Spain Slashes Economic Growth Forecasts

The Spanish government has forecast that the economy will contract by more than expected in 2013, but will return to growth next near.

The country's deputy prime minister said its gross domestic product (GDP) would shrink by 1.3% in 2013 - down from the 0.5% contraction previously forecast.

But Soraya Saenz de Santamaria said Spain's economy is expected to return to growth of 0.5% in 2014, and will expand by 0.9% in 2015.

At a press conference following the adoption of a new economic plan for the country, she said that no major new reforms, tax hikes and spending cuts were needed to meet the new targets.

The forecasts come a day after protestors took to the streets of Madrid

She added that the government - which had to backtrack from its promise to cut taxes next year - was still aiming to cut some taxes in 2015.

The economy minister, Luis de Guindos, said the deficit-reduction strategy had been agreed with the European Commission and other eurozone officials.

"2014 will be the year of recovery," he said.

The deficit is now forecast to reach 6.3% of GDP in 2013 - well above earlier targets - but would fall to 2.7% by 2016, Mr de Guindos added.

The unemployment rate - which hit a record high of 27.2% in the first quarter of this year - is expected to fall back to 26.7% in 2014, and 25% in 2015.

It comes as protests broke out in Madrid on Wednesday following the release of the latest jobs data.

Around 1,000 people took to the streets in the latest demonstration against the country's austerity measures and tax hikes that have left many without jobs.

The country's economy has been struggling to show signs of recovery since the collapse of its once-booming property market in 2008.

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US Economy Misses Forecasts In Last Quarter

The US economy has expanded at a rate below that forecast by economists, the latest official figures have shown.

Although economic growth regained speed in the first quarter, it was not as much as expected, heightening fears the already weakening economy could struggle to handle deep government spending cuts and higher taxes.

Gross domestic product (GDP) expanded at 2.5% annualised rate in the first three months of 2013, according to the Commerce Department.

The figure was up on the previous quarter, after growth nearly stalled at 0.4%.

The latest increase, however, missed economists' expectations for a 3% growth pace.

Part of the acceleration in activity reflected farmers' filling up silos after a drought last summer decimated crop output.

Removing inventories, the growth rate was reduced to a tepid 1.5%.

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Winston Churchill To Appear On New £5 Notes

Former British prime minister Sir Winston Churchill is to appear on the next banknotes, it has been announced.

Bank of England Governor Sir Mervyn King revealed the image of Churchill which will be used to members of his family at his former home, Chartwell, on Friday.

Sir Mervyn said: "Our banknotes acknowledge the life and work of great Britons. Sir Winston Churchill was a truly great British leader, orator and writer.

"Above that, he remains a hero of the entire free world. His energy, courage, eloquence, wit and public service are an inspiration to us all. I am proud to announce that he will appear on our next banknote."

The Churchill banknote is due to be issued as a £5 note for use during 2016.

The design on the reverse of the note will include a portrait of Churchill from a photograph taken in Ottawa by Yousuf Karsh on December 30, 1941 and a view of Westminster and the Elizabeth Tower from the South Bank looking across Westminster Bridge.

The image of the Elizabeth Tower will feature the hands of the Great Clock at 3pm - the approximate time on May 13, 1940 when Churchill declared in a speech to the House of Commons: "I have nothing to offer but blood, toil, tears and sweat." This declaration is quoted beneath the portrait.

In the background, there will be the Nobel Prize medal which Churchill was awarded in 1953 for literature, together with the wording of the prize citation.

Sir Mervyn King with Lady Soames, Churchill's only surviving child.

Sir Mervyn, due to retire later this year, suggested the new note could become known as a "Winston" - and that the spirit of Churchill's inspirational "blood, toil, tears and sweat" speech was just as important during today's times of economic difficulty as during the War.

He said: "We do not face the challenges faced by Churchill's generation. But we have our own.

"And the spirit of those words remains as relevant today as it was to my parents' generation who fought for the survival of our country and freedom under Churchill's leadership."

Churchill's image replaces that of Elizabeth Fry, the philanthropist and penal reformer, who appears on current notes first issued in 2002.

These will be phased out over two or three years, leaving no notes featuring the face of a famous woman - other than the Queen.

The choice of Churchill reflects the fact that, though a political figure, he is widely revered across the spectrum as the man who saved Britain in its darkest hour from the fearful advance of Nazism across Europe.

Another war hero, the Duke of Wellington, is the only other prime minister to have featured on a banknote image - the old £5 phased out in the 1990s.

