Current Account Switching Up In New Scheme

A growing number of consumers have taken advantage of a new regime making it easier to switch banks.

More than 600,000 current account customers moved to new providers in the last six months, since the week-long switch guarantee was launched.

The number of customers switching rose by 14% compared to the same period last year, according to the Payments Council.

Under the rules, a customer's new bank takes charge of the transfer.

The Payments Council said increased awareness of improved switching and growing consumer confidence was behind the spike.

It said 67% of people in the UK are now aware of being able to switch more easily, up from 59% at the end of 2013.

It added that customer confidence in the scheme had also risen, rising 9% to 65%.

The switching guarantee promises that a customer's new bank or building society is responsible for transferring all existing incoming and outgoing payments.

It also automatically closes old accounts as part of the process.

Prior to the new scheme it took up to 30 working days for a transfer to occur.

The Payments Council scheme also ensures that if the switch fails any charges are not levied against the customer.

It said that the data transfer system was operating efficiently and 99% of all transfers were conducted within the seven-day window.

Payments Council managing director Gary Hocking said: "By making the current account switch service quick, hassle-free and removing the fear factor we've taken away the barriers customers told us they had when it came to switching.

"Six months in and the latest figures suggest people clearly seem to be getting the message that things have changed for the better."

High street banks and building societies have launched a series of new accounts since the short-switch period was brought into force, as a way of enticing new customers.

Mr Hocking added: "There's also been a noticeable surge of advertising activity from current account providers big and small, suggesting that the new service is helping foster competition and choice for customers.

"As time goes on and the track record of the new service builds, we look forward to these encouraging results continuing."

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Wet February Wipes £270m From Building Sector

Woolly weather in February caused a sharp decline in UK construction, wiping more than a quarter of a billion pounds from the sector.

The Office for National Statistics (ONS) said output fell to £5.8bn, down 2.8% from January.

Output is defined as the amount charged by construction companies to customers for value of work in the period, excluding VAT and payments to sub-contractors.

It said new work dropped to 2.6% - equivalent to £160m - while the repair and maintenance sub-sector fell by 3.1% to £110m.

The ONS said: "While most private indicators of construction activity picked up throughout 2013 and 2014, a number were seen to temporarily depart from this trend in February 2014.

"Many also cited adverse weather conditions as the primary reason for lower activity levels, especially in the house building sector."

The ONS said the February dip caused construction to stay virtually flat over the quarter.

It said between December and February, the total sector grew by only 0.3%, compared to the September to November period.

The small amount of growth over the three-month winter period was due to a 1% increase in new construction work.

During the same period repair and maintenance decreased by 0.8%, despite a slight rise of 0.3% in work for public housing.

It said the level of construction was an eighth below the best monthly peak, which was recorded in June 2011 at £6.6bn.

Construction in the housing industry was particularly affected in February because of the weather.

It fell 6.3% on January's figure and was the biggest monthly drop since March last year, when below average temperatures and snow hit the country.

But overall, while public housing was down, private new housing was up 15.3% compared to February last year.

The ONS said damage to property in February caused by storms, wind and flooding is yet to be recorded in monthly data and is expected to be reflected when March's figures are released.

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Co-op Bank In Record £1.3bn Annual Loss

The struggling Co-operative Bank has reported a pre-tax annual loss of £1.3bn and said it would not return to profit for at least two years.

The bank also confirmed it would not make £4.97m deferred annual bonuses to its former bosses.

Chief executive Niall Booker said an overhaul plan known as the liability management exercise (LME) had "kept the bank alive".

Taking into account a profit made by the LME, it said the loss was reduced to £586m for the year ending December 31.

Mr Booker said: "The results today reflect the magnitude of the issues that have come to light since I jointed the Co-operative Bank ten months ago.

"It is early days but initial progress on our business plan is encouraging and we remain enthusiastic about the long-term potential for the bank."

The embattled parent mutual, the Co-operative Group, lost overall control of its banking arm to US hedge funds in December as part of its rescue plan. It now holds a 30% stake.

The Co-operative Group consists of a number of divisions

The £1.5bn funding 'black hole' was added to in March when it revealed a further £400m gap, forcing it to seek further investor funds.

The institution, which continues to market itself as having "ethical principles", said it cut assets last year by £2.1bn and reduced staff levels by 14% - around 1,000 employees.

It said it would try to restore its capital position, and refocus attention on being a bank for householders and small to medium-sized businesses.

Part of the plan includes reducing its product range, along with improving digital and branch-based banking services.

Although former executives would miss out on deferred bonuses, Mr Booker is to receive a £1.2m salary and benefits package and £1.7m bonus - dependant on the bank's future performance.

A further £1.2m is part of a long-term incentive plan that is payable over three years.

The bank's annual results were published on Friday after two earlier delays to the release.

The parent Co-op Group, which is expected to report an even larger loss later this month, also continues to struggle to find its way in an increasingly competitive environment.

 Earlier this week the former City minister, Lord Myners, quit the board amid opposition to his planned reforms of the business.

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House Prices To Soar Amid Property Shortage

Housing sales have reached their highest level for six year, fuelling fears that many buyers will be priced out of the market.

