21 April 2011
Last updated at 23:36
Greece contacted the international police agency over the email
The Greek authorities have asked Interpol to question a London trader over an email he sent which talked of the high chance of a Greek default.
The email, published in a Greek newspaper, refers to “increased noise” over a Greek debt restructuring as early as Easter.
Greece is highly sensitive to allegations it may not stick to strict repayment terms on its recent bail-out.
The finance ministry says the incident amounts to “possible criminal conduct”.
Greek police say the email was sent from the desk of a Citibank trader in London.
Citibank said in a statement: “We are co-operating with the authorities and do not consider there to have been any wrongdoing by Citi or its employees.”
Speculation Greece will default and fail to pay back its borrowings has pushed interest rates on debts due for repayment in 10 years to 15%, meaning it has to pay almost 12% more to raise cash than its fellow eurozone member, Germany.
Bonds that are due for repayment in two years were paying 23%, indicating that investors thought they were even less likely to be paid back in full.
On Wednesday, Athens’ main stock index dropped 2.6% on a new wave of fears.
Greece’s Finance Minister George Papaconstantinou insisted on Wednesday that Greece could deal with its debt mountain.
The country was the first of three to ask for special help from the European Union and its partners after it became clear a year ago that it could not close the gap between spending and borrowing.
Greece’s attempts to regain international trust in its finances have already included public sector cuts that have sparked massive demonstrations.
Last week it announced a privatisation programme to raise 50bn euros ($71.5bn; £44bn).
Article source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-13166589
22 April 2011
Last updated at 06:30
Samsung’s Galaxy tablet has so far been the top challenger to Apple’s iPad
Samsung Electronics is suing Apple, claiming its rival violated its patent rights, days after Apple accused Samsung of “slavishly” copying designs of its iPad and iPhone.
The patent lawsuits, filed in South Korea, Japan and Germany, involve infringement of up to five patents, Samsung said in a statement.
Apple filed a lawsuit against Samsung last Friday for violating its patents.
It is the latest patent dispute in an increasingly competitive industry.
“Samsung is responding actively to the legal action taken against us in order to protect our intellectual property,” the statement said.
South Korea’s Samsung is one of the fastest-growing smartphone makers in the telecommunications industry.
Its Galaxy line of smartphones and tablet computers, which use Google’s Android operating system, have emerged as the top competitors so far to Apple’s iPhone and iPad.
However, Samsung is also one of Apple’s main suppliers of components such as chips and LCD displays.
The legal battle could therefore hurt the earnings of both companies as strong sales of Apple’s iPhone and iPad mean added revenue for Samsung.
Article source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-13167573
22 April 2011
Last updated at 09:43
Japanese auto manufacturers have been among the worst hit by the earthquake and tsunami
Toyota Motors production cuts will last at least until the end of the year, as the carmaker continues to face a shortfall in the supply of parts.
Production is likely to return to normal levels only by November or December, the company said.
Toyota and other auto manufacturers have been facing a shortage of parts due to the damage caused by last month’s earthquake and tsunami.
Toyota has curbed production at its factories in Japan and overseas.
The world’s biggest carmaker said that production at its Japanese factories was likely to begin the recovery process by July, while its global operations will start to pick up speed by August.
However a complete recovery in its production at its Japanese and global plants will happen only by the end of the year, the company said.
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With this many aftershocks, including one last night, we’ve seen some of the recovery work thrown back to square one many, many times”
Toyota announced suspension of production at its factories in Japan in the aftermath of the earthquake and tsunami, which occurred on 11 March.
As the extent of the damage in Japan became clear, the company announced curbs to production at its factories in North America and Europe as well.
Earlier this week, it further extended the curbs in North America until 3 June and also announced that its factories in China would operate at 30-50% of their capacity until that date.
While it has restarted production at its Japanese plants, a shortfall in the supply of parts coupled with a shortage of electricity means that the units have not been running at full capacity.
The company’s president Akio Toyoda said the company had faced many hurdles in trying to get back on track.
