New Car Sales Up For 12th Successive Month

New car sales rose for the 12th successive month in the UK in February, bucking the market trend of falling demand across Europe.

There were 66,749  new registrations in February -  a 7.9% increase on the February 2012 figure, according to the Society of Motor Manufacturers and Traders (SMMT).

The performance - mostly driven by private purchases - took the year-so-far total to 210,392, which represents a 10.3% increase on the figure for the first two months of 2012.

The SMMT said that February was typically the month with the smallest sales volume as it precedes the registration plate-change in March.

It was, the organisation said, the highest growth in the private market since the end of the Scrappage Incentive Scheme in Spring 2010.

SMMT interim chief executive, Mike Baunton, said: "UK new car registrations have risen every month for the last year with February continuing the trend, growing 7.9% year-on-year boosted by the highest increase in private consumer demand since spring 2010."

"Attractive new car deals are sustaining the market. New models are delivering ever greater fuel efficiency, practicality, refinement, technology and predictable ownership costs, so motorists are seeing the benefit of new car purchases."

The Ford Focus was the most popular model, selling 3,853 vehicles last month.

The UK market has been outperforming the rest of the EU where demand has fallen - largely a result of the debt crisis.

The president of Renault and Nissan Carlos Ghosn told Sky News on Tuesday that dwindling demand in Europe was the main concern of global car-makers and over-capacity was a big issue for manufacturers.

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Microsoft Fined Over Rival Browser Choice

Microsoft has been fined 561m euros (£484m) by the European Commission for breaking its promise to offer a choice of rival internet browsers.

The EU said that in 2009 Microsoft agreed to make a choice of browsers available to its Windows users in Europe following an anti-trust battle.

But during the roll-out of Windows 7 between May 2011 and July last year the company failed to do so in what the Commission called a "very serious infringement" of its commitment.

Over the period, around 15 million Windows users did not see the so-called browser choice screen which enables users to select their preferred search engine, the EU said.

The Commission vice president in charge of competition policy, Joaquin Almunia, said: "Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems.

"A failure to comply is a very serious infringement that must be sanctioned accordingly."

In a statement, Microsoft said it took full responsibility for the "technical error" that caused the lapse.

"We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake – or anything similar – in the future," it said.

The fine - which is the first sanction against a company for failing to satisfy a previous EU complaint - will serve as a warning to other technology firms involved in European anti-trust disputes.

Google, for example, is currently in discussions with the EU over how it ranks search engine results.

Microsoft's penalty is the latest in a string of punishments issued by the Commission against the US software giant.

In total, it has been fined 2.16bn euros (£1.87bn) for - among other things - not providing data at fair prices to rivals and for tying its media player to its operating system.

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Around 400 Jobs At Risk Despite Dreams Sale

Sun European Partners has bought beds retailer Dreams following its collapse into administration.

The deal, overseen by administrators Ernst & Young, saves 1,600 jobs at the chain - but around 400 positions remain at risk.

The private equity group bought the company's business and assets, including 171 stores, for an undisclosed sum.

The group's head office at High Wycombe, Buckinghamshire, and two UK factories have also been sold to Sun European, which already owns sofa chain SCS Upholstery.

A buyer is being sought for the remaining 95 stores which are continuing to trade for the time being, joint administrator Alan Hudson said.

He added that high street retailers have been battling with "unprecedented conditions" over recent years.

"Dreams is a well known market leader, but in common with many others has suffered as a result of this depressed retail environment, a rapid expansion of its store portfolio and onerous lease liabilities," he said.

"Whilst recent performance has improved, it has seen a decline in like for like sales across its store portfolio as well as its operating margins being squeezed.

"This has resulted in the business being unable to continue to operate outside of administration."

Dreams, which sells beds and related products, has 266 stores across the UK and employs around 2,000 people.

It was founded by Mike Clare, who sold the company to private equity firm Exponent in 2008 for around £200m.

