US Jobless Drops To Lowest Rate Since 2008

The jobless rate in the United States fell to 6.3% in April, its lowest level since September 2008.

A total of 288,000 new jobs were created last month, more than a third up on the figure forecast by economists.

The Labor Department said job creation was picking up after the country's long winter freeze.

It said the upsurge in jobs has sent the unemployment rate down to 6.3% from 6.7% previously.

But the drop occurred because the number of people working or seeking work fell sharply.

In the US, people not seeking work aren't counted as unemployed.

American employers also added more jobs during February and March than those previously estimated.

The job totals for those two months were revised upwards by a combined 36,000.

A number of sectors in the US economy have been affected over winter, including construction and retail.

But job creation is now accelerating.

Official data showed employers added an average of 238,000 jobs during the past three months.

The figure was up more than 40%, from 167,000 in the previous three months.

Job creation also appeared to be widely spread across various sectors.

Hirings last month were broad-based and included higher-paying jobs.

The Labor Department said manufacturing gained 12,000 positions, construction added 32,000 while professional roles including accounting, engineering and technical services, were boosted by 25,100.

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Samsung Told To Pay Apple $119m In Patent Row

Samsung has been ordered to pay $119.46m (£70m) in damages to Apple after the South Korean company was found guilty of violating two patents on smartphone features.

In the latest lawsuit involving the two tech giants, a jury in a federal court in San Jose, California, ruled that Samsung had copied key features of the iPhone in creating its own line of smartphones, including universal searching and slide to lock.

But the verdict was a far cry from the $2.2bn Apple sought and the $930m it won in a separate 2012 trial making similar patent infringement claims against Samsung products, most of which are no longer for sale in the US.

In a counter-claim, the jury found that Apple had infringed one of Samsung's patents in creating the iPhone 4 and 5.

The jury awarded Samsung $158,400 - a fraction of the $6m sought by Samsung.

Brian Love, assistant professor at Santa Clara University's school of law, said: "Though this verdict is large by normal standards, it is hard to view this outcome as much of a victory for Apple.

"This amount is less than 10% of the amount Apple requested, and probably doesn't surpass by too much the amount Apple spent litigating this case.

"Apple launched this litigation campaign years ago with aspirations of slowing the meteoric rise of Android phone manufacturers. It has so far failed to do so, and this case won't get it any closer."

Apple said the ruling reinforced its stance that "Samsung willfully stole our ideas and copied our products."

Samsung representatives were not immediately available for comment.

The verdict marks the latest intellectual property battle between the world's top two smartphone makers.

For over three years, Apple and Samsung have sued each other in courts and trade offices around the world.

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House Prices: Best Annual Rise 'Since 2007'

The latest snapshot of UK house prices points to an acceleration in growth, with the biggest annual rise since 2007 recorded in April.

The Nationwide House Price Index charts a 1.2% increase month-on-month and a 10.9% rise over the past 12 months - with the top end of the market in London and the South East leading the charge.

The performance took the average cost of a home in the UK to 183,577, Nationwide calculated.

Its monthly report was released as a study by the housing charity shelter and auditors KPMG warned that prices could quadruple in 20 years if more is not done to tackle the housing shortage, which is seeing 100,000 fewer homes than are needed being built each year.

High demand but poor supply of properties for sale has been a major factor behind the recovery in the housing market in the wake of the financial crisis - with schemes to help people secure a mortgage, such as Help to Buy, stoking the interest.

Robert Gardner, Nationwide's Chief Economist, said: "The introduction of Mortgage Market Review (MMR) measures could have an impact on activity levels in the months ahead as the new measures bed down.

"However, underlying demand is likely to remain robust, as mortgage rates remain close to all-time lows and as consumer confidence improves further on the back of stronger labour market conditions and the brighter economic outlook.

"Earnings growth is beginning to pick up, with wage increases finally outpacing the rise in the cost of living in February.

"Nevertheless, house price growth is outstripping income growth by a wide margin.

"The risk is that unless supply accelerates significantly, affordability will become stretched.

"The upturn in construction of new homes continues to lag far behind the upturn in demand, with the number of new homes being built in England still around 40% below pre-crisis levels (and this was already insufficient to keep up with the increase in the number of households being formed).

"MMR measures, which place a greater emphasis on affordability, should help to ensure that prices do not become detached from earnings.

