Archive for the ‘breakfast-today ’ Category

Trump won’t scrap Nafta trade deal ‘at this time’

US President Donald Trump has told Mexico and Canada he wants to renegotiate – not scrap – the North American Free Trade Agreement. Media reports on Wednesday had suggested Mr Trump was drafting an executive order to end the pact. During his election campaign Mr Trump called Nafta the “single worst trade deal ever” and a “killer” of US jobs. The reversal surprised markets, sending the Mexican peso and Canadian dollar higher after losses earlier this week.

Boohoo online fashion retailer sees its profits double

Annual pre-tax profits at online fashion retailer Boohoo (BOO.L) have almost doubled to £31m – up from just under £16m last year. Its sales have jumped by 51% to almost £300m, thanks to new overseas markets. The Manchester-based firm puts its success down to “combining cutting-edge, aspirational design with an affordable price tag”. Its booming sales growth has also been reflected in its share price, which has more than trebled in the past year. On its stock market flotation in 2014, it was valued at £560m. It is now worth about £2bn. The firm has gone from strength to strength in recent years, while its High Street rivals have had to deal with increasing competition from Boohoo and other online retailers.

Brexit: Worries for small businesses with EU staff

More than half of small firms employing workers from the EU are worried that Brexit will stop them recruiting sufficiently skilled staff. A report from the Federation of Small Businesses (FSB) has found that only 21% of small firms currently employ staff from an EU country. But of those, 59% are concerned they will not be able to recruit the right staff in the future. The FSB said securing the right of EU staff to remain in the UK was vital. Without that, said the FSB’s chairman Mike Cherry, small firms feared they would lose skilled staff who would be difficult to replace. “EU workers are a vital part of our economy, helping to plug chronic skills gaps across a wide range of sectors, and filling jobs in an already tight labour market,” he said. “From packers, to mechanics, to graphic designers, small employers need to be able to hire the right person, for the right job at the right time.”

Euro jumps after French vote

The euro jumped to a five-month high after the first round of voting in the French presidential election on Sunday. Centrist Emmanuel Macron topped the voting, going through to the final round with far-right Marine Le Pen. Investors had worried that far-left Jean-Luc Mélenchon would beat Mr Macron, giving voters a choice between two Eurosceptic candidates. The euro initially rose 2% to its highest level since mid-November before giving up some ground.

UK’s online shoppers top global spending survey

Online shoppers in the UK spend more per household than consumers in any other country, a report says, amid a shift from stores to the internet. UK households spent the equivalent of $5,900 (£4,611) using payment cards online in 2015, the UK Cards Association said. This was higher than Norway ($5,400), the US ($4,500) and Australia ($4,000). The association suggested the frequency of debit and credit cards and the ease of delivering items drove online buys. New figures from the association showed that £154bn was spent on the internet using cards in 2016 – up by a quarter in two years.

Tesco to offload opticians’ business to Vision Express

Tesco (TSCO.L) is to sell its in-store optician business in the UK and Republic of Ireland to Vision Express, who will continue to run the eyeglass outlets. Tesco – which says the sale will “simplify” its business – has 206 optical stores in the UK and three in Ireland, as well as an online outlet. It employs about 1,500 staff, who will be transferred to Vision Express, owned by Dutch-based Grand Vision. The deal is expected to be completed this year, pending regulatory approval. No financial details about the sale have been given. Tesco UK chief executive Matt Davies said: “This allows us to further simplify and strengthen our UK business and ensures our customers are still able to enjoy high quality eye care services from Vision Express in our larger stores.” Tesco Opticians, which opened its first opticians in Peterborough in 1998, had revenues of about £90m in 2016. Tesco has been selling off businesses including restaurant chain Giraffe, Dobbies Garden Centres and music streaming service Blinkbox. Vision Express has 389 stores in the UK and about 4,500 staff.

RBS stake may be sold at a loss, chancellor admits

The chancellor has admitted for the first time that the government is prepared to sell its stake in Royal Bank of Scotland (RBS) at a loss. The Treasury bailed out the bank by buying a 72% stake for £45bn, at 502p a share, at the height of the financial crisis in 2008. Shares in the loss-making lender are now trading at less than half that price at 223p. Philip Hammond told MPs on Tuesday: “We have to live in the real world.” He added: “Our policy remains to return the bank to private hands as soon as we can achieve fair value for the shares, recognising that fair value could well be below what the previous government paid for them. “We have to live in the real world and make decisions on the future of our holding in RBS in the best interests of taxpayers.”