Surveyors sold an average of 23 homes during the three months to March - the highest number since February 2008, according to the Royal Institution of Chartered Surveyors (Rics).

All areas except Wales, where the level was unchanged, saw a rise in interest from buyers.

But while buying activity is rising in more regions, the expected "spring bounce", which sees more people put homes up for sale, has not happened, Rics said.

The mismatch between the lack of supply and rising demand is a "major concern" and is continuing to put an upward pressure on prices, the surveyors' body said.

Simon Rubinsohn, Rics chief economist, said: "Now that the housing market recovery is well and truly under way and mortgage finance is more readily available, buyers seem to be looking to test the market right across the country, not just in the usual hotspots of the South East.

"That said, it is a major concern that we are not seeing enough houses coming on to the market.

More homes are needed in areas where people want to buy

"For the market to operate effectively, we desperately need more homes in areas where people want to buy and want to live.

"Until this happens we're likely to see prices continue to increase and it is going to be ever harder for many first-time buyers to conceive of ever owning their own home."

Prices are expected to rise by around 9.3% a year in London, which would push average property prices in the capital to over #567,000 by 2020.

While in the North prices are set to increase by 2% annually, which would see average house prices there increase to just under £132,000 by 2020.

In Wales, it is predicted house prices will rise by 4.9% annually and in Scotland a 4% rise is predicted.

Government support schemes such as Help to Buy have made mortgages more widely available, particularly for people with only smaller deposits saved who may have previously been struggling to get a deal.

But critics of the scheme argue the impact it is having in pushing up demand, without a corresponding increase in the supply of homes, is also pushing up house prices and encouraging people to stretch their borrowing.

Toughened mortgage lending rules are coming into force later this month with the aim of preventing overlending to borrowers who may end up having trouble paying back, particularly when interest rates rise.

Housing Minister Kris Hopkins said: "Leading developers have pledged to build more as a direct result of this increased demand, and we've already delivered 420,000 new homes since 2010, including 170,000 new affordable homes."

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Co-op Bank In Record £1.3bn Annual Loss

The struggling Co-operative Bank has reported a pre-tax annual loss of £1.3bn and said it would not return to profit for at least two years.

The bank also confirmed it would not make £4.97m deferred annual bonuses to its former bosses.

Chief executive Niall Booker said an overhaul plan known as the liability management exercise (LME) had "kept the bank alive".

Taking into account a profit made by the LME, it said the loss was reduced to £586m for the year ending December 31.

Mr Booker said: "The results today reflect the magnitude of the issues that have come to light since I jointed the Co-operative Bank ten months ago.

"It is early days but initial progress on our business plan is encouraging and we remain enthusiastic about the long-term potential for the bank."

The embattled parent mutual, the Co-operative Group, lost overall control of its banking arm to US hedge funds in December as part of its rescue plan. It now holds a 30% stake.

The £1.5bn funding 'black hole' was added to in March when it revealed a further £400m gap, forcing it to seek further investor funds.

The institution, which continues to market itself as having "ethical principles", said it cut assets last year by £2.1bn and reduced staff levels by 14% - around 1,000 employees.

It said it would try to restore its capital position, and refocus attention on being a bank for householders and small to medium-sized businesses.

Part of the plan includes reducing its product range, along with improving digital and branch-based banking services.

Although former executives would miss out on deferred bonuses, Mr Booker is to receive a £2.9m pay package and £1.2m bonus - dependant on its future performance.

The bank's annual results were published on Friday after two earlier delays to the release.

The parent Co-op Group also continues to struggle to find its way in an increasingly competitive environment.

 Earlier this week the former City minister, Lord Myners, quit the board amid opposition to his planned reforms of the business.

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Push To Boost Number Of Women In Boardrooms

By Anushka Asthana, Sky Political Correspondent

Ministers have started a process they hope will pave the way for all-women short lists in business for the first time.

Sky News has seen a letter sent to the Government's equality body asking it to rule on whether the practice could be legally applied when companies are recruiting to their boards.

It asks the Equality and Human Rights Commission to provide guidance on the matter.

"This should help make the recruitment process easier for companies and executive search firms," writes Jenny Willott, the equalities minister.

"In turn, it could also help enable businesses to increase gender diversity on their boards and could be vital in helping us achieve the 25% target for women on boards of FTSE 100 companies by 2015."

She told Sky News that business was missing out on female talent by failing to promote enough high-flying women to the top of their companies.

The latest move is part of an effort to drive up the number of women on boards.

Progress has been made with the FTSE 100 with the proportion of female board members rising from 12.5% to 20.7% - but that still leaves women outnumbered by four to one.

And just two of the 100 have female chairs. One company - Glencore Xstrata - has no women at all.

The situation is bad among chief executives with only five of the 100 top companies led by a woman, and one of them - Burberry's Angela Ahrendts - soon to step down.

Vince Cable, the business secretary, supports radical action in this area because it is thought that more diverse boards tend to result in better company performance.

But the Government has tended to support voluntary means over any type of quota. If all-women short lists were to happen they would be a tool that companies could choose to use.

Top female executives at an event to match them up with FTSE 100 chairs were wary about the idea.