Speaking in the grounds of Chartwell, Sir Winston's grandson, Mid Sussex Tory MP Nicholas Soames, said featuring on a bank note would have given the former wartime prime minister great pleasure.

He said: "He was an extraordinary man and his ability to capture the mood and the people's mood was one of his great gifts as a statesman.

"The design of the bank note, the quotation and the whole idea behind it is so appropriate and fitting, and my grandfather would have been truly very proud."

Churchill had a long parliamentary career during which he served as home secretary and chancellor before a spell in the political wilderness in the 1930s when he warned of the increasing threat of German rearmament.

In May 1940, he replaced Neville Chamberlain as prime minister in the newly-formed National Government. His leadership and brilliant oratory were credited with helping to steer Britain to victory.

Defeated by Labour in the 1945 general election, he served again as prime minister from 1951 to 1955, when he retired aged 80. Churchill died in 1965 and was given a full state funeral, the first commoner to receive such an honour since Gladstone in 1898.

He was also the first commoner to feature on a British coin - the 1965 crown or five-shilling piece.

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GDP Figures: Triple-Dip Recession Feared

The spectre of a triple-dip recession is hanging over the UK economy ahead of official figures that will show whether the country has avoided another quarter of shrinking output.

Economists fear it will be a close-run result this morning, amid mounting warnings over the strength of the recovery and following last week's latest downgrade to the UK's AAA credit rating.

Most experts are predicting the initial estimate of gross domestic product (GDP) from the Office for National Statistics will show growth of 0.1% in the first three months of the year, which would mean the economy narrowly avoided its third recession since 2008.

But a volatile start to 2013 following snowstorms in January and March and ongoing pressure in the construction sector have left it hanging in the balance.

Facing mounting pressure to do more to help the recovery, Chancellor George Osborne beefed up his flagship Funding for Lending Scheme (FLS) on Wednesday to help cash-starved businesses and spur on growth.

Banks are being offered an up to 10-fold increase in the cheap funding they can access in return for extending loans to smaller firms under the FLS revamp.

It is also to be opened up to non-bank lenders such as invoice finance houses and leasing firms that provide around £20bn of working capital to small businesses, and will be extended for a year to January 2015.

Fitch became the second ratings agency to strip Britain of its prized AAA rating on Friday, citing a weaker economic outlook and worse-than-expected progress on cutting debt levels.

The decision came after a brutal assessment of Britain's economic prospects by incoming Bank of England governor Mark Carney, who branded the UK a "crisis economy" alongside stricken eurozone countries and Japan.

Mr Osborne was offered some respite earlier this week when figures revealed that underlying public borrowing fell in the last financial year to £120.6bn - but it was just £300m lower than a year earlier in the latest sign that his austerity plans are stalling.

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Made In Britain: China Boosts Iconic Brands

By Mark Stone, Asia Correspondent in Shanghai

As Britain contemplates the prospect of a triple-dip recession, a growing number of iconic 'Made in Britain' brands are focussing their attention on China.

In an interview with Sky News, the chief executive of Rolls-Royce said the Chinese market was key.

"The Chinese are in love with Rolls-Royce," Torsten Muller-Otvos said as he showed off the company's latest model, the Wraith, to the Asian market at the Shanghai Motor Show this week.

"It is definitely good for Britain because 90% of our cars produced in Britain are exported and 10% roughly stay in the home market.

"That is basically very good for business and for the economy in Britain."

The new Jaguar F-Type, revealed at the Shanghai Auto Show this week

Rolls-Royce is now owned by Germany's BMW but the brand itself is still iconically British. The company produced 3,575 vehicles in 2012 from its factory in Chichester, West Sussex.

It wouldn't reveal how many of those came to China but, along with the Middle East, China is a vital market.

"When you look at the long-term forecast for so-called ultra-high-net-worth individuals, this is forecast to grow 3-5% year by year," Mr Muller-Otvos said.

These ultra-high-net-worth individuals are people like Chen Anzhi, a businessman from Shanghai. He owns three Rolls-Royces and agreed to take Sky News for a spin in one.

Sky News is given a ride in Mr Chen's Rolls Royce

"British to me means very high quality of workmanship; attention to detail. I appreciate that," Mr Chen said at the wheel of his bright green convertible Roller.

"Look at my suit!" he said, taking both hands off the steering wheel of his vastly expensive car.

"I think I am wearing Dunhill today. Dunhill's also British I think?

"I bought three of these Rolls-Royces. Presently I have two: a white one, this green one and I had a burgundy one but I gave it away."