Weetabix to be sold to US company Post Holdings

UK cereal firm Weetabix is to be bought by US firm Post Holdings for $1.8bn (£1.4bn), its owner has confirmed. Weetabix – made in the UK since 1932 – was put up for sale in January by China’s Bright Food, which bought a 60% stake in 2012. Bright’s acquisition was the largest by a Chinese firm at the time, but it is believed to have struggled to build significant market share in China. Chinese consumers prefer a hot, rice-based breakfast to cold cereal. While Weetabix doubled sales in China in 2016, the UK still accounts for the majority of its sales. Post Holdings is the third-largest cereal firm in the US and owns brands including Great Grains, Golden Crisp and Cocoa Pebbles. Some of the world’s biggest names in food, including the UK’s Associated British Foods and Italy’s Barilla, had been named as possible suitors for Weetabix. Northamptonshire-based Weetabix, which has a royal warrant, was family-owned until 2004, when it was bought by private equity firm Lion Capital.

Surveyors get gloomy as property market stagnates

Property surveyors are getting gloomier about the state of the housing market, according to the Royal Institution of Chartered Surveyors (Rics). Its latest monthly survey shows that stock levels are at a new record low. The number of people interested in buying a property – and the number of sales – were also “stagnant” in March, it said. However, because of the shortage of housing, it said prices in many parts of the UK are continuing to accelerate. While prices carry on falling in central London, Rics said that price rises in the North West were “particularly strong”. Most surveyors across the country still expect prices to rise over the next 12 months, but by a smaller majority than in February. But on average, each estate agent has just 43 properties for sale on its books, the lowest number recorded since the methodology began in 1994. “High-end sale properties in central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock,” said Simon Rubinsohn, Rics chief economist. “For the time being, it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels.”

Tesco full-year profits hit by fine

Supermarket giant Tesco (TSCO.L) has reported a fall in full-year profit after it was fined for overstating its profits in 2014. It said it had taken a £235m charge after it agreed a deferred prosecution with the Serious Fraud Office and the Financial Conduct Authority in March. However, Tesco said it exceeded its full-year operating profit target. Like-for-like sales, which strip out the impact of new store openings, grew 1% in the year to 28 February. “We are ahead of where we expected to be at this stage,” said Tesco chief executive Dave Lewis. “We are confident that we can build on this strong performance in the year ahead, making further progress towards our medium-term ambitions.” Full year pre-tax profit, which includes one-off charges such as legal costs, fell to £145m from £202m the year before. But Tesco’s operating profit figure, which strips out exceptional items and is designed to give a picture of the underlying performance of the business, was £1.28bn, exceeding Tesco’s £1.2bn target.

Shell admits dealing with money launderer

Shell (RDSA.L) has admitted for the first time it dealt with a convicted money-launderer when negotiating access to a vast oil field in Nigeria. It comes after emails were published showing Shell negotiated with Dan Etete, who was later convicted of money laundering in a separate case. Shell and an Italian oil company paid $1.3bn (£1bn) to the Nigerian government for access to the field. Investigators claim $1.1bn was passed to a firm controlled by Mr Etete. Shell and the Italian firm ENI agreed a deal with the Nigerian government for the rights to exploit OPL 245, a prime oil block off the coast of the Niger Delta. The government passed on $1.1bn of the money to a company called Malabu, which was controlled by Mr Etete, according to Italian prosecutors. Documents filed by the Italian prosecutors claim that $466m of that sum was then laundered through bureau de change and passed on to the then president, Goodluck Jonathan, and members of his government.

Libor: Bank of England implicated in secret recording

A secret recording that implicates the Bank of England in Libor rigging has been uncovered by BBC Panorama. The 2008 recording adds to evidence the central bank repeatedly pressured commercial banks during the financial crisis to push their Libor rates down. Libor is the rate that banks lend to each other and it sets a benchmark for mortgages and loans for ordinary customers. The Bank of England said Libor was not regulated in the UK at the time. Banks setting artificially low Libor rates is called lowballing. The recording calls into question evidence given in 2012 to the Treasury select committee by former Barclays boss Bob Diamond and Paul Tucker, the man who went on to become the deputy governor of the Bank of England.