Beatriz Butsana-Sita, managing director of global telecom markets for BT, said she would never want to feel that she was given a job because of a target or quota.

Ann Cormak, director international of Rolls Royce, said she found the idea of all-women short lists "constrictive" and would prefer decisions to be based purely on talent.

And Laura Frith, vice president of global talent at the Intercontinental Hotel Group, agreed that it ought to be only about merit.

All women did feel, however, that more could be done.

A survey of 46 leading business figures - including 16 FTSE chairs and 30 top female executives - found that all believed that balanced boards were best for a company. But they felt more action was needed.

Most of those questioned thought their companies were not doing enough – with the majority of chairmen saying the 2015 25% target was likely to be missed.

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Co-op 'Power Struggle' As Myners Quits Board

The former City minister, Lord Myners, has quit the board of the troubled Co-operative Group amid opposition to his planned reforms of the business.

News of his resignation emerged just hours after Midcounties Co-operative, which operates Co-operative Energy as well as Co-op-branded food stores, voted against his early proposals.

Euan Sutherland resigned one month ago

His full report was not due to be completed until the end of the month but the work will continue despite his decision to step down as an independent director.

In interim findings released last month, after chief executive Euan Sutherland quit citing the group's structure as 'ungovernable', Lord Myners warned the group would collapse unless drastic steps were taken to overhaul a "massive failure" of governance.

His shake-up plans include a move to abolish its 21-member board, splitting it into two with a plc-style panel responsible for commercial decisions and representatives from its traditional membership sitting on a separate body.

It is reported that Midcounties is not the only regional board set to oppose the reforms though the board did accept his interim report's findings.

Lord Myners was appointed to the board in December and tasked with the independent review after a disastrous year for the Co-op in which its banking arm needed to be rescued by hedge funds following the discovery of a £1.5bn hole in its finances.

It has twice delayed the release of its banking division's results - now due on Friday - while the bank faces a series of investigations into what went wrong, as well as continuing questions over the appointment of bank chairman Paul Flowers despite his lack of knowledge of the sector

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British Gas Business To Pay £5.6m Penalty

Ofgem has fined the arm of British Gas which serves business customers for a series of failures including blocking firms from switching to other suppliers.

The energy regulator said British Gas Business would pay a total penalty of £5.6m.

It said £800,000 of that sum would be in fines, on top of £1.3m already paid to 1,200 customers who ended up paying higher bills because they were not notified when their contracts were due to expire.

A further £3.45m would go to an energy efficiency fund, Ofgem said.

It blamed a computer error for the blocking of customers wanting to switch and said the company failed to communicate properly with those affected.

The regulator found customers lost out financially

The watchdog said it meant 5.6% of objections British Gas Business made to customers switching suppliers between 2007 and 2012 were "invalid".

Firms can be stopped from switching if they have outstanding balances on their accounts.

Ofgem concluded that the additional failure - to notify 1,200 customers when their deal expired - had denied them the opportunity to shop around for a better package.

Some were even rolled over onto more expensive standard tariff rates.

British Gas Business has now pledged to help firms reduce their bills

The regulator's enforcement partner, Sarah Harrison, said: "The ability for consumers to switch easily and fairly is key to a well-functioning energy market.

"In these cases British Gas Business failed these consumers who were wrongly blocked from switching, many of them small businesses, and denied others the chance to switch to a better deal at the end of their contract.

"British Gas Business fully accepts its failings, has stopped the practices and corrected its processes to prevent this happening again.

"The company has taken responsibility for its actions and this package strikes a balance of penalty for the company and redress for affected consumers."

Ofgem said British Gas Business cooperated fully throughout its inquiry, which began in 2012, and that was reflected in the level of the settlement package which would have been much higher had that not been the case.

Stephen Beynon, managing director of British Gas Business, responded: "We're sorry these errors occurred and have worked swiftly to change our computer systems and processes, putting controls in place to stop this happening again.

"We take any failure to meet our obligations very seriously and will ensure that the new energy efficiency fund we have set up will be a real help to hundreds of small businesses.

"It will provide free expert advice and energy efficiency measures, such as new boilers, lighting and renewable energy, to help firms to manage their energy consumption and bills over the long term."

More follows...

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M&S Finally Arrests Fall In Clothing Sales

Marks & Spencer has confirmed it avoided an eleventh-consecutive quarter of declining clothing sales amid intense turnaround efforts.

In its results for the 13 weeks to 29 March, the retailer stripped its clothing sales away from General Merchandise for the first time to highlight a 0.6% increase on a like-for-like basis during the quarter.

Total clothing sales rose 1.3%.

Chief executive Marc Bolland, who recently confirmed an expansion of its operations abroad to help boost profitability, said: "We delivered another quarter of improvement in General Merchandise.

The firm's expansion plans include food growth in Paris

"We are encouraged by Womenswear, which is showing clear signs of improvement and performed ahead of Clothing."

The trading statement added: "Customers are responding well to our re-focus on quality and style.

"Sales of M&S Collection in Womenswear, which was re-launched last Autumn, were notably up on last year.

"Our new Spring/Summer collection has been well received, with customers noticing the improving style credentials."