Mr Chen represents one of a growing number of people in China with an eye-watering amount of money and a love affair for luxury and all things British.

"I love British cars, British furniture, I love to go to London," he said.

"I enjoy the very luxury lifestyle, yes. Chinese and British - good friends!"

The Aston Martin stand at the Shanghai Auto Show

We pass Shanghai's flagship stores, including British ones like Burberry. The reflection of our more than ostentatious car is visible in the windows of the shiny shop windows.

"Fourteen years ago you rarely see BMW and Mercedes," Mr Chen said.

"Now you see Rolls-Royce and you think 'wow'! What happened here to the economy? It's booming."

Jaguar Land Rover is another 'Made in Britain' brand - albeit now Indian owned - which is increasingly popular in China.

The Chinese market is now the company's largest globally, allowing it to invest in new jobs in the UK and set up a new joint-venture project in China.

At this week's Auto Show in Shanghai, the new Jaguar F-Type and the new Range Rover Sport were both unveiled to the Asian market.

Range Rovers, often in garish colours with added body-kits, are a regular sight on the streets of Beijing and Shanghai.

Back in Mr Chen's bright green Rolls Royce, I ask him the awkward question. How much did it cost him?

"I knew that question was coming," he laughs!

"It's close to $1.8m dollars. The price is crazy, I know, but after you drive this car, the enjoyment and pleasure, you just forget about the price."

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Spain's Jobless Rise 'Worse Than Feared'

Spain's unemployment rate soared to 27.2% in the first quarter of the year, worse than economists had predicted.

The official figures revealed that the number of those without jobs surpassed six million for the first time - with 237,400 people added to the grim unemployment statistics over the period taking the total to 6.2 million.

Economists had expected the unemployment rate to grow from 26% in the final quarter of 2012 to 26.5%.

The figures were released by the country's National Statistics Institute against a backdrop of recession, which is expected to continue throughout 2013.

The Bank of Spain has predicted a 0.5% fall in GDP during the first three months of the year while the International Monetary Fund's recent World Economic Outlook report expects a contraction of 1.6% over the 12 months.

Spain's problems stem from the collapse of its once-booming real estate sector in 2008, which resulted in a facility of up to 100 billion euros (£85bn) in rescue funds being made available by its eurozone partners.

The government has launched a series of financial and labour reforms and pursued a raft of spending cuts and tax increases that have managed to reduce a swollen deficit but been blamed for choking economic growth.

Despite the measures, Spain had the highest budget deficit among the 17 European Union countries that use the euro in 2012.

Its Budget, due to be announced on Friday, is expected to focus less on austerity and include more measures to stimulate activity in the economy.

More follows...

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Apple Profits Fall For First Time In 10 Years

Apple has reported its first fall in profits for nearly 10 years - a move that could further threaten its market value.

Analysts expected a tumble of up to 18% in earnings when the company delivered its second quarter trading statement on Tuesday.

In the end, the technology giant announced its profits for the second quarter of the financial year - the three months to the end of March 2013 - were down £1.38bn ($2.1bn) to £6.27bn ($9.56bn), which was what analysts predicted.

Soon after announcing the profit fall, the Apple board cleared the way to buy back $100bn worth of shares by 2015.

It is rumoured that higher component prices and the lower costs of some of its products were what ate into its profit margins.

Stronger competition in the smartphone and tablet markets was also expected to be reflected in the statement.

Weaker demand - largely because of the competition issue - has been blamed for the 40% drop in Apple's stock value since September last year.

But Apple reported strong growth in the sales of many of its products.

The company sold 37.4m iPhones in the quarter, compared to 35.1m in the same quarter a year before.

Apple also sold 19.5m iPads during the quarter, compared to 11.8m in the year before.

But the company admitted it sold just under 4m Macs, compared to 4m in the year-ago quarter.

Apple did its best to make light of the profits fall.

CEO Tim Cook, who took over after Steve Jobs died of cancer in 2011, said: "We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad.

"Our teams are hard at work on some amazing new hardware, software, and services and we are very excited about the products in our pipeline."

Apple shares fell below the $400 (£262) mark last week for the first time since December 2011.

Despite the fall, the markets responded positively, buoyed by the fact that the results were not worse than expected and off the back of the sales results.

Apple leapt 5.5% in after-hours trading, also boosted by the buy-back plan.

The US firm's forecast had added to market speculation that sales of the iPhone - which make up more than half of Apple's revenue - are slowing more quickly than expected as Samsung and other rivals flood the market with cheaper devices.

