US Sees Weak New Job Gains In December

The US economy added 74,000 new jobs in December, a level far below analysts' expections.

The figure takes unemployment to a five-year low, but industry experts had expected the US economy to add 197,000 new jobs last month.

The job creation figure, released by the Labor Department, is watched closely as a sign of the economy's health.

Meanwhile, the unemployment rate in the world's biggest advanced economy dropped to 6.7% - because fewer people were seeking work.

Foreign currencies, such as sterling, immediately strengthened against the dollar.

Analysts played down fears that the lower than expected rate of growth was a sign that the economy is stalling.

Joel Naroff, president of Naroff Economic Advisors, said: "I don't think the Fed is going to be panicked by this."

Dan Greenhaus, chief global strategist at brokerage firm BTIG, said: "We stop short of making larger observations based on this number.

"The economy, based on any number of other indicators, has been picking up steam of late which makes today's number ... curious."

The leisure, manufacturing and services sectors all added jobs in December.

But the construction sector shed 16,000 jobs - the biggest drop in 20 months - during a month when much of the country experienced bad weather.

The overall outlook for the US economy remains positive, with recent figures for consumer spending and industrial output strong.

The economy is predicted to grow by 3% in 2014, up on 1.7% last year.

The Federal Reserve responded to recent positive signs by announcing last month that it would start "tapering" its monetary stimulus programme by $10bn, from $85bn to $75bn.

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Wall Street Giants To Aid £1bn Travelex Sale

By Mark Kleinman, City Editor

The foreign currency provider Travelex has enlisted a pair of Wall Street titans to aid a plan that will involve a £1bn sale or flotation during 2014.

Sky News understands that Travelex has drafted in Goldman Sachs and JP Morgan to work on a deal that could value the stake held by the company's founder, Lloyd Dorfman, at £300m or more.

While a transaction is not imminent, insiders said that the appointment of the two investment banks was a signal that one was likely this year.

Apax Partners, the private equity group, has owned a controlling stake in Travelex since 2005 and is keen to offload its stake, on which it will augment an already handsome profit.

City sources said that JP Morgan was focusing on an initial public offering that would see Travelex make its stock market debut, while Goldman Sachs has been asked to field approaches from potential buyers of the company in addition to assisting with a flotation.

Rothschild was brought in last autumn to help evaluate options for the business.

A stock market listing, which would probably see Travelex join the FTSE-250 index of the public companies ranked between 101 and 350 by size on the London markets, remains the company's preferred route, the sources added.

Travelex was set up in 1976 by Mr Dorfman, who remains its chairman and second-largest shareholder. Mr Dorfman is one of Britain's most successful entrepreneurs, and is thought likely to remain on the board if it decides to pursue a listing.

Travelex has been reshaped since Peter Jackson, its chief executive, was recruited from Lloyds Banking Group in 2010, with the sale of its card management and global payments operations for an aggregate total of nearly £1bn.

Mr Jackson said last year that trading during the crucial summer period had been strong, and the business is understood to have continued to perform well since then.

A Travelex spokesman declined to comment.

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Teachers 'Should Pass MoTs Or Face The Sack'

Teachers should be licensed and will face the sack if they fail to pass checks on their abilities, the Labour party has said.

Shadow education secretary Tristram Hunt said he wants teachers to be reviewed every few years to improve standards in England's state schools.

A similar proposal was floated by the previous Labour government - and dubbed "classroom MoTs" by former schools secretary Ed Balls - but was opposed by some unions and dropped before the 2010 general election.

Mr Hunt told the BBC: "Just like lawyers and doctors they should have the same professional standing which means re-licensing themselves, which means continued professional development, which means being the best possible they can be.

"If you're not a motivated teacher - passionate about your subject, passionate about being in the classroom - then you shouldn't really be in this profession."

Mr Hunt went on to tell The Times: "If we want to re-professionalise the teachers it would be crazy not to do it. If teachers are not re-licensed they will not be allowed to teach."

