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US durable goods slip in August

2011-10-25T01:58:00.000-07:00

28 September 2011 Last updated at 15:05 GMT New orders for US cars and car parts fell sharply in August Orders for big manufactured goods in the US fell slightly in August after a sharp jump in the previous month, due in part to a fall in demand for cars.

Durable goods orders fell by 0.1% to $201.8bn, roughly in line with expectations, after a 4.1% rise in July, the Commerce Department said.

However, plane orders grew strongly for the second month in a row.

The figures come a day after weak housing and consumer confidence data reinforced concerns for the US economy.

On Tuesday, the closely-watched S&P Case Shiller index showed stagnant house prices in July, while the Conference Board's consumer confidence index for September showed no recovery from August's weak level.

'Positive signals'

The durable goods figures from the Commerce Department said new orders for motor vehicles and parts fell by 8.5% between July and August.

This was partially offset by a jump of 23% in aircraft orders.

Analysts said the figures were reassuring, given the large jump in total orders in the previous month.

"The marginal slippage in August after a positive July is not enough to suggest trend has turned negative," said David Sloan at IFR Economics.

"In fact the August breakdown contains some positive signals for business investment."

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HP completes buy-out of Autonomy

2011-10-24T22:32:00.000-07:00

3 October 2011 Last updated at 21:51 GMT Continue reading the main story Hewlett-Packard has completed the $12bn (￡7.8bn) buy-out of UK software firm Autonomy, despite the departure of the man who initiated it.

Leo Apotheker was replaced as HP chief executive last month amid falling sales and a share price collapse.

The Autonomy deal was part of a massive overhaul of the troubled US computer giant unveiled by Mr Apotheker.

But plans to spin off its core PC business received a thumbs down from the market.

HP's shares have fallen 47% this year, making it one of the worst performers in the Dow Jones index of leading US companies.

The purchase price for Autonomy was also widely criticised by market analysts as too high, but British takeover rules made it almost impossible to cancel the bid.

Meg Whitman, the former head of eBay who replaced Mr Apotheker, said shortly after her appointment that the deal would still go ahead.

The UK firm's head, Mike Lynch, later got into a colourful spat with HP rival Oracle, who claimed that Mr Lynch had sought a rival bid from them and been declined.

Oracle's chief executive Larry Ellison described the asking price as "absurdly high".

HP's shares closed 1.1% lower on Monday, outperforming the wider market.

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'More help' on childcare costs

2011-10-24T18:29:00.000-07:00

7 October 2011 Last updated at 00:13 GMT Parents eligible for tax credits can get help with up to 70% of their childcare costs Parents on low incomes who are working less than 16 hours a week will be eligible for childcare support from 2013, under new government plans.

Some ￡300m has been allocated for the move, worth up to ￡175 a week for one child and ￡300 for two or more.

Ministers say it will benefit 80,000 families receiving universal credit.

Charities had been calling on them to increase the amount they planned to spend on childcare support as part of sweeping welfare reforms.

Under the universal credit system, a single payment will replace child tax credit and working tax credit, as well as income-related jobseeker's allowance, housing benefit, income support and income-related employment support allowance.

The switchover will begin in 2013 and continue into the next parliament.

'First steps'

The universal credit budget had been set at ￡2bn, but ministers say an additional ￡300 million has been found to extend childcare tax credits.

At present, families can get credits to cover up to 70% of their weekly childcare costs, but only if they work more than 16 hours a week. The exact amount given depends on income level, but couples with an income up to ￡41,000 can qualify.

Work and Pensions Secretary Iain Duncan Smith said: "We are determined to help more parents take their first steps into work, but under the current minimum hours rule parents are trapped in state dependency without the childcare support they badly need - providing yet another barrier to work."

Deputy Prime Minister Nick Clegg said: "Childcare support is vitally important. It's a lifeline for families up and down the country, particularly for mums who want to get back into work, maybe for just a few hours a week after they've had children.

"This will help an extra 80,000 families who have previously had no help at all with childcare costs."

Childcare costs vary widely, but the government says the benefit would help low income families pay for an average of about 40 hours a week.

Labour said the government had already reduced support from 80% to 70% of weekly costs.

Liam Byrne, shadow work and pensions secretary, said: "Today's announcement is frankly smoke and mirrors. It won't mean a penny more help for parents already struggling on childcare tax credits.

"Universal credit is now set to lock in a 'parents' penalty' that cuts back childcare payments so hard that many parents will be forced to give up work.

"With parents struggling to make ends meet, it beggars belief that the Tories are stopping parents working the hours and shifts they need by taking away their childcare."

In a recent survey of 4,359 parents by the Daycare Trust and Save the Children, nearly a quarter said the cost of childcare had put them in debt.

A quarter of those on the lowest incomes said they had given up work and a third had turned down work because of childcare costs.

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Abramovich 'good at psychology'

2011-10-24T14:11:00.000-07:00

6 October 2011 Last updated at 16:59 GMT Mr Berezovsky began giving evidence as the case moved into a fourth day Chelsea Football Club owner Roman Abramovich is good at psychology, appearing humble and getting people to like him, a High Court judge has heard.

Boris Berezovsky, 65, said his former business partner "intimidated" him into selling shares in Russian oil firm Sibneft for a fraction of their value.

The Russian oligarch is seeking ￡3bn in damages from Mr Abramovich for an alleged breach of trust and contract.

Mr Abramovich, 44, disputes the claims and denies making "oral agreements".

In a written witness statement given to the judge at the Commercial Court, Mr Berezovsky said: "He [Mr Abramovich] is good at getting people to like him and good at psychology in that way.

'Pressure'

"He is good at appearing to be humble. He is happy to spend days just socialising with important or powerful people if that is what is needed so he can get closer to them."

When questioned by Mr Abramovich's lawyer Jonathan Sumption QC about his own past, Mr Berezovsky admitted he was one of the most politically-influential oligarchs in Russia in the mid 1990s.

