Written By Unknown on Jumat, 16 Januari 2015 | 11.46
Royal Bank of Scotland (RBS) is contacting 1,800 small business customers who are believed to have suffered under the latest mis-selling scandal to hit the bank.
RBS said the issue came to light following a review of customer files following complaints to the British Business Bank, the Government body overseeing the Enterprise Finance Guarantee (EFG).
The scheme, set up in 2009, has seen RBS loan more than £900m to 9,000 small firms who would otherwise have found it difficult to access credit.
RBS said: "This exercise identified a number of instances where we have not properly explained to customers how borrower and guarantor liabilities work under the EFG scheme.
"We will now be implementing a thorough and proactive review of affected and potentially affected customers to ensure they are put back in the position they believed they would have been in."
The EFG provides a 75% Government guarantee to lenders willing to back viable small businesses to aid the economy.
Some RBS customers were incorrectly led to believe that the guarantee was for their benefit rather than the bank's - and did not realise that they remained liable for 100% of the loan.
Of the 1,800 customers being spoken to, all either defaulted or found themselves in a "stressed" financial position.
Business Secretary Vince Cable met RBS executives on Wednesday to discuss the issue, previously exposed in an investigation by The Times newspaper.
The affair is the latest damaging episode related to the lender's treatment of small business customers after it was previously accused of pushing firms to the wall so it could buy back their assets at rock-bottom prices.
RBS has also been rocked by scandals including foreign-exchange rate rigging, Libor rate fixing and the payment protection insurance mis-selling scandal.
BP has cut 300 North Sea oil jobs as its looks to save costs amid the plunging cost of oil.
Of those to be laid off, 200 are BP workers with the others affected in contractor roles.
BP briefed workers in Aberdeen today on its plans, which it had previously said would result in $1bn (£630m) of restructuring costs this year.
BP is keen to ensure its business in the North Sea remains competitive and sustainable for the long term as Brent crude costs hover below $50 per barrel - down from $115 last June.
Trevor Garlick, regional president for BP North Sea, said: "We are committed to the North Sea and see a long- term future for our business here.
Video:Cheap Oil Takes Its Toll
"However, given the well-documented challenges of operating in this maturing region and in toughening market conditions, we are taking specific steps to ensure our business remains competitive and robust, and we are aligning with the wider industry.
"Whilst our primary focus will be on improving efficiencies and on simplifying the way we work, an inevitable outcome of this will be an impact on headcount and we expect a reduction of around 200 staff and 100 contractor roles.
"We have spoken to staff and will work with those affected over the coming months."
It made its announcement 24 hours after the governor of the Bank of England, Mark Carney, warned that falling oil prices represented a "negative shock" for the Scottish economy - but a "net positive" for the UK as a whole, given benefits for consumers.
The North Sea oil and gas sector employs over 400,000 people.
Video:Why Is BP Cutting Jobs?
Holyrood's energy minister has called for UK Government action, saying the employment threat had produced the "the most serious jobs situation Scotland has faced in living memory."
The energy secretary Ed Davey said: "The recent sharp reductions in oil prices are very challenging for companies active in the North Sea and that's why I'm here in Aberdeen today to meet with industry leaders to address the challenges the North Sea industry faces both in the short and longer term as a matter of priority.
"The threat to jobs has been brought home by the news from BP today. We have great sympathy with all those directly affected.
"BP is a significant investor and employer in the North Sea and the UK Government recognises the importance of the North Sea sector, both in terms of thousands of Scottish jobs it supports and its overall benefit to the whole UK economy."
In addition to the cuts at BP, Shell and Tullow Oil have been among other oil firms scaling back their investments worldwide.
Video:Oil Analyst: Two Years For Recovery
Tullow, which has a focus on Africa, reported on Wednesday that its gross annual profits were expected to fall by more than half on 2013, it was taking a writedown of $600m due to asset revisions and cutting 2015 investment by $200m.
It also raised the prospect of major job losses - warning that: "A major internal review of Tullow's organisation is ongoing which will lead to substantial long-term cost savings and efficiencies across the group."
