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alex wong was here

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You MUST read this - deflation  - mild & benign (Econ 4)

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You MUST read this - deflation  - mild & benign (Econ 4)

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The main measure of UK inflation turned negative in April for the first time on record, with the rate falling to -0.1%.

It is the first time Consumer Price Index (CPI) inflation has turned negative since 1960, based on comparable historic estimates, the Office for National Statistics said.

The biggest contribution to the fall came from a drop in air and sea fares.

Bank of England governor Mark Carney said he expected inflation to remain very low over the next few months.

But Mr Carney added that "over the course of the year, as we get towards the end, inflation should start to pick up towards our 2% target".

The latest inflation figures show that transport costs were 2.8% lower in April than the same time a year ago, while food was 3.0% cheaper.

Chancellor George Osborne said the inflation figure should not be mistaken for "damaging deflation".

He added that the lower cost of living - driven by last year's fall in oil prices - would be a welcome relief for family budgets, in an environment in which average wages were finally beginning to rise.

"Of course, we have to remain vigilant to deflationary risks and our system is well equipped to deal with them, should they arise," Mr Osborne added.

Shadow chancellor Chris Leslie said: "Any relief for households is welcome, but this month's figures reflect global trends and [that] doesn't change the reality that many are still struggling to pay the bills.

"The government must clearly guard against the risk that business investment might be deferred. We need stronger action now to raise productivity to deliver sustainable growth and rising living standards."

The latest inflation figure means that a basket of goods and services that cost £100 in April 2014 would have cost £99.90 in April this year.

The last time CPI inflation was negative, according to estimates by the ONS, was March 1960, when prices were 0.6% lower.

Analysis: Robert Peston, BBC economics editor

The last time we saw a price fall in the UK was March 1960, before even I was born, when there was a drop (probably) of 0.6%.

So my natural impulse is to say that deflation has arrived in Britain - because there is no other word in the English language than "deflation" to describe this phenomenon.

However many of those who define themselves as "serious economists" (that's not me, by the way - I'm a hack) are desperately anxious that I and you don't use the "d" word - for two reasons.

One is that they say proper deflation is a long term term trend of declining prices, and they believe - almost certainly correctly - that these current price falls won't endure much more than a month or two.

The other is that proper deflation is pernicious: if we believed that prices were set to fall month after relentless month, we would spend less - in the hope of picking up bargains later - and our bosses would pay us less.
Read Robert's blog in full
Inflation as measured by the Retail Prices Index (RPI) in April remained unchanged from the month before at 0.9%.

'Mild and benign'

Ian Stewart, chief economist at Deloitte, said the fall was "likely to prove short-lived and positive for growth".

"Falling prices raise consumer spending power and help keep interest rates low. This looks like the mild and benign variety of deflation, which is good news for consumers and for growth," he said.

Andrew Sentance, senior economic adviser at PricewaterhouseCoopers and a former member of the Bank of England's Monetary Policy Committee, said he did not expect the fall in prices to be sustained.

"Once the impact of the big drop in oil prices drops out of the annual inflation rate, it will move back up to 1-2% over the next year or so. With wage inflation picking up, we may soon be considering the prospect of above-target inflation," he said.

"In the meantime, flat or slightly falling consumer prices are good for growth, boosting real consumer spending power. So a temporary period of slightly negative inflation can be good for the UK economy."

Analysis: Anthony Reuben, BBC head of statistics

Almost nothing changed between March and April's inflation figures.

The ONS says that the thing that did move, which was the price of air fares and sea fares, was depressed by the timing of Easter.

The prices that are used to calculate the CPI are collected in a few days in the middle of the month.

In 2014, Easter fell during those days, which meant transport fares were inflated.

This year it didn't, so fares were lower, which means today's tiny deflation may be seen as a technical effect.

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The main measure of UK inflation turned negative in April for the first time on record, with the rate falling to -0.1%. It is the first time Consumer Price Index (CPI) inflation has turned negative since 1960, based on comparable historic estimates, the Office for National Statistics said.