But M&S warned the performance was achieved against a backdrop of continued high levels of discounting in its General Merchandise market.

Mr Bolland continued: "Our Food business had another great quarter, especially considering the later timing of Easter.

"This marks our 18th consecutive quarter of growth. We continued to outperform the market with record sales around key events including Valentine's Day and Mother's Day."

Total Group sales rose 1.9% in the quarter though, on a like-for-like basis, UK sales fell slightly by 0.2%.

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IMF Sees UK Growth Remaining Fastest In G7

By Ed Conway, Economics Editor, In Washington DC

The International Monetary Fund (IMF) has raised its forecast for Britain's economic growth more than any other major economy for the third time in a row, in a boost to the Chancellor's fortunes.

The Fund said it expected Britain's economy to expand by 2.9% this year – faster than any other G7 economy, and a significant upgrade from the 2.4% rate it predicted only three months ago.

The upgrade, which is likely to be seized on by the Chancellor as further evidence of British success, comes one year on from the IMF chief economist's warning that George Osborne was "playing with fire" with his austerity policies.

At that stage, Britain was facing the prospect of a possible triple-dip recession.

Now, the Fund says that not only is growth strong in the UK, there is a significant chance of an "upside risk" - in other words even stronger growth than its central prediction.

George Osborne was accused of 'playing with fire' by the IMF a year ago

However, the Fund added that the growth was being fuelled by the same imbalanced elements - consumer spending and credit - that contributed to the crisis.

"Growth has rebounded more strongly than anticipated in the United Kingdom on easier credit conditions and increased confidence," the report said.

"However, the recovery has been unbalanced, with business investment and exports still disappointing."

It pointed out that as a result, interest rates would be likely to rise sooner in the UK than in the US or Europe.

The Fund recommended that the Bank of England keep monetary policy "accommodative" - keeping rates low for the time being.

It added that "the Government's efforts to raise capital spending while staying within the medium-term fiscal envelope should help bolster recovery and long- term growth."

Labour's Ed Balls has accused the Government of complacency

The benign tone of the report, which forecast only slightly milder growth of 2.5% in 2015, is likely to be regarded within the Treasury as a victory over the Fund and Olivier Blanchard, who repeatedly urged the Chancellor to change course on austerity in recent years.

However, the Fund itself is likely to point towards the fact that the pace of Mr Osborne's spending cuts has been reduced in recent years - such that by some accounts he has already adopted a "plan B" on austerity.

A Treasury spokesperson responded: "The IMF forecast the UK to be the fastest growing major advanced economy this year.

"This is further evidence that the Government's long term economic plan is working, providing economic security for hardworking people.

"But the job is not done. Budget 2014 set out the next stage of the plan that is creating a more resilient economy through support to businesses, savers, and exporters.

"The biggest risk now to the recovery would be abandoning the plan that's delivering a brighter economic future."

Ed Balls, Labour's shadow chancellor, said: "These forecasts are welcome news after three damaging years when the economy flatlined and growth forecasts were repeatedly downgraded.

"Yet millions of working people, who are on average £1,600 a year worse off since 2010, are still not feeling any recovery at all.

"The IMF is right to warn about an unbalanced recovery and it is concerning that growth is expected to slow down next year.

"The Government should also heed the IMF's warnings about surging house prices by taking action to boost housing supply, as we have called for. 

"Instead of complacently trying to claim that everything is going well, we need a Government which understands that there is a deep-seated cost-of-living crisis and will act to tackle it."

The Fund said it expected the world economy to grow by 3.6% this year and 3.9% in 2015.

Among the countries facing a downgrade was Russia, whose growth prospects were cut by 0.6%, reflecting the economic impact of its involvement in Ukraine.

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Metro Bank Founder Goes Digital With Atom

By Mark Kleinman, City Editor

The founder of Metro Bank is switching his attention from high street to digital banking with secret plans for the launch of a new national retail and business lender.

Sky News can exclusively reveal that Anthony Thomson, who stepped down as Metro Bank chairman in 2012, is close to unveiling Atom, a digital-led bank that aims to start trading next year.

Mr Thomson has recruited Mark Mullen, the chief executive of First Direct, to run the new venture, sources said.

An announcement about the launch of Atom could be made as soon as Wednesday morning, they added.

Details of the new bank have been closely-guarded by Mr Thomson, but a person familiar with his plans said that licence applications were about to be submitted to the Financial Conduct Authority and the Prudential Regulation Authority.

Assuming the applications are approved, Atom could be among the most significant new banks launched amid a concerted political push to broaden competition in the sector.

The new business will not have any physical branches and will be primarily accessible through the internet and digital apps.

Mr Thomson, who insiders said would become Atom's chairman, and Mr Mullen, who will be its chief executive, are understood to be planning to offer a full range of products aimed at personal and small business customers.

These will include current and savings accounts, as well as loan products.

It is not clear whether the pair have secured external financial backing for Atom, which will be headquartered in northeast England, close to the Newcastle base of Virgin Money, another of the so-called challenger banks.

The plans for Atom come amid an explosion in the demand for digital banking services and a commensurate decline in footfall at thousands of retail bank branches.

Last week, the British Bankers' Association (BBA) published research showing that UK-based customers conducted almost 40m mobile and internet banking transactions each week last year.

