Virgin Atlantic Takes On BA With Delta Deal

Singapore Airlines has sold its 49% stake in Virgin Atlantic to rival Delta, in a move that will bolster Virgin's reach in the United States and intensify its rivalry with British Airways.

The deal was announced just 24 hours after a verbal spat between the chief executive of BA's parent firm and Virgin founder Sir Richard Branson over Virgin's future.

In their statement, Delta and Virgin said their joint venture would enhance competition between the UK and North America, offering greater benefits for customers travelling on those routes.

As part of the agreement Delta, which is the largest carrier in North America, will invest $360m (£224m) in Virgin Atlantic.

Virgin Group and Sir Richard will retain a majority 51% stake and Virgin Atlantic Airways will retain its brand and operating certificate.

Between them, they will jointly operate up to 31 round-trip flights between the US and UK each day.

Delta is taking a 49% stake in Virgin Atlantic

Steve Ridgway, Virgin Atlantic Chief Executive, said: "Consumers will reap the rewards of this partnership between two great airline brands on services from the UK to the USA, Canada and Mexico through a shared ethos in the highest standards of customer service.

"This unique joint venture will deliver much more effective competition at Heathrow.

"Both airlines are confident that the Department of Transportation will be as convinced as we are of the extensive consumer benefits arising from this joint venture, with expedited approval being granted by the end of 2013.

"The transatlantic market is Virgin Atlantic's heartland - it's where we started. By aligning with Delta we can continue to grow our North American network and offer greatly enhanced connectivity across the USA."

Sir Richard Branson and Willie Walsh are at each other's throats

Sir Richard, who is Virgin Atlantic's President, commented: "This is an exciting day in Virgin Atlantic history. It signals the start of a new era of expansion, financial growth and many opportunities for our customers and our business.

"I truly look forward to the possibilities our partnership with Delta will offer. We have always been known for our innovation and service and have punched above our weight for 28 years. That is why our customers love us so much.

"We will retain that independent spirit but move forward in a strengthened partnership with Delta."

News of the deal followed the latest spat between BA and Virgin. Sir Richard offered to pay staff at BA £1m if the Virgin brand disappeared within five years as the boss of BA's parent firm, Willie Walsh, had suggested would be the case if Delta sided with Virgin.

Mr Walsh is reported to have responded that he did not have £1m as he was not a billionaire banker (referring to Virgin Money) but would settle for a 'knee in the groin' instead.

00.11 | 0 komentar | Read More

Libor Scandal: UK Police Make Three Arrests

The Serious Fraud Office (SFO) has made three arrests as part of its investigation into the manipulation of the interbank lending rate, Libor.

The major banks declined to comment on the development but Sky sources have suggested that one of the people detained used to work as a trader at the Swiss bank UBS, which has a big presence in the City.

The SFO, with the assistance of the City of London Police, executed search warrants at three residential premises - one in Surrey and two in Essex.

It said in a statement: "Three men, aged 33, 41 and 47, have been arrested and taken to a London police station for interview in connection with the investigation into the manipulation of Libor."

It added: "The men are all British nationals currently living in the United Kingdom."

The SFO's criminal inquiry began in July when it decided existing legislation gave it the scope to bring potential prosecutions.

While the identities of those arrested and their employers are not known at this stage, it is known that the SFO's inquiry has been wide-ranging and not limited to Barclays - the only UK bank so far to have been fined in connection with the scandal.

Bob Diamond quit Barclays after its £290m fine came to light

The £290m penalty inflicted on Barclays preceded the departure of its chief executive Bob Diamond and forced the British Bankers' Association to signal it would abandon its responsibility for oversight of Libor amid a clamour among politicians for reform.

Libor, which stands for London interbank offered rate, affects more than £350trn in global transactions and the rates created through the submissions bear a heavy influence in the calculation of a host of financial products including mortgages.

The City regulator, the Financial Services Authority (FSA), has been working closely with the SFO in its investigation.

A review of Libor by the FSA's boss Martin Wheatley has suggested a new body be created to oversee it with the rates set being based more on actual trades rather than just banks' own estimates.

Around 16 financial institutions have been investigated worldwide over alleged Libor rigging - including a total of three based in Britain.

Taxpayer-backed Royal Bank of Scotland has previously said it hopes to settle any claims over Libor manipulation soon and warned that potential penalties could be significant.