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An example of how technology can change markets (Econ 3)

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An example of how technology can change markets (Econ 3)

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Official figures show that the numbers of people interested in becoming a London taxi driver have fallen and the car-booking phone app Uber is being blamed. But is this the beginning of a serious decline for the traditional black cab, ask Harry Low and Justin Parkinson.

"The cab trade is facing its biggest challenge in 300 to 350 years," says Steve Albasini, who's been driving a London taxi for seven years.

Cabbies in the UK feel under threat from Uber, a US firm which allows passengers to book cars using a mobile phone app, paying by debit or credit card, rather than cash. Its main selling point is that it is cheaper than taxis hailed in the street.

Transport for London figures show the number of people studying "the Knowledge", the geographical training for licensed taxi drivers, fell from 3,326 in 2012, when Uber started in London, to 2,159 last year. Under this system, would-be drivers spend between two and four years imbibing an encyclopaedic level of detail of the capital's streets and traffic systems. They learn about 320 routes, 25,000 streets and 20,000 landmarks and places of interest, such as museums, restaurants, embassies and colleges.

The aim is that, once qualified, they can get a passenger home anywhere in London as quickly and safely as possible. The written exam at the end of their training costs £200 and the practical test another £400. These are in addition to the expense of training, with several Knowledge schools offering courses.

Uber, by contrast, allows drivers to start earning money far quicker. There's no equivalent of the Knowledge - instead there's a reliance on GPS technology to get around cities.

It's a model that's proved popular since the company started in San Francisco in 2009, spreading to 57 countries. Figures released in March show there are now more Uber cars than yellow cabs in New York. In the UK it's expanded into Birmingham, Leeds, Newcastle and Manchester. The business's global value has been placed at $40bn (£25.4bn).

"The figures on London cabs from TFL sound pretty much right," says Steve McNamara, head of the Licensed Taxi Drivers' Association. "Doing the Knowledge is a big time investment. Why would you do two or three years' training, when you have the promise instead of going out and earning instant money? We're very, very concerned about the situation."

MacNamara argues that a growth in Uber vehicles is clogging up the streets of central London while they wait to pick up passengers, also reducing air quality. He claims Transport for London is not doing enough to ensure standards are maintained.

Albasini agrees. "Some people will say 'What's the point in doing the Knowledge?'" he says. "GPS can get you somewhere, but being driven by someone who knows what they're doing is better than being driven by someone who is slave to a piece of computer equipment. That's a bad thing for Londoners."

London's taxi drivers have a special term for the quietest period of the year, starting in January, calling it "kipper season". This year, things didn't really pick up again during spring, says Albasini. "I'm working 70 to 80 hours a week," he says, "and I'm just about making the same money I used to from 50 hours a week."

The capital's cabbies are proud of their history. In 1654, Oliver Cromwell set up the Fellowship of Master Hackney Carriages, a name still used for black cabs. The Knowledge test was introduced after the Great Exhibition in Hyde Park in 1851. Visitors complained that drivers were making too many mistakes. The training continued after the first motorised cabs came into use in 1898.

Uber claims that its use of GPS technology alleviates the need for such learning today. Its drivers are vetted to ensure they haven't committed sexual or violent offences, as are licensed cabbies.

After Uber journeys, passengers and drivers rate each other, by giving them up to five stars, based on courtesy, effectiveness and general behaviour. They can leave comments too. Uber says this ensures standards are maintained.

It's not the only rival to black taxis, as minicabs, whose drivers also don't have to learn the Knowledge, have been around for many years and are also regulated by Transport for London.

"We believe we are helping to grow the overall transport pie and offer a complementary service, working alongside iconic black cabs, other private hire services and public transport to keep London moving," says Jo Bertram, regional general manager for Uber UK, Ireland and the Nordics. "The efficiency of our technology helps us offer our services at a competitive price, which means we can attract people who might otherwise have driven their own cars."

