Asda To Cut More Than 1,350 Jobs Within Weeks

Asda is to cut a total of 1,360 within the next three months, it has been confirmed.

The supermarket chain, which is owned by US-based Walmart, had previously said there would be job losses but it did not reveal the number of cuts.

The plan will affect the management structure across its 578 UK stores.

The retailer said the redundancies will help create more flexible store management.

It said this would include greater emphasis on online services, removing so-called back office administration and increase the number of workers on the shop floor.

Asda chief executive Andy Clarke outlined a proposal to restructure store management last May.

At the same time, store staff were told of the new proposals, which were set to affect 4,100 people.

A formal 45-day consultation period then followed the announcement.

Asda was formerly equal second in the supermarket size ranking, alongside Sainsbury's, but has been losing ground with the rise of the deep discounters Aldi and Lidl.

Market leader Tesco has also seen its dominance whittled away by the discounters and the drift of some shoppers to the premium offerings of M&S and Waitrose.

Mr Clarke said: "Every supermarket must adapt to the intense changes in UK retailing or they will get left behind.

"We spotted this nearly two years ago, responding with a new strategy and taking time to thoroughly examine our structures, test scenarios, talk to our colleagues and adjust our proposals accordingly.

"This thorough process has helped us to reach this difficult decision today."

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Dow Jones Closes Above 17,000 For First Time

The US stock index made up of some of the biggest global firms has closed at above 17,000 for the first time ever.

Shares soared after a US jobs report showed unemployment was at its lowest rate in six years.

The government said on Thursday morning that the American economy added 288,000 workers in June, far more than analysts expected.

The Dow - a group of 30 big corporations from American Express to Walt Disney - closed up 92 points at 17,068. 

The S&P 500 - the index more closely tracked by investors - also closed at a record level, hitting 1,985.

The Nasdaq, meanwhile, ended at its highest since 2000.

Trading closed early on the eve of America's July 4 holiday, and the results leave investors with much to celebrate.

The Dow Jones' climb means that the index has gained more than 10,000 points since the depths of the US recession in 2009.

"Right now the story is onward and upward," Neil Massa, senior trading at John Hancock Asset Management, told AP news agency.

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Amazon Under Scrutiny Over EU Tax Affairs

Online retail giant Amazon faces a potential investigation by EU officials over its Luxembourg tax hub.

The EU's competition commission has demanded that the country's Grand Duchy hand over documents of the tax status given to Amazon, including any potential state aid.

The retailer has come under increasing scrutiny over structures that allow customer revenue from member states to be assessed for taxation purposes at its Luxembourg hub.

According to the Financial Times, the company has 800 staff at its headquarters, where £13.6bn in EU sales were logged last year, thereby reducing its effective tax rate by 8%.

It quoted an EU official as saying: "We are looking into what kind of arrangement Luxembourg has with Amazon."

The US firm has come under criticism within the EU for warehouse workforce conditions, purchasing power over suppliers and damaging effect on other retailers.

Amazon is the latest firm's tax status to come under scrutiny, amid a clampdown on favourable conditions given to certain multinational corporations.

EU investigations have already been launched into Apple in Ireland, Starbucks in the Netherlands and Fiat Finance in Luxembourg.

Starbucks has since announced a decision to move its EU headquarters to Britain.

Luxembourg has the highest per capita GDP in the world, according to the International Monetary Fund, while the World Bank and United Nations rank it third highest.

G20 member countries have agreed to greater cross-border tax information exchange, in a principle supported by the Organisation for Economic Co-operation and Development.

The EU intends to implement new rules about 'transfer pricing', where local divisions must buy goods and services from a parent firm located in another jurisdiction.

Westminster's Public Accounts Committee (PAC) chair Margaret Hodge previously called Amazon's finance arrangements as an "extremely aggressive tax avoidance strategy".

She told the newspaper: "We welcome this examination of Amazon's tax affairs and hope the investigation contributes to putting an end to profit-shifting.

