Tube Strike: Shoppers Face Boxing Day Delays

London Underground drivers have gone on strike on Boxing Day for the third consecutive year, causing major disruptions to Christmas bargain-hunters and visitors to the capital.

The train drivers' union Aslef stopped work today for the first of three strikes as part of a long-running dispute about Bank Holiday pay.

Two further walk-outs are scheduled for the last two Fridays in January.

With up to 7.1 million shoppers expected to hit the Boxing Day sales, Transport for London (TfL) said it is was doing everything possible to help shoppers get into and around London.

Services are operating today on most London Underground lines, however TfL is warning passengers of major disruptions and only limited services on all lines.

The Waterloo & City line is closed today, while other lines are operating reduced services.

The Piccadilly line is expected to be closed through the city centre, and the Victoria line is scheduled to run only between Seven Sisters and Victoria at a reduced frequency.

Extra buses will be laid on for those travelling to the West End, as well as the Westfield shopping centres in Stratford and White City.

London Overground services are not in operation today and the Congestion Charge has been suspended.

Some rail services are operating on Southern and South Eastern trains into London Victoria and London St Pancras International, as well as on the Gatwick Express and Stansted Express.

Aslef argues it is not to blame for today's industrial action, saying management has "sat on its hands and offered nothing constructive to resolve this dispute".

Over 90% of Aslef members voted in favour of launching the action for a third consecutive year.

But TfL has condemned Aslef for what it argues is a "completely unnecessary disruption to Londoners on Boxing Day".

Howard Collins, London Underground's chief operating officer, said: "Train drivers are paid a salary that reflects some Bank Holiday working, but the Aslef leadership is demanding to be paid twice for the same work and has rejected our attempts to resolve the matter.

"The scandalous actions of the Aslef leadership are an attempt to hold Londoners to ransom, and demonstrate a wholesale disregard for our customers - making life harder for shoppers, sports fans, retail workers and businesses amongst others at an important time.

"They also show a disregard for the thousands of transport staff who will be working hard to help people get around the capital."

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UK Economic Growth Less Than Expected

Britain's growth figure for the third quarter has been revised to 0.9% by the Office for National Statistics.

That is down from their previous estimate of 1%.

Britain's dominant services sector posted meagre growth in October, adding to the challenge for the economy as a whole to expand in the last three months of 2012.

Third quarter GDP growth was the strongest since the third quarter of 2007, but much of that reflected a one-off boost from the London Olympics and a rebound from the second quarter when an extra public holiday dented output. 

Britain suffered its second recession since the financial crisis between late 2011 and mid-2012, and overall has recovered much more slowly since 2009 than most other big economies.

It also emerged that borrowing unexpectedly increased last month, putting more pressure on Chancellor George Osborne's plan to bring down the budget deficit.

Public sector net borrowing, excluding financial interventions such as bank bailouts, was £17.5bn in November, up £1.2bn on the same month last year.

Economists had predicted borrowing would fall slightly to around £16bn.

Public sector borrowing for the year to date is £92.7bn, excluding a one-off £28bn boost from the transfer of the Royal Mail pension fund into Treasury ownership, which is 9.9% higher than the same period last year.

The latest figures will put more pressure on Chancellor George Osborne

James Knightley, analyst at ING Bank, said the borrowing figures highlighted the weak state of the UK economy and the fact that austerity measures were failing to generate the improvement in Government finances that were hoped for.

He said: "All in all, the UK appears to be ending 2012 not in particularly great shape, and as such we suspect the Bank of England has more work to do with further policy stimulus likely in early 2013, especially if the worst fears over the US fiscal cliff materialise."

The ONS said the latest figures do not take into account the transfer of assets from the Bank of England's money printing programme into the Treasury, and the auction of bandwidth for 4G mobile broadband services, which is expected to boost the finances.

In the Chancellor's Autumn Statement earlier this month, the Office for Budget Responsibility (OBR) said it expected borrowing to be £108bn in 2012/13, compared to £119.9bn in the March estimate.

The news will put further pressure on Britain's gold-plated AAA status.