As well as protests against Uber in London, there have been demonstrations in cities across Europe. It's banned in Berlin and Madrid, while in the UK, unions in Leeds gathered last year to oppose its launch there.

There have been complaints about Uber's "surge" pricing, where rates increase at times when not enough cabs are on the road. But the company says its app explicitly shows when this is happening and that the reason for it is to tempt off-duty drivers back to work to meet demand.

When an "equlibrium" is reached, the customer's costs start to fall again, it adds. The company apologised last year when the algorithms meant that surge pricing kicked in during a deadly siege at a cafe in Sydney.

Despite the criticisms, Uber's expansion looks set to continue.

For now, Steve Albasini, who studied molecular biology at university before becoming a cabbie, is planning to keep going. " When I got my badge, I felt more proud about that than getting my degree because I worked really hard to get the Knowledge. I love driving a cab around London. Whatever happens, there's no other job in the world like it."

Kipper season

Quietest time of year for business - usually starting in January lasting a few months

There are two theories as to why it is so named

One says cabbies could only afford to eat kippers, which are relatively cheap to buy

The other is that trade is as flat as a kipper

Subscribe to the BBC News Magazine's email newsletter to get articles sent to your inbox.

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Is Uber already harming the traditional taxi?

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Official figures show that the numbers of people interested in becoming a London taxi driver have fallen and the car-booking phone app Uber is being blamed. But is this the beginning of a serious decline for the traditional black cab, ask Harry Low and Justin Parkinson.

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Mexico car industry - example of FDI and trade (Econ 4)

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Mexico car industry - example of FDI and trade (Econ 4)

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Before I start, I must admit a personal interest. I have spent the past few months trying to buy a car here in Mexico, chatting to car dealers and friends about the best offers to be had.

It is never easy navigating this sort of thing in a foreign country.

But my research has proved fruitful. Not only have I been able to purchase some wheels, but in doing so I have learned a thing or two about one of Mexico's most successful industries - one that experts say brings in more foreign currency for Mexico than its oil.

Value for money

I took a flight to Nissan's manufacturing site in Aguascalientes, an hour from Mexico City. Greeted by hugely proud employees in company jackets and baseball caps, I was bombarded with statistics about the company's success.

One in four cars made in Mexico is a Nissan. And one car is made every 38 seconds at the plants in Aguascalientes. Evidently Nissan is enjoying a good ride at the moment.

Nissan Mexicana's vice-president of manufacturing, Armando Avila, says Mexico is a market that makes sense geographically. With the world's largest car market to the north and all of South America below Mexico, it gives the company flexibility, he says.

But as well as geography, Mexico has a reputation for a value-for-money workforce.

According to the US-based Center for Automotive Research (Car), wages can be as little as an eighth of what they are in the US. So is that what drives car brands to relocate?

Eduardo Solis, the man in charge of Mexico's Automotive Industry Association, does not think so.

"If these investments only came to Mexico for cheap labour, then we would have seen important investments in Guatemala, Honduras, El Salvador, Costa Rica and Nicaragua," he tells me. "Not one of these countries have one single automaker today."

Mexico car industry in numbers

In the first half of 2014, Mexico produced about 1.6 million cars, up 7.4% on the same period a year earlier

One in four cars made in Mexico is a Nissan

More than 80% of cars manufactured are exported

Foreign car makers, including Toyota, Ford, BMW and Audi have announced multi-million dollar investments in the country

There are about 22 million second-hand cars in Mexico, mostly imported from the US

Billion-dollar investments

Mexico has done well at training its workforce - not just in manual labour, engineers graduating from Mexican universities are also highly skilled.

According to Luis Lozano, who heads the automotive team at PwC, investment in human resources and the trade agreements with more than 40 countries have helped Mexico tremendously.

The numbers speak for themselves. Car says that so far this year, $5.5bn (£3.5bn) of investments have been announced, including from Toyota and Ford. That, says Car, is higher than the investments made in the US.

But it is not just the mass-market car makers who are building their businesses here.