A cloud was lifted from the iPhone on Monday night when the US International Trade Commission threw out a Motorola Mobility patent claim that threatened to block the import of some iPhone models into the US.

The commission dismissed a complaint by the Google-owned firm which accused Apple of infringing technology that makes touch screens ignore fingers when people are holding smartphones to their ears for calls.

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Funding For Lending Scheme Given Makeover

The Funding for Lending Scheme (FLS) to boost the economy has been extended and reworked in an attempt to help get more credit to small firms.

Under the reforms announced by the Treasury and Bank of England the country's banks are being offered an up to ten-fold increase in the low-interest funding they can access in return for extending loans to smaller businesses.

The FLS, they said, was also being opened up to non-bank lenders such as invoice finance houses and leasing firms that provide around £20bn of working capital to small firms, and will be extended for a year to January 2015.

The scheme was launched last summer to offer banks and building societies funding at low interest rates on condition they are passed on to households and businesses.

But while it has been helping the home loans sector, it has failed to make an impact on small businesses which have complained of remaining starved of credit.

Bank figures last week showed net lending to companies had slumped by £4.8bn in the three months to February.

Under the new deal, every pound of additional lending to small and medium-sized enterprises (SMEs) next year will allow the lender to access £5 of discounted funding from the Bank. The ratio in the rest of the scheme is 1:1.

In a bid to speed up the flow of much-needed credit into the system, each pound lent to SMEs for the rest of this year will allow a draw-down of 10 times that in 2014.

The Treasury said there was "no upper limit to the scheme" and the move was hailed by the Chancellor George Osborne, who said: "This is a big boost for the small and medium-sized businesses that are at the heart of the British economy.

"The Funding for Lending Scheme has already reduced the costs of household mortgages and loans for businesses. This innovative extension will now do even more for small and medium-sized businesses so that they can play their full part in creating new jobs."

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Co-Op Deal To Buy Lloyds Branches Collapses

Lloyds Banking Group's sale of more than 600 branches to the Co-operative Group has fallen through.

The Co-op - which pulled out of the £800m deal - said it was "not in the best interests of the Group's members" at the present time.

"This decision reflects the impact of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general," the company said in a statement.

It comes after Sky's City Editor Mark Kleinman highlighted doubts about the takeover plans in February.

If the deal had gone ahead, the Co-op bank would have doubled in size

The UK's financial regulator had concerns over the Co-op Bank's capital position, he said.

Lloyds is being forced to dispose of the branch network - known as Project Verde - by European regulators in return for the £20bn of state aid it received at the height of the 2008 banking crisis.

The part-nationalised bank now intended to sell the network through an initial public offering (IPO).

Lloyds' chief executive, Antonio Horta-Osorio, said the company was disappointed by the Co-Op's decision.

"However, we are well advanced in our plans to bring the Verde business to the UK high street during the summer through the TSB Bank, and will now proceed with the option to IPO the business, subject to the necessary approvals," he said.

"The TSB Bank will be an attractive retail and commercial bank that will have around 630 branches across the UK, a strong management team and will be a real challenger on the high street."

If the deal had been completed, the Co-op would have doubled in size with around 1,000 bank branches across the UK - making it a viable competitor to the "Big Four" lenders - Lloyds,HSBC, Barclays and Royal Bank of Scotland (RBS).

Its collapse comes after Santander UK withdrew from a deal to buy 316 RBS branches in October last year.

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Cyber Attacks On UK Businesses 'Soaring'

The number of cyber attacks hitting businesses has soared in the past year, Government-commissioned research has revealed.

The survey showed 87% of small firms - up 10% - experienced a security breach last year and 93% of large organisations had also been targeted.

The Information Security Breaches Survey, commissioned by the Department for Business, Innovation and Skills (BIS), found some of the attacks caused more than £1m of damage.

Affected companies experienced around 50% more attacks on average than a year ago.

The median number of breaches suffered by large organisations has risen from 71 to 113, while the figure for small firms is up from 11 to 17.

The Government has increased support for small firms to help them protect against electronic attacks.

The Technology Strategy Board has extended a scheme to allow small and medium enterprises to bid for up to £5,000 from a £500,000 pot to improve their cyber security by bringing in outside expertise.

BIS is also publishing guidance to help small firms make cyber security part of their normal risk management procedures.

Universities and Science Minister David Willetts said that keeping electronic information secure is crucial to a business's bottom line.

"Companies are more at risk than ever of having their cyber security compromised, in particular small businesses, and no sector is immune from attack," he said.

"But there are simple steps that can be taken to prevent the majority of incidents.

