Supermarket Wars: Price Cuts Revealed

Sainsbury's and Asda have announced details of price cuts as their rival Tesco prepares to unveil its turnaround plan.

Asda was first to confirm it was making £300m in customer savings during the first three months of the year, saying it was part of a previously announced £1bn drive to help it close the gap with hard discounters which have been eating away at the dominance of the 'Big Four' chains.

Asda, which reported its worst quarterly sales performance in nearly a decade in November, said the cost of 2,500 "essentials" would fall.

Sainsbury's later said it was to implement price cuts on 1,000 of its most popular products, costing it £150m, and customers would see more than 700 new regular prices in supermarkets this week.

Both chains, along with market leader Tesco and Morrisons, have seen customers drip away to the likes of Aldi and Lidl at the lower end of the price spectrum while Waitrose has captured some of the better off.

Asda's chief merchandising officer for food, Barry Williams, said: "After a great Christmas with the family, January is the month we all start looking at the size of our waists and our wallets.

"We're going further than ever before, rolling back those every day, can't live without items at a bigger percentage than we've ever been able to do previously.

"With hundreds of products at 50p, and even more at 15% less than normal, we're aiming to make a big difference for families in their weekly shop."

Sainsbury's chief executive Mike Coupe said: "We are investing £150m per year for the next three years in some of our customers' most popular purchases, with a total of 1,000 prices cut since we announced this investment in November.

"This will come as welcome news to customers who might be feeling the pinch after Christmas.

"These lower everyday prices are a part of our ongoing commitment to offering our customers great quality products at great prices."

The announcements were made less than 48-hours before Tesco's chief executive was expected to outline a recovery plan for its UK business.

While its supermarkets remain the dominant force in the grocery market, Tesco was slow to counter the discount threat and it has since lost further market value as a result of its £263m profits overstatement, which remains the subject of several investigations.

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Barclays’ 'Bad Bank' Chief To Step Down

By Mark Kleinman, City Editor

The executive in charge of a Barclays division housing billions of pounds of underperforming assets is to step down.

Sky News has learnt that Eric Bommensath, who was previously the co-head of Barclays' investment banking operation, is to retire later this year.

His departure, which is expected to be announced on Wednesday, will come eight months after he was placed in charge of Barclays Non-Core, a new unit set up to manage £110bn of risk-weighted assets (RWAs).

The creation of the division was a core element of a plan unveiled last year by Antony Jenkins, Barclays' chief executive, to reshape the group's sprawling structure in an attempt to improve financial returns.

Since the 'bad bank' was set up, the level of RWAs inside it has been significantly reduced, to £88bn at Barclays' half-year results and £81bn at the end of the third quarter.

That figure will be lower still at the end of the first quarter of this year following the completion of the sale of Barclays' Spanish retail operations last week.

The sale incurred a substantial loss but underlined Mr Jenkins' determination to exert a firmer grip on operations which have failed to produce satisfactory results.

Mr Bommensath, who has been at Barclays for 17 years, is expected to be replaced by two other executives within the bank's non-core unit, John Mahon and Harry Harrison.

He is understood to have decided to leave after establishing a firm path for the division.

Barclays will be the last of the big UK lenders to report their results for 2014 when it announces its full-year earnings on March 3.

The bank's overall performance has been steadily improving under Mr Jenkins, who replaced Bob Diamond in the wake of the Libor rate-rigging scandal in the autumn of 2012.

However, it continues to face a number of regulatory headwinds, including a joint settlement with US, UK and Swiss authorities over systems and control failings in its foreign exchange-trading operations.

A number of other banks, including HSBC and Royal Bank of Scotland, paid more than £1bn under an agreement with the City watchdog last November, with Barclays expected to reach a settlement in the next two months.

For the first time, Barclays plans to publish its annual report, containing comprehensive disclosures on remuneration, on the same day as its annual results.

Barclays declined to comment on the planned changes to the leadership of its non-core division.

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Bank Fashion Becomes High Street Casualty

By Mark Kleinman, City Editor

The high street clothing retailer Bank Fashion has become the high street's first big post-Christmas casualty with around 1,500 jobs at risk after it crashed into administration.

Confirming a report by Sky News, Deloitte, the accountancy firm, said it had been lined up as administrator to Bank Fashion just six weeks after the chain was sold to a subsidiary of Hilco, the specialist retail investor.

The move puts at risk more than 1,500 jobs, although a number of parties have already approached Bank Fashion about a takeover which could yet salvage some of those positions.