00.11 | 0 komentar | Read More

Vince Cable Unveils SME Lending Boost

By Mark Kleinman, City Editor

A peer-to-peer lender backed by Lord Rothschild will be unveiled as one of the major beneficiaries of a Government scheme to stimulate small business lending.

Zopa, a company which promotes direct lending over the internet, will be awarded £10m in public funding to provide loans to small companies.

The award will form part of a £110m funding package unveiled by Vince Cable, the Business Secretary, as he attempts to revive a crucial component of Britain's stuttering economy.

The small business tranche of the Business Finance Partnership (BFP) scheme is designed to provide greater access to credit at a time when many SMEs are struggling to do so.

Ministers had hoped that George Osborne, the Chancellor, would unveil the details of the BFP in last week's Autumn Statement, but they were delayed by demands from Whitehall officials for additional legal due diligence.

Wednesday's announcement by Vince Cable's Department of Business, Innovation and Skills will name three other private sector companies that will be granted public money to stimulate small business lending.

Under the programme, the Government will provide £55m, with match-funding from the private sector expected to deliver at least the same sum, making at least £110m available to lend to small businesses.

Insiders said that the other successful bidders being named are: Funding Circle, a peer-to-peer lender which will receive £20m; Boost, a new market entrant, which will also receive £20m to set up a fund that will make loans of between £1m and £8m; and Credit Asset Management Limited, a subsidiary of City of London Group PLC, which will receive £5m to provide asset finance and professions loans.

Mr Cable is expected to say that the new awards, while modest in scale, will help to diversify choice for SMEs.

However, the £110m project is tiny in the context of Britain's SME financing requirements.

A new British Business Bank, which is being seeded with £1bn of Government funding, has yet to get off the ground.

00.11 | 0 komentar | Read More

Adam Posen: Osborne's Plan Is 'Misguided'

George Osborne's economic strategy is "misguided" and has left Britain "malnourished", according to a former Bank of England policymaker.

Adam Posen, who stepped down from the Monetary Policy Committee (MPC) in August, accused the Government of focusing on "the wrong goal".

Adam Posen: There are alternatives

He attacked the Chancellor and David Cameron for doggedly pursuing deficit reduction, which he claimed was "self-defeating", and urged them to change course.

His comments come a week after Mr Osborne's mini-Budget, in which the Chancellor insisted that to switch approach now would lead to "disaster".

Mr Posen told Prospect Magazine: "Sitting central bankers should not publicly comment on fiscal policy. Silence, however, was not assent on my part.

"For two-and-a-half years the Government's economic policies have focused on the wrong narrow goal, been self-defeating in pursuit of that goal and in so doing have eaten away at British economic capabilities and confidence."

He continued: "Unfortunately, his Autumn Statement reiterated the same misguided priorities of deficit reduction and the same failed approach, with only minor variations."

Arguing for a change of direction, he said: "It is not enough for Messrs Cameron and Osborne to claim that they have done what they promised to so.

"Their policies have left the British economy malnourished, and indeed made parts of it quite ill. There are alternatives available, and the British government should switch to these now."

George Osborne delivering his Autumn Statement

Mr Posen, an American economist, joined the MPC in September 2009 but left earlier this year to become director at a US think tank.

On the committee, he was the only member to vote consistently for quantitative easing - the practice of printing more money to try and boost the economy.

He has previously advised parts of the US government, the European Commission, the Cabinet Office and the International Monetary Fund.

In his Autumn Statement last week, Mr Osborne admitted the Government is set to miss his target of reducing debt by 2015 and that slashing the deficit will take longer.

Despite criticism that he is not doing enough to stimulate growth and that his drastic austerity measures are holding back the recovery, the Chancellor refused to give ground.

"We cannot relax our efforts to make our economy safe but Britain is heading in the right direction. The road is hard but we're making progress. It's taking time, but the British economy is healing," he insisted.

However, official growth forecasts have been slashed - with the economy predicted to shrink by 0.1% this year and only grow by 1.2% in 2013.

00.11 | 0 komentar | Read More

Compensation Culture: Firm Rapped Over Ads

The Advertising Standards Authority (ASA) has raised fears about the activities of a claims management company while upholding complaints against it relating to text messages about compensation.