He had wanted to buy the business back and keep all the stores open, but was understood to be turned down by the Royal Bank of Scotland and Barclays.

News of the sale comes as travel company Thomas Cook said it was planning to axe 2,500 UK jobs and was consulting on proposals to close 195 of its 1,069 high street agencies.

There have been a number of high-profile administrations so far this year, which have resulted in the closure of all Comet and Jessops stores and a number of HMV and Blockbuster shops.

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Lady Gaga: Legal Action Over Gagged Gig

Concert promoters are suing three insurance syndicates after an Indonesian concert by Lady Gaga was cancelled due to a threat by Islamic hardliners.

The breach of contract lawsuit was filed in Los Angeles by Live Nation LGTours, Mermaid Touring and The Atom Factory.

They are suing three Lloyd's of London syndicates for at least $75,000 (£50,000) in damages.

Lady Gaga, 26, whose real name is Stefani Germanotta, is known for her outrageous outfits and wigs.

She cancelled her concert in Jakarta last June after Islamic hardliners promised "chaos" if she entered the Muslim nation.

In the lawsuit, the promoters accused the insurers of failing to pay out on a terrorism policy that had been taken out in advance of the tour.

A demure Gaga signs autographs - with no bra or panties in sight

They said the syndicates had displayed "despicable conduct that subjected plaintiffs to cruel and unjust hardship ... with the intent to vex, injure or annoy the plaintiffs".

The cancelled show was part of Lady Gaga's tour of Asia that also drew protests from Christian groups in the Philippines and South Korea.

Jakarta police refused to approve the June 3 concert after the Islamic Defenders Front threatened violence if she performed.

The group called her the "devil's messenger" who wears only a "bra and panties".

Local promoter Big Daddy said it was "unfortunate" that the show had had to be called off.

More than 50,000 tickets had been sold for the event at the Bung Karno Stadium, but the Islamic Defenders Front said the cancellation was "good news" for Muslims in Indonesia.

Around 90% of Indonesia's 240 million people identify themselves as Muslim, making it the world's largest Islamic-majority nation, but the vast majority practise a moderate form of the religion.

In the past, pop stars including Beyonce and Pussycat Dolls have been allowed to perform in the country on condition they wore more conservative clothes than usual.

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Payday Loans: Firms Given Reform Deadline

The UK's biggest payday loans firms are facing the prospect of being put out of business unless they implement swift changes to their practices within 12 weeks.

The ultimatum was issued by the Office of Fair Trading (OFT) following a wide-ranging investigation of the controversial sector as it emerged that a separate shake-up would place greater controls on advertising by such firms.

The Government will work with the Advertising Standards Authority (ASA) and the industry to make sure advertising does not tempt consumers into taking out payday loans that they cannot afford, and restrict the number of adverts firms put out per hour and the times they can advertise.

Lenders will also be required to make sure that interest rates are clearly displayed.

The OFT carried out checks on 50 major lenders and obtained information from all 240 lenders in the market.

The inquiry uncovered evidence of "widespread irresponsible lending", the OFT said.

It confirmed it was also proposing to refer the payday market to the Competition Commission after finding "deep-rooted problems" in how lenders compete with each other.

The OFT said it had found evidence that the 50 lenders, which account for 90% of the market, were failing to comply with the standards expected and were therefore in danger of losing their licences.

Some of the worst problems identified included lenders not carrying out proper affordability checks before lending or rolling loans over, failing to explain adequately how payments will be collected, acting aggressively to claw back debts and not making enough allowances for struggling borrowers.

Payday lenders are taking a greater presence on UK high streets and online

OFT chief executive Clive Maxwell said: "We have found fundamental problems with the way the payday market works and widespread breaches of the law and regulations, causing misery and hardship for many borrowers.

"Payday lenders are earning up to half their revenue not from one-off loans, but from rolled over or re-financed deals where unexpected costs can rapidly mount up."

The regulator acted after charities reported rocketing numbers of complaints about payday lenders from borrowers.