All of the three main ratings agencies have now put the UK on negative watch.

Vicky Redwood, chief UK economist at Capital Economics, said: "Although a number of temporary factors flattered the OBR's new forecast for borrowing this year, the underlying picture is that the weak economy is preventing the deficit from falling."

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Banks Face Break-Up Over Risky Trading

By Poppy Trowbridge, Business and Economics Correspondent

British banks face break-up if they fail to follow new rules protecting high street operations from riskier trading.

The Parliamentary Commission on Banking Standards has published a report assessing Government-backed legislation that will require lenders to protect customers' banking deposits from potential losses.

While the report suggests ring-fencing will help address the damage done to culture and standards in banking, it may not be enough to stop banks taking advantage of the rules.

Commission chairman Andrew Tyrie MP said: "The legislation needs to set out a reserve power for separation - the regulator needs to know he can use it.

"Over time, the ring-fence will be tested and challenged by the banks. Politicians, too, could succumb to lobbying from banks and others, adding to pressure to put holes in the ring-fence."

MPs are looking at ways to exert pressure on lenders that fail to comply.

Shadow chancellor Ed Balls told Sky News: "I think people are really frustrated, families, businesses, that banking reform is taking so long.

"In the meantime, our economy has not been growing, small business lending is falling. We've got to get on with it and we've got to get it right.

"The commission says the proposals on the table so far from George Osborne don't go far enough, they've been watered down, and they also are going to look at the wider issues of standards and culture in the way our banks operate."

Next year, the commission will take further evidence on whether full separation of proprietary trading operations at banks is necessary.

The Government launched an inquiry into banking standards in the wake of revelations that the London Interbank Offered Rate (Libor) had been manipulated by traders.

Barclays and Swiss bank UBS have been fined by authorities for manipulating Libor.

The rate is a reference point for vast ranges of financial contracts around the world worth around £184trn.

Mr Tyrie said: "The latest revelations of collusion, corruption and market-rigging beggar belief.

"It is the clearest illustration yet that a great deal more needs to be done to restore standards in banking."

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BT Slapped With £95m Refund Bill

BT has been told it must repay almost £95m to corporate customers following a row over high speed data provision.

The regulator Ofcom ruled the company had overcharged for Ethernet services and must hand back £94.8m to communication providers BSkyB - the owner of Sky News - Talk Talk, Virgin Media, Verizon UK and Cable & Wireless.

Ethernet services are mainly used by businesses and provide dedicated broadband capacity between different locations.

Ofcom said it received the first complaint in 2010 that the charges levied by BT were "not cost orientated".

It had continued to receive related claims ahead of today's decision, the regulator stated.

BT, which said in November that its second quarter revenues had been hit by a triple whammy of recession, regulation and rain, has two months to decide if it will appeal the decision.

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BAE Systems Strikes £2.5bn Deal With Oman

By Alistair Bunkall, Defence Correspondent

A deal worth £2.5bn has been completed between British defence manufacturer BAE Systems and Oman.

It will see BAE provide the Gulf state with 12 Eurofighter Typhoon aircraft and eight Hawk training jets.

As well as supplying aircraft, BAE Systems will provide in-service support to the Royal Air Force of Oman's (RAFO) operational tasks.

Work to start building the aircraft will begin in 2014, with the first jets due for delivery in 2017.

But the markets did not seem too enthusiastic about the announcement, as the BAE share price was down 2% during the early hours of trading.

More importantly for the company's future financial health is the Salam deal for 72 Typhoon jets with Saudi Arabia, worth £4.5bn.

Earlier this week, BAE warned that its 2012 earnings would suffer if no agreement was reached on this deal by February 21.

Last month, Prime Minister David Cameron visited Jordan, Saudi Arabia and the United Arab Emirates on a trade mission to promote BAE and persuade the states to buy British-made defence equipment.

PM David Cameron visited Jordan, Saudi Arabia and the UAE last month

It is unusual for a British prime minister to promote defence companies so openly but the Government is seeking to build closer ties with friendly Middle Eastern states in the face of what it sees as a growing threat in the region from countries like Iran.