The ASA said Data Supplier, based in India, had not responded to its enquiries about the texts which were found to have breached its code.

One of the messages, judged to be in breach of the rules, said: "We have been trying to contact you regarding your PPI (payment protection insurance) Claim, we now have details of how much you are due, just reply CONFIRM and we will call you back".

The second text said: "Our records indicate you may be entitled to £3750 for the accident you had. To claim for free just reply CLAIM to this msg. To stop text STOP."

Three complainants, two of whom received the first text and one who received the second, challenged whether they were misleading and could be substantiated.

This was because they had not recently had an accident or did not believe that they were eligible to reclaim PPI payments, and suggested that the texts breached the advertising code because they were unsolicited.

The ASA said it was concerned by a lack of response from Data Supplier to its findings and apparent disregard for the code.

It said: "We reminded them of their responsibility to provide a substantive response to our enquiries and told them to do so in future.

"We noted that we had not seen any evidence to show that the recipients of the texts had given their explicit consent to be included on the Data Supplier's database.

"We also understood that none of the recipients had recently had accidents or considered themselves to be eligible to make a PPI claim, and that the texts did not identify who the message had been sent from.

It added: "The texts must not be sent again in their current form. We told Data Supplier not to send texts to consumers unless they had their explicit permission to do so.

"We also told them not to make claims in their advertising unless they could provide evidence to substantiate them, and to identify themselves as the advertiser in any future texts."

The claims management market has come under intense scrutiny this year amid concern about its behaviour in the wake of the PPI scandal - hampering efforts to get compensation to those who truly deserve a share of an estimated £10bn for mis-selling.

The insurance industry also blames 'ambulance chasing' by claims management companies (CMCs) for rising premiums.

The consumer group Which? has even gone as far as to recommend avoiding CMCs altogether while the Financial Ombudsman Service has raised questions about fee structures and MPs are considering tighter regulation.

Among the industry's lines in its defence is that it has raised awareness of financial shortcomings to consumers and enabled people to make claims they may not have been aware of amid a deep lack of trust in the country's major institutions.

00.11 | 0 komentar | Read More

SuperGroup's Profits Up After Sales Boost

The owner of the SuperDry fashion brand has reported an increase in profits, as a broader product range boosted sales.

SuperGroup - whose products are favoured by celebrities including David Beckham and Pippa Middleton - said pre-tax profit over the 26 weeks to October 28 was up 13% to £14.7m. 

Sales of its trademark t-shirts, hoodies and jackets, among other clothing products, were up 3.9% at UK stores open for over a year, while revenue at the group increased by over 16% to £158.2m.  

The retailer's chief executive, Julian Dunkerton, said the company's recent investment was starting to pay off. 

"Although the trading environment has remained challenging and volatile, the group's sales performance in the first half of the year has been encouraging,"  he said in a statement.

"There have been a number of positive factors that have supported this performance but it is clear that the ongoing investment in design and the growing presence of the brand have enhanced sales both in the UK and overseas."

The results come after an overhaul of the group's management structure following a series of profit warnings in 2011.

"Good progress is being made but the full infrastructure upgrades, and the associated benefits, will take a number of years to deliver," Mr Dunkerton added.

He said that despite global economic uncertainty, he remained confident that company could meets its full-year profit targets.

Since SuperGroup listed on the stock market in 2010, its shares have rocketed from 500p to a high of 1,899p in early 2011.

Its share price fell dramatically last year after a string of management mistakes led to stock availability issues and "arithmetic errors", before beginning to recover this summer. 

00.11 | 0 komentar | Read More

Barclays Hires Former FSA Boss Hector Sants

Barclays has hired the former chief executive of the Financial Services Authority (FSA), Hector Sants, as its head of compliance.

The bank's interest in Mr Sants, which was exclusively revealed by Sky's City Editor Mark Kleinman last week, emerged soon after news that accounting firm Deloitte had held talks with him over the prospect of a new job.

Kleinman said then that taking a Barclays role would be seen as significantly more controversial than a move to Deloitte, given the bank's involvement in the Libor-fixing scandal this year.

Mr Sants stepped down from the FSA in June, the same month in which the regulator fined Barclays £59.5m for manipulating the interbank borrowing rate Libor.