The Opposition has previously said it would insist on all teachers having Qualified Teacher Status, with staff already working in academies given a deadline to acquire a formal qualification.

A Conservative Party spokesman said the Government was willing to look any proposals which will "genuinely improve the quality of teaching".

He said: "We have already taken action by allowing heads to remove teachers from the classroom in a term, as opposed to a year previously, and scrapping the three-hour limit on classroom observations.

"We are improving teacher training, expanding Teach First and allowing heads to pay good teachers more. Thanks to our reforms, a record proportion of top graduates are entering the profession.

"Fixing the schools system so young people have the skills they need is a key part of our long-term economic plan."

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Record Online Xmas Sales Boost Festive Figures

Increasing use of tablets and smartphones and speedy delivery times are the major factors behind a sharp rise in online shopping before Christmas.

Web sales growth accelerated to 19.2% compared with the same month in 2012 - the fastest rate for more than three years.

However, overall UK retail sales grew by just 0.4% on a like-for-like basis.

The data from the British Retail Consortium (BRC) survey carried out by KPMG showed online trade represented 18.6% of total non-food sales in December, up from 16.5% the year before.

BRC director general Helen Dickinson said: "More of us clicked into Christmas than ever before, with online non-food sales growth putting in its best performance since March 2010 and accounting for nearly 20% of spending.

"The surge in the use of tablets and smartphones last year, together with the ever-faster delivery times achieved by an increasing number of retailers, has provided a new spur of growth to online shopping."

David McCorquodale, KPMG head of retail, said: "Whilst store sales continue to flatline, online sales remain the main driver of growth for the sector, contributing nearly three quarters of the uptick in non-food sales in the last quarter of 2013.

"The winners this Christmas were those retailers with slick multichannel operations, who could offer consumers the flexibility to shop how, and when, they wanted to."

In clothing, online purchases represented 21.2% of sales in December, up from 18% in 2012, while furniture and flooring products bought on the internet represented nearly a third of all sales, at 32.4% - though this was down a little on 32.6% last year.

The figure for electrical goods and toys was 14.4%, up from last year's 11.9% but a fall on the 15.5% who shopped online for these goods in November.

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China 'Overtakes US' As World's Top Trader

China's annual trade in goods passed the $4trn (£2.4trn) mark for the first time in 2013, official data has revealed, confirming its position as the world's biggest trading nation.

Exports from the world's number two economy rose 7.9% to $2.21trn (£1.34trn), while imports increased 7.3% to $1.95trn (£1.18trn), the General Administration of Customs (GAC) announced.

The trade surplus stood at $259.75bn (£157bn), up 12.8% from 2012.

Total trade came to $4.16trn, an increase of 7.6%, just below the government's 8% target.

The total was a record high and effectively confirmed a historic geo-economic shift, making China the world's biggest trader of physical goods, not including services.

Reports last February said the United States' total trade in goods was lower than China's in 2012, but GAC said due to differences in calculation methods the change happened for the first time in 2013.

Further confirmation of the new status is expected to come when the full US data for the year is released.

"It is very likely that China overtook the US to become the world's largest trading country in goods in 2013 for the first time," Customs spokesman Zheng Yuesheng said.

The European Union was China's biggest trading partner, GAC said, followed by the United States, the Association of Southeast Asian Nations (Asean), Hong Kong and Japan.

Between them the traditional markets of the EU, US and Japan accounted for 33.5% of China's trade, down 1.7%, suggesting emerging markets' share of business was growing.

China's Xi Jinping has been courted by President Barack Obama

"Generally speaking, the environment for trade to grow in 2014 is likely to be better than 2013," Mr Zheng said, citing improvements in international demand and domestic economic factors.

However, China's trade surplus in December fell 17.4% to $25.64bn (£15.5bn), below expectations.

Exports increased 4.3% to $207.74bn (£125bn) last month, while imports climbed 8.3% to $182.1bn (£110bn).

China's 2013 trade performance came as the economy turned in a mixed performance, slowing during the first half of the year before showing some vigour in the final six months.