“With this many aftershocks, including one last night, we’ve seen some of the recovery work thrown back to square one many, many times,” Mr Toyoda said.
“In that sense it’s difficult to say what the impact on production volumes or earnings will be,” he added.
Article source: http://www.bbc.co.uk/go/rss/int/news/-/news/13167400
21 April 2011
Last updated at 16:33
Retail sales in the UK registered a surprise pick-up in March, led by strong food and non-store sales.
Sales volumes rose 0.2% compared with a month earlier, according to the Office for National Statistics (ONS).
Market analysts had expected a much weaker number after a downbeat survey was released by the British Retail Consortium (BRC) last week.
It follows a revised 0.9% drop in sales in February – a fall that had also caught analysts by surprise.
The ONS said in its latest retail sales bulletin that the volume of sales was up 1.3% compared with March 2010 on a seasonally adjusted basis – which takes account of the fact that Easter fell in March last year.
Food stores saw their sales rebound 0.7% compared with February, which had been a very weak month for them, but remain 1% lower than a year ago.
Non-store sales continued to register strong growth – up 0.6% against February, and up 13.1% versus a year earlier – in part reflecting the continuing shift of business online.
The ONS estimates that internet sales now comprise 9.8% of all non-fuel retail sales in the UK by value.
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I have found a lot of enquiries coming, with a lot of people asking for curtains to be made”
“The ONS figures confirm a worrying downward trend for retail sales,” said BRC director general Stephen Robertson.
“Annual growth in sales values is a quarter of what it was in January and the worst since April last year which was hit by the earlier Easter.
“This April’s figures will be helped by Easter and the Royal Wedding. That’s welcome, but won’t change the fundamentally weak conditions likely to undermine consumer confidence for some time yet.”
The numbers caught markets by surprise – instead of a 0.2% rise, economists had expected a month-on-month fall in sales of 0.5%.
Sterling jumped half a cent against the dollar after the data was released, as currency traders priced in a higher probability that the Bank of England will raise rates over the summer, and went on to hit a 16-month high of $1.657.
In the minutes from its latest rate setting meeting in April, the Bank indicated that the strength of recovery in consumer spending was a key question for them.
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Down in December because of bad weather, a bounce back in January, another drop in February and some recovery last month – the recent story for retail sales has been volatile.
Analysts were surprised to see there was sales growth in March, given all the doom and gloom about the squeeze on household budgets. Better weather might have created a cheerier mood.
But the 0.3% increase over the three months to March was nothing spectacular, though some might argue it could have been worse.
All eyes will now be on the whole economy. GDP figures for the first quarter are released next week.
However, the retail price deflator – an important proxy for inflation included in the data release – slowed down to a 3.4% annual increase from 4% in February.
“The consumer is not quite as flat on his back as had been feared,” said Howard Archer, economist at IHS Global Insight.
However, he pointed out that despite the modest pick-up in sales and slowdown in price rises in the month, consumers were still seeing their incomes squeezed by inflation and “the underlying impression remains that consumers are less able and willing to spend”.
He also noted that consumer spending for the first quarter of the year as a whole had only risen 0.3% versus the previous three months, which did not bode well for the economy, as retail sales comprise 65% of all spending.
Victoria Cadman, an economist at Investec, said: “These figures and those from the last couple of months are not really showing the retail sector as being a picture of health.
“I suspect the Monetary Policy Committee will not see this as a sign that consumer demand is gathering pace.”
Big vs small
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Pound Sterling v US Dollar
Last Updated at 22 Apr 2011, 05:50
*Chart shows local time
Smaller shops were doing well – including those in London selling memorabilia for the royal wedding, Aileen Simkins from the ONS told the BBC.
The ONS highlighted in its bulletin that small stores did much better than large stores.
This was particularly true of the food sector, where sales at smaller retailers were 2.5% higher than a year earlier, whereas supermarkets were down 4.1%.
The trend was first apparent in January, and reverses years in which sales growth at big stores has been outstripping that at smaller ones.
“There is some talk that the high cost of petrol is leading some people to cut back on driving to the out of town shopping centres and supermarkets and do more shopping locally,” said Mr Archer.