In September, Mr Sants released correspondence with Barclays to Andrew Tyrie, chairman of the Treasury Select Committee, in which it emerged that he had raised profound concerns about the culture and governance arrangements at Barclays when Bob Diamond was appointed as the bank's chief executive in 2010.

Kleinman learned that Antony Jenkins, who replaced Mr Diamond as CEO, was keen to recruit Mr Sants to bolster the status of Barclays' compliance and regulatory oversight functions and make them integral to the way the bank operates.

Mr Jenkins is due to present his strategy for Barclays to the City in February on the day of its 2012 results. The new boss of Barclays has stated publicly his desire for it to become the "go-to bank" in terms of the ethical standards with which it conducts its business.

The move effectively sees Mr Sants swap sides from one of the regulator to being the first point of contact at Barclays on regulatory matters.

The role will also include him policing trading activities.

He said today: "I left the FSA with the intention of finding a role which would allow me to put into practice the experience I have gained in both the public and private sector.

"Taking on the responsibility of leading Barclays global compliance function, and overseeing the bank's relationships with governments and regulators, gives me that opportunity.

"I am delighted to have been asked by Antony Jenkins to create and implement a new compliance concept and approach which will be central to the cultural change which is already underway at the bank."

Barclays share price was 1% higher shortly after the announcement was made.

00.11 | 0 komentar | Read More

Youth Unemployment Falls Amid Jobs Record

There has been the biggest quarterly fall in unemployment for a decade amid a welcome drop in the number of young people without work.

The Office for National Statistics said unemployed 16- to 24-year-olds fell by 72,000 to 945,000 in the three months to October.

It helped drive a fall of 82,000 in the total jobless total to 2.51 million - with a record number of people now in work after what the ONS said was the biggest quarterly fall in unemployment since the spring of 2001.

The jobless total was down by 128,000 on a year ago.

Employment jumped by 40,000 to 29.6 million, the highest figure since records began in 1971 and up by half a million on a year ago.

The number of people claiming Jobseeker's Allowance fell unexpectedly in November by 3,000 to 1.58 million following rises in the previous two months. Analysts had expected an increase of 7,000.

The figures highlighted the growing gulf between public and private sector employment as public sector jobs fell for the 12th consecutive quarter, by 24,000 to 5.7 million, the lowest since 2002.

Employment in the civil service was cut by 3,000 to 455,000, the lowest since records began in 1999, while local government employment also fell to a record low of 2.5 million after a cut of 32,000.

Private sector employment rose by 65,000 in the latest quarter to 23.8 million, the highest on record.

That figure was seized on by employment minister Mark Hoban as proof that the Government is delivering on its economic programme.

He told Sky News: "Cynics were saying the private sector wouldn't step up to the plate, they wouldn't create the jobs ...to offset losses in the public sector but we've seen in the last year an extra half a million people in work."

But Paul Kenny, general secretary of the GMB union, claimed that the Government's handling of the economy meant that millions of families faced another miserable Christmas with "little hope of things getting better".

He said: "Instead of the recovery the Government inherited in 2010, the economy faces a triple dip recession due to the failed and futile attempt to deflate their way to growth."

At Prime Minister's Questions in the Commons, the Labour leader Ed Miliband welcomed the fall in unemployment but highlighted stubborn long-term unemployment and sought assurances from David Cameron that more would be done to tackle it.

00.11 | 0 komentar | Read More

Cameron Hopes 'Every Little Helps'

By Mark Kleinman, City Editor

The chief executives of Diageo and J Sainsbury, two of Britain's most successful companies, are to step down as advisers to David Cameron amid growing private sector scepticism over the Coalition's efforts to revive the economy.

I have learned that Paul Walsh and Justin King, who run the drinks company and supermarket chain respectively, will relinquish their roles on the Prime Minister's Business Advisory Group as part of a wider shake-up of its membership.

I also understand that Philip Clarke, the chief executive of Tesco, Britain's biggest retailer, will be among the new members joining the advisory group when the revamp is announced by Downing Street in the new year.

The overhaul of Mr Cameron's advisers comes at a sensitive time for relations between the Government and the business community. Last week's autumn statement was welcomed by business leaders for unveiling an additional 1 per cent cut in the headline rate of corporation tax but condemned for its raid on savers' pension funds and other measures that employment groups warned would do little to stimulate the economy.