German Mittelstand wants ‘soft Brexit’

Germany’s “Mittelstand” of small and medium-sized firms (SMEs) could lose billions of euros if the UK is shut out of the single market, an industry representative has warned. The boss of the BVMW, which represents more than 270,000 SMEs, told the BBC “a hard Brexit would harm both sides”. Mario Ohoven added that negotiations should be “guided by economic sense and not by political ideologues”. The remarks diverge from the position taken by other leading German voices. In September last year, the head of the BDI, a powerful German business lobby whose members are larger companies, told the BBC it was “better to have a hard Brexit that works”. German politicians have almost unanimously underlined that the UK cannot have unfettered access to the single market unless it allows for the free movement of EU citizens. In her letter to the EU last week, Theresa May said the UK would “not seek membership of the single market” in the upcoming negotiations.

Criminal gangs use UK ports to defraud EU customs

Systematic failures by UK customs officials have allowed criminal gangs to defraud the European Union of at least £2bn in just four years plus billions more in lost VAT, the EU anti-fraud office OLAF has claimed. Olaf said failures by Customs and Excise had cost at least 5.2bn euros (£4.5bn) in lost duties and VAT. The losses relate to clothing and footwear exported mainly from China. An HMRC spokesman said its experts did not recognise OLAF’s estimates. As a result it planned to challenge them, he added. Ernesto Bianchi, investigations director for OLAF, said: “In the last year we have seen a concentration of the fraud pattern and we have calculated that roughly 79.9% of the losses in customs duties are made through declarations made in UK ports. “These are estimates, of course, because the fraud is perpetrated by a particular type of scheme where the companies actually disappear.” The EU may order the UK to pay back the lost customs duties, estimated at about 2bn euros (£1.7bn).

Donald Trump tells banks he will give laws a ‘haircut’

President Donald Trump has promised sweeping reforms to “horrendous” US banking regulations that were introduced after the financial crisis. “We’re going to do a very major haircut on Dodd-Frank,” he said, referring to the Wall Street and consumer protection rules Barack Obama enacted in 2010. Dodd-Frank aimed to prevent banks taking on too much risk and to separate their investment and commercial arms. But Mr Trump said he wants “some very strong” change to help the bank sector. “We want strong restrictions, we want strong regulation. But not regulation that makes it impossible for the banks to loan to people that are going to create jobs,” the president told a group of about 50 business leaders at a White House meeting. “We’re going to be doing things that are going to be very good for the banking industry so that the banks can loan money to people who need it.” Mr Trump had promised during his election campaign to relax rules on big banks, and subsequently ordered a review of the industry’s regulations.

Tesla’s market value overtakes Ford

Tesla’s market value has overtaken that of Ford after shares in the electric car maker added more than 7%. At the close of trading Tesla had a market value of $49bn (£38bn), compared with Ford’s value of $46bn. Tesla’s shares rose on Monday after the company announced record vehicle deliveries in the first three months of the year. The firm delivered more than 25,000 cars in the first quarter, up 70% on the same quarter last year. While Tesla’s sales are growing fast they are still a fraction of Ford’s, which sold almost 6.7 million vehicles in 2016. Tesla delivered 76,000 electric cars last year.

Lloyds Bank to shrink hundreds of branches in size

Lloyds Bank (LLOY.L) has announced plans to shrink hundreds of its branches in size, in some cases boarding up the old counter sections. The new “micro branches” will be staffed by just two people, who will help customers to use machines, including pay-in devices. Some of those being converted will be Halifax and Bank of Scotland branches. Lloyds said the reason was “a profound change in customer behaviour”, which has seen more transactions move online. It has already announced plans to close 400 of its branches around the UK, with 9,000 job losses. The micro format, modelled on an existing branch in Paternoster Square in the City of London, will use as little as 1,000 square feet of space. “We have a lot of branches that used to have a lot of footfall, and therefore feel quite empty and intimidating for customers,” said Jakob Pfaudler, Lloyds’ chief operating officer for retail. “So when there’s too much space we may board up places in existing branches.”