The ONS’ Aileen Simkins also noted that good weather in March helped sales of items such as climbing frames, as people prepared for a long summer.
Other sectors showing strong growth were garden stores and toy stores, while IT stores were also doing well on the back of new product launches, she said.
The ONS figures come after supermarket giant Tesco revealed earlier this week a 0.7% drop in UK like-for-like sales in the three months to 26 February.
Meanwhile Home Retail Group reported shrinking markets for its Argos and Homebase chains, and predicted another tough year in 2011.
Article source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-13154886
22 April 2011
Last updated at 04:15
The Japanese government has announced a 4 trillion yen ($48.9bn; £29.6bn) emergency budget for disaster relief, after March’s earthquake and tsunami.
The budget still needs approval from parliament later this month, and could be implemented in May.
Authorities say no new bonds were issued to fund the spending, to prevent adding to Japan’s huge public debt.
The government estimates it will cost as much as 25tn yen to rebuild the country.
The emergency budget is aimed at disaster relief, including providing temporary housing, restoration of infrastructure and disaster-related loans.
The 11 March earthquake left more than 27,000 people dead or missing.
It also destroyed infrastructure in the north-eastern part of Japan and triggered a nuclear disaster.
Prime Minister Naoto Kan has said this could be the first of several extra budgets needed to fund reconstruction.
On Thursday, his government made it illegal to enter a 20km (12-mile) evacuation zone around the stricken Fukushima nuclear reactor.
Cooling systems were knocked out by the twin disasters and radiation has been leaking from the plant.
It is not clear how many people are still living in the evacuation zone, but reports said police had counted at least 60 families.
The budget will be financed by taking 2.5tn yen from pension funds, as well as money set aside to increase payments to families with children.
Money from emergency reserves is also being used.
The devastation has been described as the country’s biggest crisis since the end of World War II
But the government has promised that it will not sell more bonds, or borrow more money from the markets, to fund this spending.
Japan already has a debt burden double the size of the economy.
However, some analysts warn that the government will have to increase debt issuances in the future to finance reconstruction.
The BBC’s Roland Buerk in Tokyo said that although future emergency budgets were likely to require more borrowing, this one would be paid for by spending cuts.
“Plans to increase allowances for families with children are being scrapped and highway tolls will be increased,” he said.
“Much of the money will come from dipping into pension reserves, [which is] controversial in a country with a rapidly ageing population.
“Tax rises are also being discussed.”
He added that the budget was likely to get through parliament, despite concerns about some of the measures, as the opposition does not want to be seen as preventing money from getting to those who need it.
The government is hoping the budget will be enacted soon, despite calls for Prime Minister Naoto Kan to resign.
Article source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-13167014
21 April 2011
Last updated at 18:13
Oil from the Deepwater Horizon explosion last year is still in the water one year on
BP has agreed to provide $1bn (£600m) to repair damage to the US Gulf Coast resulting from last year’s oil spill.
The US Justice Department, which helped form the agreement, said the funds would go to Alabama, Florida, Louisiana, Mississippi and Texas.
It will be used to clean up affected areas, including beaches.
Other recipients of the $1bn include the Department of the Interior and the National Oceanic and Atmosphere Administration.
Hundreds of miles of coastal wetlands and beaches were contaminated, a third of the Gulf’s US waters were closed to fishing, and the economic costs have reached into the tens of billions.
The Justice Department said the release of the money was the largest restoration agreement of its kind ever reached and was “a first step towards fulfilling BP’s obligations to fund the complete restoration of injured public resources”.
The department said the agreement does not affect the ultimate liability of BP or any other company for environmental damages or other liabilities, but lets restoration projects get started sooner.
The Secretary of the Interior, Ken Salazar, said in a statement: “This milestone agreement will allow us to jump-start restoration projects that will bring Gulf Coast marshes, wetlands and wildlife habitat back to health after the damage they suffered as a result of the Deepwater Horizon spill.”