But he denied any underhand dealings, telling the court: "I am not corrupt. I didn't corrupt anybody."

He also denied "fixing" an auction of Sibneft following its privatisation, and putting "pressure" on the then Russian president Boris Yeltsin.

"My way is not to make pressure," he said. "My way is to persuade and to explain why it is important to do."

Mr Abramovich watched proceedings from the public gallery as Mr Berezovsky began giving evidence to the judge, Mrs Justice Gloster, on the fourth day of proceedings.

The trial is expected to last more than two months.

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US Senate postpones currency vote

2011-10-24T10:44:00.000-07:00

7 October 2011 Last updated at 04:02 GMT President Obama has said that any action by the US has to be consistent with international treaties The US senate has postponed its vote on the much-debated currency bill until next week amid differences between the Republicans and Democrats.

The bill would make it easier to impose penalties on goods from countries seen as keeping their currencies artificially low.

Politicians and some business groups have accused China of using its policy of limiting the yuan's value to boost exports.

Leaders differed on certain amendments.

"I think China needs to carefully think about and process the substance of what people are saying here on the floor of the United States Senate." said John Kerry, chairman of the Democratic Senate Foreign Relations Committee.

'Very aggressive'

The debate on China's currency policy has become the centre of attention amid a slowdown in the US economy.

Continue reading the main story

Whatever tools we put in place, let's make sure that these are tools that can actually work, that they're consistent with our international treaties and obligations”

End Quote Barack Obama US President President Barack Obama said "China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States."

"It is indisputable that they [China] intervene heavily in the currency markets and that the RMB [yuan], their currency, is lower than it probably would be if they weren't making all those purchases in the currency markets."

Politicians and policy makers have said that undervalued yuan has not only given an unfair advantage to Chinese exporters, it has also contributed to the unemployment situation in the US.

"We cannot continue to let China flaunt the rules," said Democratic Senator Chuck Schumer.

Mr Schumer added that if no action was taken against China's policies the US "may never recover as a country. This is serious stuff".

Cautious approach

However, President Obama warned that the US needed to take a cautious approach while handling the matter.

"My main concern and I've expressed this to Senator Schumer, is whatever tools we put in place, let's make sure that these are tools that can actually work, that they're consistent with our international treaties and obligations." he said.

President Obama's comments come as China has accused the US of using the currency dispute to take protectionist measures.

At the same time, some politicians and trade groups have said that such a bill may do more harm than good to the US economy.

They have warned that any such action by the US may start a trade war with China.

"Unilateral action by the United States will only serve to increase trade tensions and negatively impact the US economic recovery during this fragile period in the global economy," Bruce Josten of the US Chamber of Commerce wrote to the Senators earlier this week.

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IMF warns on drastic budget cuts

2011-10-24T06:55:00.000-07:00

5 October 2011 Last updated at 14:41 GMT Changing economic times will mean a change in economic policy, the IMF said Europe's stronger economies should avoid imposing drastic budget cuts at the expense of growth, a report by the International Monetary Fund has said.

If things worsen in the UK, Germany or France, they should "consider delaying" cuts, because they can borrow "at historically low" interest rates.

The IMF also warned that a recession in Europe in 2012 could not be ruled out.

Separately, a Markit PMI study said the eurozone's service sector shrank for the first time in two years last month.

The IMF's warning came in its latest 100-page report on the economic outlook for Europe.

"Finding a durable solution to the euro area sovereign crisis has become more than overdue," the IMF said in its report.

"(This) will require some difficult decisions to improve crisis management and a demonstration of unity behind the project of economic and monetary union that will convince markets.

"The pursuit of nominal deficit targets should not come at the expense of risking a widespread contraction in economic activity," the IMF said.

"If (economic) activity were to undershoot current expectations and risk a period of stagnation or contraction, countries that face historically low yields (for example, Germany and the UK) should also consider delaying some of their planned consolidation."

The IMF's Europe director, Antonio Borges, said that Europe had edged closer to recession. "We still predict growth in 2012, but very modest," he said.

But if economies go into reverse "all those countries with fiscal leeway might want to consider" changes in fiscal policy, he said.

'Spreading malaise'

The weakness of the eurozone's economic recovery was underlined in data from the latest Markit/CIPS Services Purchasing Managers' Index.

For September, the index fell to 48.8, from 51.5 in August, its lowest reading since July 2009. A reading below 50 indicates contraction.

Markit said that a service sector downturn that began in smaller members of the 17-nation eurozone had spread throughout the bloc.

"The malaise is spreading to the core, where surging rates of expansion earlier in the year have turned rapidly into contraction in Germany and only very modest growth in France," said Chris Williamson, chief economist at Markit.

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'Bad bank' plan for Dexia assets

2011-10-24T03:03:00.000-07:00

4 October 2011 Last updated at 22:46 GMT Dexia shares have fallen sharply in the past two days The Belgian government has approved the creation of a "bad bank" for risky assets held by the troubled Franco-Belgian bank Dexia.

Shares have fallen sharply in the past two days amid fears about its large exposure to Greek government debt.

Belgian Prime Minister Yves Leterme said his cabinet had agreed to isolate at-risk assets and to guarantee debts.

There are fears that Greece may end up defaulting on more than 50% of its debt, mostly held by European banks.

Shares fell by as much as 37% at the start of European trading on Tuesday - adding to a 10% Monday drop prompted by an alert by ratings agency Moody's - but rallied back to a mere 22% down at the end of the day.

Reorganisation

The commitment to guarantee debts raised questions over the heavily indebted Belgian government's own solvency.

Belgium's 10-year cost of borrowing jumped from 3.7% to 3.8% in bond markets on Tuesday.

Separately, the French and Belgian central banks also stated that they "fully support" Dexia, indicating that they will provide whatever borrowing is needed by the bank to ensure it does not run out of cash.

