with a £100,000 pension pot could have secured an annual income of £7,855 by buying an annuity in the summer of 2008 but if he was doing so in December 2012, that figure would have fallen to £5,338.

Quantitative easing (QE) has been blamed for pushing down annuity rates which set the size of someone's retirement income for life.

QE makes it cheaper for companies to borrow by pushing down the yield on government bonds, but annuity incomes are also based on these yields, meaning that new pensioners see their incomes reduced.

The Office for National Statistics has also been consulting on changes to the RPI and the recommendations from this will be announced on Thursday.

This trend downward is set to continue as baby boomers pass the age of 65, with 55% of 55 to 64-year-olds drawing a salary, compared with 41% in February 2010, Aviva has said.

Vince Smith Hughes, retirement expert at Prudential, said: "Those who are still working should think about saving as much as possible as early as possible to give themselves the best chance of building up a decent pension pot to help to ensure a comfortable retirement."

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Dyson Warns Government Over UK Manufacturing

The Government must do more to protect the future of manufacturing in Britain, inventor Sir James Dyson has warned.

The entrepreneur, famous for inventing the bagless Dyson vacuum cleaner, said Britain will have a deficit of 60,000 engineering graduates this year.

Too much emphasis has been placed on "the glamour of web fads and video gaming" over "tangible technology that we can export", he argued.

The 65-year-old's comments come despite Dyson's decision around 10 years ago to move its production to Malaysia, with the loss of 800 jobs.

He said: "The Government must do more to attract the brightest and best into engineering and science so that we can compete internationally. 26% of engineering graduates do not go into engineering or technical professions.

"More worrying is that 85% of all engineering and science postgraduates in our universities come from outside the UK."

Speaking to the Radio Times magazine, he said: "Yet nine in 10 leave the UK after they finish their studies. British knowledge is simply taken abroad.

"Engineering postgraduates need to be encouraged with generous salaries. A salary of £7,000 a year for postgraduate research is insulting."

Asked to reconcile his remarks with Dyson's decision to shift manufacturing jobs abroad, he told Sky News all the firm's machines were still conceived and developed at its research and development headquarters in Wiltshire.

"We have more scientists and engineers there than ever before, over 750 Dyson scientists and engineers developing technology for the next 25 years," he said.

"Last year, another 220 engineers joined the team, a third of them graduates. But we need more. Dyson is expanding, new markets and new machines. 

"Our future technology depends on nurturing bright minds to develop technology for export, but there is a shortage of engineers in the UK. To help businesses the Government needs to encourage more students into engineering subjects.

"Businesses full of bright minds can then develop patented technology for export."

A spokesman for the Department for Business, Innovation and Skills said: "Engineering graduates go into a range of sectors, including financial services and retail as well as manufacturing.

"We are working closely with industry and continue to look at various ways to support engineering at all levels, including engagement in schools, apprenticeships and postgraduate training.

"Applications for engineering courses at university have held up this year."

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Online Sales Fail To Boost 'Sluggish' December

By Ursula Errington, Business Reporter

Strong online sales in December have failed to boost what has been described as an "underwhelming and sluggish" Christmas on the high street.

The British Retail Consortium (BRC) said retail sales for the month were up just 1.5% compared to the Christmas period in 2011.

However Internet sales rose by almost 18%.

If the online contribution to total year-on-year sales growth is stripped out, it shows that high street trading stagnated compared to last Christmas.

"Online retail still accounts for a relatively small part of total sales," said BRC Director General, Helen Dickinson.

The outlook for British retailers for 2013 year is 'subdued'

"But in December it played a disproportionately larger role in driving non-food sales.

"Shoppers took advantage of the investment many retailers have made in making their websites easier to use across multiple devices, in flexibility of delivery options as click-and-collect came of age, and in security - they now feel much more comfortable putting their credit card numbers into their mobile phones."     

Pimlico-based florist, Rosemary Watkins, knew it would be a tough December for the shop she has worked in for three years but it was worse than she imagined.

They closed early on December 24 and in the run-up to Christmas they hardly saw what could be termed as Christmas trade.

"We had the shop ready from the first week in December," she told Sky News. "But what we anticipated would happen, didn't happen.

"We were lucky to sell what we did. We had to stop buying stock as it's perishable; you can't hold onto it. If it's this bad here in SW1 I can't imagine what it's like in other parts of the country."   

The survey reveals shoppers are increasingly confident buying good online

Footfall was down considerably on last year largely because of bad weather and consumers buying more in one go, thereby reducing the opportunity to browse and be tempted to buy.

But perhaps the most influential factor was the shift towards the internet. It appears fewer shoppers were searching in stores first, before going online.

Pharmacy owner Nishma Hirani is just a few doors down from Rosemary's florist. She has decided to focus on internet sales of perfume and her higher-end health and beauty products for Christmas 2013.

She also intends to modify how much stock she carries in the run up to next Christmas. The BRC survey showed that generally, retailers bought in less stock and held off offering heavy discounts in order to keep their margins up.

But optimistic Nishma did not do that. Buoyed by solid sales in last year's difficult climate, she bought a lot of stock and is now stuck with it.