"I only wish the British authorities would be so assertive."

In 2012, the PAC grilled top executives from Amazon, Starbucks and Google over their tax strategies and effective UK tax rates.

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BAE Gets US Deal For 'Anti-Insurgent' Missile

UK defence giant BAE Systems has been chosen to further develop its 'anti-insurgent' missile system for the US military.

The Naval Air Systems Command said it intends to enter into sole source negotiations with the US subsidiary of the British firm to develop the Advanced Precision Kill Weapon System II (APKWS II).

The project expands integration into the arsenal used on aircraft, including the A-10 'Warthog'.

The existing semi-active laser-guided APKWS system is designed as a cheaper alternative to the Hellfire missile, at around a third of the cost - $30,000 (£17,000).

The Hellfire has become renowned for use on Predator and Reaper drones and was originally designed to target armoured vehicles.

The APKWS is designed to destroy lightly armoured and "soft" vehicles, moving or stationary, in urban locations.

It can be armed with high explosives or flechettes - steel darts - in the warhead.

Earlier this year trials were carried out firing the missile from the A-10 and the new missiles hit within inches of their target.

The MkI version has been used in Afghanistan against insurgents (pic: USMC)

It is based on a 2.75 in (70mm) rocket with guidance 'canard' lead fins, and the new version has improved laser control for accurate targeting.

The original development plan for the precision weapon began in 2002 and the first version has been in full production for three years and used in war zones such as Afghanistan.

It has been fired from more than a dozen aircraft types and been sold to US allies including Jordan, for use on its airborne gunships.

BAE Systems programme manager Joe Tiano told Sky News: "Our APKWS laser-guided rocket has a long history of success in theatre and in testing on multiple platforms including the A-10, and we look forward to exploring additional opportunities for integration on the A-10."

The sole source award to BAE Systems sees a continuation of its rehabilitation in the eyes of US authorities.

In 2010 it pleaded guilty in a US court to making false statements over foreign corruption, along with arms export and trafficking violations.

It was fined $400m (£230m), which at the time was one of the largest criminal fines ever levied in the US against a company for business-related violations.

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Osborne: 'I Could Have Done More' For Economy

By Sarah Hewson, Sky News Presenter

George Osborne has admitted he wishes he had done more to help Britain's economy when the coalition came to power.

Speaking to Sky News, the Chancellor of the Exchequer expressed regret his attempts to reform the economy had not gone far enough.

The Chancellor fielded questions from the readers of First News

Mr Osborne did not specify what further action he would have liked to have taken but he is now likely to face questions over which other policies he might have pursued or which reforms he would have taken further.

On assuming power the coalition embarked on the biggest austerity drive for more than 50 years as it attempted to repair the nation's finances.

But the Chancellor faced several years of criticism as the economy struggled to recover from the recession.

Asked what his biggest regret of his time in office has been, he said: "When you get into office that's your opportunity to take some really big decisions.

"And we did take some big decisions because then you've got a few years to see them played out.

"But actually I look back and think there's even more we could have done to fix some of the economic problems and I want to go on therefore taking decisions that will help create jobs.

"If anything, it's like I wish we'd done even more."

Mr Osborne made his comments in response to a question from one of a panel of readers of First News - the UK's national newspaper for young people - and students from Sky Academy - an initiative that is giving up to one million opportunities to young people.

During the interview - the first in a series called Hot Seat, where prominent men and women will face questions from young people - Mr Osborne defended the rowdy atmosphere at Prime Minister's Questions, arguing it demonstrates "passion".

The children also challenged Mr Osborne over Prime Minister's questions

But inquisitor Jessica Trueman, 12, from Buckinghamshire retorted, saying: "I think it is good for adults, but not so good for the children watching it because they might think it is ok to shout."

Mr Osborne told the children he saved up as a youngster for a Scalextric set and claimed to spend his time running listening to Happy singer Pharrell Williams on his iPod.