The Money Advice Trust (MAT) recently said complaints about payday loans have doubled year-on-year to a record 20,000 in 2012.

New regulator the Financial Conduct Authority (FCA), which will oversee the consumer credit market from next year, will prioritise tighter rules on payday lending that could come into effect from April 2014.

The FCA's rules will be binding and if they are broken it will have tough enforcement powers including imposing unlimited fines and the ability to claw consumers' money back.

The Government is also planning to do more to encourage greater communication within the industry to stop consumers taking out multiple loans from different lenders.

Sajid Javid, Economic Secretary to the Treasury, said: "The Government is introducing a fundamentally new approach to regulating consumer credit, which will ensure that irresponsible firms and bad practice will have no place in the consumer credit marketplace.

"Consumers can have greater confidence that the new FCA will intervene early and decisively in their interests - thanks to its more focused remit, objectives and powers."

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Ferrari Launches First-Ever Hybrid Model

Ferrari has unveiled its first-ever hybrid model - LaFerrari.

The limited edition car was revealed at the Geneva Motor Show.

The company says LaFerrari encompasses the "very best of Prancing Horse passion, technology and exclusivity".

Ferrari president Luca di Montezemolo explained: "We chose to call this model LaFerrari because it is the maximum expression of what defines our company - excellence.

"This is a truly extraordinary car which encompasses advanced solutions that, in the future, will find their way onto the rest of the range, and it represents the benchmark for the entire automotive industry.

"LaFerrari is the finest expression of our company's unique, unparalleled engineering and design know-how, including that acquired in Formula 1."

The car is described as the successor to Enzo

The company says its hybrid technology - Hy-Kers - represents the perfect combination of maximum performance and lower emissions, and offers "absolute levels of performance, aerodynamic efficiency and handling without any form of compromise in any area".

As expected, there has been a lot of excitement at the new hybrid car, with motoring journalists fulsome in their praise.

Technology website Engadget said: "Everyone knew Ferrari was cooking up its first hybrid, and that it would be very quick when it was pegged as an Enzo successor. Still, we didn't quite expect the sledgehammer that is the LaFerrari."

Autocar was also impressed, saying: "Ferrari has effectively opened a second front in its war with McLaren, its deadliest racing rival, in revealing the replacement for its 10-year-old Enzo supercar."

AutoExpress pointed out that while the exact price has yet to be confirmed "don't expect change from £1m".

But the price clearly does not matter for those who have already placed an order. Ferrari said a total of 499 cars are being built - and they have already all been sold.

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Sir Mervyn King Wants RBS To Be Split Up

There are some who slip into retirement so quietly that you could be forgiven for missing their departure entirely. Then there's Sir Mervyn King.

The Bank of England Governor chose his appearance before the Parliamentary Commission on Banking Standards to launch an astonishing attack on the way the Government has handled the semi-nationalisation of Royal Bank of Scotland. He also signalled that the relationship between the Government and Britain's big banks is far too cosy.

Sir Mervyn, who steps down in June, said that the way the Government had attempted to keep RBS at arm's length, despite its 82% ownership of the stricken bank, "is a nonsense. The longer it has gone on, the more difficult that has become."

He warned that the bank's significant balance sheet problems helped explain why many small businesses in the UK had been so starved of funds, which in turn had led to weak economic growth in recent years. The solution, he added, was to split the bank into two - separating the profitable half of the bank from the overhang of assets which RBS invested in in previous years but which are now "underwater".

"The way to minimise losses is to restructure the bank and get a healthy RBS back into the private sector," he said. "It would clearly mean having a plan to create a healthy unit capable of attracting lending. It means a number of activities on the balance sheet need to be separated. Accepting that and facing up to the reality would be the right way forward.

"The sad thing is that the UK led the world in bank recapitalisations - it was an idea the US took from us. But they were more decisive in the way they did it than us."