"The package of support we are announcing today will help small businesses protect valuable assets like financial information, websites, equipment, software and intellectual property, driving growth and keeping UK businesses ahead in the global race."

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Independent Scotland Could Lose The Pound

The Treasury has warned it may not be in the UK's best interests for an independent Scotland to retain the pound in a currency pact.

The Scottish government has outlined plans to keep the pound if the country becomes independent after next year's referendum.

But in a new report, the Treasury said the economic case for creating a "sterling zone" was not clear and cast doubt on whether a deal could be reached.

Chancellor George Osborne and Chief Secretary to the Treasury Danny Alexander will launch the report to an audience of business leaders in Glasgow later.

It outlines four options for currency if voters north of the border decide to leave the UK.

One would see Scotland keep using the pound in a formal agreement with the rest of the UK, creating a sterling currency union.

Alternatively, it could continue to use the pound unilaterally with no such deal in place, or join the euro, or introduce a new Scottish currency.

Scottish First Minister Alex Salmond is pushing for independence

The Scottish Government wants the "sterling zone" and economic experts there have concluded it is "sensible" and an attractive choice for the rest of the UK.

But the Treasury report said a formal sterling currency union "would only be possible if both an independent Scotland and the continuing UK could reach an agreement that satisfied both countries' economic interests".

It argues a formal sterling currency union would be "very different to the current arrangements and would be a profound economic change for both states".

An independent Scotland would "need to agree a negotiated set of constraints on its economic and fiscal policies", the report said.

It added: "In practice, this would be likely to require rigorous oversight of Scotland's economic and fiscal plans by both the new Scottish and the continuing UK authorities.

"Even with constraints in place, the economic rationale for the UK to agree to enter a formal sterling union with a separate state is not clear.

"The recent experience of the euro area has shown that it is extremely challenging to sustain a successful formal currency union without close fiscal integration and common arrangements for the resolution of banking sector difficulties."

Treasury warning: Chancellor George Osborne

The paper argues the "current currency and monetary policy arrangements within the UK serve Scotland well", describing the UK as "one of the most successful monetary, fiscal and political unions in history".

It concluded: "All of the alternative currency arrangements would be likely to be less economically suitable for both Scotland and the rest of the UK."

It also claims both the Scottish and UK governments would need to agree for the commercial banks in an independent Scotland to continue issuing sterling notes as part of a currency union.

The Treasury has said the role of the Bank of England, as the central bank of the UK responsible for issuing notes by all commercial banks, would have to be reviewed under independence.

Scottish Finance Secretary John Swinney condemned suggestions that Scottish banknotes could be lost under the SNP's plans as "insulting" and insisted they would be kept.

He also claimed that the pound was "every bit as much Scotland's currency as it is England, Wales and Northern Ireland's".

He said: "If this scare story is the best George Osborne can do in advance of his visit to Scotland then it betrays the utter weakness of his case."

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EE Reports 'Strong Demand' For 4G

EE - which owns the Orange and T Mobile brands - has said almost 320,000 customers have signed up for its 4G services.

It is the first time Britain's largest mobile network operator has given subscriber numbers since it launched its super-fast broadband service earlier than rivals.

The company used its existing airwaves to launch 4G in October last year - but competitors have to wait until later this year, following the auction of the UK's 4G spectrum.

EE - a joint-venture owned by France Telecom and Deutsche Telekom - said it was "firmly on track" to meet its target of more than one million 4G customers by the end of 2013.

It added that the super-fast broadband services had boosted the average amount each customer paid - by 2.2% in the first quarter of the year.

Chief financial offer, Neal Milsom, said the company was making "good progress" and the results were in-line with expectations

"We're announcing 318,000 4G customers after just five months of trading, strong postpaid net adds and continued growth in our underlying average revenue per user," he said.

"We expect to strengthen our industry leadership position in the year ahead as the 4G roll out continues and we introduce double-speed 4GEE."

Average speeds will climb to 20Mbps in ten UK cities by the end of June, the company said.

The existing 4G service already offers speeds around five times faster than 3G, meaning quicker downloads and internet browsing.

EE added that it was on track to expand its 4G coverage to cover 55% of the population by the end of June, and 70% by the end of the year.

The company, which now has around 27 million customers, was formed when Orange and T-Mobile joined forces in 2010.

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Ofgem Changes: Warning Over New Energy Tariffs

More than three million households could be paying more than they need to under new energy tariffs proposed by Ofgem, according to new research.

The consumer group Which? estimates energy customers could face bills of an extra £55m in total.