Surrounded by perfumes bearing sale stickers she explained: "Last year people were buying four or five bottles of perfume at a time but this year they only bought one or two - not bulk buying.

"We kept our stock quite high but we just didn't find it was moving as quick as we would have liked it too."

Overall, the BRCs outlook for this year is subdued. They have said their members expect the hard times to continue but not worsen, with this "bumping along the bottom" effect to continue for perhaps years to come.

KPMG's Head of Retail, David McCorquodale, said: "While consumer confidence remains low, shoppers will tighten their belts and rein in their spending, making life difficult for the average UK retailer.

"There will be no boom and it's likely more than a few will go bust".

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Exclusive: ShEx Boss In DECC Move

By Mark Kleinman, City Editor

The man responsible for stewarding tens of billions of pounds-worth of state-owned assets and who oversaw the sale of the Government's stakes in the Tote and British Energy is to step down from his role.

I can reveal that the departure of Stephen Lovegrove, chief executive of the Shareholder Executive, will be announced in the coming days. He is quitting to become the new permanent secretary of the Department for Energy and Climate Change (DECC), one of the most senior posts in the civil service.

Mr Lovegrove's appointment will be closely-watched in Whitehall, since it follows a decision in November by David Cameron, the Prime Minister, to veto the previous choice for the permanent secretary role at DECC. Mr Cameron is understood to have blocked climate change expert David Kennedy despite his appointment having the support of Ed Davey, the Liberal Democrat MP who is Secretary of State.

Mr Lovegrove is among the most widely-respected figures in Whitehall. He was recognised in the New Year's honours list in and was awarded a Companion of the Bath in acknowledgement of his role in the sale of the Government's stake in British Energy and the ongoing preparations for the privatisation of Royal Mail, which is expected to take place through a stock market listing later this year.

Mr Davey is understood to have developed a strong working relationship with Mr Lovegrove during his stint as the minister responsible for the state-owned postal operator.

In his new role, Mr Lovegrove is set to be heavily-involved in Government plans to sell the state's one-third stake in Urenco, the nuclear fuel processor. Britain owns an equal stake with the Dutch government and two large German utilities and a sale is likely in the next couple of years.

During more than eight years at ShEx, Mr Lovegrove was instrumental in the professionalization in the way the Government managed publicly-owned assets, creating a separate wing to oversee the state's vast property portfolio. He was also responsible for the Nuclear Decommissioning Authority, a non-departmental public body established in 2004.

One of the most significant transactions during his time at ShEx came two years ago when the Government finally sold the Tote, the bookmaker, more than decades after the company's privatisation was originally signalled.

Mr Lovegrove, a former investment banker with Deutsche Bank, also sits on the board of the London Organising Committee of the Olympic Games and is a director-general of the Department for Business, Innovation and Skills (BIS), one of the ministries top management posts.

It was unclear on Sunday who would replace Mr Lovegrove at ShEx, although insiders pointed to Mark Russell, his deputy, as an obvious candidate for the job. Mr Russell was one of the key figures who represented the Government during last year's aborted merger discussions between BAE Systems, the defence contractor, and EADS, the European defence and aerospace group.

BIS and DECC both declined to comment, while Mr Lovegrove could not be reached for comment on Sunday.

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City Jobs On The Slide Amid Weak Economy

The number of new City jobs has fallen by more than a third, new figures reveal.

Just 35,115 posts were created in 2012 - down 35% on the 54,025 in 2011.

In addition, around 800 new City jobs were available in December last year, compared to 1,490 in December 2011.

The data was released by financial services recruitment firm Astbury Marsden.

Its chief operating officer, Mark Cameron, said: "2012 was a busy year for HR departments across the City as cost-cutting remained a key focus for senior management and board members throughout the year.

"Tighter regulation including higher capital requirements forced up costs at a time when revenues dipped due to a number of factors including a continued weak economy and less trading activity.

"Although broad cost-cutting is fairly typical in the City during a downturn, 2012 was particularly significant as senior management in banks took very decisive action and implemented major structural changes including winding down entire units.

"Hopefully we are now behind the worst of the cost-cutting. Although banks may still tinker with staffing numbers, most of the obvious and immediate cuts are likely to have now been made."

The firm believes developments in the handling of the eurozone crisis since the autumn have started to have a positive impact, which could improve hiring confidence in 2013.

"Some of the dark clouds around the euro - which has been a major concern in the City for the last 18 months - seem to have lifted which will encourage some firms who are contemplating hiring staff," Mr Cameron said.

"Whilst the closure in the US budget battle is still to come, markets have responded well to progress already made there.

"For the world's largest economy, which is so important in setting trends globally, 2013 has certainly started on a more positive note than 2012 ended, which could help mitigate the gloomy outlook around hiring."

There has been a spate of redundancies in the financial sector as it battles to gain ground in a weak economy - amid increasing regulation and public scepticism.

Last month, banking giant Citigroup announced plans to axe 11,000 jobs worldwide - some 4% of its workforce - to cut costs.

In October, Switzerland's biggest bank UBS confirmed it was cutting 10,000 jobs to shrink its investment operations.