A government report last month cited in state media suggested GDP grew 7.6% in 2013, from the 7.7% in 2012, which was the worst performance in 13 years.

President Xi Jinping, who assumed office in March after becoming head of the ruling Communist Party in November 2012, wants to transform the economy to one in which domestic demand is the key growth driver, rather than public investment.

China's yuan currency gained more than 3% against the dollar last year, hitting a series of record highs since Beijing launched its modern foreign exchange market in 1994.

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Heathrow Slams Price Cap Put On Airline Fees

The operator of Heathrow airport has slammed a price cap limiting how much it can charge airlines to use the west London site.

The Civil Aviation Authority (CAA) has imposed a far greater price cap on the amount it can charge airlines than it originally proposed.

From April, prices can only rise by 1.5% below the retail prices index (RPI) measure of inflation at Britain's busiest airport.

Heathrow, whose owners include Spain's Ferrovial and the sovereign wealth funds of Qatar, China and Singapore, described the cap as draconian.

It is now reviewing a planned investment programme to see if it is still financially viable.

The CAA said the -1.5% cap would mean price would fall for passengers and service for customers would be increased.

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'Project Cook' Signals Huge RBS Cost Cuts

By Mark Kleinman, City Editor

The new head of Royal Bank of Scotland (RBS) is preparing to take another axe to the lender's cost-base in a move which could herald thousands more job cuts.

Sky News has learnt that Ross McEwan is working on the plans, to be announced alongside the taxpayer-backed bank's annual results in six weeks' time, under the codename Project Cook.

The name is understood to be a reference to Captain James Cook, the English explorer who sailed along the coast of Australia in 1770, and is a nod to the RBS chief executive's success in cutting costs at Commonwealth Bank of Australia, where he ran its retail operations for five years.

Mr McEwan's plans for RBS will not be finalised until next month, when he will announce the details to the City, but he has told colleagues that he expects "very substantial" cost cuts to be identified as part of his review.

The bank's workforce is already one-quarter smaller than the 161,000 people who were employed by it when taxpayers injected £45.5bn to rescue it in 2008.

More than 40,000 people have left RBS since then, many through redundancy, with others leaving as part of the sale of dozens of businesses by Stephen Hester, Mr McEwan's predecessor.

People close to Project Cook said that Mr McEwan would further shrink RBS's markets and international banking operations, as well as setting out plans for greater automation of high street banking services.

Over time, this would result in far more cost-effective operations that would require a smaller headcount, they said.

About 120,000 people now work for the Edinburgh-based bank.

In RBS's third-quarter results statement in November, the bank said that Mr McEwan was launching a review of its operations in an effort "to capture the full potential of its customer businesses".

"The review will aim to improve the bank's performance and effectiveness in serving its customers, shareholders and wider stakeholders.

"This will include detailed plans to realign the Group's cost base, with a cost:income percentage target in the mid 50s, down from 65% currently."

Even if RBS's income remained constant, that shift would entail slicing hundreds of millions of pounds from RBS's cost-base, but the sale of Citizens in the US and other business units will reduce the bank's profitability in the short term.

"The aim is to put more capital and resource into areas where they generate income, and that will be one focus of the review next month," said one source.

Since the November announcement, RBS has been hit by a series of further IT systems breakdowns which have inconvenienced millions of NatWest, RBS and Ulster Bank customers.

George Osborne, the Chancellor, is being kept informed about the progress of Project Cook, as is UK Financial Investments, the agency which manages taxpayers' 81% stake in RBS.

RBS, which declined to comment on Wednesday, is not alone among UK banks seeking to reduce its workforce.

Barclays, HSBC and Lloyds Banking Group have each either carried out or signalled plans to cut tens of thousands of roles as retail banking customers increasingly frequent use online and mobile-based services.

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M&S Christmas Clothing Sales Fall 2.1%

Extended pre-Christmas discounting by Marks & Spencer has failed to spark sales growth in the company's troubled clothing lines.

M&S confirmed to the City that it had suffered its tenth consecutive quarter of falling sales in its general merchandise division, dropping 2.1% on a like-for-like basis in the eight weeks to December 24.