Hospitality firms warn on EU recruitment

The hospitality sector has warned it faces a shortfall of 60,000 workers a year if immigration from the European Union is too tightly controlled. The British Hospitality Association (BHA) said that thousands of businesses are facing having to drastically reduce their dependence on EU workers. Staff from the EU make up nearly a quarter of all jobs in the sector. Immigration is set to be one of the most controversial issues to be settled during the Brexit negotiations. The hospitality industry represents 3 million workers and about a tenth of the UK’s economic wealth. In the first major business intervention since the triggering of Article 50, a report by KPMG for the BHA says that it will take 10 years to reduce the need for EU workers by training British staff, targeting older workers and encouraging younger people to take jobs in the sector. But with the UK economy approaching full employment, the report says that there are no easy pools of labour to exploit and that EU nationals will still make up a large part of the workforce.

Insurer Lloyd’s of London confirms new Brussels base

Lloyd’s of London says it will establish a new European base in Brussels to avoid losing business when the UK leaves the EU. The 329-year-old insurance market confirmed the plan as it released its latest annual results. “A subsidiary office will be opened in Brussels with the intention that it will be operational for the January 1 renewal season in 2019,” it said. The company’s continental business generates 11% of its premiums. Other financial institutions are also planning to relocate business within Europe. Several investment banks, including Bank of America, Barclays, and Morgan Stanley are considering relocating staff to Dublin. Frankfurt, Madrid and Amsterdam are also likely to benefit. HSBC is expected to move significant numbers of employees to Paris. Lloyd’s also announced it had made a profit of £2.1bn for 2016, the same as for the year before.

Brexit: What do businesses want from Article 50 talks?

Prime Minister Theresa May is set to trigger Article 50 later, formally starting the process of the UK leaving the European Union. The next two years of negotiations will have far-reaching implications for British businesses and their staff. The three main areas companies will be watching in the Brexit talks are: migration, customs, and tariffs. But different firms – often within the same industry – will rank them in different orders of importance. With so many competing interests, what message is business sending to the government about the Brexit talks?

Tesco fined £129m for overstating profits

Tesco has agreed to pay a fine of £129m to avoid prosecution for overstating its profits in 2014. The supermarket giant has reached a deferred prosecution agreement with the Serious Fraud Office (SFO) after a two-year investigation. The SFO said Tesco had co-operated with the investigation and had undergone an “extensive” period of change. Tesco also said it had accepted a finding of “market abuse” from the Financial Conduct Authority. It says it will compensate investors who bought shares or bonds between 29 August and 19 September, which Tesco estimates will cost it about £85m.

BT fined record £42m for late installations

BT has been hit with a record fine from telecoms regulator Ofcom and has set aside £300m to repay providers for delays in installing high-speed lines. Ofcom has issued the firm with a £42m fine, which it said was the largest it has ever handed down. It found BT’s Openreach division had cut compensation payments to telecoms providers for delays in installing the lines between early 2013 and late 2014. Openreach said it “apologised wholeheartedly” for the mistakes. The investigation found BT had broken rules about its “significant market power” by cutting the payments. Gaucho Rasmussen, Ofcom’s investigations director, said: “These high-speed lines are a vital part of this country’s digital backbone. “We found BT broke our rules by failing to pay other telecoms companies proper compensation when these services were not provided on time. “The size of our fine reflects how important these rules are to protect competition and, ultimately, consumers and businesses.”

Call for ‘decently paid’ maternity leave

Statutory maternity pay for UK mothers is among the worst in Europe, according to an analysis by the TUC. The trade union body says only Ireland and Slovakia have worse “decently paid” entitlements. It defines decently paid as two-thirds of a woman’s salary or more than £840 a month. The government said the UK’s maternity system was one of the most generous in the world and most mothers could take up to 39 weeks of guaranteed pay. That was nearly three times the EU minimum requirement of 14 weeks, a statement said. The TUC argues that statutory maternity pay should be at least as much as the minimum wage so mothers do not have to return to work prematurely. “The UK is in the relegation zone when it comes to decently paid maternity leave,” said Frances O’Grady, general secretary of the TUC. “Many European countries offer decent support to new mums, but lots of parents here are forced back to work early to pay the bills.” The analysis is based on research by the Leave Network, an international group that analyses and researches leave policies.

Next sees first annual profit fall in eight years

Next (NXT.L) has reported its first fall in annual profit for eight years and warned of “another tough year ahead”. Pre-tax profit at the clothing and homeware retailer dropped 5.5% from £836.1m to £790.2m last year. The firm, which had already warned profits would fall, said it remained “extremely cautious” about trading. It said shoppers were shifting their spending away from clothing, at the same time as inflation was rising and incomes were being squeezed. The profit fall in 2016 is the first for the retailer since the financial crisis of 2008. Sales at Next’s bricks-and-mortar business fell 3% to £2.3bn, as the retailer said shoppers continued to shift away from the High Street. Its online and catalogue business did better, with sales growing 4% to £1.7bn. Next chairman John Barton said: “Trading conditions in the year ahead will continue to be tough, however I believe that by focusing on our core strengths, as we did during 2008, we will see Next emerge from this period stronger than before.”