Audi will be moving the production of its Q5 SUV from its headquarters in Germany to its plant in Mexico - a move that it says has been made easier by the free trade agreements on offer here.

Low demand at home

But as is so often the case, there is a downside to all of this success. Amid the rising production figures - the industry grew by 10% last year - demand for cars here in Mexico is finding it hard to move up a gear.

Fewer than one in five cars made in Mexico is sold in Mexico. The rest are exported. In fact, at the Nissan plant we visited, 90% of the cars were being sent to the US. The other 10% to Brazil.

Analyst Armando Soto, of Kaso & Associates, says the demographics explain why.

"If you look at spending power, more than 50% of the population find it difficult to buy a new car if they don't have an adequate source of financing," he says. "But there's another problem - we have a huge part of the labour force which works in the informal economy, and they can't access financing either."

Junk cars

The solution? Second-hand cars it seems. But not just any old cars.

Since 2006, when then-President Vicente Fox legalised the imports of second-hand cars from countries such as the US, more than seven million cars have entered Mexico. In total, there are about 22 million used cars in the country.

The imported cars are what critics call garbage or junk cars - often more than 10 years old and not roadworthy in the US, they are sold in bulk at auction and come to Mexico for a new lease of life because there are fewer restrictions for cars on the roads.

While some would say it gives poorer people a chance of car ownership, Eduardo Solis' view is that they have hugely damaged domestic sales, and his organisation has been fighting to tighten the rules over imported cars.

Back at the Nissan factory at Aguascalientes, production continues.

There may not be much call to sell these cars on Mexican soil, but this an industry that is revving up. They see this as an opportunity - there will be plenty more people to sell to in the future.

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Before I start, I must admit a personal interest. I have spent the past few months trying to buy a car here in Mexico, chatting to car dealers and friends about the best offers to be had. It is never easy navigating this sort of thing in a foreign country.

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Low Productivity - One of the biggest challenges facing the UK Economy (Econ 3)

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Low Productivity - One of the biggest challenges facing the UK Economy (Econ 3)

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George Osborne has signalled a major push to boost the UK's economic productivity as he vowed not to "take his foot off the pedal" in the wake of the Tories' election victory.

The chancellor told business leaders the UK could only find an "extra gear" if it tackled long-term deficiencies in transport, skills and broadband.

He promised a "productivity plan" in the run-up to the Budget in July.

Departments are also being asked to find savings as soon as possible.

In his first major speech since his return to the Treasury, Mr Osborne told the CBI annual dinner that boosting productivity was vital to sustaining rises in living standards.

Productivity is generally defined as the level of economic output per hour worked against the cost incurred.

'Puzzle'

The BBC's economics editor Robert Peston said productivity in the UK was historically 30% lower than in Germany and America - a gap that previous governments had wrestled with but failed to do much about.

Insisting there would be no let-up in his efforts to embed the economic recovery, Mr Osborne identified increased productivity as one of the government's central economic challenges over the next five years.

The UK, he suggested, could become the "most prosperous country in the world" but only if historic weaknesses in the UK's infrastructure and skills base were remedied.

Steps to upgrade transport links, reduce red tape, streamline planning and incentivise business ownership would be at the centre of a plan to "make Britain work better" and rebalance the economy, he said.
Analysis by BBC economics editor Robert Peston
If I were cynical I would say that it is a shame that the so-called productivity challenge hardly featured in the general election battle.

Or I might point out that successive governments and chancellors have vowed to improve the UK's internationally substandard productivity, to very little effect.

But I am minded to say that George Osborne's focus on productivity at the CBI dinner matters, not least because it represents an important shift of emphasis at the Treasury - towards an agenda for economic growth, rather than the almost exclusive focus of the previous coalition government on reducing the large deficit between public sector revenues and outgoings.
Read Robert's blog
Addressing what he called the "productivity puzzle", Mr Osborne said. "Frankly, nobody knows the whole answer. But what I do know is that I'd much rather have the productivity challenge than the challenge of mass unemployment.