However, he avoided being tested on his times-tables when the youngest of the panel, seven-year-old Sam Raddings, asked Mr Osborne what seven times eight is.

"I've made it a rule in life not to answer a whole load of maths questions," came the swift response from Mr Osborne.

The Chancellor had been invited to give the children an "exclusive" story. If you want the scoop on a hamster on the loose in Downing Street, watch the video.

There will be more to come from the Hot Seat series in the run up to next year's General Election.

Let us know who you would most like to hear from and look out for details on how you can get involved on Sky News and in First News.

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Poundland Profit Up 23% As EU Expansion Starts

Discount chain Poundland has seen a 23.5% rise in annual underlying pre-tax profit, as it begins expansion plans in Europe.

In the 12 months until the end of March, profit rose to £36.8m, on a revenue rise of 13% to £997m.

However like-for-like sales were subdued in stores opened more than a year, rising by 1.9%.

The gross margin for sales in stores, where all items are priced at £1 or less, was 37%.

In March, the company received a stock market listing in its initial public offering (IPO).

Chief executive Jim McCarthy said: "This was a transformational year for Poundland culminating in our successful IPO in March.

"I am pleased to report that in our maiden set of results we have delivered excellent growth in sales."

Poundland said it intends to more than double the number of stores it owns.

It currently operates 528 stores in the UK and Ireland and said it intends to have more than 1,000 stores in its long-term plan.

It opened 70 new stores across the group territory in the last year.

On July 2 it launched its first store in Spain, at the resort location of Torremolinos.

The Spanish trial of stores branded as Dealz will see an initial 10 stores opened over a two-year period.

More follows...

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Sainsbury's Energy Hit By Mis-Selling Scandal

By Mark Kleinman, City Editor

British Gas is being forced to compensate thousands of customers for providing inaccurate savings estimates in the latest mis-selling episode to blight the utility sector.

Sky News has learnt that the UK's biggest energy provider, which is part of the FTSE-100 group Centrica, is paying out around £500,000 to approximately 4,300 people who signed up to Sainsbury's Energy and British Gas tariffs between February 2011 and March 2013.

Insiders said on Tuesday that British Gas had overstated the potential savings for consumers by providing inaccurate quotes for the following year's gas and electricity bills.

Details of the compensation package are understood to have been agreed with Ofgem, the industry regulator, and are expected to be confirmed in a public statement in the coming days.

A source said that British Gas had notified Ofgem of the mistake itself, and that the watchdog was satisfied with the proposed remedy, which has seen customers' accounts credited with average repayments of around £130.

The news comes days after the gas and electricity sector was referred by Ofgem to the Competition and Markets Authority for a full investigation.

The inquiry, which came in the wake of intense pressure from Ed Davey, the energy and climate change secretary, and Ed Miliband, the Labour leader, is unlikely to be completed until towards the end of next year.

British Gas was in April for blocking business customers from switching

Mr Miliband has sought to depict rising household energy bills as a central theme of the "cost of living crisis" that is likely to form the defining narrative of Labour's General Election campaign.

Sainsbury's Energy has operated in partnership with British Gas for several years, and has been in trouble with regulators before.

In 2012, dozens of British Gas employees were suspended for reportedly trying to persuade Sainsbury's customers to sign up to more expensive energy tariffs through an aggressive sales push inside its stores.

The supermarket chain ceased selling energy policies through British Gas staff in its stores last year, but retains a relationship with the Centrica subsidiary.

The latest payout comes after a series of fines and compensation packages imposed upon the major utilities.

In April, British Gas was fined £5.6m for unfairly blocking business customers from switching to rivals.

Npower, EDF Energy and Scottish Power, which have German, French and Spanish owners respectively, have also been hit by stiff penalties for mis-selling or misleading customers.

British Gas is also expected to face a record fine from Ofgem for failing to meet targets set under a household insulation scheme called Cert, which was funded from levies on consumers' bills.