The Hilco subsidiary is understood to have paid JD Sports Fashion just £1 to take control of Bank Fashion in late November.

Headquartered in Bury, Lancashire, and trading from 84 stores, principally in the Midlands, northern England and Scotland, the retailer is understood to have struggled amid tough high street and online competition.

In its statement, Deloitte partner and joint administrator Bill Dawson said: "Bank has struggled in a highly competitive segment of the retail industry and has been loss-making for a number of years. 

"A review of the business has determined that a solvent turnaround would not be possible and so its director has sought the appointment of Joint Administrators."

A source close to the situation said the Hilco subsidiary had acquired the business with a view to implementing a turnaround, but had concluded within weeks that it was not viable.

"All stores are open as normal, staff have been paid and additional sale discounts will be implemented later this week," Mr Dawson added.

"The company has already been approached by several parties who have expressed an interest in the business and the Administrators are trading as a going concern with a view to progressing these options and seeking further interested parties for some or all of the business."

Hilco declined to comment.

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Success Rolls On As Car Firm Posts Record Sales

Rolls-Royce sold more cars than ever before last year.

The company delivered 4,063 cars in 2014 - its highest total in 111 years.

A 12% increase on 2013 means sales have now risen five-fold since 2009.

In 2014 sales rose 13% in the UK, 75% in Australia, 60% in Japan, 40% in Europe as a whole, 30% in the USA and 20% in the Middle East.

The best-selling dealership was in Abu Dhabi - though the US remains the company's biggest market, followed by mainland China.

Sales were boosted by orders for the Ghost Series II launched in November. The Wraith also enjoyed its first full year on the market.

The company has created 200 permanent jobs in 18 months, meaning more than 1,500 people now work at its Goodwood headquarters in West Sussex.

Business Secretary Vince Cable said: "Rolls-Royce motor cars are famous throughout the world with increasing numbers now exported abroad. The skill and dedication of its workers here in Britain has led to another very successful year.

The US remains the company's biggest market, followed by mainland China

"The UK's automotive industry is thriving with a new car rolling off the production line every 20 seconds, and increasing levels of investment that's helping to secure local jobs.

"Through our industrial strategy we are backing companies like Rolls-Royce as they go from strength to strength, giving them the right environment to invest with confidence and create high-skilled jobs."

The Rolls-Royce figures precede statistics from the Society of Motor Manufacturers and Traders that are expected to show new-car sales in the UK reached a 10-year high of 2.46 million in 2014.

Rolls-Royce Motor Cars chief executive Torsten Muller-Otvos said: "This fifth consecutive record year saw Rolls-Royce Motor Cars break through the 4,000 car sales level for the first time in its history.

"The result confirms that our strategy of balanced, sustainable and profitable growth is delivering and that Rolls-Royce remains the world's leading luxury goods brand."

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Cable Warns Bank Bosses On Branch Closures

By Mark Kleinman, City Editor

Vince Cable has summoned Britain's biggest banks for fresh talks about branch closures after their bosses refused to renew a promise not to close hundreds of rural outlets.

Sky News has learnt that the Business Secretary has asked executives from the five largest high street lenders to attend a meeting later this month following initial discussions in December.

Mr Cable wants the banks, including Barclays, Lloyds Banking Group and Royal Bank of Scotland (RBS), to make a binding commitment not to close branches when they are the last one remaining in a local community.

However, letters from senior bankers make it clear that rapid technological changes, with customers now performing billions of transactions remotely each year, have rendered such a pledge obsolete.

A sign in the window of a shut bank branch

Figures compiled by community banking campaigners suggest that half of the UK's bank branches have shut since 1989.

Lloyds alone has said that it will close 200 branches during the next three years, although this will be partly offset by 50 new sites to be opened by the taxpayer-backed bank.

Instead, insiders said the banks have agreed to draw up a framework covering circumstances in which they could close a community's last branch.

This would include better information for customers about alternative banking arrangements in their area.

A broader partnership with the Post Office to utilise its 11,500-strong network, as well as the concept of shared branches, are also under discussion.

Mr Cable says communities must not be cut off from basic banking services

Speaking to Sky News, Mr Cable said: "There are a lot of people who are not connected who also need to do basic banking functions, and we mustn't be in a position where large numbers of villages and other small communities are effectively being cut off from banking.

"If the banks cannot perform that service we need an adequate substitute, and they've got a responsibility to help provide it."

In his letter to the banks, he added that they should "think about… how to address any additional financial and operational burdens on the Post Office", implying that they could face a substantial bill.