Sir Mervyn added that he had shared these thoughts with the Chancellor, who, according to Lord Lawson, one of the members of the Commission, is resistant to such a plan. Creating a good bank/bad bank out of RBS would imply that the Government would have to put further money into the bank in order to shore up the underperforming half. However, George Osborne has refused to spend any extra public money on bank bail-outs.

Sir Mervyn said: "We need to accept the reality. [RBS] is worth less than we thought. We should accept that and get back to finding a way to create  a new RBS that should be a major lender to the UK economy."

He added: "The lessons of history show very clearly that it is not a good idea to have banks in the public sector for very long."

The bank has now been in the public sector for almost five years.

Sir Mervyn also acknowledged that the Funding for Lending figures earlier this week, which showed a fall in net lending to UK businesses, were "disappointing but not surprising", given the troubles of many of Britain's banks.

In a broader warning about the leverage bank lobbyists have over UK policymaking, Sir Mervyn said: "I was surprised at the degree of access of bank execs to the very top. certainly easier access to people at the top than regulators have. In 2007 the only time there was a speech on regulation it was an attack on the [Financial Services Authority] for over-bureaucratic regulation.

"The climate has changed since then but the access hasn't."

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McLaren Eyes £100m Sports Car Deal

By Mark Kleinman, City Editor

The British manufacturer of some of the world's most expensive sports cars is kicking off a £100m fundraising to accelerate its international expansion.

I have learnt that in recent days McLaren Automotive has begun sounding out prospective investors about providing capital to fund the loss-making company's growth.

Earlier this week, it unveiled the P1, its latest model, at the Geneva Motor Show, claiming it was the most technologically-advanced British sports car ever produced.

The P1 is expected to have a price tag of £700,000 and only 375 of the cars will be manufactured, according to Mclaren.

The new fundraising follows the separation of McLaren Automotive from the rest of the McLaren Group, which includes the Formula One racing team, in 2009.

Two years ago, it raised roughly £150m from investors including Peter Lim, a Singaporean billionaire, while exiting investors included Mumtalakat, the Bahraini sovereign wealth fund, and TAG Group, a conglomerate headed by a Saudi businessman.

Credit Suisse, which helped McLaren Automotive raise the initial £150m of funding, is understood to have been replaced as the company's financial adviser for the latest phase of the capital-raising by another investment bank, insiders said.

A McLaren spokesman said: "In line with previous statements, McLaren Automotive is in ongoing discussions to secure the second round of planned funding to support the future growth of our successful business."

Accounts filed at Companies House last month showed that McLaren Automotive made a post-tax loss of nearly £54m in 2011. It is understood to have been closer to breaking even last year.

McLaren Automotive's sports cars are produced at its £50m production centre in Surrey, which was opened in November 2011 by David Cameron, the Prime Minister.

Despite the losses, McLaren is understood to have met internal sales targets with more than 1400 cars sold in 2012.

It recently opened its 40th dealership in a network which now spans 24 markets. Later this year it will open dealerships in China for the first time, helping the company to access a vital emerging market.

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Thomas Cook To Cut 2,500 UK Jobs

Holiday firm Thomas Cook says it is planning to axe 2,500 UK jobs to "secure" its future.

It plans to consult on proposals to close 195 of its 1,069 high street travel agencies, with the full details being announced at a later date, though a union representing staff has already spoken of its fury at the scale of the cuts.

It is understood that many of the stores to close operate under the Co-Operative brand.

Thomas Cook is also planning to shut its Accrington office in the North West in a move impacting around 100 roles while administrative and managerial jobs are at risk across its head office in Peterborough and its Preston site.

The job losses amount to 16% of its 15,500 workforce in the UK and Ireland.

In a statement, the company said: "As Thomas Cook UK & Ireland continues to focus on the turnaround of the business it has today entered  a 90 day consultation process with a number of its UK employees on the next phase of the three-year programme to transform its operations.

"The need to evolve the UK business has been a clearly stated goal, accelerated by the appointment of Peter Fankhauser, an experienced Thomas Cook leader as UK CEO.