The Nationwide report highlighted that higher priced properties in London and the South East accounted for a higher proportion of transactions during April - renewing fears of a price bubble.

Mr Gardner added: "In London, the proportion of housing transactions involving properties over £500,000 has increased from 13% in 2007 to around 25% in 2013.

"The share involving properties of over £1m has more than doubled from 3% to more than 6%."

More follows...

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Channel 5 To Be Bought By MTV's Owner

It has been confirmed that Viacom, the owner of MTV, has agreed to buy Channel 5 for £450m.

The deal represents a £346m profit on what media tycoon Richard Desmond's Northern & Shell paid for the broadcaster in 2010, but the price tag fell short of the reported £700m he initially sought.

Viacom's successful bid is subject to regulatory approval but the agreement marks the first time a US broadcaster has taken control of one of the UK's five free-to-air channels.

MTV is Viacom's best-known brand

Its chief executive Philippe Dauman said: "The acquisition of Channel 5 accelerates Viacom's strategy in the UK, one of the world's most important and valuable media markets.

"Channel 5's momentum is indisputable, with impactful programming, increasing popularity and a growing digital platform.

"Channel 5's management and employees have done an outstanding job building their brand and we are pleased to welcome them to our team.

"Viacom's global resources, technology and expertise will help Channel 5 develop even more compelling programming and provide content to consumers in exciting new ways.

"In addition, we will introduce our popular content to new UK audiences and create a comprehensive offering for our commercial partners on-air and on-line."

Viacom, which is best-known in the UK for MTV, has more than 20 branded TV channels available in the country, including Nickelodeon and Comedy Central.

Channel 5's fortunes have been transformed since Northern & Shell, which also owns the Daily Express and Daily Star newspapers, bought it four years ago.

Mr Desmond was credited with bringing in viewers by snapping up Big Brother after it was ditched in favour of new projects by Channel 4.

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Twitter Stock Down 12% As It Posts $132m Loss

Twitter shares fell 12% on opening in New York on Wednesday after the social network's latest results disappointed investors.

Shareholders were looking for stronger user growth than the company reported in its first quarter statement following the market close on Tuesday.

Twitter, which went public on the New York Stock Exchange last November, said it had 255 million monthly users at the end of March, up 25% on a year ago, though the figure was two million lower than Wall Street's consensus. 

The social network posted a deeper net loss of $132.4m (£79m) - which compares to $27m in the same period last year - blaming  stock compensation costs.

A sharp increase in advertising revenue helped numb the pain.

Total revenue more than doubled to $250m from $114m while Twitter's advertising revenue was $226m, about 80% of which came from mobile advertising.

But it was not enough to appease investors, with shares hitting $38.35, 10% down, in Wednesday afternoon trading - still above their flotation price of $26 but down significantly on the heights seen in December of $74.73.

Analysts said user numbers was a key metric for Twitter.

The company has said it is focusing on expanding its audience and encouraging people using short messaging service to use it more often.

By comparison, Facebook has 1.28 billion users and professional networking service LinkedIn had 277 million users at the end of 2013.

WhatsApp, the messaging app Facebook has agreed to buy for $19bn, recently passed the 500 million user milestone.

"We had a very strong first quarter. Revenue growth accelerated on a year over year basis fuelled by increased engagement and user growth," Twitter's chief executive Dick Costolo said in a statement.

Twitter gave a conservative revenue forecast for the current quarter and for all of 2014 - expecting revenue of up to $280m for the April-June period.

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Co-op Bank Review Sparks Pay Clawback Demand

The Main Findings Of The Co-op Bank Review

Updated: 10:38am UK, Wednesday 30 April 2014

The review by Sir Christopher Kelly into what went wrong at the Co-operative Bank is summarised below:

:: THE REVIEW

The independent review was commissioned in July 2013. It is based on more than 130 interviews of current and former employees, board members and others, as well as examinations of internal papers and external reports.

Its conclusions are scathing. In its own words it is a "sorry story of failings in management and governance".

The review states that contributory factors to the "debacle" include the economic environment and increasing capital requirements by regulators but Sir Christopher Kelly identifies two key areas of failing:

:: BRITANNIA MERGER

It says the Britannia merger of August 2009 "lies at the heart" of the problems at the bank. At the time of the merger, Britannia was the second largest building society in the UK with assets of £35bn, 2.8m customers and 254 branches, compared with Co-Op Bank's assets of £15bn, 500k customers and 90 branches.