The removal of Mr King from the group will raise eyebrows given his track record as one of the country's most respected businessmen.

He has been a vocal critic of a number of Government policies, including recent proposals made by George Osborne, the Chancellor, to allow company workers to trade employment rights for share ownership. Mr King also advocated the introduction of a national insurance holiday to support job creation.

Insiders pointed out that both Diageo and Sainsbury's had been ranked among Britain's most admired companies in 2012 in a survey published last week by Management Today magazine.

"It does send a rather odd message," one insider said today.

Another observer suggested that Mr Cameron risked "scoring an own goal" over the changes if Eric Schmidt, the chairman of Google, remained as an adviser while British executives were allowed to depart.

The ongoing row over the low levels of corporation tax paid by some overseas multinationals, including Google, has left ministers open to criticism that they are doing too little to level the playing field for British companies despite reforms announced last week by Mr Osborne.

A Downing Street source insisted that the changes would be "routine" and that membership of the group was always intended to be the subject of regular reviews.

A number of other members of the advisory panel are expected to make way for new names, according to insiders.

Other existing members of the group include Angela Ahrendts, chief executive of Burberry; Sir Martin Sorrell, chief executive of WPP Group; Sir Roger Carr, chairman of Centrica and president of the CBI; and Dick Olver, chairman of BAE Systems.

The advisory committee meets on a quarterly basis and continues a format employed by Gordon Brown, the former Prime Minister.

Announcing the formation of the group in October 2010, Mr Cameron said:

"The Deputy Prime Minister and I want to make sure the Government is getting really good high level advice from some of Britain's leading business men and women. Having an advisory group with a range of experience and expertise should ensure that there is real interaction and discussion.

"It is vital that we get these policies right as we take forward our plans to drive down the deficit and transform our economy. Our prize will be balanced growth, getting Britain working and ensuring our whole country shares in rising prosperity."

A spokesman for Number Ten and the companies involved all declined to comment.

00.11 | 0 komentar | Read More

Mick Jagger Love Letters Sell For £187,000

Passionate letters sent by Mick Jagger to his secret lover in the summer of 1969 have sold for £187,250.

The Rolling Stones front man penned the love notes - which include song lyrics and a band playlist - to singer Marsha Hunt in the summer of 1969.

The American, who was the inspiration for the 1971 Stones hit Brown Sugar, had expected to receive between £70,000 and £100,000 for the 10 letters.

After the sale, Hunt said: "The passage of time has given these letters a place in our cultural history.

"1969 saw the ebbing of a crucial, revolutionary era, highly influenced by such artists as The Beatles, The Rolling Stones, James Brown and Bob Dylan.

"Their inner thoughts should not be the property of only their families, but the public at large, to reveal who these influential artists were - not as commercial images, but their private selves."

The auction house's books specialist Gabriel Heaton said: "These beautifully written and lyrical letters from the heart of the cultural and social revolution of 1969 frame a vivid moment in cultural history.

"Here we see Mick Jagger not as the global superstar he has become, but as a poetic and self-aware 25-year-old with wide-ranging intellectual and artistic interests."

The letters were penned by Jagger while filming Ned Kelly in Australia, at a time when his relationship with Ms Hunt was a closely-guarded secret.

In a separate auction, Bonhams has been tasked with auctioning the Beatles collection, once owned by the legendary band's lead guitarist George Harrison.

His leather jacket - worn on stage during the early 1960s in Hamburg and The Cavern Club - has an estimate of between £90,000 and £120,000.

Also up for grabs is a pair of Harrison's custom-made leather boots from around 1964, and an orange shirt worn during his famous charity event, the Concert For Bangladesh in 1971.

Bonham's director of entertainment memorabilia, Stephanie Connell, said: "This leather jacket is instantly recognisable and was an important part of the Beatles' image in their early years.

"It is extremely exciting to see such an iconic part of Beatles history emerge onto the market, this fresh piece of important music memorabilia never offered at auction before is sure to garner significant interest during the sale."

A guitar used by Sir Paul McCartney in the 1950s - before the Beatles formed - will also go up for sale, with an estimate of between £20,000 and £30,000.

And a collection of photographic negatives of the iconic band could fetch up to £50,000.

00.11 | 0 komentar | Read More