Continue reading the main story

The European Banking Authority... portrayed Dexia as one of the strongest banks in Europe”

End Quote Robert Peston Business editor, BBC News The bank is to be restructured. As well as the creation of a "bad bank" supervised by the French and Belgian governments, a unit of the bank responsible for lending to French local authorities, Credit Local, will be sold off.

A joint statement from the countries' finance ministers said: "In the framework of Dexia's restructuring, the governments of France and Belgium, in co-ordination with our central banks, will take all necessary steps to ensure the protection of depositors and creditors."

The two ministers, who were meeting at a wider EU finance ministers' meeting in Luxembourg, have been discussing ways to support the bank.

Many investors anticipate that the bank will ultimately have to be recapitalised by the two governments - in other words, nationalised.

The crisis at Dexia comes just weeks after the bank passed stress tests by regulators of all the major European banks, further undermining the credibility of the entire exercise.

Exposure

Market concerns over Greece's ability to repay its debts were further heightened on Monday, as eurozone finance ministers again delayed a decision on giving Greece its next instalment of bailout cash.

It came after Greece said it would not meet this year's deficit cutting target.

Eurozone banks have been hit by cash outflows since the summer amid fears that Greece, and possibly other governments, may ultimately default on their debts, and even exit the eurozone, leaving their lenders sitting on big losses.

Dexia's exposure to Greek government debt totals 3.4bn euros ($4.5bn; ￡2.9bn). Its total exposure to Greece - including to private-sector Greek borrowers - is 4.8bn euros.

It has already written off 21% of its Greek debts, but market prices now suggest the eventual loss to lenders could be in excess of 50% of the amount owed by Greece.

The bank is partly-owned by the French and Belgian governments, after it received a 6bn-euro joint bailout at the height of the financial crisis in 2008.

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Wolseley returns to annual profit

2011-10-23T22:37:00.000-07:00

4 October 2011 Last updated at 07:19 GMT Wolseley said weaker economic forecasts would have an impact on its markets Building and heating materials group Wolseley has returned to a full-year profit in 2010-11.

The group suffered when the housing market was hit during the recession, but said it had focused on improving its "customer, product and vendor mix".

Wolseley reported a pre-tax profit of ￡391m in the year to July, compared with a ￡328m loss a year earlier.

It said markets were broadly stable but there had been "no strong rebound in activity after the recession".

Revenues rose 3% to ￡13.6bn.

The group also took a ￡39m charge on its Bathstore and BCG brands in the UK, "reflecting a deterioration in the outlook for retail markets".

It added that in the current environment, it remained cautious about its cost base.

"Recent economic forecasts have weakened, and over time this is likely to have an impact on our markets," said chief executive Ian Meakins.

The company has been selling off units as part of a disposal strategy over the past 18 months.

In July, it sold its French distribution division Brossette and British Build Center business to France's Saint-Gobain for ￡310m.

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Eurozone manufacturing contracts

2011-10-23T19:26:00.000-07:00

3 October 2011 Last updated at 09:11 GMT Markit says the German economy, the eurozone's main engine of growth, is stalling Manufacturing in the eurozone shrank at its fastest pace in two years in September, a business survey has shown.

Markit's purchasing managers' index (PMI) of activity dropped to 48.5 last month, from 49 in August. A reading below 50 indicates contraction.

That is the second consecutive month that eurozone manufacturing has shrunk.

Greece, the focal point of the eurozone's debt crisis, saw its output contract for the 25th consecutive month.

"Manufacturers are reporting the worst business conditions for over two years, facing a combination of lacklustre domestic demand and falling export sales," said Chris Williamson, Markit's chief economist.

The region has been weighed down as leaders struggle to prove that heavily indebted countries, led by Greece, will be able to avoid defaulting on their debts.

This has led to bailouts for Greece, the Irish Republic and Portugal - but the crisis has continued and has weighed on bonds and stocks globally.

Even in Germany, the engine of European economic growth, Markit's survey showed factory activity has come to a standstill.

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Online traders' 'refund failings'

2011-10-23T15:45:00.000-07:00

6 October 2011 Last updated at 12:15 GMT By Kevin Peachey Personal finance reporter, BBC News The test purchases were part of an EU-wide campaign to check consumer rights More than half of traders failed to give full refunds to customers who pulled out of online purchases during a cooling-off period, tests have shown.

Under consumer rights law, all costs - including delivery costs - should be refunded if consumers decide to cancel the contract in the allotted time.

Test purchasing by European authorities found that in 57% of cases, traders failed to reimburse delivery costs.

A BBC investigation highlighted the issue in December.

Online shopping

When buying from the internet, unlike in a shop, customers are unable to examine the goods before they buy them.

As a result, a cooling-off period is available to people shopping online. In the UK, shoppers have seven working days to return items bought on the internet that they do not want to keep. In some European countries it is longer.

There are a few exceptions, such as unwrapped CDs and perishable goods, but otherwise the money should be credited to the buyer's account as soon as possible and within 30 days at the latest.

Continue reading the main story In the UK, there is a cooling-off period of seven working days for unwanted itemsTraders should refund within 30 days, unless previously agreed otherwiseDelivery charges should also be reimbursedSome perishable goods such as foods and flowers are exemptRights for goods that are not of satisfactory quality are the same as the High Street - a refund, replacement or repairAny refund should include delivery costs incurred by the customer.

During a mystery shopping exercise by European authorities in 2003, these delivery costs were not reimbursed in 53% of cases.

But 305 tests earlier this year, by the European Consumer Centres' Network, found that this had increased to 57%, although refunds for the items themselves were paid in 90% of cases.

"This needs to improve in order to ensure a continuous positive development in cross-border e-commerce," a spokesman for the UK European Consumer Centre said.

In 7% of all the purchases made, the trader did not inform the customer about the price of the delivery costs at all.