Sources said that that penalty, which may not be finalised for several months, could run to tens of millions of pounds.

EnergyUK, the industry lobbying group, has responded to the string of scandals by pledging to reduce the time it takes for customers to switch providers.

Ofgem said, however, that growing consumer mistrust of the Big Six gas and electricity providers was a factor in its decision to refer the industry for a full competition probe.

British Gas, Sainsbury's and Ofgem all declined to comment on Tuesday.

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JPMorgan CEO Diagnosed With Throat Cancer

The boss of US banking giant JPMorgan Chase has confirmed he is being treated for throat cancer.

In a memo to staff, CEO Jamie Dimon said the ailment is curable.

He also intends to remain actively involved in running the banking business, which is America's biggest.

Mr Dimon, 58, has never been a smoker.

He said the cancer was caught at an early stage, following tests within the last two weeks, after he started feeling unwell.

He will undergo radiation and chemotherapy treatment for around two months.

Mr Dimon said: "I feel very good now and will let all of you know if my health situation changes."

"Importantly, there is no evidence of cancer elsewhere in my body."

He has been in charge of the bank for more than eight years and credited with navigating the business through the fallout of the global financial crisis.

However JPMorgan has hit recent trouble and has been tarnished as a result.

It lost $6.2bn (£3.6bn) over the so-called London Whale derivative bets, in 2012, with the scandal prompting shareholders to try and push for Mr Dimon to drop his joint role as chairman.

And last year it agreed a $13bn (£7.6bn) settlement with the US government for overstating the quality of mortgages it sold to investors before the crash.

In January, it agreed to pay more than $2bn (£1.16bn) to settle claims related to Bernard Madoff's fraudulent ponzi scheme.

The US Treasury Department called "critical and widespread deficiencies" in its programmes to prevent money laundering and other suspicious activity.

Shares in the bank were down 0.6% in after-market trades on Tuesday, following news of the diagnosis.

In his memo, Mr Dimon told staff his treatment is still being finalised and it would curtail his travel.

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House Prices 'Rise Above 2007 Peak' Values

Average house prices have risen above their 2007 peak values, according to a monthly housing survey.

The Nationwide said that in seasonally-adjusted terms, prices reached the peak in the end of the second quarter.

It said that prices in June recorded their 14th successive monthly rise, up 1% on May's value.

Seen in annual terms, the average rise was 11.8%, making it the fastest pace of growth for nine years.

That annual figure was up from 11.1% recorded in May.

Although rises were seen across the country, disparity continues to grow.

The high street lender said: "While all regions recorded annual price gains for the fourth quarter in a row, there is still significant variation across the UK, with the South of England continuing to record the strongest rates of growth.

"In particular, London continued to outperform, with prices up by almost 26% in Q2 compared to the same period in 2013."

It added: "The price of a typical property in London reached the £400,000 mark for the first time, with prices in the capital now around 30% above their 2007 highs and more than twice the level prevailing in the rest of the UK when London is excluded.

"In the UK as a whole, prices are less than 1% above their pre-crisis peak. Excluding London they are 0.4% below peak."

Nationwide said newly-implemented stress tests to ensure borrowers can afford a 3% base rate rise, and 85% of applicants limited to 4.5 times loan-to-income levels are "unlikely to have a significant impact" on transactions or growth in the near term.

It also believes as a result of the measures, prices should not become "detached from earnings".

Mounting expectation of the Bank of England (BoE) raising the base rate have probably helped cool market activity, the lender said.

But it warned that attempts by the BoE's Financial Policy Committee (FPC) to help overcome significant problems in the UK housing market were being hampered by forces outside of its control.

Nationwide said: "It is important to note that the FPC does not have the tools to address the fundamental problem in the housing market – the lack of supply.

"While there are encouraging signs that the pace of construction has picked up, the pace of house building is still well below the expected pace of household formation."