Last month's meeting convened by Mr Cable included representatives from consumer groups, the Competition and Markets Authority and the British Bankers' Association (BBA).

In a response to Mr Cable, Antony Jenkins, Barclays' chief executive, said the bank "aimed to leave no community without the ability to transact - meaning that, if we do choose to close a branch, we work closely with the local community to determine if there are other ways to support its day-to-day banking needs".

Ross McEwan, chief executive of RBS, said the bank had seen a 30% decline in branch usage since 2010, adding that it would be spending £1bn to improve physical and digital banking infrastructure for customers.

The acceleration of branch closures fits against a broader backdrop of financial inclusion, with major banks under political pressure to continue serving unprofitable customers even as regulators demand that they hold more capital to protect them in the event of another industry crisis.

Last month, the nine biggest high street lenders said they would launch fee-free basic bank accounts as part of an agreement engineered by the Treasury.

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Investec Joins Race For RBS' Coutts Arm

By Mark Kleinman, City Editor

The Anglo-South African financial services group Investec has joined a cluster of international banks eyeing bids for the international arm of Coutts, the wealth manager whose customers include Her Majesty The Queen.

Sky News understands that Investec is among at least half a dozen parties to have expressed interest in buying Coutts International, which has been put up for sale by its owner, Royal Bank of Scotland (RBS).

Coutts International is expected to change hands during the course of 2015, having been identified as non-core by Ross McEwan, RBS' chief executive.

The sale will form part of a wider retrenchment from the global empire-building which became the hallmark of Fred Goodwin, the former RBS boss who took the Coutts brand to mainland China in an attempt to tap demand from the country's fast-growing middle classes.

It is unclear exactly how much the Coutts International business is worth, although analysts have speculated that it could fetch between £500m and £650m.

Video: Coutts CIO On European economy

A sale will not include a licence to use the famous wealth management brand, which will remain attached to Coutts' UK operations.

RBS is retaining the domestic franchise, which is among the world's oldest private banks, with a heritage dating back to the late 17th century.

Investec, which is understood to have hired advisers to help it plot a takeover, has been expanding its wealth management activities rapidly in recent years, with profits rising sharply as a result.

It will face stiff competition for the Coutts International unit, however.

The Singaporean bank DBS and French lender Societe Generale are in talks to team up to buy the business and carve it up along geographical lines.

Other bidders are said to include Intesa Sanpaolo, the Italian bank, Brazil's BTG Pactual, and Julius Baer, the Swiss private bank.

Goldman Sachs, the investment bank, is overseeing the auction.

Investec and RBS declined to comment.

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Cable Warns Bank Bosses On Branch Closures

By Mark Kleinman, City Editor

Vince Cable has summoned Britain's biggest banks for fresh talks about branch closures after their bosses refused to renew a promise not to close hundreds of rural outlets.

Sky News has learnt that the Business Secretary has asked executives from the five largest high street lenders to attend a meeting later this month following initial discussions in December.

Mr Cable wants the banks, including Barclays, Lloyds Banking Group and Royal Bank of Scotland (RBS), to make a binding commitment not to close branches when they are the last one remaining in a local community.

However, letters from senior bankers make it clear that rapid technological changes, with customers now performing billions of transactions remotely each year, have rendered such a pledge obsolete.

A sign in the window of a shut bank branch

Figures compiled by community banking campaigners suggest that half of the UK's bank branches have shut since 1989.

Lloyds alone has said that it will close 200 branches during the next three years, although this will be partly offset by 50 new sites to be opened by the taxpayer-backed bank.

Instead, insiders said the banks have agreed to draw up a framework covering circumstances in which they could close a community's last branch.

This would include better information for customers about alternative banking arrangements in their area.

A broader partnership with the Post Office to utilise its 11,500-strong network, as well as the concept of shared branches, are also under discussion.

Mr Cable says communities must not be cut off from basic banking services

Speaking to Sky News, Mr Cable said: "There are a lot of people who are not connected who also need to do basic banking functions, and we mustn't be in a position where large numbers of villages and other small communities are effectively being cut off from banking.

"If the banks cannot perform that service we need an adequate substitute, and they've got a responsibility to help provide it."

In his letter to the banks, he added that they should "think about… how to address any additional financial and operational burdens on the Post Office", implying that they could face a substantial bill.

Last month's meeting convened by Mr Cable included representatives from consumer groups, the Competition and Markets Authority and the British Bankers' Association (BBA).