Changes

Some results of the test purchases do make better reading for consumers.

For example, the delivery rate for items ordered online improved significantly compared with 2003, as had the number of items delivered within 14 days. There was also an increase in the number of websites offering information in more than one language.

Many of the current consumer rules operating in EU countries pre-date the widespread use of the internet by shoppers.

So MEPs have approved plans to update the rules, including a 14-calendar-day cooling-off period for online purchases.

Governments will have two years to implement the changes.

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Pub waits on TV football ruling

2011-10-23T10:51:00.000-07:00

4 October 2011 Last updated at 02:46 GMT Karen Murphy saved more than ￡350 per month by using a cheap foreign decoder A pub landlady will later learn the result of her legal fight with English football's Premier League over use of a foreign TV decoder to screen games.

Karen Murphy had to pay nearly ￡8,000 in fines and costs for using a cheaper Greek decoder in her Portsmouth pub to bypass controls over match screening.

But she appealed her case to the European Court of Justice.

Its judges are to rule whether the league's power to restrict broadcasting rights within the UK breaches EU rules.

If they rule in favour of Ms Murphy, it could trigger a major shake-up for the Premier League and its current exclusive agreements with Sky Sports and ESPN.

The legal battle kicked off six years ago when Ms Murphy was taken to court for using the Nova firm to show matches at the Red, White and Blue pub.

Using the Greek service, she had paid ￡118 a month, rather than ￡480 a month with the official broadcaster.

Ban 'not possible'

But earlier this year the Luxembourg court's advocate general issued a legal "opinion" backing her case.

"European Union law does not make it possible to prohibit the live transmission of Premier League football matches in pubs by means of foreign decoder cards," declared Julie Kokott.

Such opinions have no legal force, but the full court follows the advice in about 80% of cases.

The league's existing arrangement allows selected broadcasters to screen matches and "exploit them economically within their respective broadcasting areas, generally the country in question", according to the advocate general.

Border-free zone

Licensed broadcasters encrypt satellite signals, with subscribers needing a decoder card to access them.

Ms Murphy took advantage of an offer to UK pubs to use imported cards.

And the advocate general said this was in line with the aims of the EU single market - a border-free zone for goods and services.

The Premier League has already taken action against two suppliers of foreign satellite equipment and a group of pub landlords who used imported decoding equipment to show English Premier League games and avoided the commercial premises subscription fees for Sky.

The European judges have been considering Ms Murphy's case for seven months since the opinion was released and are taking into account EU directives across several areas.

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Where are the Occupy Wall Street protests heading?

2011-10-23T07:25:00.000-07:00

3 October 2011 Last updated at 22:58 GMT By Laura Trevelyan BBC News, New York Commentators are wondering if this movement could become a "Tea Party" for the left As a man known as Mercury puts the finishing touches to his corporate zombie make up, he explains why he's joined the anti-capitalist protests here in the shadow of Wall Street.

"We are inspired by the Arab Spring. Americans have rights but they're too often apathetic."

Welcome to Zuccotti Park, where the leaderless protest is now entering its third week.

Sophie is here to protest about the execution of a Georgia man, Troy Davis.

Will Estrella believes this is his generation's revolution.

And Brian Phillips, a marine turned housing community official, wants to see the Federal Reserve abolished.

The protesters aren't unified in their motivations or their demands, but they're tapping into discontent about inequalities in an America still struggling after one recession and fearful about entering a second.

'We're the 99%'

Brian Phillips, who wears his marine dog tags round his neck, says he has been lied to all his life by officialdom and he's had enough.

The protesters want a change in political and economic culture

That's what made him leave Washington state and his job at a low-income housing unit to come here.

Now Brian is efficiently dealing with media requests.

I tell him that I want to speak to one of the 700 arrested on Brooklyn Bridge on Sunday.

"Arrested Sunday!" calls Brian. Two young men step forward for me to interview.

That's how we communicate, Brian explains, with marine-like efficiency, as to his left a group start the day with yoga.

Police officers stand at the edges of the protesters' encampment, and today at least relations seem cordial enough.

But on Saturday the demonstrators say the police ushered them on to a roadway section of the Brooklyn Bridge rather than the pedestrianised walkway, fenced them in and then arrested them for disorderly conduct.

The NYPD says this isn't correct, and has released a video of the police telling the protesters not to go on the roadway section of the bridge.

Freelance photographer Will Estrella says the police clearly guided him and others on to the bit of the bridge they weren't meant to be on.

The NYPD's tactics for policing this protest have been called into question after a high ranking officer was seen on a YouTube video using pepper spray on demonstrators the weekend before last.

Will Estrella wants this to be a peaceful protest, a theme echoed across Zuccotti Park.

Most of the protesters I saw camping out at Zuccotti Park were young - in their mid-20s. Many have gone from job to job since graduating.

They have known difficult economic times in young adulthood, and they don't like a system which to them seems to reward what they call the "1%" of society.

"We're the 99%", they say.

Their manifesto supports the people of the world against corporate greed, and calls for people to assert their power and create a process to address the problems we face.

In the centre of Zuccotti park, amid the sleeping bags, is the communal food area.

Ange, a 24-year-old redhead who does freelance art work in Manhattan, is helping organise the food for the protesters.

"I like communal decision making, something that comes from the bottom up," she explains. Ange isn't sure how long she'll be here, but she's pleased to be part of a grassroots movement.

Where will this lead? No-one knows. But the protesters say their enthusiasm won't fade with the autumn sunshine.

The question is whether this ad hoc group of protesters - who feel they're getting the short end of the stick while corporate America hoards money - could morph into a political movement, a kind of left wing Tea Party.

The city's unions are now starting to back the protesters, something they didn't at first, suggesting they see the potential here.

Jesse Cooper Levy, a bearded 24-year-old, hopes this movement will influence politics.