Tullow added that it expected to announce the details at its full-year results on 11 February.
Its share price rose 3.2% in early trading when markets opened for business on Thursday while BP saw a 2.3% boost.
Mining and energy stocks generally recovered some ground following sharp falls on Wednesday.
Video:19 Dec 2014: Oil City Price Fears
Unions however warned of the potential for long-term damage to the country's energy capacity as a result of falling investment.
The RMT claimed tens of thousands of jobs were at stake.
Its general secretary, Mick Cash, said: "In the wake of the current price slump, RMT is demanding that Westminster and the Scottish Parliament adopt a crisis management approach to ensure sustained production, maintenance of infrastructure, retention of skills, and a robustly regulated regime in the future.
"If immediate action isn't taken then we risk turning today's crisis into longer term damage that would threaten the very core of our offshore industry.
"This is no time for playing politics when the security of UK energy supplies is on the line."
Written By Unknown on Rabu, 14 Januari 2015 | 11.46
The annual rate of inflation has hit a 15-year low as oil costs continue to fall and supermarkets engage in a price war.
The Office for National Statistics (ONS) measured consumer price inflation (CPI) at 0.5% in December - its joint lowest level on record - slowing from a rate of 1% in the previous month.
The figure represents a further easing in the cost of living as wage growth is boosting consumer spending power and easily outpacing rises in costs.
The ONS said falling petrol prices and lower gas and electricity bills compared with a year earlier were the biggest factors pushing inflation down last month.
The cost of Brent crude is currently at six-year lows - trading on Tuesday at $45-per-barrel.
Video:Sub-£1 Petrol Boss Denies Gimmick
It represents a fall of more than half since last summer on a supply glut and fears for world economic health.
Flat household gas and electricity tariffs over the month - compared to a period last year when they were raised sharply - also made a major contribution to the drop in CPI.
Food and non-alcoholic beverages were 1.7% cheaper in December than the same month a year ago - driven by the intense price war between the major supermarkets under pressure from discounters Aldi and Lidl.
Core vegetable costs were over 7% lower.
Video:Chancellor Welcomes Inflation Drop
Motor fuels fell 10.5% year on year with the price of a litre of petrol tumbling 13.6p between December 2013 and last month, with diesel 15p lower.
The plunge in CPI to below 1% triggers a letter of explanation from Bank of England governor Mark Carney to George Osborne because it is more than 1% off the Bank's 2% inflation target.
But the Chancellor is unlikely to be worried that, ahead of May's election, prices are falling following a tough six years for voters in the wake of the financial crisis.
Price growth could ease further this month as energy firms begin to cut standard tariffs - with no sign of a rebound in oil and gas costs.
Video:Low Inflation - Good Or Bad?
The Bank had previously said it expected CPI to fall below 1% and remain there for months to come.
But the sharpness of the decline brings the UK uncomfortably close to the scenario in the eurozone, where there are fears of a damaging deflationary spiral after inflation fell to -0.2%.
Deflation, which dogged Japan for more than 25 years, is seen as dangerous economically because consumers and businesses hold off on purchases on hopes goods and services will be cheaper in future.
Mr Osborne said: "Inflation is at its lowest level in modern times.
Video:Will Inflation Drop Help Consumers?
"We have family budgets going further and the economic recovery starting to be widely felt.
"We will always remain vigilant that we have lower inflation for the right reasons and today is yet further proof our long term plan is working."
Shadow Treasury minister Shabana Mahmood said: "Plummeting global oil prices are the reason why the rate of inflation is falling here in Britain.
"But wages continue to be sluggish and the squeeze on living standards since 2010 means working people are £1,600 a year worse off under this government."
Britain should celebrate the low inflation rate and not be frightened by it, Chancellor George Osborne is to insist.
He will say the slump in the headline rate to just 0.5% is due to external factors - and the benefits for consumers should be welcomed.
The comments, in a speech to the Royal Economic Society on Wednesday, come as Mr Osborne and Bank of England governor Mark Carney seek to calm nerves over the issue.