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GM Reveals Pay Out Plan Amid Fresh Recalls

General Motors has recalled 7.6 million more cars just as the company's compensation attorney revealed that he is prepared to pay billions to victims of car crashes linked to faulty ignition switches.

Kenneth Feinberg said on Monday that GM has placed no limit on the total amount he can pay to injured people or relatives of those killed.

The Detroit-based company says 13 deaths have been linked to a defective switch installed in some of its small car models.

Relatives of crash victims attended Mr Feinberg's news conference

But trial lawyers and lawmakers say claims of wrongful death and injury could total in the hundreds.

Mr Feinberg has been tasked with determining how much each victim will get.

He said: "GM has basically said whatever it costs to pay any eligible claims under the protocol they will pay it. There is no ceiling."

His announcement came just hours ahead of GM issuing fresh recalls for a least 7.6 million vehicles over the faulty ignition switches.

Crash victim relatives sit behind Ms Barra during a hearing on Capitol Hill

The automaker had already recalled some 2.6 million small cars since February.

US lawmakers accused GM of a potential criminal cover-up after it was revealed that the company knew of problems with the ignition switches for more than a decade before recalls were announced.

An internal review ordered by CEO Mary Barra, who took over the company in January, found a "pattern of incompetence and neglect" in the company's handling of the recalls.

Fifteen employees, including senior legal and engineering executives, were dismissed over the failure to disclose the defects.

GM's compensation plan is aimed at limiting its legal liabilities, control the damage to its image and eventually move beyond the crisis.

A deadly Chevy Cobalt crash in 2006 could be linked to the faulty switch

The company said in a statement that Mr Feinberg's plan shows it is taking responsibility for what happened to victims "by treating them with compassion, decency and fairness".

People filing claims will have to prove that the switches caused the crashes, and once their claim is settled, they forfeit their right to sue GM.

Claims must be submitted no later than December 31.

Mr Feinberg said he will not consider whether those injured in crashes contributed to the cause by drinking alcohol, speeding, not wearing seat belts or other behaviour.

He said: "We have no interest in evaluating any alleged contributory negligence on the part of the driver."

Laura Christian, the mother of an accident victim who attended the news conference, said she had evidence that 165 people have died in accidents caused by the ignition switch problem.

Mr Feinberg responded that he would "be glad to consider anything you have".

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BNP Paribas Fined $9bn For Sanctions Busting

French bank BNP Paribas has agreed to pay a fine of $8.83bn (£5.16bn) after pleading guilty to sanction-busting charges in a New York court.

According to prosecutors, the bank evaded sanctions imposed by the US by facilitating transactions involving Sudan, Cuba, and Iran between 2004 and 2012.

The fine is almost as much as the bank's full-year pre-tax income of $11.2bn (£6.6bn).

BNP - France's biggest bank - is also likely to receive a year-long suspension from making dollar payments on behalf of clients in some businesses; an untested and potentially severe penalty.

The New York State Department of Financial Service proposed the ban as one of the conditions for not revoking the bank's licence to operate in New York.

US authorities have been examining whether BNP Paribas evaded sanctions by stripping identifying information from wire transfers so they could pass through the financial system unnoticed.

The bank evaded sanctions banning transactions with Sudan, Cuba and Iran

"BNP Paribas went to elaborate lengths to conceal prohibited transactions, cover its tracks and deceive US authorities," Attorney General Eric Holder said.

"These actions represent a series breach of US law."

 Assistant District Attorney Ted Starishevsky: "This conduct, this conspiracy was known and condoned at the highest levels of BNP."

Lawyers for BNP briefly appeared in court and pleaded guilty to one count of falsifying business records and one count of conspiracy.

French President Francois Hollande appealed directly to US President Barack Obama to demand that any penalties were fair and proportionate, however Mr Obama said it was a matter for the courts.

The bank is expected to be given six months to pay up, to allow it to implement restructure plans which could include lowering its dividend and raising funds by selling billions of euros of bonds next week, according to reports.