The move also demonstrates an attempt to forge links outside of the traditional Nato countries.

The deal is not only important for BAE Systems but also for the companies that form the supply chain, many of which are based in the UK.

The deal will support BAE's assertion that it still has a strong business with a positive future after the proposed merger with EADS collapsed in October.

Cuts to defence budgets globally have resulted in a tougher and more competitive market, and BAE had hoped a merger with a company that specialises in civil aviation would lessen any effect of budget cuts.

Guy Griffiths, group managing director for BAE Systems' International business, said: "Receiving this contract is an honour and is excellent news for both BAE Systems and the Eurofighter Typhoon consortium.

"We look forward to working in partnership with Oman's Ministry of Defence, and the Royal Air Force of Oman, to ensure this is a highly successful programme that maximises the potential of both Hawk and Typhoon."

Oman becomes the seventh country in the world, and the second in the Middle East, to operate the Typhoon, joining the air forces of the United Kingdom, Germany, Italy, Spain, Austria and Saudi Arabia.

Business Secretary Vince Cable said: "This is obviously a very good day for BAE Systems, its suppliers and the broader Eurofighter supply chain.

"We, and our partners in the Eurofighter consortium are pursuing a number of opportunities at present and I hope that the decision by Oman to join the Typhoon family is followed by more of its friends and neighbours."

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House Prices Predicted To Edge Down In 2013

House prices across the country will fall by 1% during 2013 as the London market shows signs of cooling, property analysts have said.

Prices fell 0.1% month-on-month in December, marking the sixth month in a row that this has happened, and average prices ended the year 0.3% lower than a year ago, Hometrack said.

It predicts that a reluctance by struggling families to take on more debt will continue to act as a drag on the housing market next year and prices will be more volatile with continued low sales.

Hometrack's monthly figures for December show prices were flat in London and East Anglia, fell 0.1% in the Midlands, the South and Yorkshire and Humberside, dropped 0.2% in the North West and Wales and by 0.3% in the North East.

One in five postcodes in England and Wales recorded price increases over the past year but prices have fallen across two-thirds of the country.

London has had strong demand from wealthy overseas buyers and consistently outperforms other regions, seeing prices rise in seven out of 10 postcodes this year. Property prices are now 10% higher than at the peak of the market in 2007.

But price growth in London, vital to keeping average prices up in the rest of the country, is predicted to slow over next year, with a 2% annual increase pencilled in.

Central London price growth looks set to slow, following the introduction of a 7% stamp duty rate placed on homes worth over £2m in March.

The Office for National Statistics recently indicated that house price increases in London could be slowing. The rate of year-on-year price growth in the city dropped from 5.2% in September to 3.4% by October.

The study regularly asks estate agents across England and Wales about achievable selling prices.

But Hometrack's predictions jar with some other recent surveys, including one from Rightmove which said increased competition among mortgage lenders and a continued shortage of homes to choose from will help to push asking prices up by 2% across England and Wales next year.

The Council of Mortgage Lenders has said it expects the housing market to "feel more stable and positive" next year, with much of the boost coming from a multibillion-pound Government scheme which has already helped to increase mortgage availability.

But the council has also said demand for mortgages could be held back by the weakness of the economy and much will hinge on the continued resilience of UK employment.

Halifax has said house prices are likely to be flat next year, with any growth likely to be strongest in London and the South East.

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Belgian Chocolate: Is Its Reputation Melting?

By Robert Nisbet, Europe Correspondent

Belgium's reputation as the world's chocolate capital could be melting as emerging markets develop a sweet tooth and the recession continues to bite.

The region became the base for the industry shortly after the Spanish explorer Cortes returned from Mexico with cocoa pods in the 17th century.

Three hundred chocolate companies are based in Belgium, which have a combined turnover of nearly £2bn every year.

While the commodities analyst Mintel suggests the global market for chocolate has held steady in 2012 at roughly £52bn, the market in Western Europe shrank by 5%.