Ofgem's proposed tariff comparison rate aims to simplify energy tariffs and allow consumers to compare tariffs across the market.

Consumers will be advised on their best deal based on medium usage of gas and electricity, but only 26% of consumers use this level of energy.

The remaining 74% will be directed to tariffs which could be unsuitable for their usage and would cost them more, Which? claimed.

Which? estimates around 500,000 low energy users, who tend to be on the lowest incomes, could be advised on the wrong tariffs.

Richard Lloyd, executive director at Which?, said: "Rising energy bills remain one of consumers' top financial concerns yet six in 10 of us have never switched supplier as people are left baffled by the vast array of complicated tariffs.

"These current proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal, with three-quarters of people being asked to compare prices that are not based on their energy usage.

"The Government should introduce single unit prices for each energy tariff so people can easily see the best deal for them at a glance. Only then will people have the confidence to switch, injecting much-needed competition into the broken energy market."

But an Ofgem spokesman said the reforms would "deliver a simpler, clearer and fairer energy market for consumers and will make it much easier for consumers to choose the right deal for them".

He added: "Which? is misrepresenting the purpose of the tariff comparison rate and how it fits into the full scope of Ofgem's reform package. The tariff comparison rate acts as a prompt to consumers to take a look at comparative deals.

"The tool is similar to the 'typical APR' used in financial services marketing. But it is partnered with personalised consumption information necessary to make a full and accurate cross market comparison, which every supplier must provide via bills and annual statements. Ofgem's reforms will also see suppliers' cheapest deals on your bill.

"We share the desire with Which? to see an at-a-glance tariff comparison. We are taking forward our innovative proposals to put the market cheapest deal on consumers bills - even if it is from a rival supplier - and this will remove the need to compare tariffs altogether. We hope Which? will respond positively to our invite to them to join this next stage of our work."

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Mediterranean Resort Holiday Costs 'Plunging'

Prices have plunged in popular Mediterranean resorts, according to a holiday cost-comparison report.

The tumbling prices mean favourite spots in Portugal and Spain are more affordable for Britons despite the weakness of the pound against the euro, the report from Post Office Travel Money showed.

The survey looked at in-resort prices, such as meals and drinks, at 20 locations, including Bournemouth and Blackpool in England.

Judged on 10 items, Albufeira in the Portuguese Algarve had the lowest prices, with the items costing £46.34.

Torremolinos in southern Spain was the second cheapest on the list

The most expensive resort on the list was the Jumeirah region of Dubai in the United Arab Emirates, where items cost £103.23.

A cup of coffee in a bar or cafe in Albuefeira was 93p, but as much as £3.91 in Dubai.

Albufeira was only fractionally cheaper than in Torremolinos in southern Spain, where the items cost £46.50, and Javea on Spain's Costa Blanca (£47.14)

Prices at these three resorts are between 15% and 20% lower than this time last year.

Andrew Brown of Post Office Travel Money said: "The pound may be worth less in Europe than a year ago but fierce competition means that lower prices in several of the resorts we surveyed can easily offset the falling value of sterling.

The survey found Jumeirah region of Dubai the most expensive

"Taking some time to check out resort costs and add them to package prices to find the best overall deal will pay dividends this summer. "

Back in the UK, Blackpool, where the items cost £65.96, ranked 11th cheapest in the 20-strong list, with Bournemouth (£78.01) 14th.

And Italy is still proving an expensive place to visit. Sorrento (£101.79) and the region of Tuscany (£94.92) were the second and third dearest destinations.

While a three-course evening meal for two, with wine, was just £20.56 in Albufeira, it was as much as £70.09 in Tuscany.

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Pub Industry Gets New Code Of Conduct

New plans to protect pub landlords against high rent and beer costs to try and shore up the ailing industry have been unveiled by the Government.

Under the proposals, a code of practice and an independent adjudicator with the power to investigate and settle disputes would be introduced.

The Department of Business claims the moves will ensure fair treatment and could save landlords £100m a year.

The new code would contain mandatory rules for all pub companies who own more than 500 pubs, who are the source of 90% of complaints.

It will particularly focus on stopping firms abusing the beer tie, under which landlords are forced to buy beer from the pub owner instead of on the open market.

Ministers hope the changes will also boost small British beer and ale manufacturers by opening up pubs to select independent beers.

The adjudicator would be able to impose sanctions and fines in cases of abuse - ending the self-regulation which has been in place since 2004.

The Government is putting the plans out for consultation and wants to look at whether the ownership threshold is fair.

