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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Sainsbury’s profits rise again

Category : Business

Sainsbury’s said it had outperformed competitors and celebrated the ‘milestone’ of non-food sales reaching £1bn for the first time

Profits at Sainsbury’s have risen again as the supermarket maintained its run of success under chief executive Justin King.

It came as the retailer also announced it was taking full control of Sainsbury’s Bank in a £248m deal to buy the 50% stake held by taxpayer-backed Lloyds Banking Group.

Full-year results to 16 March showed underlying profits up 6.2% to £756m, though the bottom-line pre-tax figure fell 1.4% to £788m when property disposals were included.

King, who took over at the supermarket amid sliding sales nearly a decade ago, remained bullish about its prospects despite the economic downturn.

He said: “Whilst we see no near-term change in the current economic situation, we remain confident that by continuing to invest in our long-standing strategy and by understanding and helping our customers, we are well positioned for future growth.”

Total sales rose by 4.6% to £25.6bn, driven by 33 consecutive quarters of like-for-like sales growth.

Sainsbury’s said it had outperformed competitors, citing figures from earlier this year which showed it had achieved 16.8% market share, its highest for a decade.

The results were boosted by what it called the “milestone” of non-food sales reaching £1bn for the first time.

Grocery online sales were nearing the £1bn mark, while Sainsbury’s convenience stores took £1.5bn, the company announced. During the year, it opened 14 new supermarkets, eight extensions and 87 convenience stores.

The supermarket, which sponsored the Paralympic Games and was also involved in the events to celebrate the Queen’s Diamond Jubilee, said: “It has been a year like no other.”

David Tyler, chairman of Sainsbury’s, said the decision to take full ownership of Sainsbury’s Bank would “benefit both customers and shareholders and allow its full potential to be realised”.

The bank, launched in 1997, has delivered five successive years of profit growth, the company said. Profit before tax in 2012/13 was £59m.

King said: “We see a great opportunity to increase the number of bank customers by offering accessible, high- quality financial service products which reward customers who bank and shop with us.

“We expect the bank to become an important source of profit diversification and growth, building on the strengths of our core business.”

Heinz: Buffett buyout gets even less Buffett-y

Category : Business, Stocks

Heinz’s new CEO Bernardo Hees comes from Burger King and, before that, Buffett’s buyout partner 3G. It’s another move that’s outside of Buffett’s playbook.

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The budget: cuts as far as the eye can see | Editorial

Category : Business

Just before the general election of 2010, Mervyn King reportedly declared the upcoming poll would be ‘a good election to lose’

Just a week before the general election of 2010, a striking warning from Mervyn King made its way into the public domain. At a private lunch, it was reported, the Bank of England governor had declared the upcoming poll would be “a good election to lose“. “He told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be,” reported Mr King’s lunch companion. The implication was clear: the government that took over in May 2010 would have the near-impossible task of sorting out a broken economy and wrecked public finances: a tough, thankless job – but an essential one.

As dust settles on the budget, one inescapable thought is that if 2010 was a good election to lose then so too is 2015. Because George Osborne’s fourth red book indicates that Britain’s economy has got weaker, not stronger, with the result that the public finance mess is getting bigger. The task that Mr King identified as so vital to carry out this parliament will now drag on until well into the end of this decade.

The Bank governor obviously did not mean to suggest that any political party should actually throw the general election; he was suggesting the difficulty of the victor’s task. And yet, as the well-respected Institute for Fiscal Studies pointed out in the post-budget analysis, the scale of the task for the winner of the next election is at least as tough, if not even tougher. Consider this finding: in the first three years of this coalition, spending across government departments was cut by 8.9%. That led to the layoff of hundreds of thousands of public-sector workers, a sharp squeeze on the pay of those still in employment, and in some cases toxic industrial relations between the government and its own civil servants. It also appears to have made some government departments far less effective. As part of its £2bn cuts programme, Revenue and Customs lost 10,000 staff. The result, according to successive reports from the Public Accounts Committee, has been “unacceptable” customer service, “disgraceful” treatment of taxpayers making enquiries, and an inability to deal with tax avoiders – a lack of competence costing £5bn a year. If all that sounds terrible, then consider: on the coalition’s current projections, the pace of cuts is set to accelerate after the next election. The cuts will continue all the way to 2018, by which point government departments will be over 18% smaller than they were in 2010. If these cuts are carried out, then what has happened at Revenue and Customs could well be the tip of the iceberg: government departments will be so etiolated it is hard to see how some will be able to carry out their core task.