In a response to Mr Cable, Antony Jenkins, Barclays' chief executive, said the bank "aimed to leave no community without the ability to transact - meaning that, if we do choose to close a branch, we work closely with the local community to determine if there are other ways to support its day-to-day banking needs".

Ross McEwan, chief executive of RBS, said the bank had seen a 30% decline in branch usage since 2010, adding that it would be spending £1bn to improve physical and digital banking infrastructure for customers.

The acceleration of branch closures fits against a broader backdrop of financial inclusion, with major banks under political pressure to continue serving unprofitable customers even as regulators demand that they hold more capital to protect them in the event of another industry crisis.

Last month, the nine biggest high street lenders said they would launch fee-free basic bank accounts as part of an agreement engineered by the Treasury.

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Tory Vow To End Hefty Taxpayer-Funded Payouts

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Video: Cap Pledge On Public Sector Payouts

A cap would be introduced to curb hefty six-figure redundancy pay-offs for public sector bosses the Tories have promised, if they are returned to office in May.

The party will pledge in its election manifesto to impose a £95,000 limit on payments in the public sector, according to Conservative Treasury Minister Priti Patel.

The move comes in the wake of a string of controversial taxpayer-funded golden goodbyes.

These include severance payments of more than £450,000 in the Civil Service, £500,000 in the NHS, and £1m in the BBC.

Latest figures show the national average redundancy payout is £13,396.

1/9

1. Gallery: Big Public Sector Payouts

   George Entwistle, former director general of the BBC Paid £475,000 after just 54 days in the job

Mark Byford, former deputy director-general of the BBC Pay-off of £949,000

]]>

Caroline Thomson, ex-chief BBC operating officer Paid £670,000

]]>

Katherine Kerswell, former managing director of Kent Council Paid £420,000 and later given civil service job

]]>

Michael Lockwood, chief executive of Harrow Council Given £168,000 when role made redundant, then rehired to same position

]]>

Under the Conservative plan, public sector staff earning less than £27,000 will be exempt from the cap in order to protect the small number of low-paid, long-serving public servants who might otherwise have been hit.

Latest figures show the average redundancy payout is £13,396.

Ms Patel told Sky News: "This is a clear commitment by the Conservative Party, for our next manifesto, to bring an end to this culture where people who are highly paid in the public sector receive these automatic redundancy payments that are extremely high, compensation payments and pensions pots, that are funded by hard-working taxpayers."

The Minister said the cap would not apply to MPs losing their seat at the next election, as they were regulated under a different system operated by the parliamentary watchdog.

Members failing to be re-elected at the May poll will receive a resettlement grant based on length of service, up to a maximum of six months salary - £33,530 based on current pay.

Video: Tory Redundancy Cap Plan Criticised

Labour's Shadow Health Minister Jamie Reed argued the Conservatives should have acted sooner to tackle the issue of redundancy payouts

He said: "David Cameron can't get away from the fact that this horse has already bolted.

"He wasted £1.6bn on redundancy payouts to NHS managers as part of his reckless reorganisation.

"Frontline NHS staff found it galling that 4,000 managers who received pay-offs are now back in NHS jobs."

And unions point out the proposed cap will not apply retrospectively, meaning that those who have already received pay-offs will be able to keep them.

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We use cookies to give you the best experience. If you do nothing we'll assume that it's ok.

Video: Cap Pledge On Public Sector Payouts

A cap would be introduced to curb hefty six-figure redundancy pay-offs for public sector bosses the Tories have promised, if they are returned to office in May.

The party will pledge in its election manifesto to impose a £95,000 limit on payments in the public sector, according to Conservative Treasury Minister Priti Patel.

The move comes in the wake of a string of controversial taxpayer-funded golden goodbyes.

These include severance payments of more than £450,000 in the Civil Service, £500,000 in the NHS, and £1m in the BBC.

Latest figures show the national average redundancy payout is £13,396.

1/9

1. Gallery: Big Public Sector Payouts

   George Entwistle, former director general of the BBC Paid £475,000 after just 54 days in the job

Mark Byford, former deputy director-general of the BBC Pay-off of £949,000

]]>

Caroline Thomson, ex-chief BBC operating officer Paid £670,000

]]>

Katherine Kerswell, former managing director of Kent Council Paid £420,000 and later given civil service job

]]>

Michael Lockwood, chief executive of Harrow Council Given £168,000 when role made redundant, then rehired to same position

]]>

Under the Conservative plan, public sector staff earning less than £27,000 will be exempt from the cap in order to protect the small number of low-paid, long-serving public servants who might otherwise have been hit.