Britannia had more exposure to sub-prime lending (loans to people who may struggle to repay them) than any other building society. The review found out Britannia would sometimes complete transactions that no other lender would take on.

It was put on a "watch list" by the city regulator, then-called the FSA, but it makes clear neither Britannia, nor the Co-op Bank were aware of this.

It calls the due diligence process preceding the merger "cursory" and "startling". Accountancy firm, KPMG was not given access to Britannia premises so could only perform high level checks on the information provided. But adviser JP Morgan Cazenove advised the Co-op that KPMG's due diligence "exceeded that normally undertaken for listed companies".

The Bank's board was not alerted to the deteriorating business case of Britannia as property prices plummeted. Something the review calls "a major error of judgement".

:: MANAGEMENT AND CULTURE

It says the executive team of the bank "failed to exercise sufficiently prudent and effective management of capital and risk" and that the board "failed" in its oversight of the executive. Combined it says "they badly let down the Group's members".

The bank's culture accepted mediocrity and "did too little to discourage wrong behaviours". It failed to address poor performance and tolerated under-performers – "something which might take a week in most banks would take months in the Co-operative Bank".

It advises that considering the Group still owns 30% of the bank, the Group board should take on an experienced banker. It notes that both Sainsbury's and Tesco, which are trading companies with banking subsidiaries smaller and less complex than the Co-op Bank, have experienced bankers on their main boards.

Other areas of note:

:: Payment Protection Insurance

In relation to PPI mis-selling it notes that in spite of the fact the Bank had an avowedly ethical policy, it "manifestly failed to treat its customers fairly". Total provisions for PPI compensation up to the end of 2013 were £347m.

:: PROJECT VERDE (LLOYDS BRANCHES)

Paul Flowers, the disgraced former chair of the Bank, is called in the report a "wholly unsuitable person to chair the Co-operative Bank board".

Flowers has asserted the Treasury pressured the Bank into buying branches of Lloyds, in the deal known as Project Verde.

He declined to be interviewed by the review but the report has found "no compelling evidence of pressure from government ministers or anyone else".

:: CONCLUSION

The report concludes the circumstances that led to the lessons laid out by the report "must pain all who care about the co-operative movement".

:: CONTEXT

In the past few weeks both the Co-operative Group and the bank have announced major losses.

The group's losses were £2.5bn for 2013 - the worst results in the group's 150-year history, with £2.1bn of that coming from the Co-op Bank.

The Bank's figure contained a trading loss of £1.44bn for the year to December, when the group lost control of Co-op Bank to US hedge funds.

The interim chief executive of the group, Richard Pennycook, on April 17 called the past year a "disastrous year for the group" - the worst in its history.

:: AGM

On May 17 there will be an AGM for Co-operative members. It is expected the mutual's board will seek backing for Lord Myners' proposals to reform corporate governance.

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UK Economy Grows 0.8% In First Quarter

The UK's economic recovery continued in the first quarter of 2014, with the first estimate of GDP growth coming in at 0.8%.

The figure, while weaker than the 0.9% most economists had expected, meant that output was 3.1% higher than on the same period the previous year, marking the fastest annual growth since the last quarter of 2007.

However, the economy remains 0.6% smaller than at its peak in the first quarter of 2008, after the recession wiped 7.2% off total output.

News of the economy's latest performance, released by the Office for National Statistics (ONS), showed growth across each major sector of the economy, though construction output was damaged by the impact of the winter storms.

The ONS said while widespread flooding appeared to have no overall effect on output it said bad weather in January and February did hit efforts to meet demand for new homes, with construction recording just 0.3% growth.

Mr Osborne says the figures show Britain is "coming back"

Output in the service sector - which makes up more than three quarters of UK GDP - rose by 0.9% and continued to be driven by consumer spending.

Manufacturing grew by 1.3%, its strongest quarter for nearly four years, bolstering hopes for a rebalancing in the recovery away from its reliance on consumers.

Industrial production rose 0.8% though mining and quarrying, electricity and gas production and agriculture shrank over the quarter.