Business Secretary Vince Cable said: "We gave pub companies every chance to get their house in order. But despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn't working.

"Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship."

It is claimed that more than 3,500 pubs have shut since 2009 because of overcharging for rent and beer.

Figures cited by the Department of Business suggest almost half of tied pubs - which make up 48% of all the pubs in the UK - earn less than £15,000-a-year.

At the Devonshire Arms in the affluent village of Dore in Sheffield's commuter belt, licensee Tina Gage says the new code cannot come soon enough.

The pub is a bustling community hub, but she says her landlord charges £150,000 each year for rent and the drink she sells, leaving her with no salary at all.

"There's no other business in the world where you would rent a building from somebody and they would force you to buy their product," she said.

Ten years after taking on the lease she has won a rent reduction after going to court, but says unless she makes a profit soon, this year will be her last behind the bar.

"I've got to try to turn it road this year or I will have to call it a day," she warned. "And if I go, someone else will come in and take the pub and the same thing will happen to them."

The Liberal Democrat MP Greg Mulholland, who leads the all-party Save the Pub group, has campaigned for legislation to stop what he calls wholly unacceptable rents.

"The problem here is the large pub companies in this country are based on a business model of taking more than is fair and reasonable in pub profits," he said.

"The code will address that, and the key phrase is the Government have committed that a tied licencee will not be worse off than a free-of-tie licencee."

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Fitch Strips UK Of AAA Rating On Debt Outlook

Ratings agency Fitch has stripped the UK of its AAA rating, citing a "weaker economic and fiscal outlook".

The agency placed the UK on an AA+ rating, following Moody's downgrade of UK debt in February.

A Fitch statement said: "The downgrade of the UK's sovereign ratings primarily reflects a weaker economic and fiscal outlook and hence the upward revision to Fitch's medium-term projections for UK budget deficits and government debt."

The downgrade will place further pressure on the Government ahead of next week's first quarter GDP figures, which will reveal if Britain has managed to avoid an unprecedented triple-dip recession.

The agency now expects Government debt to peak at 101% of GDP in 2015-16, only declining gradually in 2017-18. That is worse than its previous forecast of debt peaking at 97% of GDP and declining in 2016-17.

Fitch, which waited until stock markets had closed before announcing the downgrade, had already warned that Government failure to stabilise debt below 100% of GDP and set it on a firm downward path would trigger a downgrade.

Chancellor George Osborne had pledged to retain the UK's AAA status

The statement said: "Despite the UK's strong fiscal financing flexibility underpinned by its own currency with reserve currency status and the long average maturity of public debt, the fiscal space to absorb further adverse economic and financial shocks is no longer consistent with an AAA rating."

Fitch slashed the UK's growth forecast to 0.8% this year, from its earlier expectation of 1.5%. Next year it expects the UK economy to grow by 1.8%, down from its previous 2% forecast.

Earlier this week, the International Monetary Fund also cut the UK's growth forecast growth from 1% to 0.7% this year and 2014's projection from 1.9% to 1.5%, noting the recovery was "progressing slowly".

IHS Global Insight economist Howard Archer said the downgrade was "no surprise" and is likely to have minimal market impact.

"Nevertheless, Fitch's move is another slap in the face for the government - particularly as the Chancellor (George Osborne) made keeping the AAA rating a key focus for the UK," he said.

Fellow ratings agency Standard & Poors held the UK's debt rating steady at AAA earlier this month, but warned over the economy's "negative outlook".

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George Osborne Urged To Rethink Economic Plan

Lagarde's Support For Osborne

Updated: 4:29pm UK, Saturday 20 April 2013

By Ed Conway, Economics Editor

A few weeks ago, eagle-eyed Twitter users would have noticed a rather unusual tweet from one household name to another.

"Welcome to Twitter @George_Osborne," read the public message from @Lagarde, "see you in two weeks at the 2013 IMF/WB spring meetings in Washington, DC".

It was, it turns out, the only personal tweet that Christine Lagarde sent to any other finance minister in the run-up to this past week's Spring Meetings in Washington DC.

This is no coincidence. Lagarde and Osborne really are good friends. They talk regularly (and not just on Twitter); they have a genuinely warm personal and professional relationship.

Osborne was the first major finance minister to endorse Lagarde for her post as managing director of the International Monetary Fund and she, in turn, has always been steadfastly and publicly supportive of his economic policy.

Last summer, Lagarde made a personal appearance at the UK Treasury to unveil the Fund's annual assessment of the British economy, and endorsed the Osborne economic plan.    