Latest figures show the average redundancy payout is £13,396.

Ms Patel told Sky News: "This is a clear commitment by the Conservative Party, for our next manifesto, to bring an end to this culture where people who are highly paid in the public sector receive these automatic redundancy payments that are extremely high, compensation payments and pensions pots, that are funded by hard-working taxpayers."

The Minister said the cap would not apply to MPs losing their seat at the next election, as they were regulated under a different system operated by the parliamentary watchdog.

Members failing to be re-elected at the May poll will receive a resettlement grant based on length of service, up to a maximum of six months salary - £33,530 based on current pay.

Video: Tory Redundancy Cap Plan Criticised

Labour's Shadow Health Minister Jamie Reed argued the Conservatives should have acted sooner to tackle the issue of redundancy payouts

He said: "David Cameron can't get away from the fact that this horse has already bolted.

"He wasted £1.6bn on redundancy payouts to NHS managers as part of his reckless reorganisation.

"Frontline NHS staff found it galling that 4,000 managers who received pay-offs are now back in NHS jobs."

And unions point out the proposed cap will not apply retrospectively, meaning that those who have already received pay-offs will be able to keep them.

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1. Breaking News: Crew Rescued After Car Carrier Runs Aground
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House Prices Rise At Slowest Pace For A Year

UK house price growth eased to its weakest annual pace for 13 months in December, according to Nationwide.

The building society's monthly index showed that property prices lifted by 7.2% annually this month to reach £188,559 on average, slowing from an 8.5% annual rate of growth in November.

The average cost of a home edged slightly lower from the record high of £189,388 measured the previous month.

Nationwide's report named London as the UK's "top performer" for price growth in 2014, with prices there up by 17.8% year on year, reaching £406,730 typically.

Wales was the weakest-performing region, with values having increased by 1.4% annually to reach £141,631 on average.

Activity in the housing market slowed following the introduction of tougher mortgage affordability checks but Nationwide forecast a return to stronger growth in 2015 because of stamp duty reforms and improved levels of construction.

Its chief economist Robert Gardner said: "The slowdown in housing market activity is surprising given further steady gains in employment, a pickup in wage growth (albeit from low levels) and the continued low level of mortgage rates.

"Moreover, surveys suggest consumers remain in high spirits – a view reinforced by robust retail spending growth in November, which was at its highest for over a decade.

"If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead.

"Supply side developments will be crucial in determining the trajectory for prices."

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City Link Confirms Thousands Of Jobs Lost

The administrators of courier firm City Link have announced 2,356 job losses after a bid to buy the company failed.

Many workers found out about the firm's collapse on Christmas Day and had been warned to expect "substantial redundancies".

Announcing the job losses on New Year's Eve, the administrators at EY said an offer that was made for City Link had not been acceptable.

The bid, made by a consortium, "offered no money up front and significantly undervalued the assets to be acquired", the administrators said.

They said: "The administrators proposed an alternative structure that would be acceptable and common in these situations.

Video: Dec 29: Workers Protest At Depots

"The consortium, despite attempts to make them reconsider, declined to amend their original offer."

Coventry, where the firm has its head office, faces the highest number of redundancies, with 350 jobs lost.

There have also been more than 100 job losses in Hatfield, Heathrow and Warrington.

The administrators said 371 people have been retained to deal with remaining parcels and to help with winding down its operations.

Hunter Kelly, joint administrator of City Link Limited, said: "The company endured substantial losses, which ultimately became too great for it to continue as a going concern, and City Link Limited entered administration following an unsuccessful sale process."

RMT union general secretary Mick Cash said: "The confirmation from the administrators that they have just sacked 2,400 staff and are pulling the plug on any efforts to save City Link is a disgraceful and cynical betrayal that will wreck the lives of our members, many of whom are owed thousands of pounds.

"RMT does not believe that those pulling the strings had any interest in saving this business and were happy to cut and run leaving a trail of human misery in their wake.

"The City Link collapse has blown the lid off the cosy relationship between bandit capitalism and the political elite."

Business Secretary Vince Cable said: "This is very sad news for the City Link workers and their families at a particularly difficult time of year.

"The Government has put arrangements in place to help employees who are made redundant and we stand ready to help."

Around 30,000 parcels are waiting to be collected from City Link depots.

Administrators say they expect depots to remain open until "approximately" 6 January.

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