More worryingly for many of the Belgian craftsman, who buy their chocolate already ground and cooked before adding their own ingredients, processing has shifted away from factories in neighbouring Germany and the Netherlands.

Statistics from the European Cocoa Association show that processing in Europe fell by 17% over the summer.

It is not just the recession, the economic model is changing: demand for luxury chocolate is growing in emerging economies, but slowly shrinking in richer countries.

World record-breaking chocolate train

So it makes more economic sense for the larger companies to shift production to new markets where labour costs are low and the beans do not have to be shipped to Europe to be processed.

Since the recession, Belgian artisans have been mostly shielded from a dip in local demand by growing demand in eastern Europe and the so-called BRIC countries.

But there could be problems ahead when they have to pay more to buy processed chocolate from further afield.

There certainly is not an air of impending crisis.

We saw a giant chocolate sculpture of a hippopotamus draw gasps in Grand Sablon, the "quality street" where most of the famous chocolate houses have a flagship shop.

There was also the unveiling of the world's longest ever structure built purely from chocolate in the Gare du Midi near the railway platform where Eurostar trains rumble in from London.

The 34 metre long sculpture of a vintage steam train was checked by inspectors from the Guinness Book of World Records to ensure it was solid chocolate and not bulked out using cheaper ingredients.

The tourism minister Christos Doulkeridis told Sky News that he believed Belgium will keep its chocolate crown.

"We don't want to be the first one just in chocolate. We want to be the first one in chocolate of quality," he said.

The test will be whether the country can continue to maintain its reputation as a marque of quality in the teeth of foreign competition.

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Steve Jobs' Yacht Row Settled With Payout

Steve Jobs' yacht is free to set sail after the late Apple co-founder's estate paid a deposit to resolve a dispute with the designer.

The boat, which reportedly cost more than £80m to build, was impounded after Philippe Starck said Mr Jobs' estate still owed him around £2.5m for his contribution to its design.

Mr Starck said he was to be paid a fixed sum of £7m, while lawyers for Mr Jobs' estate said he was to be paid a percentage of the project's cost - equal to £5m.

"The Venus is no longer impounded, we have found a solution," said lawyer Gerard Moussault.

"A security deposit was paid into a bank account, but I cannot say for how much."

The designer was supposedly "very close" to Mr Jobs during the period the design was agreed and construction went ahead.

That was said to be one of the reasons there was no formal agreement on the job.

The Dutch-built yacht was unveiled in October, just over a year after Mr Jobs died of respiratory problems related to his pancreatic cancer.

Seven iMacs are installed in the bridge

Although the boat is no longer impounded, it remains in Amsterdam harbour because of bad weather.

The yacht will reportedly be taken to the United States, where Mr Jobs' family, including his widow Laurene Powell Jobs and their three children Reed, Erin and Eve, are to take charge of the boat.

The aluminium-hulled 70-metre (230-foot) yacht was built by shipbuilder Royal De Vries in Aalsmeer, just south of Amsterdam, with the interiors designed by Mr Starck.

He described the vessel as "sleek and minimalist", with teak decks.

The bridge features a control panel made up of an array of seven iMac computers.

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Pop-Up Shops Benefit From Empty High Street

By Lisa Dowd, Midlands Correspondent

With 20 shops closing every day on Britain's high streets, some premises are being temporarily rented out for as little as £1 a week to pop-up businesses.

One in six premises now stands empty compared with one in 20 at the start of the recession, according to retail research firm the Local Data Company.

So could pop-up shops help alleviate the situation?

"I've heard of examples of some shops going for as little as £1 a week because the landlord is saying to himself, I think these people have got a good product and if I give them a month or two at a cheap rate they may want to stay longer and then I can charge a commercial rate, " said Jerry Blackett from Birmingham Chamber of Commerce.

In Birmingham's Great Western Arcade, No 22, a jewellery shop showcasing the talent of young, local designers, moved into premises which had stood empty for months.

Silversmith and mentor Kerry O'Connor said: "We pay rates and all the bills and we get a reduced rent.