Damaged seabirds and other wildlife including dolphins continue to wash up on beaches in the affected region. The agreement was announced the day after the first anniversary of the worst offshore oil spill in US history.
BP said on Wednesday it was suing Transocean, the owner of the oil rig that exploded in the Gulf of Mexico last year, for $40bn (£24.37bn) in damages.
Article source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-13164415
21 April 2011
Last updated at 02:10
An inquiry found the blowout preventer had snagged on a piece of drill pipe
BP is suing Transocean, the owner of the oil rig that exploded in the Gulf of Mexico last year, for $40bn (£24.37bn) in damages.
BP said safety systems on Transocean’s Deepwater Horizon rig had failed.
Separately, BP also sued the maker of the rig’s blowout preventer, alleging the device failed to stop the huge oil spill that followed the explosion.
Both lawsuits were filed on Wednesday on the first anniversary of the explosion, which killed 11 workers.
Overnight on 20 April 2010, Transocean’s Deepwater Horizon burst into flames while drilling a well for BP.
In the months that followed, more than 200 million gallons (780 million litres) of oil flowed in the Gulf of Mexico from the well, soiling hundreds of miles of coastline in the worst US oil spill in recent history.
In federal court in New Orleans on Wednesday, BP said Swiss-based Transocean and Cameron International, the Houston company that supplied the blowout preventer (BOP), should help it pay for tens of billions of dollars in liabilities resulting from the spill, which include clean-up and compensation costs.
BP also wants the court to declare that Cameron caused or contributed to the disaster.
“The Deepwater Horizon BOP was unreasonably dangerous, and has caused and continues to cause harm, loss, injuries, and damages to BP (and others) stemming from the blowout of Macondo well” and resulting spill, the BP lawsuit said.
Cameron has filed counter-claims and defended the integrity of its products. Transocean did not immediately comment on the BP lawsuit but has also requested court judgements against BP, Cameron and others.
BP has estimated its liability at $40.9bn, but could face tens of billions more in fines and penalties.
Investigators hired by the US government said last month that the blowout preventer’s design was flawed, and that a piece of drill pipe trapped in the well pipe under the rig kept the blowout preventer from shearing and pinching off the well after the explosion.
In a statement supplied to the Associated Press, Cameron noted that Wednesday, the first anniversary of the disaster, was the deadline for companies to file claims against one another.
The investigators hired by the US government also said Transocean workers’ actions contributed to the blowout preventer’s failure.
In addition, in January a commission convened by US President Barack Obama found that BP, Transocean and Halliburton – the US company that handled the well-sealing operation ahead of the disaster – made decisions aimed at cutting costs and saving time that ultimately added to the risk of an accident.
20 April 2011
Last updated at 22:23
The last year has seen a huge rise in sales of Apple’s iPhones, but iPad sales disappointed
Latest profits for the computer giant Apple beat hopes, including a higher-than-expected rise in iPhone sales.
Net income for the three months to March jumped 85% on the same period a year ago, with iPhone sales of 18.65m – a rise of 113%.
The figures are the latest in a string of good results from the US’s technology companies.
Intel’s figures, released on Wednesday, were also well above hopes and helped share prices to a three-year high.
Apple reported quarterly net profits of $5.99bn (£3.6bn), 95% up on the $3bn it made a year ago. Revenue was $24.67bn, a rise of 83%.
Sales of the company’s computers were strongly higher, up by 28% from a year ago driven by its tweaked MacBook Pro.
Apple’s figures were not uniformly positive. It sold 4.69m iPad tablet computers in the quarter, below expectations.
Another disappointment was sales of its one-time star, the iPod, down by 17% on the year at 9m units.
Most analysts were enthusiastic about the figures.
Channing Smith, portfolio manager at Capital Advisors growth fund, said: “Dynamite numbers across the board. The only hiccup is lower than expected iPad numbers.”
Apple chief executive Steve Jobs said in a statement: “With quarterly revenue growth of 83% and profit growth of 95% we’re firing on all cylinders.”
Mr Jobs, who went on medical leave in January with an undisclosed illness, continued: “We will continue to innovate on all fronts throughout the remainder of the year.”