The group admitted that a series of discounts to drive seasonal sales - which included a pre-Christmas "Mega Day" with reductions of up to 30% on clothing lines - would hit profit margins when full-year results are reported later this year.

Total UK sales fell by 0.2% over the same period on a like-for-like basis - with its popular food offering propping up its performance with growth of 1.6%.

In the quarter ending December 28, total sales rose by 1.5%.

Chief executive Marc Bolland said: "We delivered an improved performance in General Merchandise over the important Christmas period, with sales up 1.5% in a highly promotional market.

"However, an exceptionally unseasonal October, which saw General Merchandise sales down strongly, has resulted in a quarterly performance below our expectations."

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Tesco UK Sales Decline 2.4% Over Christmas

Tesco is blaming "further weakness" in the UK grocery market for a fall in sales over Christmas.

The UK's biggest supermarket chain said sales at British stores open over a year, excluding fuel and VAT, fell 2.4% in the six weeks to January 4.

The company - led by chief executive Philip Clarke - is 21 months into a turnaround plan for its main UK business that has seen over £1bn invested in store revamps, more staff, new product ranges and pricing initiatives.

Mr Clarke confirmed the investment amid plunging sales and complaints it had taken its eye off the ball in the UK, focussing too heavily on its foreign operations.

Tesco said today that despite the fall in UK sales, it still expected to report full year results within the range of current market expectations.

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Co-Op: Regulator Stands By Flowers Decision

A senior City regulator has told MPs he stands by his decision to approve the appointment of disgraced former Co-op Bank chairman Paul Flowers, arguing it was "correct at the time".

Clive Adamson, director of supervision at the Financial Conduct Authority (FCA), said the Methodist minister seemed to be the right person to control the "unruly" board at the bank, despite him later becoming embroiled in a drugs scandal and displaying a lack of knowledge about banking.

He said that Mr Flowers was "not the same individual" as he seemed at a later meeting before the Treasury Select Committee last year, when gave a stumbling performance and seemed unable to give basic facts and figures.

Mr Adamson was quizzed by MPs on the same committee about a 90-minute meeting he and two colleagues at the now-defunct Financial Services Authority held with Mr Flowers ahead of his appointment in 2010.

At the meeting, it was agreed two deputies would be needed to assist Mr Flowers as chairman because of his lack of banking knowledge.

Mr Flowers gave a stumbling performance when he appeared before MPs

He told the Treasury Select Committee: "I stand by the decision I made at the time.

"I am as surprised as all of us as to the events that surrounded Mr Flowers' apparent misdemeanours."

Following close questioning by MPs, Mr Adamson eventually agreed that the FSA overall made a mistake, but insisted he stood by the decision on Mr Flowers.

"With the benefit of hindsight, yes we did get it wrong," he said.

But committee member Jesse Norman likened it to a doctor saying: "The operation was a success but the patient died."

The Co-op Bank last year had to be rescued after a £1.5bn hole was discovered in its finances.

Regulators have announced the launch of investigations that could see former senior managers fined or banned from working in the industry.

Mr Adamson told the committee he was surprised by the former chairman's answers during his appearance before MPs last year, and that at his own meeting with Mr Flowers he had been "much more cogent".

But committee chairman Andrew Tyrie told him: "It is an extraordinary state of affairs that you are asking us to believe."

He criticised the decision to put Mr Flowers in place to oversee the board, saying: "Your solution was to put a financial illiterate in charge of it."

Mr Adamson said he was disappointed that no one "in public life or indeed his other associations" who may have "known more about some of his misdemeanours" ever alerted regulators.

But he admitted that he had never before approved a chairman with such little experience, telling MPs: "There was no hiding the fact that he didn't have sufficient experience so the decision was around how that could be mitigated."

Mr Adamson said Mr Flowers' 1981 conviction for gross indecency was disclosed but it was not considered relevant and he was not questioned about it. He said a separate drink-driving conviction was not known.

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