The women still working into their 70s

The proportion of women working into their 70s in the UK has doubled in the last four years and is starting to catch up with men. Analysis of official data reveals that 5.6% of women only stopped working after the age of 70 in 2012. This had risen to 11.3% in 2016. Worries over pension income and a motivation to stay active have pushed up working ages. An estimated 15.5% of men stopped work in their 70s in 2016. Changing laws and workplace regulations, such as the end to age discrimination and the right to request flexible hours, have also helped people to work for longer as longevity increases.

Bill Gates tops Forbes’ rich list but Trump’s wealth slips

Microsoft founder Bill Gates again tops Forbes’ list of the world’s richest people, in a year when the number of billionaires rose 13% to 2,043. According to the magazine’s annual rich list, Mr Gates’ fortune rose to $86bn, from $75bn, followed by investor Warren Buffett, up $14.8bn to $75.6bn. It was bad news for US President Donald Trump, who slipped 220 spots to 544 and must now rub along on just $3.5bn. Forbes said the $1bn fall in his wealth was due to the slow US property market. There were 183 tech billionaires on the Forbes list, with a combined $1tn in wealth. The list is dominated by US billionaires. Others in the top 10 included Amazon founder Jeff Bezos, who moved up to number three with the biggest gain of any person on the planet, a $27.6bn rise in his fortune of $72.8bn. Facebook founder Mark Zuckerberg was number five and Oracle co-founder Larry Ellison was number seven.

Vodafone’s Indian unit and Idea Cellular announce merger

UK telecoms giant Vodafone (VOD.L) has merged its Indian business with Idea Cellular, India’s third-largest network, to create the country’s largest operator. The combined company will have almost 400 million customers, accounting for 35% of the market share, the firms said in a statement. The announcement ends months of speculation over an impending deal. Analysts say the merger was to fend off competition from a new operator – Reliance Jio. Owned by the country’s richest man, Mukesh Ambani, Jio has forced Vodafone India and Idea Cellular, together with current market leader Bharti Airtel, to cut prices. Shares in Idea rose almost 4% in Mumbai following the announcement of the deal. India’s leading mobile networks are embroiled in what analysts have described as “a vicious price war”, started by the arrival of Jio. More than 10 telecom operators are battling it out to try and attract India’s one billion mobile phone users. That has forced firms to keep tariffs low – significantly impacting their profitability.

MPC member calls for interest rates to rise

UK interest rates should be raised, despite risks in the economy, according to a member of the Bank of England’s rate-setting committee. Kristin Forbes, a US academic, was the only member of the Monetary Policy Committee to vote to raise rates this month. This was the first split between policymakers on rates since last July. “Monetary policy should not go on hold,” Ms Forbes wrote in an opinion piece in the Daily Telegraph. Ms Forbes, who is due to leave the Bank in June, said raising rates would lessen the risk of above-target inflation, and boost an improved outlook for unemployment and UK output.

Sainsbury’s sales fall at start of year

Underlying sales have fallen at Sainsbury’s (SBRY.L) in the first nine weeks of the year, but the newly-acquired Argos reported strong growth. The supermarket’s like-for-like sales, which strip out new stores, fell by 0.5% in the period to 11 March. However, Argos sales rose 4.3%, resulting in a 0.3% increase across the Sainsbury’s group as a whole. Mike Coupe, chief executive, said the impact of rising cost pressures “remains uncertain”.

Ikea drivers living in trucks for months

Lorry drivers moving goods in Western Europe for Ikea and other retailers are living out of their cabs for months at a time, a BBC investigation has found. Some drivers – brought over from poorer countries by lorry firms based in Eastern Europe – say their salary is less than three pounds an hour. They say they cannot afford to live in the countries where they work. One said he felt “like a prisoner” in his cab. Ikea said it was “saddened by the testimonies” of the drivers. The drivers the BBC spoke to were employed by haulage companies based in Eastern Europe, which are paid to transport Ikea goods.