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Flexible Isas Offer £15,000 Tax-Free Saving

Some of the barriers to saving with Individual Saving Accounts (Isas) have been stripped away from today as they become more flexible and the annual allowance rises.

Savers will be able to stash up to £15,000 each year - money they can hold in stocks and shares, cash or any combination of the two.

The New Isas - or 'Nisas' as they are being called - were demanded by campaigners who had long complained about only being previously allowed to save up to half of their annual Isa allowance in cash and the remainder in stocks and shares.

The new flexibility rules apply to all existing Isas as well as new accounts opened from today.

At the same time the annual subscription limits for Child Trust Funds (CTFs) and Junior ISAs are increasing to £4,000 to enable families to save more for their children in a tax-advantaged way.

The Chancellor George Osborne, who announced the changes in his Budget statement, said today: "We want to support savers at all stages of their life and make sure they have greater flexibility and choice over how they access their savings.

"That's why as part of our long-term economic plan we announced a radical package of measures at Budget - reducing taxes for the lowest income savers, reforming ISAs and giving people flexibility over their pensions.

"Today's introduction of the New ISAs is a big boost for millions of people, giving them greater economic security by putting aside money in savings."

Over 23 million adults - roughly half of the UK adult population - currently have an ISA.

But despite the greater freedom for savers, comparison websites have warned that the typical potential returns on offer for Nisas have deteriorated since the Budget.

Rachel Springall, spokeswoman for Moneyfacts.co.uk, said that since March, the average rate on offer on a one-year fixed-rate Isa had fallen from 1.58% to 1.48%.

She said: "The falls in rates will likely cause much disappointment for savers who did not see a fruitful Isa season this year and have pinned hopes on the new limits to provide new deals so they can boost their income.

"Challenger banks appear to be leading the way with decent Isa deals lately.

Kevin Mountford, head of banking at MoneySupermarket.com, added: "The current rates on offer are stagnant and uncompetitive."

He said savers would need to be prepared to shop around to get the best deals.

Figures released by the British Bankers' Association (BBA) last week showed a plunge in people ploughing their savings into Isas compared with a year ago.

The BBA's report said: "There has been a lower take-up of Isas this year, with £5.3bn being deposited with high street banks during March to May, compared with £9bn in the same months of 2013".

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Haggis Hopes: UK Urges US To End 43-Year Ban

A US ban on Scottish haggis could be overturned if Britain can persuade aides to Barack Obama that British meat is safe to eat.

Environment Secretary Owen Paterson is to lobby US Secretary of Agriculture Tom Vilsack today to bring an end to the ban and open up a market that could be worth millions of pounds to Scottish producers.

Mr Paterson has already overturned the ban on UK beef

It has been forbidden to import the savoury pudding into the US since 1971 following an embargo on food containing sheep lung, which makes up part of the traditional recipe.

The mad cow disease crisis in Britain in 1989 complicated matters when it became forbidden to import any UK beef and lamb products.

Mr Paterson hopes the ban can be lifted as part of  European Union-US trade deal negotiations which could be worth £10bn to the British economy overall.

He will be hoping to build on his success of overturning a ban on UK beef exports to the US earlier this year.

Speaking at the Royal Highland Show last week, Mr Paterson said: "I share many haggis producers' disappointment that American diners are currently unable to enjoy the taste of Scotland's wonderful national dish in their own country.

"I am meeting my US counterpart today to discuss how we can begin exporting it, particularly as so many Americans enjoy celebrating their Scottish heritage.

"This Government has opened many markets for our home-grown food and drink businesses.

Haggis is made from sheep's entrails cooked in the animal's stomach

"I will continue to do everything I can to boost exports of everything from whisky to haggis to support Scotland's farmers and rural economy."

James Macsween, director of haggis maker Macsween of Edinburgh, said: "The opportunities for exporting our haggis into the American market are very exciting and I am delighted to hear progress is being made in this respect.