The day-to-day running of Apple is currently being done by chief operating officer Tim Cook.
Article source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-13152294
20 April 2011
Last updated at 15:06
UK banks have lost a judicial review that could have a major impact on whether more compensation has to be paid on mis-sold loan insurance.
Banks will now have to look back at past sales of Payment Protection Insurance (PPI), even if consumers have not complained.
Some estimates have said this could lead to a £4.5bn bill for the banks.
The British Bankers’ Association (BBA), which said it was “disappointed” by the ruling, has 21 days to appeal.
The BBA also said banks would continue to put some fresh cases on hold until it had decided whether to continue its challenge in the courts.
Thousands of people have already received compensation because they were mis-sold PPI policies, which are supposed to repay people’s loans if their income drops because they fall ill or lose their jobs.
The banks challenged the Financial Services Authority (FSA) over guidelines it published last year which said banks should contact all past PPI customers and invite them to complain if they thought they had been mis-sold PPI.
But High Court judge Mr Justice Ouseley rejected the challenge in a judgement on Wednesday.
Natalie Ceeney, the chief financial ombudsman, said: “This judgment is very clear-cut – and it confirms that the ombudsman’s approach to PPI complaints is right.
“People have been waiting a long time while the banks’ legal action has been ongoing. I would now like to see financial businesses showing real commitment to sorting out their customers’ complaints efficiently and promptly.”
Some PPI sales proved appropriate but the banking industry has been accused of mis-selling them on a huge scale, generating many millions of pounds in profits by selling insurance that people were unaware they were paying for or did not need, or on which they could not claim.
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It is the implications of today’s ruling for the banks that are serious”
Some of these people have been compensated, sometimes after their case was initially rejected by the banks.
During the judicial review hearings in January, the court was told that implementation of the new guidelines could cost the banks and credit card companies as much as £4.5bn, paid to millions of people.
Customers would have to be repaid their PPI premiums, plus interest, if the bank or other firm concluded that the customer would not have bought the policy in the first place if they had been fully aware of the policy’s details.
A similar reimbursement could be due to those customers that paid for a policy in full up-front.
There have been more than 200,000 cases referred to the Financial Ombudsman Service about PPI in recent years, including 100,000 in the past financial year and now 5,000 each week. About three in four complaints have been upheld in the past.
The Financial Ombudsman Service said there should no longer be any stalling over fresh cases.
Complainants included people such as Gary Thomas, from London.
“I was sold a PPI policy – it amounts to 25% of the cost of the loan covering me for a five year period. In total it cost me £20,000 over a five-year period on a £60,000 loan,” he said.
“I feel I was misled by this company and asked the ombudsman to look into it. It is nothing short of theft. They should be stopped from selling the insurance.”
The UK’s banks, represented by the BBA, challenged the FSA’s new requirements.
The High Court judgement will affect millions of bank customers
They argued that the FSA was effectively applying new rules to previous sales – even when those sales were regulated by other FSA rules.
“It was due to the widespread concerns that the FSA and the Financial Ombudsman Service had not properly applied the law in this area – and only having exhausted all other avenues for resolving the underlying dispute that a judicial review was sought,” the BBA said.
“We are disappointed with today’s judgment and now need to consider the details of it very carefully as well as next steps, including whether it would be appropriate to apply for permission to appeal.”
But the FSA, which said there had been 1.5 million complaints about PPI since 2005, said: “Our primary aim has always been to get proper redress, once and for all, for those with genuine complaints.
“We believe this decision signals the end of years of poor complaint handling and will trigger a dramatic improvement in the way customers are treated when complaining.”
Ray Cox QC, a barrister who specialises in banking law, said the court ruling was a “massive endorsement” of the FSA’s powers.
“The court has confirmed that the FSA has the power to require firms to pay compensation for breaches of its high-level principles, not just specific rules,” he said.
Article source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-13128692
A new law should be created giving consumers the right to take misleading and aggressive businesses to court, the Law Commission and Scottish Law Commission have said.