The BBA insisted that branches would "remain at the heart of banking in the 21st century", but it emerged just days later that the taxpayer-backed Royal Bank of Scotland was closing 44 branches, sparking a fresh political row.

RBS responded by pointing to a 30% fall in branch transactions since 2010, a statistic echoed by some of its competitors.

The growth of digital banking has also sparked concerns about the robustness of the high street lenders' IT systems, particularly in the wake of high-profile failures at Lloyds Banking Group, Nationwide and RBS, among others.

The archaic nature of some of that infrastructure has provided encouragement to new entrants to the market that they can win significant numbers of customers by avoiding such mishaps.

They also hope to take advantage of the new current account switching regime, which forces banks to transfer customers and their direct debits within seven days.

Under revised rules aimed at bolstering competition, the FCA has pledged to decide on banking licence applications within six months.

The process historically took several years, frustrating Treasury officials in the aftermath of the 2008 banking crisis, which sparked the merger of Lloyds TSB and HBOS, and the disappearance of several other UK banks.

Some applicants, such as Home & Savings Bank, a telephone and internet-based lender, were effectively forced to abandon their plans because of difficulties securing regulatory approval.

Metro Bank's launch in 2010 as the first new high street bank for more than a century came after a similarly tortuous process.

It has since taken billions of pounds in deposits, opening more than 20 branches, and attracting high-profile investors such as the Wall Street hedge fund tycoon Steven Cohen.

The new regulatory timetable should put Atom on track to launch sometime in 2015, although a firm date has not been decided.

Mr Mullen's involvement is a coup for the new venture, since First Direct frequently scores highly in customer service polls.

Neither Mr Thomson nor Mr Mullen could be reached for comment on Tuesday.

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Toyota In Global Recall Of 6 Million Vehicles

Toyota has issued a global recall of millions of vehicles because of safety issues.

The Japanese company said the announcement covers three issues affecting RAV4, Hilux, Yaris and Urban Cruiser models.

A total of 35,124 UK-registered vehicles are affected by the recall.

The carmaker said: "Worldwide, there have been no reports of any accidents or injuries relating to these issues.

"Toyota is conducting the recalls according to Driver and Vehicle Standards Agency (DVSA) code of practice."

The firm said it would provide a "prompt inspection and repair programme" without charge to owners.

Customers can check if their vehicle is affected by using a registration number look-up function on its website.

It said a spiral cable assembly issue had been identified on airbag modules of some RAV4 and Hilux vehicles.

There is a risk that when the steering wheel is turned damage may occur to the circuitry.

"If connectivity is lost, the airbag warning light will illuminate on the instrument panel and the driver's airbag may be deactivated," Toyota said.

The RAV4 and Hilux vehicles were manufactured between June 2004 and December 2010.

The world's largest carmaker also found a fault in the seat adjustment rail for Yaris and Urban Cruisers could fail after repeated usage.

Toyota's Prius Hybrids were recalled last February

It said: "Should the spring break, the seat may not lock into its adjusted position, and could move in the event of a crash."

The affected Yaris and Urban Cruiser models were built between January 2005 and August 2010, covering 10,339 UK-registered cars.

Toyota said there was a potential fault in the tilt or telescopic steering column of some second generation Yaris and Urban Cruisers.

It said: "Toyota is aware that the weld which connects the steering column bracket to the instrument panel on some Yaris and Urban Cruiser models might break when the steering wheel is repeatedly turned with full force.

"The driver may hear an abnormal noise from the bracket area and if the vehicle continues to be driven, it is possible that the bracket will fail, causing the steering column to tilt out of position. However, the driver will not lose steering control."

The potential steering issue affected 1,293 UK cars built between September 2005 and February 2009.

The company said: "Vehicle owners will be contacted by Toyota within the coming weeks by post or telephone and asked to make an appointment to bring their car to their nearest Toyota Centre, in accordance with DVSA guidelines."

Tokyo-listed shares for the company were down more than 3% on the Nikkei after the news was announced on Wednesday.

Some of the affected vehicles were made in France, with the majority built in Japan.

Toyota was once renowned for impeccable build quality but that reputation has been hit in recent years.

In 2012, it recalled more than 3 million vehicles over safety issues and last February 1.9 million Prius Hybrids were recalled.

The Toyota announcement is the latest in a series of high-profile recalls to hit the sector.

General Motors recently recalled more than 2.4 million North American vehicles over ignition switch issues - with its CEO grilled by politicians in Washington DC - while the world's second biggest carmaker, Volkswagen, recalled 2.6m vehicles late last year.

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Samsung Pins Profit Hopes On New Galaxy S5

Samsung Electronics has admitted it is expecting to confirm its second consecutive quarter of declining profits, just days ahead of the global launch of its new smartphone.

The South Korean firm estimated its January-March operating profit at $7.96bn (£4.8bn) - a fall of 4.3% - in its guidance to investors ahead of the release of its full quarterly figures, due on April 25.

The figure was slightly below that expected by analysts who said the company's efforts to stave off the threat of a decline in annual profits would depend on its cost-saving measures but also the success of the Galaxy S5 - launched worldwide on Friday.