The reason why these cuts are mounting up is not hard to state: as the economy has failed to pick up, so tax revenues have continued to undershoot and the public debt pile has only grown. This week’s budget saw another round of downgraded forecasts for growth and raised predictions for borrowing. George Osborne is now on course to borrow £245bn more than originally planned. What’s more, as the IFS pointed out the chancellor’s own forecaster, the Office for Budget Responsibility, is now more pessimistic about the underlying strength of the economy. After the banking crash of 2008, the official estimates for the rate at which the UK could sustainably grow were reduced; this week they were reduced further. When Gordon Brown was chancellor, it was assumed that UK GDP could grow 2.75% a year, which was always too optimistic; but now the official assumption is closer to 2.1%.

The next government does not have to make cuts in quite this fashion, as the IFS made clear. It could make gentler cuts all the way till 2020. Or it could tax more, by increasing the range of goods subject to VAT. It could even increase income tax – although that hasn’t happened since 1975. But where Westminster once assumed that the economy would be growing strongly by 2015 and the public finances restored, it is now clear that Britain faces quite a few more years of privation.

More spending? The coalition may as well build a bridge to the moon | Simon Jenkins

Category : Business

David Cameron and Vince Cable are both wrong. Infrastructure isn’t the answer and nor is QE – money in pockets is

Why not build a bridge to the moon? It will restore confidence, “kickstart infrastructure spending”, create thousands of jobs and boost British scientific and engineering expertise. A moon base could exploit rare mineral resources and even relieve the housing crisis. A Humberside portal for the bridge will help close the north-south gap. The prestige gain for business would be immense. The consultants are ready. Britain showed it could do something extravagantly pointless like an Olympics. Why not go to the moon?

This is the level of economic debate in the UK at present. Bridge-to-the-moon projects have been knocking about business schools for years, ever since George Bush proposed a lunar colony in 2004. They offer every cliche in the “growth strategy” book, including a sensational ministerial headline.

Britain now has two government economic policies. On Thursday the prime minister, David Cameron, was in Yorkshire, promising that the recession was almost over and things were on the mend. Meanwhile Vince Cable, the business secretary, was dismissing the PM’s policy as too timid and proposing more spending on our old friend, infrastructure.

Both ministers agree on essentials. They accept the Treasury and Bank of England view that the level of demand in the British economy is about right to contain inflation and nothing else really matters, not even stagnation and recession. The only difference between them is whether a little stardust might be in order from a handful of high-profile building projects – some roads, houses, power stations – guaranteed against future borrowing. It is roughly the same policy as advocated by Labour’s Ed Balls. Demand is bad, infrastructure good.

As a result there are not just two policies but two British economies now running in parallel. One is doing just fine. The stock market is back to its highest level since before the crash in 2008. Banks and their executives are returning to prosperity. This has nothing to do with the economy but with the microeconomy of quantitative easing. QE has given £375bn to the banks, who have used it to refinance government debt and inflate the stock market.

Rather than boost the economy with renewed lending to businesses, this vast sum has depressed demand by reducing bond yields, cutting private pensions, and forcing companies to funnel money into pension schemes to keep them solvent. The Pension Insurance Corporation estimates the Treasury has lost £37bn in corporation tax as a result. If anything, QE has sucked spending power out of the economy. Yet for some reason the BBC continues to call it “pumping money into the economy”.

The reason banks have not been lending to businesses is easy to see in the second, real, economy. It is flat, indeed went backwards in the last quarter. Triple-dip now beckons. Retail sales sputter up and down. Manufacturing and construction are dormant. Exports, which should benefit from a devalued pound, are ailing. The economy is drained of blood. It craves cash in circulation, and the government starves it. The banks are right: why should they risk bad credit on businesses with no customers?