Bank of England chief Mark Carney
The Consumer Prices Index (CPI) hit its joint lowest level in December, thanks mainly to cheaper food and petrol.
Economists said the continued plunge in the oil price meant it was likely to fall further and a brief period of negative inflation was "not entirely out of the question".
Video:Consumers Welcome Price Drops
Mr Carney - who is due before the Treasury Select Committee later - has conceded deflation is now "possible", but insists Britain has the tools to deal with it.
Mr Osborne is expected to say: "The low inflation we see here in the UK is much more welcome than in the eurozone where inflation has been very low for some time and is now negative.
"There the debate has understandably turned to the dangers of deflation - the risk of a self-reinforcing spiral where economic activity falters, consumers defer purchases as prices fall and nominal debt burdens become ever harder to manage."
Mr Osborne will suggest the European Central Bank's inflation target could be changed so it is obliged to take action when inflation is below 2% - as well as above it.
Video:Low Inflation - Good Or Bad?
"In the UK our system is well equipped to deal with negative inflation shocks just as it dealt with the surge in commodity prices in 2010 and 2011," he will say.
He will add: "Of course we will always remain vigilant to ensure that inflation is low for the right reasons.
"But we should not confuse this welcome news for Britain's households as a result of falling oil prices with the threat of damaging deflation that we see in the eurozone.
"Rising real incomes, a recovery spreading to all parts of our economy, and family budgets that can stretch that little bit further - let's celebrate these effects of low inflation, not fear them."
Written By Unknown on Selasa, 13 Januari 2015 | 11.46
The owner of three petrol stations in the West Midlands has cut the price of unleaded petrol below £1 a litre, as supermarkets announce further reductions.
The decision to sell petrol at 99.7p by Harvest Energy garages in Birmingham, Redditch and Walsall sees sub-£1 pump prices in the UK for the first time in more than five years.
Dr Velautham Sarveswaran, who runs the stations, claims he will still make money from the move.
"The supermarkets continue to make a fortune without passing the price cuts to their customers. It is a scandal. They are cheating people," he told MailOnline.
Unleaded petrol costs hit a five-year low last week of 109.8p - with figures provided by Experian Catalist showing that average costs on Sunday had reduced further to 108.9p.
Video:Brent Crude Could Go Below $40
Diesel stood just below 115p a litre.
Analysis showed that with an unleaded price of 99.7p, 57.95p of that figure would go to the Treasury in fuel duty and a further 18.3p would be paid in VAT, with the driver paying just over 20p for the product itself.
Lower petrol prices are a consequence of the plunge in oil costs - with Brent crude losing more than 50% of its value since June last year on a supply glut and fears for the strength of the world economy.
Brent was down at fresh six-year lows of $48.8 a barrel in Monday trading.
Supermarkets confirmed further reductions to their prices - with Tesco taking 2p off their petrol and diesel costs from Monday afternoon.
Asda, Morrisons and Sainsbury's confirmed similar moves from Tuesday.
For Asda customers, the latest reduction means they will pay no more than 103.7p a litre for petrol, with diesel at 110.7p.
While motoring groups welcomed the Harvest price, the AA said it "appears to be a publicity stunt rather than a reflection of general pump prices."
Its president Edmund King added: "There remains a postcode lottery out there when it comes to fuel prices.
"Drivers in rural areas are still paying much more than the 109p average price ... It will still take some time to get down to an average of £1 per litre."
The chief executive of Wm Morrison, the UK's fourth-largest supermarket chain, was said to be on the brink of resigning on Monday amid expectations that it would be the sector's worst performer during the Christmas sales period.
Sky News understands that directors of Morrisons were discussing Dalton Philips' future with an announcement possible as soon as Tuesday, when the company is due to provide an update on its trading performance.
A Morrisons spokesman said it did not comment on management changes.
Sources said it remained possible that boardroom discussions would result in Mr Philips remaining in his post for the immediate future and that directors could express renewed confidence in his ability to improve the company's fortunes.
Sky News reported last week that Andrew Higginson, who was appointed as Morrisons' chairman-designate last year, was likely to take over from Sir Ian Gibson at the helm of the company earlier than had been expected.