"And what I also know is this: we have a once in a generation opportunity, right now, to find an extra gear for the British economy, and ensure higher living standards for the next generation to come.

"Confidence in the British economy is at its highest level in 12 years. If we don't, together, fix our country's long term weaknesses now - when will we?"

He added: "It would be very easy at the beginning of a second term to take our foot off the pedal. That's not what we are going to do."

'Stagnation'

The CBI welcomed the focus on productivity, saying it was "the missing piece" from the UK's positive economic prospects but unions said output per worker had "stagnated" since 2010 and was symbolic of the "weak recovery".

But Frances O'Grady, the general secretary of the TUC, said: "It's no good putting your foot on the pedal if you keep cutting the fuel in the tank. The extreme cuts the chancellor is planning will put growth at risk during a recovery that is already precarious."

Mr Osborne also said the Treasury was asking ministers to identify areas where money could be saved this year and to report back within weeks, although no target for the level of savings will be set.

All departments excluding health, education and international aid, whose budgets are being protected to some degree, will be expected to spend less money than they have been allocated in the coming year as part of the process.

"When it comes to saving money, we all know that the more you can do early, the smoother the ride," he said.

Before the election, the Conservatives said £30bn would need to be found in the early years of the Parliament to achieve their target of balancing the books by 2017-18 - £13bn of which is earmarked from departmental spending cuts.

Share sell-offs

Mr Osborne has also paved the way for a quicker sell-off of government-owned assets by announcing the consolidation of two bodies which manage taxpayer stakes in UK banks and other businesses.

The Shareholder Executive and UK Financial Investments - which oversee government shareholdings in Lloyds Banking Group, RBS, Bradford & Bingley and Eurostar - are to be brought together under a single holding company, UK Government Investments.

The move is designed to ensure value for money from the sale of assets, set to total £23bn this year, and to improve the performance of assets that remain in public hands.

"If we want a more productive economy, let's get the government out of the business of owning great chunks of our banking system," Mr Osborne said.

The Conservatives have pledged to make £4bn worth of Lloyds shares available to small investors - at a discount to the market price - as part of a £9bn share sell-off.

The government has already raised £9bn from the sale of Lloyds shares, and the state's stake in the bank - which was 43% at the time of its 2008 bailout - is now down to 22%.

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George Osborne has signalled a major push to boost the UK's economic productivity as he vowed not to "take his foot off the pedal" in the wake of the Tories' election victory. The chancellor told business leaders the UK could only find an "extra gear" if it tackled long-term deficiencies in transport, skills and broadband.

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Example of Trade Unions & Labour Markets (Econ 3)

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Example of Trade Unions & Labour Markets (Econ 3)

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Workers and labour unions are stepping up their pressure on McDonald's to raise the wages it pays workers.

Over 1,500 employees and supporters converged on the fast-food giant's headquarters in Illinois on Wednesday.

Larger protests are planned for Thursday morning, before the company's annual shareholder meeting.

The company has been under pressure from workers to raise wages, just as investors have become increasingly unhappy with the firm's slumping sales.

Customers in the company's biggest market - the US, which is responsible for 40% of its operating income - have been increasingly foregoing McDonald's and other fast-food restaurants in favour of so-called "fast casual" chains like Shake Shack and Chipotle.

That has caused the firm's share price to sink - and let to grumbling amongst shareholders, who will vent their frustrations with McDonald's management on Thursday behind closed doors. McDonald's has banned media from attending the meeting.

Earlier in May, chief executive Steve Easterbrook - the Brit who took over the firm in January - unveiled plans to turn around the company after it reported yet another quarter of disappointing results.

'Still in poverty'

McDonald's is facing pressure on all sides: from customers, investors, and increasingly, workers.

The company has been under pressure for over two years by the Fast for 15 campaign - a group of workers, backed by traditional labour unions - that has called on McDonald's and others to raise the base amount it pays workers to a so-called "living wage" of $15 (£9.7) per hour.

The current US federal minimum wage is $7.25, but some states and cities - most notably, Los Angeles - have higher minimums.