The S5 counts a pedometer and heart monitor among its features

It got off to a weak start at home, with its South Korean debut marred by a temporary ban on mobile carriers selling handsets and criticism that it lacks eye-catching new features.

Underscoring the challenges, Samsung has priced the S5 about 10% cheaper than the S4 even though main rival Apple is not widely expected to update its line-up until September.

It also dialled back on marketing glitz to keep margins stable.

Pricing has become a major issue given the growing pressure from cheaper Chinese rivals in the Asian market particularly.

Its share price is nearly 12% off the record high it hit in January last year, weighed by worries over high-end market saturation and the competition from low-end phones made by the likes of Huawei.

Such headwinds may increase pressure on the company to use its cash holdings to boost languishing share prices.

The firm said in January that it would raise dividend payouts after hiking them by 79% last year.

IM Investment analyst Lee Min-hee said: "High dividends give the impression that the company is no longer growing, and the most important thing for technology companies is growth.

"Samsung has repeated this message. Given that fact, I don't think there will be a major share buyback or a dramatic increase in dividend payout."

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Top Locations Named But How Does London Fare?

Paris, New York and Prague are among the glamour capitals pipped to the post by London as a favourite traveller destination.

The UK capital is placed third in the global rankings compiled by TripAdvisor from millions of reviews, with only Istanbul and Rome edging ahead.

On people's favourite world city, London beat the top two destinations from 2013 - Paris and New York - which fell to 7th and 12th places respectively.

Fourth in the world list was Beijing, with Prague fifth and Marrakech in Morocco sixth.

London beat both Paris and New York in the destination rankings

Meanwhile, the traditional seaside resort of Torquay in Devon, came behind only London and Edinburgh as the best destination within the UK.

It saw off competition from the likes of York, Bristol, Leeds and Birmingham.

Manchester, Glasgow and Blackpool all dropped out of the top 10.

TripAdvisor spokesman James Kay said: "These awards are based on millions of reviews and ratings by those that really matter - travellers themselves.

"There is no doubt the birth of the royal baby helped keep the eyes of the world on London in 2013, but the capital's continued appeal among travellers around the world surpasses any one event."

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Firms 'Need Migrants Amid Skills Shortage'

A lack of skills among the UK's long-term unemployed means the Government must consider easing visa restrictions for migrant workers, according to a jobs study.

The call was made by the Recruitment and Employment Confederation (REC) as two reports on Tuesday warned of threats to the UK's economic recovery.

While the separate studies - by the REC and British Chambers of Commerce (BCC) - all contained positive messages on jobs and output, they also maintained pressure on the Government.

The REC, along with auditors KPMG, pointed to starting salaries for permanent employees rising faster in March than at any time since July 2007.

The study also showed that vacancies continued to increase but said a shortage of qualified candidates highlighted skills shortages, particularly among the long-term unemployed.

The REC's director of policy, Tom Hadley, said: "The trend of growth in people finding jobs across all industrial sectors and regions continues.

"Starting salaries and hourly pay rates are up as employers battle to entice the talent they need.

"However worsening candidate shortages mean that the number of people available to fill both temporary and permanent jobs is falling at the sharpest rate in nearly a decade.

"As well as 'up skilling' UK workers, the Government needs to take a joined up approach to immigration.

"A priority is addressing the restrictions on visas for highly skilled workers, which would allow businesses to access the people they need to grow and create jobs for more British workers."

He made his plea just a day after experts in the construction industry told Sky News a 'brawn drain' to New Zealand and Australia during the recession meant a skills shortage was now hitting the building of new homes in the UK.

The BCC pointed to strong service sector and manufacturing growth in its latest quarterly economic update.

However the survey of 8,000 firms also warned the recovery must become more balanced in the months ahead as it is still too reliant on consumer spending.

The report also continued to demand better access to finance for businesses as they look to expand.

BCC director general John Longworth said: "Confidence is high and our members are determined to continue driving the recovery.

"We are brilliant at services and very successful at exporting our knowledge-based industries all over the world.

"This includes everything from accountancy and marketing through to literature and the IT sector.

"In addition, our dynamic, high-value manufacturing sector is once again confounding expectations, and going from strength to strength.

"But UK firms are ambitious, and more support is needed if we are to place the recovery on a sustainable, broader footing in the medium-term.

"We have witnessed many false dawns during the recovery, and external shocks still loom on the horizon. Given that over the next year or so we face political change at home and abroad, long-term policies that support our businesses as they look to grow and invest are crucial."

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Energy Complaints Soar By Staggering 224%

Complaints about energy companies have trebled in the first quarter of this year, according to the energy sector's ombudsman who is calling for "increased transparency".

The record figures showing a 224% rise in the first three months of this year come after regulator Ofgem said it was referring the energy sector to the Competition and Markets Authority for a full-scale competition inquiry.

Between January and March, complaints trebled to 10,638, compared with 3,277 received during the same period last year.

More than 2,000 consumers complained about not receiving bills, 1,474 people made complaints about billing charges, and over 1,000 consumers criticised the quality of customer service.

The numbers suggest that 2014 will see more complaints overall, as there were 17,960 complaints made over a 12-month period last year.