"With the huge popularity in the US of all things Scottish, hopefully these negotiations will allow American consumers the chance to finally taste authentic, high-quality Macsween haggis very soon."

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Juncker 'Committed To Addressing UK Concerns'

Jean-Claude Juncker has told David Cameron he is "fully committed" to addressing the UK's political concerns in Europe.

The pair spoke after the Prime Minister telephoned Mr Juncker to congratulate him on securing the nomination for the EU's top job.

Last week, Mr Cameron had attempted to block the arch-federalist, who he claims is not the right man to force through the continent's reforms.

But writing in The Daily Telegraph after speaking to Mr Juncker, the Prime Minister said the pair could "do business" if there were concessions to Britain.

A Downing Street spokesman said: "The Prime Minister congratulated Mr Juncker on running a successful campaign and securing the Council nomination.

"They discussed how they would work together to make the EU more competitive and more flexible.

"The PM welcomed Mr Juncker's commitment of finding a fair deal for Britain and Mr Juncker said that he was fully committed to finding solutions for the political concerns of the UK.

Jeremy Hunt labelled Mr Juncker's backers "cowards"

"The PM wished Mr Juncker well with the hearings in the European Parliament and they agreed to speak further at the next European Council on 16 July."

The PM was one of just two leaders who opposed Mr Juncker as the next European Commission president.

The Tories have promised a referendum on EU membership should they win the next general election.

Health Secretary Jeremy Hunt labelled Mr Juncker's backers "cowards" and believes electing the former Luxembourg leader can only make a vote to quit more likely.

Labour said the failed negotiations over the appointment had been a "catastrophe" for Britain.

The party is attempting to keep up the pressure on the PM over the defeat, and Ed Miliband will get an opportunity to grill him in the Commons about the issue on Monday afternoon.

Labour claims the loss has taken the UK closer to the "exit door" which it believes could put three million jobs and tens of thousands of businesses at risk.

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BNP Paribas Fine To Be Announced In US Court

French bank BNP Paribas is expected to be hit with the biggest ever fine against a European bank later today, stemming from violations of United States law.

The US Justice Department will reveal the settlement, believed to total almost $9bn (£5.3bn), at a Manhattan Federal Court.

Sources have hinted that the penalties may also include temporary bans on some US denomination foreign exchange activity.

BNP Paribas, which is France's largest bank, is expected to be hit with a reduced dividend, lowered investment bank earnings and tighter capital ratios as a result.

The bank is set to plead guilty so that it can continue operations in the US, and retain its New York state banking licence.

The US Justice Department is planning a news conference in Washington to reveal further details of the offences, which are believed to relate to activity primarily with Sudan between 2002 and 2009.

On June 27, BNP chief executive officer Jean-Laurent Bonnafe sent staff an internal memo warning of a "heavy penalty".

He added: "However, the difficulties that we are currently experiencing must not affect our plans for the future."

The bank originally planned for a fine of around $1.1bn (£645m) but the expected fine almost matches its 2013 full-year pre-tax income of $11.2bn (£6.6bn).

French President Francois Hollande appealed directly to US President Barack Obama over penalties being fair and proportionate, however Mr Obama said it was a matter for the courts.

Legal action against BNP was taken over breaking sanction rules stipulated by the Office of Foreign Assets Control.

The bank has seen its share value drop by around a fifth this year, after it made an allowance for a $1.1bn fine.

It is expected to be given six months to pay the fines, to allow it to implement restructure plans.

In 2012, HSBC paid more than $1.9bn (£1.1bn) in penalties for violations over sanctions and secrecy law, in what was then a record fine.

HSBC was found to have allowed Mexican drug cartels launder hundreds of millions of dollars inside the US.

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Rates 'May Return To Pre-Recession Levels'

Homeowners should expect interest rates to return to their pre-recession levels within a decade, the Deputy Governor of the Bank of England has warned.

Last week the Bank's Governor Mark Carney suggested that even once borrowing costs rise, the "new normal" for them to settle at would be around 2.5% - significantly lower than the long-term average of 4-5%.