The new law would only apply to transactions between a business and a consumer, the Law Commissions said as they launched a consultation into whether there should be a consumer right of redress. The existing law is either too confusing or not strong enough to protect the public against bad business practices, they said.
Where companies acted improperly, the new law would allow customers to claim a refund and cancellation of their contract if they return or reject elements of goods or services within a three-month deadline. This solution will be relevant in all cases, the Law Commissions said.
A second tier would enable customers to claim damages for economic loss, distress and inconvenience, the Law Commissions said.
“They are provided only if the consumer can prove that the practice caused actual loss, meeting a ‘but for’ test of causation. Furthermore, the trader can avoid this consequential liability with a due diligence defence,” the Law Commission and Scottish Law Commission proposals said in their joint consultation paper (274-page/2.97 MB PDF).
The new law would also give businesses the right to take legal action against customers who owe money, even if a contract doesn’t exist.
“The law of misrepresentation provides redress for misleading practices, but it is overly complex and uncertain. By contrast, the law on aggressive practices leaves major gaps. None of the main causes of action (duress, undue influence or harassment) covers the sort of aggressive problems consumers typically encounter,” they said.
The Consumer Protection from Unfair Trading Regulations (CPRs) govern unfair business practices and were introduced in 2008 to combat misleading and aggressive behaviour by businesses. CPRs implement the EU’s Unfair Commercial Practices Directive in the UK.
The CPRs outline 31 practices that are unfair for businesses to adopt. Offences on the blacklist include ‘doorstepping’ customers at home, bogus sales and forcing a customer to make an immediate decision on a product falsely advertised as only being available for a limited time.
CPRs are policed by the Office of Fair Trading (OFT) and Trading Standards. These bodies can impose punishments against firms for bad practice, including in serious instances taking criminal proceedings to court, but there is no provision within the regulations for customers themselves to take direct action against firms.
The Law Commission and Scottish Law Commission are proposing that a new law is written explicitly for the purpose of enabling customers to take action against misleading and aggressive businesses.
“The aim is to clarify and simplify the law on misleading practices, and to extend protection against aggressive practices. The new Act would not replace the existing criminal regime, and prosecutions for aggressive and misleading practices would continue to be brought under the Regulations,” the proposals said.
“The overlap in coverage between the Regulations and the proposed new Act lies in the underlying conduct by the trader,” they said.
The Law Commission and Scottish Law Commission proposed six new ways that the new law would be more focused than CPRs.
The new law would only consider customers in a contract or those who have made a payment, the Law Commissions said.
Customers could only seek redress against a direct trader, and not a third-party firm, under the new law, they said.
The new law would not apply to the financial services industry or to land transactions, the Law Commissions said.
“These often involve large sums, and are unsuited to the ‘rough and ready’ standardised remedies we are proposing. Moreover, these areas are already covered by tailored alternative dispute resolution systems. The current law would continue to apply,” they said.
Businesses that omit information about a product to secure a sale would not be liable under the new law unless they made an “actual or implied representation” to a customer, the Law Commissions said.
Proof of a company’s culpability in one of the 31 unfair practices laid out in the CPRs would not automatically entitle a customer to take legal action. There would have to be proof that the average customer would have been induced into a purchase by the behaviour, the Law Commissions said. An average customer is generally taken to be a reasonably well-informed, reasonably observant and circumspect member of the public.
The law would also not consider general claims of unfair practices against businesses. These are broadly classified in the CPRs as activities that do not involve “professional diligence”. Professional diligence can be defined as the standard of skill and care that would reasonably be expected of a trader in its field of activity.
“We think this is too uncertain to form the basis of private law rights,” the Law Commissions said.
In order to prove liability, customers will have to prove that a business acted in a misleading or aggressive manner. They also need to show that an average customer would have made a payment or entered a contract on the basis of the company’s behaviour, and that they wouldn’t have made a purchase without the company acting as it did.
Responses to the Law Commission and Scottish Law Commission consultation have to be submitted by 12 July, and the groups intend to lobby parliament with finalised plans in 2012.
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