His particular concern is what he sees as the corrupting influence of corporate lobbyists on Washington DC.

"What do you want?" I ask the protesters. "Change", comes the answer - a change in political and economic culture.

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Yahoo! surges on takeover rumour

2011-10-23T03:05:00.000-07:00

5 October 2011 Last updated at 21:40 GMT Yahoo is one of the internet's best-known brands Shares in the internet portal firm Yahoo have leapt 10% on rumours that Microsoft is considering a second attempt at a takeover.

Microsoft, which last bid in 2008, joins a host of other companies which are considering buying Yahoo, one of the internet's best-known brands.

China's giant internet company Alibaba has already said it might buy Yahoo.

Rumours of a bid from Vodafone also pushed shares in BlackBerry maker, Research in Motion, 12% higher.

Yahoo shares jumped 10.1% to close at $15.92 and Microsoft shares ended 2.2% higher at $25.89.

Yahoo's current market value is $20bn (￡13bn), compared with Microsoft's previous bid of around $45bn.

Neither party has made any official comment.

Microsoft is said to be divided as to whether it would make sense to mount such a bid.

Reasons in favour include the ability to beat AOL as a competitor by creating a stronger web portal.

Market share

Microsoft already has an agreement with Yahoo involving its Bing internet search engine, which powers Yahoo's search but gives 88% of advertising revenue back to Yahoo.

Combing the two could give Yahoo 30% of the US search market, according to analysts.

According to the latest figures from research firm comScore, Google has 64.8% of the US search market, Yahoo has 16.3% and Microsoft 14.7%.

But Yahoo is seen as lacking in growth potential.

Early last month, Yahoo fired its chief executive in a row over the company's future direction.

It said last month that it had received "inbound interest" from a number of parties.

Sid Parakh, analyst at fund firm McAdams Wright Ragen, told the Reuters news agency: "There are many reasons why this thing probably makes sense.

"If you strip out the variety of assets Yahoo owns, you are pretty much paying nothing for the core business."

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VIDEO: Philippines aims to boost rice output

2011-10-22T23:29:00.000-07:00

7 October 2011 Last updated at 00:40 GMT Help

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VIDEO: Thailand launches new rice price policy

2011-10-22T19:58:00.000-07:00

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Soros' sympathy for bank protests

2011-10-22T16:28:00.000-07:00

3 October 2011 Last updated at 20:34 GMT Other protests have been held in Boston, Los Angeles and Chicago Billionaire investor George Soros says he can sympathise with the ongoing protests on Wall Street, which have spread to other US cities.

He said he understood the anger at the use of taxpayers' cash to prop up stricken banks, allowing them to earn huge profits.

A large rally is planned for Wednesday in New York City, with backing from union groups.

More than 700 protesters were arrested on Saturday on Brooklyn Bridge.

The demonstrations - based at Zuccotti Park, near Wall Street and the Federal Reserve - are now entering their third week.

Answering questions during a news conference at UN headquarters on Monday, Mr Soros said: "The decision not to inject capital into the banks, but to effectively relieve them of their bad assets and then allow them to earn their way out of a hole leaves the banks bumper profits and then allows them to pay bumper bonuses."

Mr Soros was announcing a gift of $40m (￡26m) to a development project in Africa.

'Corporate zombies'

Protests continued on Monday in New York, with many under the Occupy Wall Street banner wearing make-up to pose as "corporate zombies", eating fake money.

Protesters dressed as zombies took to the streets of Manhattan on Monday

One of the protesters, John Hildebrand, 24, an unemployed teacher from the US state of Oklahoma, told the Associated Press news agency: "My issue is corporate influence in politics. I would like to eliminate corporate financing from politics."

Union members are expected to back a large rally planned for Wednesday.

Last Thursday, the United Federation of Teachers and the Transport Workers Union, which has 38,000 members, pledged support for the protests.

In Los Angeles on Monday, an anti-Wall Street demonstration was held outside the court where Michael Jackson's doctor is being tried for manslaughter.

Protests were held in recent days in Boston, Los Angeles and Chicago in front of their respective cities' Federal Reserve buildings. A march was also held in Columbus, Ohio.

A rally is planned, too, for later this month in the Canadian city of Toronto.

On Saturday, 700 protesters were arrested on the Brooklyn Bridge, where traffic was halted for several hours.

The protesters won support from actor Alec Baldwin, who posted videos on his Twitter page that had already been widely circulated.

One appeared to show police using pepper spray on a group of women, and another a young man being tackled to the ground by an officer.

"This is unsettling," Baldwin wrote. "I think the NYPD has a PR problem."

But the NYPD said the marchers had been warned many times not to stray on to the road, and released video footage on Sunday showing protesters chanting "take the bridge".

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Trade watchdog link to loan firm

2011-10-22T11:57:00.000-07:00

1 October 2011 Last updated at 23:40 GMT By Adrian Goldberg Presenter, 5 live Investigates Trading Standards is taking consultancy payments from a firm which is also the subject of customer complaints.

West Yorkshire Trading Standards (WYTS) received payments from online loans broker SGE Loans in exchange for regulatory advice.

But some customers claim that SGE Loans has debited their bank accounts without consent - a claim SGE Loans denies.

WYTS says such partnerships are necessary because of budget cuts but its integrity remains unaffected.

WYTS says it has received over ￡88,000 ($137,500) since April 2011 from a total of 47 companies with which it has similar partnerships.

It confirmed that it only started charging SGE Loans for its detailed advice in that month, but would not reveal the precise sum it had received from SGE Loans, citing commercial confidentiality.

However, it did reveal that it had investigated a number of complaints made against the company.

Unauthorised payments

One customer who contacted the 5 live Investigates programme, Lianne Gray, says she rang SGE Loans in August of this year.

Customers say SGE took unauthorised payments from their bank accounts. SGE Loans denies this.

She says she was reassured that no money would be taken out of her account if she decided not to take out a loan.