The sole coalition policy for growth this past four years has been QE. It has been a pretence, an intellectual confidence trick, with the economic establishment buying into it. The reason is that the Bank of England under Sir Mervyn King is still more worried about inflation than about continuing recession. Asked to justify QE, all King and the Treasury can say is, “Things would have been worse without it”.

After four years of failure he really should prove it. The trouble any layman has in arguing this toss is that QE is so technical and dreary that nobody dares challenge the pundits. Yet the question for King is not whether Britain would be worse off without his donation of £375bn to the City but whether it might have been better off had the money gone into consumer circulation.

Suppose the government had used its printing presses to put the same £8,000 a head into the pocket of every man, women and child in Britain? Or suppose it had written off the equivalent in private and housing debt? Would the economy really have been worse off than it is now? I do not believe it.

The argument over so-called “helicopter money” continues to rage. Two members of the bank’s policy committee, Adam Posen and Andrew Sentance, have queried as to whether QE as such has been effective. The maverick candidate for the bank governorship, Adair Turner, gave a lecture to the Cass Business School last month, pleading to lift the “taboo” on discussing unconventional or “overt” increases in money supply to the economy. He suggested using QE to finance handouts, tax cuts or benefits rises, reflating the real economy rather than just the stock market. Turner pointed out that the economy is so far from operating at full capacity that the risk of inflation is now minimal. Britain’s problem is not inflation but intractable recession.

Turner is focusing on what is now a classic of British establishment snobbery. Giving money to ordinary people to spend is considered by the Treasury, the Bank of England and Westminster to be immoral. (When they did it in Sweden it led to a surge in employment.) Yet it is just fine to give similar sums to “respectable” bankers, pension fund managers, consultants, contractors.

Last year, after blowing £375bn on QE, the government blew another £80bn on a bank lending scheme. Lending actually fell by more than £2bn. The Treasury has no shame. Had local councils wasted so much money they would have been wound up overnight. The money went on inflating the assets of the rich.

Now the cry is once more for infrastructure spending, code for respectable spending, spending on things ministers want by “people like us”. One day in the future a railway, a power station, a housing estate, may be built. Perhaps some of this will some day trickle down to the consumer, but not now. For the present, the policy is merely to swill ever more money around the City, perpetuating a recession now forecast to last a decade.

For most of those alive today, this must constitute the greatest failure of political intelligence of the age. And nobody dares try any other plan. How historians will curse us.

Bank governor suggests splitting RBS

Category : Business

Bank of England governor Sir Mervyn King says there is a case for splitting up state-owned Royal Bank of Scotland.

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Savills allows staff to defer bonuses to avoid 50% tax

Category : Business

Executives at the Mayfair estate agency could delay taking bonuses until lower 45p rate is in place

Savills, the Mayfair estate agency behind some of London’s most expensive property sales, has given its top staff the opportunity to defer bonuses until the start of the next tax year to avoid the soon-to-be-abolished 50% top rate of tax.

Executives at the firm, some of whom earn more than £1m a year, could delay taking bonuses until the lower 45p rate is in place.

The chancellor, George Osborne, announced in December that the top rate of income tax would be cut from 50% to 45% from 6 April. He said: “We’re going to have a top rate of tax that supports enterprise,” and promised that it would “raise more money from the rich”. The top rate is levied on incomes of more than £150,000.

The estate agency is not the first firm to allow high earners to defer bonuses for tax reasons. The Guardian reported in January that London-based insurer Aon was helping 250 of its best-paid staff avoid the 50% rate by deferring bonus payouts.

These are thought likely to be just two examples of a popular remuneration strategy among Britain’s biggest bonus-paying firms. Many large businesses are expected to be quietly pursuing a similar strategy in the hope of avoiding the ire that Goldman Sachs attracted from Bank of England governor Sir Mervyn King at the start of the year.