Of the total job cuts, it said 2,500 positions would be lost in Switzerland while the rest would be felt in the UK and US.

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More Pensioners Working Into Retirement

By Becky Johnson, Sky News Correspondent

As nearly 10 million people in Britain are now over 65, increasing numbers of pensioners are taking up a second career after they retire.

One in three 45 to 65-year-olds now plan to carry on working into retirement, according to a report by investment group Standard Life.

Sam Almond is 86 and lives in Altrincham, Cheshire, with his wife Hazel. After he retired from his job as the owner of a manufacturing company he began writing books about the financial markets.

His success as an author spurred him on to write a self-help book, Spinach For Breakfast, about the secrets to living longer.

He believes the key to staying young is keeping busy. Every day he gets up at 4.30am to allow time to do some exercise, eat a healthy breakfast and be at his desk for 8am.

The latest census shows the number of people over the age of 65 in England and Wales has increased by 10% over the last decade.

According to the Department for Work and Pensions life expectancy for men is expected to reach 91 by the year 2050.

One reason more people over retirement age are continuing to work is to top up their income.

The National Association for Pension Funds says nine in 10 people believe the state pension will not be enough for them in retirement.

Universities Minister David Willetts told Sky News: "One thing that we've done is transform the regime for older workers by abolishing compulsory retirement ages so that companies can keep staff for longer.

"But there may some people, who've paid off the mortgage and the kids have left home, who want to make a career change.

"We notice increasingly mature students who may have had one career but who are now thinking of getting a new qualification and starting a second career.

"I believe the more people that are out there seeking work, the more jobs get created. And if you look at the record of the last two years, despite the austerity, there have been more than one million extra jobs created in the private sector so we can create the jobs as people come forward who want to do them."

Julie Kertesz, 77, took up stand-up comedy a year ago. She says it's something she fell into by accident after realising she could make people laugh.

Originally from Hungary she has lived and worked around the world, mainly as a chemist.

She retired aged 60 but says she continued to pursue her interests in writing and photography.

She then tried public speaking and has now performed her stand-up routine in more than 50 venues across the UK.

She told Sky News: "The young people who listen to me are surprised and they like it, they say I'd like my grandmother to be like that or my grandfather.

"Don't die before you die - do things and live completely, change things because that is when you live... Even at 70 or 80 you can do wonderful things."

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Exclusive: Banks Braced For Cash Bonus Cap

By Mark Kleinman, City Editor

The two giant banks bailed out by British taxpayers in 2008 are preparing to impose a fourth consecutive annual cap on cash bonuses as they finalise staff payouts for last year.

I have learned that executives at Lloyds Banking Group and Royal Bank of Scotland (RBS) are braced for the Government to push for a £2,000 ceiling on cash payments as ministers and investors seek to drive down pay in the financial services sector.

The boardroom remuneration committees at Lloyds and RBS have begun consulting with leading investors about the size and shape of their bonus pools for 2012, with approximately eight weeks remaining until the two state-backed banks report their full-year results at the beginning of March.

No formal talks have yet taken place between the banks and UK Financial Investments (UKFI), the body which manages the taxpayer's 82 per cent stake in RBS and 41 per cent of Lloyds, about using the £2000 limit again this year.

However, several bank executives spoken to by Sky News in recent days said a repeat of the £2,000 cap was inevitable.

Any nod toward restraint would gain public support from Cabinet ministers such as George Osborne, the Chancellor, and Vince Cable, the Business Secretary.

"It would be politically impossible for the Government to sanction a removal of the cap, or even raising it modestly, given the wider economic environment," one of the bank executives said.

The £2,000 limit on cash payouts was introduced in 2010 amid pressure from Gordon Brown's Labour government a few months before the general election.

It was repeated in the following two years, and in 2012, David Cameron, the Prime Minister, said the cap was essential as part of a broader Coalition crackdown on executive pay.

The imposition for a fourth year of the cash cap is unlikely to muster significant opposition from Lloyds and RBS executives, who in previous years have complained privately that it leaves them more exposed to having employees by other banks not subject to the cap.

That is because intensifying pressure from City shareholders and new remuneration rules set out by the Financial Services Authority (FSA) have triggered a reduction in cash bonuses across the banking industry.

Both Barclays and HSBC both imposed cash ceilings on investment banking staff last year - although these were much higher than the £2000 limit at Lloyds and RBS.

The FSA has been particularly robust about banks' plans to pay bonuses for 2012, arguing that the spate of scandals which has hit the industry - ranging from payment protection insurance mis-selling to Libor rate manipulation - must be reflected in the size of payouts.

Only the cash components of bonuses for Lloyds and RBS staff would be restricted to £2,000, with dozens of staff likely to receive share-based bonuses running into tens or hundreds of thousands of pounds.

These employees will principally be employees of RBS's global banking and markets arm, although there will be fewer of them this year than in any previous bonus round since the bail-out of the banks because of the subdued performance of the division.

RBS has already side-stepped the annual row over the bonus of Stephen Hester, its chief executive. He waived his entitlement to be considered for a bonus following the IT systems glitch last summer which left millions of RBS customers without access to their accounts.

Lloyds, RBS and UKFI all declined to comment.

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