"I then discovered two days later that the company had taken ￡79.99 out of my bank, which I could not afford to lose because I'm on benefits," she said.

"I am absolutely disgusted with how I have been treated."

5 live Investigates contacted SGE Loans on Ms Gray's behalf and her money was subsequently refunded five weeks after it had been debited.

Continue reading the main story

SGE Loans does not debit money from customers' accounts without authorisation”

End Quote Sally Hill Chief executive, SGE Loans David Dutfield had a similar experience when he called SGE Loans in June.

"I was told on the phone that no money would leave my account if my loan was below ￡200, which is what I was after.

"Yet when I came off the phone I found that ￡69.99 was taken from my account."

Following inquires made by the BBC, Mr Dutfield has also been refunded following more than three months of dispute.

West Yorkshire Trading Standards confirmed, in several instances, recordings of customer calls revealed that some SGE Loans staff had not fully explained the terms of its business and did not warn customers they were liable to pay an upfront fee, which could be refunded after a 14 day cooling-off period.

WYTS says SGE Loans subsequently took disciplinary action and retrained staff who made such mistakes.

SGE Loans chief executive Sally Hill told the BBC that SGE Loans did not debit money from customers' accounts without authorisation.

In a written response, she said that SGE Loans had never refused to refund money to a customer who had cancelled within the 14 day cooling-off period, if the company's service had not been used.

'Error of judgement'

Leeds-based SGE Loans has what is called a Primary Authority Partnership with West Yorkshire Trading Standards, which means that the branch deals with complaints made against the company from across the UK.

The company also has a commercial contract with WYTS, paying for advice about legal and regulatory issues.

During the course of its investigation, 5 live Investigates discovered SGE Loans featured a West Yorkshire Trading Standards logo on its website.

When asked why the logo was being used by the company, WYTS said: "Initially, and possibly naively, this service [WYTS] assumed that this would be taken for what it was - a statement of fact that we and the business had a Primary Authority partnership.

Continue reading the main story

Trading Standards should distance themselves from all companies and it would be better for all of us if all businesses regarded Trading Standards as a threat and something to be worried about”

End Quote Mark Gander Consumer Action Group "However, we now recognise that people are assuming that this is an endorsement of the business."

As a result, WYTS has asked SGE Loans to remove the logo from its company website.

When asked if it felt compromised by taking payment from firms it was also receiving complaints about, WYTS told the BBC:

"We refute any allegation that being in a Primary Authority Partnership with any business means this service does not undertake its duties, including to deal with complaints impartially, in anything but a professional manner."

WYTS also says that its relationship with SGE and other businesses helps them to understand the legal framework within which they operate, and "get it right", thus saving taxpayers money in the long run.

Marc Gander, from Consumer Action Group, told 5 live Investigates that it was inappropriate for a regulatory body to be funded in this way and said it was "a grave error of judgement".

"Trading Standards should distance themselves from all companies and it would be better for all of us if all businesses regarded Trading Standards as a threat and something to be worried about," he said.

WYTS, in common with Trading Standards offices around the UK, is under severe financial pressures as it faces budget cuts.

Planned local government spending on Trading Standards across England has been reduced overall by 11.4% in 2011/12, and in Wales by 7.4%.

WYTS says it faces budget cuts of 22% and this has has made it a necessity to charge companies such as SGE Loans for its regulatory advice.

Some 443 of 538 Trading Standards departments responded to a survey by 5 live Investigates - 18 said they received income from private companies in exchange for regulation and compliance advice.

You can hear the full report on 5 live Investigates on Sunday, 2 October at 21:00 BST on BBC Radio 5 live.

You can listen again on the BBC iPlayer or by downloading the 5 live Investigates podcast.

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UK 'will resist' EU financial tax

2011-10-22T07:23:00.000-07:00

28 September 2011 Last updated at 22:30 GMT Jose Manuel Barroso: "We have to understand we are in a situation where we have to do things together"

Bank shares have fallen in London after the UK said it would "resist" a financial transaction tax on EU members proposed by the European Commission.

The tax would raise about 57bn euros ($78bn; ￡50bn) a year and would come into effect at the start of 2014.

At close, Royal Bank of Scotland was behind by 3.64%, Lloyds Banking Group by 2.4%, and Barclays by 1.22%.

London would be hardest hit by the tax as the majority of banking transactions in Europe come through the city.

'Tax on London?'

City of London officials have said that about 80% of the revenues of any Europe-wide financial tax would come from London.

Stuart Fraser of the City of London said the question that had to be asked was whether the proposal was "a tax on London".

The banking sector played a role in causing the economic crisis, the commission said

Mr Fraser also warned that such a tax could mean a lot of banking transaction being lost to outside of the EU, and that the cost of setting up the scheme could outstrip whatever monies it raised.

Under the proposals, the financial tax would be levied at a rate of 0.1% on all transactions between institutions when at least one party is based in the EU. Derivative contracts would be taxed at a rate of 0.01%.

The BBC's business editor Robert Peston said that while dealers and investors in financial products such as derivatives and bonds were not happy about the proposal, share dealers were more relaxed as the tax would cost less than the existing stamp duty, which the tax would replace.

Meanwhile, in Germany and France bank shares also fell at close, and the European Banking Federation called the tax a "nonsense".

Among the market losers were Deutsche Bank and Commerzbank in Germany, and Societe Generale and BNP Paribas in France.

'Contribution' Chancellor Merkel faces a crunch vote on the eurozone bailout fund

Despite the opposition Algirdas Semeta, EC commissioner for taxation, customs, anti-fraud and audit, said: "Our project is sound and workable. I have no doubt this tax can deliver what EU citizens expect - a fair contribution from the financial sector."

The EU executive also points out that financial services are "in the majority of cases exempt from paying VAT (due to difficulties in measuring the taxable base)".