But in an exclusive interview with Sky News Sir Charlie Bean, the Bank's longest-serving senior policy maker, said that this lower rate was only caused by a range of temporary factors.

Sir Charlie said that in the "long term", meaning beyond five or ten years, it could easily rise again towards 5% - the level traditionally considered "neutral".

"It might be reasonable to think that in that long term you would go back to 5% but it's probably quite a long way down the road," he said.

Sir Charlie's comments will be welcomed by savers who have suffered ever since the Bank lowered interest rates to just 0.5% five years ago.

However, they may also alarm millions of mortgage holders who may struggle to make their repayments.

The deputy governor, whose term comes to an end on Monday, also said that markets' expectations that the first increase in interest rates would come at the turn of the year seemed "reasonable".

He added: "The market has rates going up to 2.5% over the next three years. That seems like broadly sensible judgement."

Sir Charlie also admitted that in the run up to the crisis he, along with other economists, was "not sufficiently cognisant of the risks building up in the financial system".

However, he said that he was leaving the Bank in safe hands, and the economy far more resilient than when he arrived in 2000.

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Parcelforce Starts Seven-Day Delivery Service

Parcelforce, the express parcels business of Royal Mail, will today become the first national parcels carrier in Britain to deliver on Sundays.

The business said it anticipates the new service will be of particular benefit to online shoppers.

Among the first retailers to sign up is the department store Fortnum and Mason.

Iain Anderson, director of communications agency Cicero Group, said the move was about Royal Mail "sharpening up its act".

He told Sky News: "This is all about parcels not letters and what Royal Mail really see as an opportunity to hold onto market share.

"There is a lot of competition and seven-day trading is about making sure they maintain and, if they can, grow their market share.

"The significance of this is that by 2017 the vast majority of revenues and profits are going to be coming from parcels.

"This is all about making sure they can continue that trajectory because the letters business, for all mail providers with the growth of email, is in long-term decline."

The Communication Workers Union said it had reached an agreement that Sunday working would be voluntary, while negotiations will be held on new shift patterns.

National officer Terry Pullinger said: "Talks with Parcelforce management established a very important principle as far as employment security is concerned and we are delighted that we have had an assurance that permanent employees will be used to deliver this new exciting innovation to customers."

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All Staff Get Rights To Work From Home

By Emma Birchley, Sky News correspondent

The right to request flexible working arrangements is about to be extended to apply to all staff and not just parents and carers.

From Monday, workers who have been in their job for six months will be able to ask for flexitime, to job share or to work from home.

The change will extend flexible working rights to around 20 million people.

Many businesses who already offer it say it increases staff motivation and productivity and reduces absence.

Workers may be able to avoid painful commutes to work

It has been an option for all employees at the small advertising agency Osbornenash in Norwich since they set up three years ago - and it has paid off.

Managing director Carole Osborne said: "For us as a business it has helped because we want to be able to recruit the best staff that we possibly can ... it's important that we are flexible around their lives and then also that they can be flexible around what we as a business offer our clients."

The company's senior art director, Neil Wright, has two young daughters and is able to change his hours to suit his family life.

"Obviously family is important to everyone particularly having two children and my wife also works full time," he said.

"It's very valuable to be able to balance life and work equally."

The team at Osbornenash support flexi hours

But employment lawyer Fraser Younson, a partner at Squire Patton Boggs, fears it could leave bosses with tough decisions about whose request to prioritise.

Flexibility will not be an option for all businesses and there are various grounds on which they can reject an application.

Christopher Soule, from the Federation of Small Businesses, said that one reason might be if the request worked out as too expensive for the employee's company.

But Mr Soule believes that many companies will embrace the opportunities.

"About 70% of our members already do some kind of flexible working," he said.

"It will make people think about whether it will help their business and improve their business and improve their staff relations."

Workers will have the right to appeal if the decision does not go their way and apply again 12 months later.

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