Outside McDonald's headquarters in Oak Brook, protesters carried banners and balloons, and chanted slogans.

"I've been working at McDonald's for the last 23 years and I'm still living in poverty," Tyre Johnson told the BBC at the protest.

Mr Johnson says he started working at a McDonald's in Chicago in 1992 for $4.25 per hour and currently only makes $8.55.

"The shareholders of McDonald's are investing money into a million dollar bigtime boss - why can't they invest that money into the workers?" he added.

McDonald's, for its part, dismissed the protestors.

"Today's protest in Oak Brook is the latest instance in an $80m publicity campaign organised and paid for by the Service Employees International Union and its members," said the company in a statement.

"McDonald's and its more than 3,000 independent franchisees are standing strong and together in the face of this union attack."

'Watershed'

However, McDonald's has already said it plans to raise the wage it pays workers to above $9 per hour - and several other firms, including Wal-mart and Target, have said they will increase their hourly minimums in the wake of the protests.

Part of the move, experts say, is that as the US economy recovers, large firms have to increase their base wages to keep workers.

But the companies also face mandatory wage increases in the several states and US cities that have voted to raise the local minimum wages since 2014.

On Tuesday, Los Angeles became the largest US city to boost wages, voting to increase the minimum wage in the city to $15 per hour by 2020. Experts say that amounts a $2.4bn wage increase to over 500,000 workers in the city.

"This really is a watershed," Ken Jacobs, head of the University of California-Berkeley's Labor Center, who added that the Fast for 15 movement was not just about wages but also about the right to organise fast food workers into a union.

Prof Jacob's said that while the city and state minimum wage legislation might be more impactful: "It is the protest at company headquarters that are moving the policy makers."

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Workers and labour unions are stepping up their pressure on McDonald's to raise the wages it pays workers. Over 1,500 employees and supporters converged on the fast-food giant's headquarters in Illinois on Wednesday. Larger protests are planned for Thursday morning, before the company's annual shareholder meeting.

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Cartels & Regulation in FOREX markets (Econ 3)

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Cartels & Regulation in FOREX markets (Econ 3)

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Five of the world's largest banks are to pay fines totalling $5.7bn (£3.6bn) for charges including manipulating the foreign exchange market.

Four of the banks - JPMorgan, Barclays, Citigroup and RBS - have agreed to plead guilty to US criminal charges.

The fifth, UBS, will plead guilty to rigging benchmark interest rates.

Barclays was fined the most, $2.4bn, as it did not join other banks in November to settle investigations by UK, US and Swiss regulators.

Barclays is also sacking eight employees involved in the scheme.

US Attorney General Loretta Lynch said that "almost every day" for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates.

Their actions harmed "countless consumers, investors and institutions around the world", she said.

Separately, the Federal Reserve fined a sixth bank, Bank of America, $205m over foreign exchange-rigging. All the other banks were fined by both the Department of Justice and the Federal Reserve.

Cartel threat

Regulators said that between 2008 and 2012, several traders formed a cartel and used chat rooms to manipulate prices in their favour.

One Barclays trader who was invited to join the cartel was told: "Mess up and sleep with one eye open at night."

Several strategies were used to manipulate prices and a common scheme was to influence prices around the daily fixing of currency levels.

A daily exchange rate fix is held to help businesses and investors value their multi-currency assets and liabilities.

'Building ammo'

Until February, this happened every day in the 30 seconds before and after 16:00 in London and the result is known as the 4pm fix, or just the fix.

In a scheme known as "building ammo", a single trader would amass a large position in a currency and, just before or during the fix, would exit that position.

Other members of the cartel would be aware of the plan and would be able to profit.

"They engaged in a brazen 'heads I win, tails you lose' scheme to rip off their clients," said New York State superintendent of financial services Benjamin Lawsky.

The fines break a number of records. The criminal fines of more than $2.5bn are the largest set of anti-trust fines obtained by the Department of Justice.