Chief Energy Ombudsman Lewis Shand Smith said: "Consumer frustration and dissatisfaction is something that we hear about every day, and we welcome any attempts by Ofgem to make the energy market fairer.

"With energy complaints trebling in the first quarter of this year and problems relating to billing the greatest concern, increased transparency is something that should be addressed."

A competition inquiry will be held into the household energy supply market

A spokeswoman for Energy UK, the trade body that represents the industry, said most customers had no problems with their energy company, but accepted that sometimes things go wrong.

She added: "If a customer has any concerns relating to their bills, they should contact their provider as soon as they can, and if possible have an up-to-date meter reading to hand which will ensure their bill is as accurate as possible.

"Energy companies work very hard to resolve problems and most complaints are fixed within a few working days with no more than a phone call."

The spokeswoman said there were new rules in force which made matters "more open and clear for customers including: explaining bills so people understand what they are paying; making it easy to switch; ensuring customers are on the right deals; and simplifying tariffs".

But Richard Lloyd, executive director of Which?, the consumer watchdog, said the rise in complaints was "further proof that the energy market is broken".

He added it was "right" that the energy sector had been referred for a full-scale investigation.

A Department of Energy and Climate Change spokeswoman said the figures were "worrying", and added: "We would advise consumers to shop around and switch to find a better deal, whether on cost or customer service."

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Benefits At Risk Unless Jobseekers Make Effort

By Siobhan Robbins, News Correspondent

Jobseekers will soon have to prove they are taking steps to make themselves more employable or face losing some of their benefits.

From April 28, those looking for work will be expected to have written a CV, set up an email account and logged onto the Government's jobs website before they meet a Jobcentre Plus adviser.

Ministers said the move signalled a "fundamental shift" in expectations, and would help put to an end the "one-way street" to benefits where people start claiming Jobseeker's Allowance by just signing-on without first taking steps to make themselves attractive to employers.

Employment Minister Esther McVey said: "With the economy growing, unemployment falling and record numbers of people in work, now is the time to start expecting more of people if they want to claim benefits.

"It's only right that we should ask people to take the first basic steps to getting a job before they start claiming Jobseeker's Allowance - it will show they are taking their search for work seriously.

"This is about treating people like adults and setting out clearly what is expected of them so they can hit the ground running.

"In return, we will give people as much help and support as possible to move off benefits and into work because we know from employers that it's the people who are prepared and enthusiastic who are most likely to get the job."

There are currently 1.17 million people claiming Jobseeker's Allowance.

Employment Minister Esther McVey says more should be expected of claimants

Under the changes, people will also be able to meet with Jobcentre Plus advisers weekly, rather than fortnightly.

Kate Shoesmith, from the Recruitment and Employment Confederation, is one of many employers welcoming the move.

She said: "Everything that helps the long-term unemployed back into work has to be one of the Government's top priorities right now, along with helping those who are young and looking for work, and we think this is a good move forward."

However, some are concerned political point-scoring means people on benefits are increasingly being labelled scroungers.

Sue Marsh has not been able to work for the last 13 years due to health problems.

She is now campaigning for a change to the current benefit system, and told Sky News: "The tough line actually makes people less likely to move off benefits, it makes them less likely to be confident and inspired to try to find work and makes them feel like it's better to just hold tight and dig in, which is exactly the opposite of what Iain Duncan Smith wants to achieve."

Mark Serwotka, general secretary of the Public and Commercial Services union, said: "This Government is already making life intolerable for people who are out of work, with a massive increase in the number of benefits sanctions for even minor transgressions.

"Instead of dreaming up new ways to turn the screw, ministers should be doing something about consistently high unemployment, a drastic shortage of job vacancies and the fact so many new jobs are low paid and insecure."

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Unions Bid To Halt Rail Franchise Awards

Rail unions have launched legal action against the Government over the way it is going ahead with the awarding of three rail franchises.

The Rail, Maritime and Transport (RMT) union, Aslef and the Transport Salaried Staffs Association (TSSA) want a judicial review into the reprivatisation of the East Coast line and the extensions to the Thameslink and Great Northern franchises.

They accuse the Government of rushing the processes - a claim the Department for Transport (DfT) says it will vigorously defend.

The unions, who are seeking a judicial review, argue their members' jobs and conditions are threatened by a lack of consultation and suggest passengers will also be worse off.

National Express gave up the East Coast franchise in 2009

The legal bid is a response to the expectation of an East Coast franchise sale being completed ahead of the next election in May 2015.

The London to Scotland line has been in public hands since 2009 when National Express gave up the franchise with five years left to run on it.

Aslef general secretary Mick Whelan said of the expected reprivatisation: "It is imperative that we raise the genuine concerns of all stakeholders but, especially, the employees before this is rushed through.

"We cannot, in good conscience, allow the mistakes of the past to happen again."

RMT acting general secretary Mick Cash said: "After the scandal of this Government robbing the British taxpayer of a billion pounds in the scramble to privatise the Royal Mail it is shocking that they are engaging in the same tactics to try and hand the East Coast Mainline back to their friends in big business.