Mr Philips, a former executive at Loblaw, Canada's biggest food retailer, became Morrisons' boss in March 2010, and also sits on the board of the Department for Business, Innovation and Skills.
If his departure is announced in the near-term, it would bring the curtain down on a near-five-year period during which Morrisons has struggled to modernise its business in the face of tough competition from supermarket discounters and established rivals.
Last autumn, Morrisons announced thousands of job cuts and the introduction of a new loyalty scheme in a bid to stem the decline in sales.
A major profit warning last March sparked speculation that Mr Philips was likely to step down in the medium term.
Analysts have forecast that the chain will announce a like-for-like sales fall over Christmas of between 3% and 4%, worse than either of its listed peers, Tesco and J Sainsbury.
Written By Unknown on Senin, 12 Januari 2015 | 11.46
By Mark Kleinman, City Editor
A former finance director of Royal Mail and one-time boss of Prudential in the UK will this week join an attempt to rehabilitate the reputation of the controversial insurance claims outsourcer Quindell.
Sky News has learnt that the company, which has seen its stock market valuation crash from a peak of £2.5bn amid doubts over its financial probity, will name Richard Rose, the chairman of online electrical goods retailer AO.com and cash-and-carry operator Booker Group, as its new chairman.
Jim Sutcliffe, a former boss of the insurer Old Mutual and Prudential UK, is to become deputy chairman.
Banking sources said that Quindell also plans to name Marisa Cassoni, who was finance director of Royal Mail and John Lewis and who is now a director of the Skipton Building Society, as a consultant.
John Tomlins, a former colleague of Mr Sutcliffe, will also join in a consulting role.
The group of heavyweight appointments, which are likely to be announced on Monday, is intended to remove lingering market uncertainties about the state of Quindell's finances and the robustness of its business model.
One of Mr Sutcliffe's current roles is as chair of the codes and standards committee of the Financial Reporting Council, the accounting regulator, which one source suggested should reassure Quindell investors.
The announcement will come, however, amid an ongoing investigation led by PricewaterhouseCoopers into Quindell's performance following months of turmoil at the company.
Quindell's founder, Rob Terry, had promised to revolutionise the insurance industry by taking on a large chunk of its claims processing activities, but eventually quit the board late last year after a row over share deals involving himself and other directors.
David Currie, a former Investec banker, stepped in to replace Mr Terry as chairman, and has been focused on addressing shareholders' concerns about Quindell's corporate governance.
Mr Rose's appointment will mean that Mr Currie will step down as chairman, but he is expected to remain on the board as a non-executive director.
Earlier this month, Quindell said it was in exclusive talks about the sale of one of its divisions, while it is also engaged in discussions about transactions involving other parts of the group.
Quindell, whose financial affairs have become one of the City's most notorious talking points, raised £200m from investors in 2013 in order to become a one-stop shop for car insurers.
It provides a range of services which help insurers assess and treat drivers and passengers, leading to the formation of a joint venture with the RAC, the roadside recovery service.
The partnership was hailed as the beginning of a far-reaching initiative that would involve installing more than 2m telematics black boxes in cars across the UK, but has since been scaled back to a far more limited project.
Quindell has faced persistent questions over the way it books revenues and its financial forecasts, which it has rebutted, but the sense of crisis surrounding it deepened in November, when Canaccord Genuity resigned as its joint corporate broker.
A replacement has yet to be appointed.
Quindell's shares have plummeted by more than 70% in the last 12 months, although they made significant gains last week when it emerged that Toscafund, a prominent City investor, had acquired a 5% stake in the hope that its fortunes would improve.
The company, which is now valued at around £370m, declined to comment on Sunday.
Some of Britain's biggest energy retailers are expected to rule out price cuts ahead of the General Election amid an intensifying political row over Labour's vow to impose a 20-month price freeze.
Sky News has learnt that a number of major suppliers will tell ministers in the coming weeks that the time horizons over which they set tariffs render a pre-election cut "illogical and impractical" despite the falling oil price and declining cost of wholesale gas.