The GDP figures were seized upon by the union organisation the TUC as evidence the recovery was not gaining enough momentum to sustain a raise in interest rates, which is widely expected next year.

The figures were released at the same time as statistics showing a 2.5% rise in the number of people being declared insolvent in England and Wales over the same period.

There were 24,931 individual insolvencies recorded during the three months - a period when wage increases finally caught up with inflation for the first time since the recession.

Chancellor George Osborne said: "Today's figures show that Britain is coming back - but we can't take that for granted. We have to carry on working through our long-term economic plan.

"For the first time in a decade all three main sectors of the economy - manufacturing, services and construction - have grown by at least 3% over the last year.

"The impact of the great recession is still being felt, but the foundations for a broad-based recovery are now in place.

"The biggest risk to economic security would be abandoning the plan that is laying those foundations".

Shadow chancellor Ed Balls said: "Now that growth has finally returned, the question is whether ordinary working people will properly feel the benefit and we have a balanced recovery that's built to last."

He told Sky News: "Most people are experiencing a cost of living crisis, which David Cameron and George Osborne try to deny. Its a reality for most people in our country".

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WPP Boss Nets £29m After Share Payout

By Mark Kleinman, City Editor

Sir Martin Sorrell's status as one of Britain's best-paid businessmen will be cemented on Wednesday when the company he founded discloses that he earned close to £30m last year.

Sky News can reveal that Sir Martin, chief executive of WPP Group, the world's biggest marketing services supplier, saw his total remuneration reach a record high in 2013.

His package was boosted by a £22.7m payout disclosed last month from a scheme linked to total shareholder returns during a five-year period in which WPP was the seventh-best performer in the FTSE-100.

Sir Martin's pay will be outlined in WPP's annual report, days after the company reported a strong set of results for the first quarter of 2014, with like-for-like revenues growing by 7%.

The document is expected to show that Sir Martin's overall pay for 2013 was in the region of £29m, 90% of which was performance-related, insiders said on Tuesday.

The £22.7m share payout was made under a scheme called LEAP, which was discontinued last year after feedback from institutional shareholders.

The remainder of Sir Martin's 2013 package is understood to consist of roughly £4m awarded under a short-term incentive plan, half of which is in shares deferred for two years.

He also received £1.15m in base salary last year, a lower figure than the previous year's £1.3m, and a reduced pension contribution.

WPP's status as the world's biggest supplier of marketing services, through advertising and media buying networks such as J Walter Thompson and MEC, has been under threat from the proposed merger of Omnicom of the US and France's Publicis.

However, that transatlantic alliance now looks to be in jeopardy, with tax authorities in the UK and the Netherlands resisting overtures to host a new holding company for the combined group.

Disagreements about the management line-up at the new Franco-US company are also said to be undermining the proposed merger.

Sir Martin said last week that the uncertainties about his rivals' deal was fuelling a surge in new business success at WPP, with recent major client wins including Marks & Spencer and Vodafone.

The WPP boss has been a staunch defender of his pay, frequently pointing to the risks he took to fund its growth during several precarious phases of the company's existence.

One ally of Sir Martin's pointed out that during the five-year period covered by the £22.7m share payout, there was a £12.35bn uplift in returns to all WPP's shareholders.

Reforms to WPP pay policies saw investor support for the company's remuneration report rebound to 80% last year from a meagre 40% in 2012.

Vince Cable, the Business Secretary, has forced an overhaul of the way companies report executive pay, and handed shareholders a binding vote on future compensation policies.

Votes on the previous year's pay deals, which saw bloody noses given to boards at Barclays and Pearson last week, remain non-binding.

A WPP spokesman said: "The vast majority of Sir Martin Sorrell's pay relates to the five-year LEAP scheme already disclosed and designed to link long-term shareholder value creation with executive rewards as prescribed in Vince Cable's recent communication with companies."

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Banks To Be Tested On 35% House Price Slump

By Mark Kleinman, City Editor

Britain's biggest banks and building societies could be forced to raise billions of pounds of fresh capital unless they can demonstrate their ability to withstand a house price slump of roughly 35%.

Sky News has learnt that stress tests to be carried out by an arm of the Bank of England later this year will also assess their readiness to cope with a sudden spike in interest rates to more than 5%.

A series of commercial real estate losses will also be applied to the banks' balance sheets as part of the tests, insiders said.