The £284m fine imposed on Barclays by Britain's Financial Conduct Authority was a record by the regulator.

Meanwhile, the $925m fine imposed on Citigroup by the Department of Justice was the biggest penalty for breaking the Sherman Act, which covers competition law.

The guilty pleas from the banks are seen as highly significant as banks have settled previous investigations without an admission of guilt.

The Attorney General warned that further wrongdoing would be taken extremely seriously: "The Department of Justice will not hesitate to file criminal charges for financial institutions that reoffend.

"Banks that cannot or will not clean up their act need to understand - it will be enforced."

Analysis: Kamal Ahmed, BBC business editor

If anyone in the City thought that the latest multi-billion pound fines for the banks meant that they were now out of the regulatory woods, they should think again.

The New York State Department of Financial Services is still investigating Barclays, for example, over other aspects of the foreign exchange market including electronic trading.

Barclays is also being investigated in the UK over its Qatari fund raising during the financial crisis and in America over the operation of its "dark pool" electronic trading business.

Other allegations include manipulating the energy markets in California and the US precious metal market.

For the Royal Bank of Scotland it is not a much rosier picture. The bank is facing a class action from major investors over whether it gave the correct information to the market during the financial crisis and is also facing an investigation into its mortgage business in the US.

Civil legal actions on foreign exchange manipulation are also in the offing for both banks.

It looks like the major global banks are going to face many more "we deeply regret this behaviour" days ahead.

'Regain trust'

Royal Bank of Scotland will pay fines totalling $669m (£430m) - $395m to the Department of Justice and $274m to the Federal Reserve - to resolve the investigations.

Ross McEwan, chief executive of RBS, said: "The serious misconduct that lies at the heart of today's announcements has no place in the bank that I am building.

"Pleading guilty for such wrongdoing is another stark reminder of how badly this bank lost its way and how important it is for us to regain trust."

Antony Jenkins, Barclays chief executive, said: "The misconduct at the core of these investigations is wholly incompatible with Barclays' purpose and values and we deeply regret that it occurred.

"I share the frustration of shareholders and colleagues that some individuals have once more brought our company and industry into disrepute."

Shares in Barclays gained 3.4% and RBS rose 1.8%.

The fines are "much lower than expected," said Chirantan Barua, an analyst at Bernstein Research in London. "No retroactive massive Libor fine for Barclays is a big positive, as is no reopening of the NPA ( non-prosecution agreement).

"The fine came in £270m better than we expected for RBS, £850m better in the case of Barclays," he said.

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Five of the world's largest banks are to pay fines totalling $5.7bn (£3.6bn) for charges including manipulating the foreign exchange market. Four of the banks - JPMorgan, Barclays, Citigroup and RBS - have agreed to plead guilty to US criminal charges. The fifth, UBS, will plead guilty to rigging benchmark interest rates.

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Very Relevant for market structures (privatisation) Royal Mail reports profit rise. Very relevant for Econ 3

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Very Relevant for market structures (privatisation) Royal Mail reports profit rise. Very relevant for Econ 3

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Royal Mail has reported an increase in full-year profits, with cost cuts helping the company in a "challenging" market.

It reported £740m in annual adjusted operating profit before transformation costs, up 6% from a year earlier.

Revenues in the year to 29 March were barely changed at £9.4bn.

UK parcel volumes grew by 3%, although revenues from its parcels business rose by just 1%. Letter volumes fell by 4%, with revenues from letters down 1%.

The company expects this year to follow a similar pattern to last year, with strength coming in the second half.

Royal Mail chief executive Moya Greene said: "Our trading environment remains challenging.

"At this early stage of the financial year trading is in line with our expectations, but as in previous years our performance will be weighted to the second half and will be dependent on our important Christmas period."

Competition in the UK parcels and letters market is fierce, the company said.

Amazon impact

Royal Mail said it expects Amazon's parcel delivery service will limit the rate of growth in its parcels business in the short term.

The online retailer is increasing the number of parcels it delivers using its own network.

That is contributing to the stiff competition Royal Mail faces.