They plan to respond to a letter from Matthew Hancock, the Business, Energy and Enterprise Minister, who wrote to the six companies this weekend to demand that prices should be slashed.
"Wholesale gas prices have been falling for months, and are now 30% lower than this time last year," he wrote.
"In a competitive market, I would have expected energy suppliers to cut bills as a result of these low wholesale prices.
"Independent suppliers have done precisely this. However, larger energy suppliers have failed to cut prices across all their tariffs?"
The six firms which dominate the residential supply of energy - British Gas, which is owned by Centrica; EDF Energy; EON; Npower; Scottish Power; and SSE - argue privately that a pledge by Ed Miliband to freeze prices if Labour wins May's election has made it commercially risky to cut prices.
"We are taking pricing decisions now that may have to last for two years," an executive at one of the companies said.
"Anything could happen to wholesale prices during that period which would make supplying energy at lower levels than today wholly uneconomic."
The companies have been summoned for talks with Mr Hancock, who also ordered them to explain whether their fuel-hedging strategies, which protect them against sharp changes in wholesale costs, were a factor in preventing them from cutting prices now.
In his letter, he insisted that he did not want to interfere with a competition investigation into the energy sector, which is expected to report its provisional findings in June.
However, Mr Hancock said that the 'Big Six' needed to explain the lack of action on pricing in order "to maintain market confidence".
Speaking to Sky News, Mr Hancock said Labour's policy was "already an embarrassment".
"The evidence increasingly shows the threat of Labour's high price freeze is responsible for higher household bills now. If that's the case, they should abandon it immediately.
"Hardworking households must feel the benefits of lower gas prices and we cannot let the threat of Ed Miliband stand in the way."
Downing Street sources said on Saturday that Mr Hancock's letter had been approved by both the Prime Minister and the Chancellor.
George Osborne this week vowed to watch utilities and fuel retailers "like a hawk" to ensure that the benefits of lower oil prices were being passed on to consumers.
The intervention of senior ministers over the issue in recent days underlines the extent to which the cost of living will be a central plank of the looming election campaign.
Energy company executives pointed, however, to regulatory requirements which meant that gas and electricity had to be sold under contracts of at least 12 months, with customers informed of prices in advance.
"When the natural gas price soared in 2010, consumer prices were able to be maintained because the cost to companies was already locked in," said one.
"Industry profit margins are around 5%. If the price of oil and wholesale gas remain where they are now for a sustained period, we will be able to pass that on over time."
A director of another of the major suppliers added that wholesale costs accounted for only 50% of consumers' bills, with network costs and those associated with environmental obligations expected to rise, rather than fall, during 2015.
None of the companies contacted by Sky News would comment officially on Mr Hancock's letter.
Written By Unknown on Minggu, 11 Januari 2015 | 11.46
By Mark Kleinman, City Editor
The agency which represents taxpayers' stakes in Britain's bailed-out lenders is in talks with Royal Bank of Scotland (RBS) about a £2bn capital-raising which could eventually dilute the Government's shareholding.
Sky News has learnt that UK Financial Investments (UKFI) is discussing with RBS the terms of an additional Tier 1 (AT1) capital buffer which the bank said it would seek from investors last month.
RBS said when it passed a stress test run by the Bank of England in December that the £2bn AT1 issuance would take place during the course of this year, and would see the instrument convert to shares in RBS if its capital buffer fell to 7%.
However, sources said on Friday that the £2bn capital-raising was being complicated by a clause in RBS's taxpayer bail-out which prevents taxpayers' shareholding being diluted through the launch of such convertible securities.
The issue relates to B-shares held in RBS by UKFI, which were created at the time of its bail-out by taxpayers in 2009.
The bank remains roughly-80% owned by the Government, with apparently little possibility of a substantial share sale at a profit for several more years.
RBS has 51 billion B-shares in issue, which do not carry voting rights but can be converted at a rate of ten-for-one into ordinary shares.
In a prospectus issued in 2009 outlining the structure of these B-shares, RBS said they would include rights which would prevent taxpayers' stake being artificially reduced.