Germany and France have been among countries pressing the European Commission to propose the tax on all financial investment systems, as they seek to show their citizens they are serious about recouping some of the costs of the banking crisis.

Austria, Belgium, Norway and Spain also support such a tax.

Earlier, Commission president Jose Manuel Barroso had said banks must "make a contribution" as Europe faced its "greatest challenge".

A transaction tax would need the approval of the UK in order to be implemented across the EU.

The commission said that if the UK vetoed the tax, it would look to implement it in the eurozone.

Referring to "the constraints of unanimity", Mr Barroso said "further changes to the Treaty of Lisbon" may be required in order to push through measures to stabilise Europe's economy.

'Additional revenue'

The commission said the tax was "to ensure that the financial sector makes a fair contribution at a time of fiscal consolidation in the member states".

It said financial firms had played a role in the current "economic crisis" and was "under-taxed" compared with other sectors.

The "significant additional revenue" raised would contribute to public finances, it added.

A spokesperson for the UK Treasury said it would "absolutely resist" any tax that was not introduced globally.

Continue reading the main story Use the dropdown for easy-to-understand explanations of key financial terms:AAA-rating GO The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is miniscule."We would not do anything that is not in the UK's interests," he told the BBC.

The Treasury has said there are also a number of practical issues that need to be worked through.

And the financial secretary to the Treasury, Mark Hoban, said the transaction tax would be ineffectual unless it was a global agreement.

"If it's not done at a global level, it's not done as part of a comprehensive package, then people will find ways around it," he said.

"They'll move business out of Europe, somewhere else, they'll find different products that are outside the scope of this transaction tax, so I think there's a lot of detail to be looked at to get this right."

Earlier, in his annual State of the Union address in Strasbourg, Mr Barroso had called not only for the transaction tax but for eurozone members to issue debt collectively, through so-called eurobonds.

"Once the euro area is fully equipped with the instruments necessary to ensure both integration and discipline, the issuance of joint debt will be seen as a natural and advantageous step for all," he said.

Further austerity

Officials from the commission, along with those from the European Central Bank and International Monetary Fund, are due to begin reviewing Greece's attempts to reduce its debt levels on Thursday.

Greece's new property tax has proved particularly unpopular

They will then decide whether to release about 8bn euros from a 110bn bailout package agreed last summer, money the Greek government badly needs in order to pay its bills.

A key obstacle to the payment was removed on Tuesday when the Greek parliament passed a controversial new property tax bill that aims to boost revenues.

Eurozone members are in the process of ratifying proposals put forward in July, one of which would see private lenders writing off about 20% of their loans to Greece.

The proposals also included expanding the powers of the eurozone bailout fund. Finland approved the plan on Wednesday, while Germany will vote on it on Thursday.

With 330 seats in the 620-seat Bundestag, Chancellor Angela Merkel can afford no more than 19 rebels if she is to deliver the 311 seats required for a majority.

Greek write-off

There has been renewed optimism this week that eurozone leaders may finally be ready to take decisive action to tackle the debt crisis.

G20 leaders met over the weekend to discuss the best way forward, but EU officials stressed that no grand plan of action had been agreed.

A number of ideas were reportedly discussed, including a 50% write-down of Greece's government debts.

Other proposals included strengthening big European banks that could be hit by any defaults by highly indebted governments, and boosting the size of the

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Apple co-founder Steve Jobs dies

2011-10-22T04:07:00.000-07:00

6 October 2011 Last updated at 01:26 GMT Jobs introduced the iPod and the iPhone to the world

Former chief executive and co-founder of US technology giant Apple Steve Jobs has died, the company says. He was 56.

"Steve's brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve," Apple said.

Jobs announced he was suffering from pancreatic cancer in 2004.

Microsoft boss Bill Gates said Jobs' "profound impact" would " be felt for many generations to come".

Mr Gates added: "For those of us lucky enough to get to work with him, it's been an insanely great honour. I will miss Steve immensely."

US President Barack Obama also paid tribute: "Michelle and I are saddened to learn of the passing of Steve Jobs. Steve was among the greatest of American innovators - brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it."

And New York Mayor Michael Bloomberg said that "America lost a genius who will be remembered with Edison and Einstein, and whose ideas will shape the world for generations to come".

'The face of Apple'

In the statement Apple said: "Apple has lost a visionary and creative genius, and the world has lost an amazing human being".

"Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple."

Jobs had built a reputation as a forthright and demanding leader who could take niche technologies - such as the mouse and the graphical window-based interface - and make them popular with the general public.

He introduced the colourful iMac computer, the iPod and the iPhone to the world. His death came just a day after Apple unveiled its latest iPhone 4S model.

In 2004, Jobs announced that he was suffering from pancreatic cancer and he had a liver transplant five years later.

In January, he took medical leave, before resigning as CEO in August and handing over his duties to Tim Cook.

In his resignation letter, Jobs said: "I believe Apple's brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role."

However, Jobs stayed on as Apple's chairman.

More than almost any other business leader, he was indistinguishable from his company, which he co-founded in the 1970s.

Apple - whose market value is estimated at $351bn (￡227bn) - is now the world's most valuable technology company. Only oil giant Exxon Mobil is worth more.

As the face of Apple, Jobs represented its dedication to high-end technology and fashionable design.

And inside the company he exerted a level of influence unheard of in most businesses.

Despite a high profile, however, he remained fiercely protective of his private life.

He married his wife Laurene in 1991, and the couple had three children.

Jobs also leaves a daughter from a previous relationship, and as an adult discovered that he had a biological sister, US novelist Mona Simpson.

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Morning business round-up

2011-10-22T00:28:00.000-07:00

6 October 2011 Last updated at 11:04 GMT What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Continue reading the main story Stock markets across Europe have been boosted by expectations that EU leaders are about to act to ease the debt crisis.

The main markets in London, Frankfurt and Paris were about 2% up, after Hong Kong closed 5.6% higher.