"The British public have a right to openness and transparency when it comes to the ideologically-driven attempt to sell off Britain's most successful rail-route to the speculators and chancers after two previous private sector failures on the same line."

TSSA leader Manuel Cortes said: "The coalition knows only too well that rail franchising is not fit for purpose. Rail workers are at a loss to understand why the government insists on going forward with a broken system which threatens the interests of passengers and taxpayers.

"We can only conclude that the ideology which saw Royal Mail flogged off on the cheap continues to thrive."

A Department for Transport spokeswoman said: "We will vigorously defend this claim and remain committed to the franchising programme.

"As these legal proceedings are ongoing it would not be appropriate to comment further at this stage."

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House Of Fraser Bought By Chinese Tycoon

A Chinese tycoon has bought British high street chain the House of Fraser, according to sources.

Reuters said a 89% stake was bought by Sanpower, a Nanjing-based conglomerate controlled by Yafei Yuan.

Sources have told Sky News an announcement is expected imminently.

House of Fraser will now seek strategic growth in mainland China as part of a wider, global expansion.

The deal values the department stores at more than £450m.

The two sides are thought to have been in secret discussions for several months.

This follows a protracted search for investors led by House of Fraser's chairman, Don McCarthy.

Just months ago the company was tipped for a public flotation.

But Sky News City Editor Mark Kleinman reported in February that Mr McCarthy apparently had no desire to chair a publicly-listed company.

Sports Direct and Newcastle United owner Mike Ashley was also tipped as a making a possible move for the company.

The British group enjoyed strong Christmas trading, with like-for-like sales at its 61 stores up more than 7% during the three weeks to December 28 and more than 4% in the nine weeks to the same date.

Established during the 1850s, House of Fraser was taken private in 2006 for £351m by a consortium led by Baugur alongside Mr McCarthy and entrepreneur and philanthropist Sir Tom Hunter.

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Microsoft XP And Office 2003 Security Warning

Britain's data protection watchdog has warned owners of Microsoft's Windows XP and Office 2003 products of future potential security flaws.

The warning from the Information Commissioner's Office (ICO) comes as the software giant is set to end official support of the products on April 8.

Despite Windows XP being considered an aged operating system, it still powers nearly a third of all PCs worldwide, according to NetMarketShare.

UK software firm AppSense believes three-quarters of UK firms have XP within their networks, while Gartner says many businesses have up to 20% running on XP.

The ICO said once official support ends, no update release to overcome flaws will be issued, risking data breaches of machines used by businesses and private users.

The watchdog said the problem will get worse over time as more vulnerabilities are gradually discovered.

It said that will increase opportunities for attackers to exploit and potentially gain unauthorised access to systems.

ICO technology group manager Dr Simon Rice also warned that the issue is not limited to these two products.

He said: "Organisations regularly end support for their older products.

"And those with supported systems still need to be vigilant, as vulnerabilities will be discovered over time."

Dr Rice urged businesses to be prepared for the ending of support.

He said: "As a responsible data controller, it is your organisation's responsibility to make sure you have the measures in place to keep people's details safe."

He added: "Where you cannot apply a (software) update, you may need to put additional measures in place to mitigate the risk."

Approached by Sky News, a Microsoft spokesperson said warning about the end of support was announced some time ago.

It said the user notifications raised the issue of potential virus and security risks.

:: Microsoft has given advice for users of both Office 2003 and Windows XP on its website.

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Food Waste 'Is Morally Repugnant', Say Lords

The scale of food waste, which sees 15 million tonnes of food dumped each year in the UK and at least 90 million tonnes across the EU, has been branded "morally repugnant" by a House of Lords committee.

The Lords EU Committee said supermarkets should abolish "buy one get one free" offers and not cancel orders of food from farmers after the produce has been grown, a practice which leads to edible food being ploughed back into the fields. 

They also suggested that more unused food sold by retailers should be donated to food banks, rather than sent for composting or landfill as is often the case at present.

In a report, the committee said EU efforts to reduce food waste were "fragmented and untargeted" and called for the new European Commission to publish a five-year strategy within six months of taking office later this year.

Committee chairwoman Baroness Scott said: "Food waste in the EU and the UK is clearly a huge issue. Not only is it morally repugnant, but it has serious economic and environmental implications.

The committee says taking action against food waste cannot be delayed

"The fact that 90 million tonnes of food is wasted across the EU each year shows the extent of the problem and explains why we are calling for urgent action.

"Globally, consumers in industrialised nations waste up to 222 million tons of food a year, which is equivalent to nearly the entire level of net food production of Sub-Saharan Africa.

"We cannot allow the complexity of the issues around defining and monitoring food waste to delay action any further.

"We are calling on the new European Commission, which will be appointed in November this year, to publish a five-year strategy for reducing food waste across the EU, and to do so within six months of taking office."

The report found that the carbon footprint of worldwide food waste is equivalent to twice the global greenhouse gas emissions of all road transportation in the US.

Lady Scott added: "We were shocked at the extent of food waste in the EU. Especially given the current economic challenges the EU faces, it is an absolutely shocking waste of resources.

"Some efforts are already being made, which is very positive, but much more can be done, and so we are calling on the EU, the Government, businesses and consumers to make sure it is."

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