Details of the stress tests, which have been drawn up by the Financial Policy Committee and the board of the PRA, will be disclosed to markets on Tuesday.

It is unclear whether the interest rate hike will be quantified as part of the tests, while the 35% figure is "in the ballpark" of the housing market scenario to be tested by the PRA, a source said.

The Prudential Regulation Authority (PRA) will unveil the UK tests of banks' resilience alongside a similar exercise being carried out by the European Banking Authority, which will include lenders from across the Continent.

The PRA is to announce the stress test of UK banks

The tests will come amid growing concerns about overheating in the housing market, particularly in London, where price rises have accelerated amid the improving economy.

Government ministers including Vince Cable, the Business Secretary, have warned that the Help to Buy scheme has contributed to the inflation of a housing bubble.

Banking sources have expressed concern about the PRA's methodology for conducting the tests, with some uncertainty about the timing and extent of the publication of the results.

In a statement last month, the FPC said the stress test "was not intended to be the FPC's expectation of what would happen, but a coherent tail risk event against which banks' resilience could be tested".

"A key part of the scenario would examine the resilience of the banks to a housing market shock and to a snap back in interest rates," it added.

The Government wants to avoid a 'too big to fail' scenario

Lenders including Nationwide and Santander UK, which have a substantial proportion of their business skewed towards the UK mortgage market, are said to be concerned about the possible outcome of the tests.

Banks such as HSBC, meanwhile, are also being tested for the impact of a severe slowdown in the Chinese economy.

The stress tests are designed to ensure that British banks have sufficient capital to withstand another economic slump, obviating the need for taxpayers to bail them out, as happened during the crash which began in 2007.

"The philosophy is that banks' bondholders and shareholders, rather than UK citizens, should pick up the tab," said a source familiar with the PRA's plans.

Banks would be given a substantial period of time to raise any capital that the PRA deems necessary as a consequence of the stress tests, insiders said.

The PRA declined to comment on Monday on the details of the stress tests ahead of Tuesday's announcement.

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Pfizer Confirms Bid Interest For AstraZeneca

AstraZeneca: The Key Statistics

Updated: 10:51am UK, Monday 28 April 2014

American pharmaceutical giant Pfizer, which makes Viagra, has until May 26 to confirm its intentions in what could be Britain's biggest ever takeover. Here are some key statistics and history about AstraZeneca:

:: Pfizer's original bid earlier this year for AstraZeneca valued the company at just under £60bn.

:: AstraZeneca operates in more than 100 countries and employs 51,500 people worldwide.

:: Around 9,000 of its staff work in research and development (R&D).

:: It attracted £15.6bn of annual sales in year ending December 31, 2013, however this was down 24% in two years - from £20.4bn in 2011.

:: Reported operating profits have fallen from £7.8bn to £2.2bn, a fall of 71% over the same period.

:: Key to these falling sales and profits is the loss of exclusivity on some of its blockbuster drugs including Arimidex, Atacand, Crestor, Nexium and Seroquel IR. In 2013, the loss of exclusivity directly reduced revenues by £1.3bn.

:: The group forecast that, with new drugs coming online and its extensive acquisition activity, revenues will be back in line with its 2013 figures by 2017.

:: In the three years to 2013, it has completed more than 150 acquisitions including Pearl Therapeutics and Omthera Pharmaceuticals.

:: In 2013, it bought Amplimmune for £700m to help the group secure future products.

:: Analysts see the group battling to sustain itself in a more competitive industry, where cheaper generics eat into the profits on successful drugs post exclusivity.

:: The R&D cost and difficulty of developing new equivalent blockbuster drugs keeps growing.

:: Pfizer's previous proposal on January 5 included a combination of cash and shares which represented an indicative value of £46.61 per AstraZeneca share.

:: The bid included a substantial premium of approximately 30% to AstraZeneca's closing share price of £35.86 on January 3.

:: AstraZeneca was formed in 1999 when Sweden's Astra - which was formed in 1913 - merged with the UK's Zeneca.

:: Zeneca was created in 1993 following a de-merger from ICI.

:: Pfizer's revenues were $51.6bn (£30.7bn) in 2013.

:: Pfizer employs 78,000 people worldwide including 900 in Britain.

:: It makes Viagra and Chap Stick.

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