The US investment bank abandoned its plan to defer London bonuses after it was attacked by King. He told parliament’s Treasury select committee: “I find it a bit depressing that people who earn so much seem to think that it’s even more exciting to adjust the timing of it to get the benefit of the lower tax rate … which they will benefit from in the long run to a very great extent knowing this must have an impact on the rest of society, when even now it is the rest of society which is suffering most from the consequences of the financial crisis.”

Savills, which is listed on the London Stock Exchange, declined to answer questions from the Guardian on the timing of bonus payouts to directors and other top earners. However, one source close to the company denied that in previous years bonuses and profit-share rewards had been routinely paid in March. Savills offers flexible arrangements every year, with staff able to take payouts at any time between the company’s year-end in December and its annual shareholder meeting in May, the source said.

Among the senior staff at Savills who could benefit from receiving their cash bonus after 6 April include chief executive Jeremy Helsby and finance director Simon Shaw, who received £1.27m and £891,390 respectively in salary, bonuses and perks for 2011. Savills’ head of residential property, Rupert Sebag-Montefiore, is also thought to be among the top earners, though his earnings are not disclosed by the company as he is not a board director. Savills declined to say whether any of these three intended to delay taking their 2012 bonuses.

While widespread attempts to exploit the timing of the tax changes have “depressed” King, the expected clustering of bonus payouts within the 2013/14 tax year may eventually be seized upon by Osborne as evidence of the apparent success of his controversial top-earner tax cut.

The chancellor has already suggested that Labour’s decision to raise the rate to 50% was “a con” because it had raised “almost no money”. A large part of the explanation for the seemingly disappointing tax take from the 50% was that many top earners timed their take-home income to minimise their tax bills.

Guggenheim is flexing its $170 billion muscles

Category : Business, Stocks

When the bidding began last winter for the Los Angeles Dodgers — a storied baseball team in America’s capital of glamour — the lengthy list of suitors was predictably studded with bold-faced names. There were TV celebrities like Larry King, baseball luminaries like the former Dodgers great Steve Garvey, billionaire investors such as hedge fund mogul Steve Cohen, and prominent owners of other teams, such as Stan Kroenke of the NFL’s St. Louis Rams.

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Golden ale sales soar as lager drinkers turn their backs on the fizz

Category : Business

Tesco reports that sales of pale malt beer seen as ‘stepping stone’ from lager to ale have risen by 40% on last year

Golden ale is the UK’s fastest growing beer variety, having lured increasing numbers of drinkers away from the dominant and heavily promoted lager brands.

Retail analyst Nielsen reports that sales of golden ale have soared by 26% in the last year across all retailers, while sales of lager fell by 3% over the same period.

At Tesco, the UK’s biggest beer retailer, the trend is even more marked with year-on-year growth of 40%, far larger than for any other type of beer.

Industry experts say golden ale has become the stepping stone for younger drinkers as they switch from lager to ale.

Among the most popular golden ales are Thwaites Wainwright, Greene King Old Golden Hen, Greene King IPA, St Austell Tribute, Badger Fursty Ferret, and Harviestoun Bitter & Twisted.

Roger Protz, editor of the Good Beer Guide called the trend “a remarkable turnaround. A few small brewers in the 1980s launched golden ales because they didn’t have the right equipment to make lager but wanted to introduce younger drinkers to the delights of paler beers.

“The beauty of golden ales is that they’re made only with pale malt, so there are no roasted, darker malts to impede the hops. The result is a beer style that positively bursts with tangy, zesty and citrus hop flavours.”

Tesco ale buyer Chiara Nesbitt added: “Over the last five years ale has made a resounding revival as a flavoursome beer that is now appealing to a younger generation of beer drinkers. Golden ale with its light and refreshing taste is playing a major role in this revival as it is the beer lager drinkers first generally try if they want to switch to ale.”

VIDEO: Supermarkets ‘not out of woods’ on meat

Category : Business

Justin King, the chief executive of Sainsbury’s, speaks to the BBC’s Newsnight about the horsemeat scandal

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VIDEO: Who will Mark Carney try to please?

Category : World News

Will the next governor of the Bank of England, Canadian Mark Carney, be like his predecessor Mervyn King, or something completely different?

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