"It works both ways that we can stay here potentially as long as we want but likewise if somebody comes along who wants to take on a proper lease we could get kicked out within a month."

No 22 is paid for by European funding and a local council who are keen to help fledgling businesses and promote Birmingham as a centre of jewellery excellence.

"The pop-up encourages people to come to the arcade and see something new," said Carol Alderson from Birmingham City Council.

"We've put out flyers around the city, we've emailed, lots of people have gone on the website, it encourages new people into the arcade which should have a knock-on effect on the other businesses with people coming into the pop-up shop."

Designer Karen Collis said: "It's a brilliant opportunity to showcase my work for the first time really because I only graduated in June so I can test the market to see if people like the stuff that I'm making and also there's the opportunity to sell, I sold a piece yesterday, it was exciting."

Pop-ups come and go quickly, so it's not known how many are trading, or their impact.

But those involved with No 22 recognise that no-one benefits from premises standing empty.

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Boxing Day Sales: Bargain Hunters Hit Shops

Britain's shops look set for a bumper Boxing Day of profits as bargain hunters go on a predicted £3bn spending spree at the sales.

People queued overnight in London's Oxford Street in preparation for stores opening this morning, with thousands pouring through the doors from as early as 6am.

Selfridges bosses said they took £1.5m at the tills in the first hour of opening and stores across the West End expect some £50m of takings in one day.

Sue West, Selfridges director of operations, said handbags and menswear were among the items flying off the shelves.

She said: "Online sales have been great but year on year people still want to experience the Boxing Day sales."

Manchester's Trafford Centre has been enjoying what is thought to be the biggest Boxing Day in its history - with police drafted in to help manage the crowds.

Hundreds of shoppers poured through the doors when Selfridges opened

The centre's Gordon McKinnon said: "Many retailers have kept stock levels much tighter this year, so the sales will not be stretching on into January."

Queues began to form at Kent's Bluewater at 1am on Boxing Day, with around 3,000 waiting for the doors to open at 7am.

Up to 7.1 million shoppers are expected to hit the shops at some stage, with one in 10 venturing out for a deal before 9am, according to research from Green Flag.

According to MoneySupermarket.com, shoppers in the UK are set to spend a total of £2.9bn.

A poll for the website found almost four million Britons (8%) planned to head to the high street on Boxing Day in addition to more than five million (10%) who will be searching online.

Queues formed outside some shops from as early as 1am.

However, figures from one survey, by comparison website Pricerunner, suggested that almost half (47%) of those questioned were not planning on buying anything in the post-Christmas sales.

A strike by London tube drivers about bank holiday pay does not seem to have had too much impact on the sales.

Extra buses were laid on for those travelling to the West End, as well as the Westfield shopping centres in Stratford, east London, and White City, west London, Transport for London said.

Jason Tyrrell from the New West End Company told Sky News: "We were prepared for this strike and had coaches for staff. The shoppers are out in force, but I hope both sides get round the table and sort it out."

Stores reported an influx of shoppers from abroad

Online retailers tried to stay one step ahead of the competition by offering heavy discounts on Christmas Day with Amazon's UK website seeing a 263% rise in sales over the last five years.

Analyst Experian predicted that Christmas 2012 would be the "biggest and busiest ever" for online retailers in the UK, with visits to retail websites expected to reach 126 million today, up 31% on 2011 and consumers predicted to spend £472.5m online.

But there was more gloom for the high street in the run-up to Christmas with shoppers preferring to buy presents online, according to Business recovery group Begbies Traynor.

The British Retail Consortium (BRC) said high street spending was "acceptable but not exceptional" this festive period - blaming it on poor accessibility to high streets and weak consumer demand rather than online shopping.

Richard Dodd of BRC said: "There are a lot of myths around online retail - 10% of overall retailing over the year comes from online shopping and actually it presents lots of opportunities for the retail sector."

A Begbies Traynor report said almost 140 high street firms were in a critical condition in the fourth quarter, meaning they are on the brink of collapse, while more than 13,700 were in "significant" distress - up 35% during the three months to December 17.

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