"The UK business needs to reduce cost to ensure back-office costs are not passed on to customers and that the necessary operational changes are made to reflect evolving customer needs and purchasing requirements."

It continued: "The company has 1,069 stores in the UK, making it the largest high street travel retailer. A number of these stores do not meet the performance targets of the business and are in communities where Thomas Cook has more than one retail outlet."

Mr Fankhauser added: "Thomas Cook is a much loved brand that needs to make the proposed changes to secure our future and provide continued employment for many thousands across the UK and better meet the needs of our customers going forward.

"We firmly believe these proposals will mean a better - more profitable - Thomas Cook that continues to be a major employer in the UK and offer the widest range of holidays for travellers and voyagers in the future.

"We are already consulting with our Unions and employee representative bodies to minimise the impact of these changes and I am speaking personally to all employees today to provide information and support through this period of consultation."

Thomas Cook's transformation plan, under which it had already cut 168 stores and 1,100 jobs, was blamed for deeper losses in its last financial year.

The 171-year-old company reported a statutory loss of £590m for the 12 months to the end of September - worse than the £518m loss recorded the previous year.

Thomas Cook was under pressure to tighten its purse strings at a time of a slowdown in consumer spending and changing holiday habits.

The Transport Salaried Staffs Association (TSSA), which represents employees, said it was "shocked and angry" at the scale of the job losses.

General secretary Manuel Cortes said: "This constant policy of slash and burn, with the axing of one in four stores and the loss of jobs, is simply self-defeating.

"The company needs new products if it to come to come to terms with the age of the internet and prosper in the 21st century."

Thomas Cook also confirmed it planned to change staff terms and conditions for remaining workers.

Sharon Ainsworth, national officer of Usdaw, said: "Even those who are not at risk of redundancy are facing the prospect of cuts to their benefits packages, following a number of cost-cutting proposals which the business has put forward.

"We will be examining these proposals closely and will defend our members' interests throughout this uncertain time."

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Sir Mervyn King Writes To British Businessman

By Enda Brady, Sky Correspondent

When Mike Benson was refused a £10,000 loan to buy a new transit van for his company selling air compressors in Worcestershire, he despaired.

His business turned over £640,000 last year, and even more the year before - the kind of thriving small British business that Chancellor George Osborne has repeatedly urged the banks to help.

But still the answer was a firm 'no'.

All he wanted was a 12-month loan, but the money was not forthcoming.

"I was angry, annoyed, yes all of those things, but I was also slightly shocked and puzzled really," Mr Benson told Sky News at his company base outside Bromsgrove.

"We've been in business 20 years and the van needed replacing at a time when we had just paid a corporation tax bill of £10,500.

"The bank refused me on the basis of 'fixed assets'. But we have very few of them.

He added: "In the old days they would have taken a look at our business and at us and said 'yes'.

"But the banks have lost their way and they have lost touch with their customers.

"You struggle to even find a phone number for your bank. It's all done by call centres in a kind of 'tick box' fashion."

The personal letter was printed on Bank of England headed paper

So Mike decided to write a letter, not to the boss of his bank, but to the governor of the Bank of England.

And he was astonished to get a signed response from Sir Mervyn King himself.

It read: "I was sorry to read of the difficulty you have had in trying to replace your transit van.

"I can fully understand how maddening that, and the behaviour you describe from the banks you have spoken to, must have been.

"Your experience is common to that of many companies across the UK that I have visited recently.

"I would encourage people who have had problems with their bank to try new lenders. One such example is Handlesbanken, a long established, but relatively new to the UK, Swedish bank."

So will the publicity surrounding his letter shame the banks into lending to small businesses again? Mr Benson is not so sure.

"Oh, don't get me wrong, I'd like to think so. I'm just not that confident," he said.

"More chance of pigs flying at the moment, if you ask me!"

He eventually got the money and the van - but says he will take his business elsewhere in future.

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