European Commission President Jose Manuel Barroso said in a television interview that there were plans for co-ordinated action to recapitalise banks.

In the UK, the Bank of England has said it will inject a further ￡75bn into the UK economy through quantitative easing (QE).

The Bank has already pumped ￡200bn into the economy by buying assets such as government bonds, in an attempt to boost lending by commercial banks.

But this is the first time it has added to its QE programme since 2009. There have been recent calls for it to step in again to aid the fragile recovery.

The Bank also held interest rates at the record low of 0.5%.

European aircraft maker Airbus has struck a deal worth $9.5bn (￡6.2bn) with Australia's Qantas for 110 jets.

The order, said by Qantas to be the country's single largest aircraft purchase by units, will underpin the airline's expansion into Asia.

Qantas, which is launching a low-cost and a premium airline in Asia, is buying 78 Airbus 320neos and 32 A320s.

Eleswhere in Asia, there are reports that many Chinese private sector enterprises are facing bankruptcy because of credit tightening and an explosion in informal lending.

In the eastern city of Wenzhou, one-fifth of the city's 360,000 small and mid-sized businesses have stopped operating due to cash shortages, China's official news agency Xinhua reported on Thursday.

Business headlines

And shares of Citic Securities have fallen on their debut at the Hong Kong stock exchange as market volatility continues to dent investor sentiment.

Its shares fell by as much as 10% in early trade to HK$11.90 from an offer price of HK$13.30.

Citic securities, China's largest listed brokerage had sold 995.3m shares raising HK$13.2bn ($1.7bn, ￡1.1bn).

Many Chinese firms have recently cancelled or postponed their proposed listing on the exchange.

Meanwhile, the state of the UK housing market has been under scrutiny. House prices are "lacking genuine direction", according to the Halifax, as it reported a 0.5% fall in values in September compared with August.

Prices were down 2.3% from a year ago, leaving the average home in the UK worth ￡161,132 ($249,560), the lender said.

The latest edition of Business Daily from the BBC World Service looks at the legacy of Steve Jobs, founder of Apple Computers, who died on Wednesday aged 56.

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VIDEO: Why is Germany still in thrall to European Project?

2011-10-21T19:43:00.000-07:00

Newsnight's Peter Marshall reports on why, despite clear public anger about the prospect of continued financial bailouts for the euro zone, Germans apparently still in thrall to the European Project.

Broadcast on Thursday 29 September 2011.

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Players named in 'cricket scam'

2011-10-21T15:02:00.000-07:00

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FirstGroup sells German bus unit

2011-10-21T11:28:00.000-07:00

30 September 2011 Last updated at 06:47 GMT FirstGroup is focusing on its core markets in the UK and US Rail and bus firm FirstGroup has announced the sale of its German bus operations for 5.5m euros (￡4.8m).

The Aberdeen-based transport company said it had sold FirstGroup Deutschland to Marwyn European Transport.

FirstGroup chief executive Tim O'Toole said the disposal marked "a further step in our programme of small asset and business disposals".

This was part of the group's strategy to focus on its core operations in the UK and North America, he added.

FirstGroup Deutschland operates about 130 buses in the Rhineland Pfalz region in south-west Germany.

On Thursday, FirstGroup said it expected like-for-like passenger revenue at its UK rail division to rise by 9% in the six months to 30 September, and revenue at its UK bus division to increase by 1.2%.

FirstGroup also operates school buses and the coach business Greyhound in the US.

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US factories 'see slight pick-up'

2011-10-21T07:18:00.000-07:00

3 October 2011 Last updated at 15:13 GMT Employment in US factories reportedly strengthened in September, although activity remained subdued Manufacturing in the US has registered a small but unexpected pick-up, according to a widely watched survey.

The ISM Manufacturing Index rose to 51.6 in September, from 50.6 a month earlier, beating expectations that the index would remain unchanged.

Any level above 50 indicates expanding activity at US factories.

However, new orders continued to fall, the survey suggested, with respondents saying they were worried by the weak recovery and political deadlock.

Separate data, released simultaneously by the US Commerce Department, showed that the construction industry also grew much more strongly than expected in August.

US stocks reacted strongly to the news, with the main Dow Jones index jumping 1.4%, before later falling back again on what is proving another volatile day of trading.

New orders

The manufacturing sector has now expanded for 26 months in a row, since the 2008-09 recession ended, according to the survey.

But industry continues to endure a soft patch, with the index still well below the 55-60 range seen earlier in the recovery.

Production - which is only one measure of activity included in the survey - also expanded, having been reported as shrinking in August. Employment also picked up more strongly.

Continue reading the main story But the backlog of orders continued to weaken, reaching its lowest level since April 2009.

"We see production is up, back in growth territory, but manufacturing is working off its backlog of orders," said Bradley J Holcomb, who chairs the survey committee.

"The main concern going forward would be if new orders didn't pick up."

He added that anecdotal evidence pointed to concern over the sluggish economy, political and policy uncertainty in Washington, and forecasts of ongoing high unemployment that will continue to put pressure on demand for manufactured products.

'Bumping along the bottom'

Meanwhile, construction spending in the US rose 1.4% in August, according to separate data from the Commerce Department.

That also easily beat market expectations of a 0.3% contraction, and reversed a 1.4% fall seen in July.

Public sector spending accounted for the bulk of the expansion, while private sector spending grew a much weaker 0.4%.

"[It] was better than what we were expecting," said Sean Incremona, economist at financial analysts 4cast.

"We got a big upward correction in public spending - that was due, it has been very weak.

"On the private side we got an upside there but the construction industry is really just parallel to housing, which is really just bumping along the bottom of its cyclical range."

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VIDEO: Qantas boss threatened over job cuts

2011-10-21T02:39:00.000-07:00

5 October 2011 Last updated at 15:18 GMT Help

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