She memorably said that when she tried to imagine what the public finances would have looked like without the Chancellor's austerity measures, "I shiver."

Even as the Fund's professional assessment of the UK economy's health turned negative, Lagarde's support for Osborne has remained unwavering.

Earlier this week in Washington, the IMF chief economist, Olivier Blanchard (who, like Lagarde, is French) said Osborne would have to reduce the pace of his spending cuts, adding that the Chancellor was "playing with fire".

The World Economic Outlook said, in black and white, that "greater near-term flexibility in the path of fiscal adjustment" was necessary in the UK – economese for "you need to consider plan B".

And yet when asked about Britain, Lagarde offered a far more equivocal verdict: there was "nothing new" in the Fund's assessment that the UK should be ready to change course if and when economic growth disappointed - though she conceded that "the growth numbers are not particularly good."

This difference in tone has been useful for the Chancellor. When asked in a press briefing about Blanchard's criticism, Osborne quoted Lagarde's comments at length, saying that the chief economist was "just one voice".

However, the reality, according to a range of Fund insiders, is quite the contrary. They point out that the institutional IMF view is far closer to Blanchard's opinion than Lagarde's. That it is Lagarde who is the outlier.

In fact, some Fund officials were privately aghast when they heard Lagarde claim in that press conference that there was "nothing new" in the Fund's position on the UK.

One told me that within the Fund some were muttering that Lagarde's good relationship with the Chancellor - and her consequent efforts to be diplomatic - were undermining the overall message: that Britain must change course.

However, if there were any doubt about the Fund's true position, it has now been laid to rest by Lagarde's deputy, David Lipton. In an interview with Sky News, he said, explicitly, that when it comes to Britain's budget, "the pace of consolidation ought to be reconsidered".

The precise numbers, he signalled, would have to wait until the Fund's official survey begins next month, but the verdict could hardly be clearer.

The intervention is particularly significant given who it has come from. Lipton is not a household name; he is not on Twitter. But not only is he Lagarde's deputy, he is the man who will take her place to unveil the ominous findings of the IMF assessment in London next month. It's enough to make George Osborne shiver.

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Arsenal Co-Owner Is Now UK's Richest Man

Britain has a new richest man - Russian co-owner of Arsenal Football Club Alisher Usmanov has taken the top spot from the previous Rich List number one Lakshmi Mittal.

Mr Usmanov, who has a near-30% stake in Arsenal, is worth £13.3bn, putting him into the top spot of the 25th annual Sunday Times Rich List.

Researchers found the 1,000 richest people in Britain have wealth totalling almost £450bn.

There are now a record 88 billionaires among the country's wealthiest 1,000 individuals and families, up from 77 billionaires in 2012 and just nine in 1989.

The combined wealth of the top 200 people in the 2013 Sunday Times Rich List is £318.2bn, a more than eightfold rise on the £38bn for the combined wealth of the 200 people featured in the first Rich List in 1989.

In 1989, the Queen was Britain's richest person.

Russian businessman Mr Usmanov started off making plastic bags, but went on to found a business empire with numerous interests.

As well as Metalloinvest, the country's biggest iron ore producer, he owns a stake in mail.ru, the largest internet company, and has a big holding in MegaFon, a mobile phone operator that listed on the London and Moscow stock markets last year.

Uzbekistan-born Mr Usmanov, 59, also owns Sutton Place, the former Surrey home of the late oil baron J Paul Getty, as well as a £48m mansion in north London.

He shares a passion for sport with his wife, Irina Viner, 64, head coach of Russia's rhythmic gymnastics team, whom he met when he was a young fencer.

Second in the list is Ukrainian Len Blavatnik, the highest riser in the list in wealth terms.

Mr Blavatnik is now worth £11bn, an increase of £3.4bn on last year.

Odessa-born Mr Blavatnik, who owns Warner Music, received £2bn last month for his stake in TNK-BP, when company was sold to state-owned Russian oil company Rosneft.

After eight years at the top of the Sunday Times Rich List, steel magnate Lakshmi Mittal has dropped down to fourth place.

Mr Mittal is now only worth £10bn, making him the biggest faller in wealth terms.

The 40% stake Mr Mittal and his wife Usha hold in the steelmaking giant ArcelorMittal has plummeted from £28bn at its peak to £5.95bn.

The highest placed UK-born person in the 2013 Sunday Times Rich List is The Duke of Westminster, ranked eighth and worth £7.8bn. The Duke's interests are mainly in London land and property.

Chelsea Football Club owner Roman Abramovic was fifth with £9.3bn.

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