The potential obstacle to the new capital-raising, which was an important element of the PRA's decision to approve RBS's current capital plan, was highlighted last month in a previously unreported research note by Autonomous, a leading analyst of financial institutions.
"As part of the capital plans it had to present as a result of the poor stress test result, RBS signalled that it will issue £2bn AT1s next year," Autonomous said.
"We have previously argued that there are legal obstacles to AT1 issuance by RBS, which we continue to see as a problem.
"However, if the PRA is prepared to accept AT1 issuance as part of RBS's remedial plan, we assume regulators must have sufficient clarity that a legal solution to RBS's AT1 problem can be found."
One source said that RBS, UKFI and the PRA were confident that the issue could be resolved, and pointed out that at the time the B-shares were devised, convertible securities such as AT1s were not conceived as a potentially important part of a bank's capital structure.
Insiders insisted that the taxpayer's interests would be fully protected in any AT1 capital-raising and that they would in any event not face being diluted at the point of issuance.
Some of Britain's biggest energy retailers are expected to rule out price cuts ahead of the General Election amid an intensifying political row over Labour's vow to impose a 20-month price freeze.
Sky News has learnt that a number of major suppliers will tell ministers in the coming weeks that the time horizons over which they set tariffs render a pre-election cut "illogical and impractical" despite the falling oil price and declining cost of wholesale gas.
They plan to respond to a letter from Matthew Hancock, the Business, Energy and Enterprise Minister, who wrote to the six companies this weekend to demand that prices should be slashed.
"Wholesale gas prices have been falling for months, and are now 30% lower than this time last year," he wrote.
"In a competitive market, I would have expected energy suppliers to cut bills as a result of these low wholesale prices.
"Independent suppliers have done precisely this. However, larger energy suppliers have failed to cut prices across all their tariffs?"
The six firms which dominate the residential supply of energy - British Gas, which is owned by Centrica; EDF Energy; EON; Npower; Scottish Power; and SSE - argue privately that a pledge by Ed Miliband to freeze prices if Labour wins May's election has made it commercially risky to cut prices.
"We are taking pricing decisions now that may have to last for two years," an executive at one of the companies said.
"Anything could happen to wholesale prices during that period which would make supplying energy at lower levels than today wholly uneconomic."
The companies have been summoned for talks with Mr Hancock, who also ordered them to explain whether their fuel-hedging strategies, which protect them against sharp changes in wholesale costs, were a factor in preventing them from cutting prices now.
In his letter, he insisted that he did not want to interfere with a competition investigation into the energy sector, which is expected to report its provisional findings in June.
However, Mr Hancock said that the 'Big Six' needed to explain the lack of action on pricing in order "to maintain market confidence".
Speaking to Sky News, Mr Hancock said Labour's policy was "already an embarrassment".
"The evidence increasingly shows the threat of Labour's high price freeze is responsible for higher household bills now. If that's the case, they should abandon it immediately.
"Hardworking households must feel the benefits of lower gas prices and we cannot let the threat of Ed Miliband stand in the way."
Downing Street sources said on Saturday that Mr Hancock's letter had been approved by both the Prime Minister and the Chancellor.
George Osborne this week vowed to watch utilities and fuel retailers "like a hawk" to ensure that the benefits of lower oil prices were being passed on to consumers.
The intervention of senior ministers over the issue in recent days underlines the extent to which the cost of living will be a central plank of the looming election campaign.
Energy company executives pointed, however, to regulatory requirements which meant that gas and electricity had to be sold under contracts of at least 12 months, with customers informed of prices in advance.
"When the natural gas price soared in 2010, consumer prices were able to be maintained because the cost to companies was already locked in," said one.
"Industry profit margins are around 5%. If the price of oil and wholesale gas remain where they are now for a sustained period, we will be able to pass that on over time."
A director of another of the major suppliers added that wholesale costs accounted for only 50% of consumers' bills, with network costs and those associated with environmental obligations expected to rise, rather than fall, during 2015.
None of the companies contacted by Sky News would comment officially on Mr Hancock's letter.