But the sector is shifting: one of Royal Mail's rivals, Whistl, formerly known as TNT UK, ceased its letters service earlier this month.

Whistl was Royal Mail's main competitor in the market for last mile delivery, a term which refers to the final leg of a delivery route.

Ian Senior, independent postal expert, told the BBC's Today programme: "Royal Mail must be smacking its lips with joy that Whistl has withdrawn from trying to do 'final mile' delivery."

Mr Senior also said he thought Royal Mail's results were good: "They're at the upper end of what people were expecting."

Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers, noted that even with Whistl's removal from the market, competition was still tough.

He said: "Royal Mail has posted numbers which indicate measured progress in a treacherous environment."

Shares in Royal Mail were 1.5p lower at 498.40p by midday.

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Royal Mail has reported an increase in full-year profits, with cost cuts helping the company in a "challenging" market. It reported £740m in annual adjusted operating profit before transformation costs, up 6% from a year earlier. Revenues in the year to 29 March were barely changed at £9.4bn.

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You MUST read this - an article on globalisation. Very relevant for Econ 4

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You MUST read this - an article on globalisation. Very relevant for Econ 4

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Does the changing nature of the global economy mean that the world is about to experience - or is already experiencing - a period of deglobalisation, as in the interwar period?

The closely integrated global economy of the late 19th century - a time of widespread and fast-growing trade, global capital flows and high migration - unravelled in the interwar period.

Understanding the last period of unravelling is crucial to judging the risks this time around.
This is a question I've blogged on before myself.
Since the financial crisis, the pace of integration of the global economy certainly looks to have slowed.

World trade growth, which, over the 1990s and 2000s, easily outpaced global GDP growth, has been expanding at a slower rate than global output.

Various factors can be pinpointed as the cause: the changing nature of global supply chains, a lack of trade liberalisation (the lack of further liberalisation has been more important than rising protectionism) or banks and financial services firms choosing to pull back from international operations.

A regional future?

It certainly looks like that this slowing is more than merely a cyclical downturn in global trade. Something structural and longer lasting appears to be at work.

The consultancy firm Capital Economics today asks, "is globalisation dead?", concluding that it isn't dead but merely resting, and that the pace has slowed but the process will continue.

There are signs, though, that the nature of globalisation may be beginning to change - and that is as much about geopolitics as raw economics.

Even Capital Economics' relatively optimistic take today notes that:

"Trade and investment agreements should eventually unleash a fresh wave of economic integration, even if they are formed on a regional rather than global basis."

The future of the world economy may be less about "globalisation" and more about "regionalisation".

To understand why, it is worth starting with China. According to IMF data (adjusting for relative prices) in 1980 the Chinese economy represented around 2% of the global economy, while the United States represented around 23%. Last year they each amounted to around 16%.

That, in just over a generation, is a striking change.

Even if China's rate of growth dips in the coming years by weight of population alone China is set to be the largest economy in the world, even if Chinese living standards remain low compared to the West.

Many observers have been tempted to compare China's eclipse of the US (economically at least), to the US's eclipse of Britain in the 20th century.

Just as the Pax Britannica gave way to a post-World War Two Pax Americana, talk of the "Chinese Century" has been commonplace.

But that is to misunderstand the economic history of the last two centuries.

Multipower global outlook

The extent of American economic dominance over the last few decades has been truly exceptional , as has the extent of US power.

From the 1870s until the First World War, the height of British imperial power, the British economy never represented more than 10% of global GDP.

Even adding in the Empire doesn't get the total share to the levels of the levels the US achieved in the 1950s and 1960s.

While the British Empire was a major factor in world politics, Britain always had to share power globally.

The new geography of global economics is far more similar to that of the late 19th century than the late 20th.

Adam Posen, a former member of the Bank of England's Monetary Policy Committee, has noted before that the "new normal" is really the "old normal".
In 2012, he argued that the experience of the late 19th century offered important lessons for the 21st.
Specifically, a world of multiple economic powers would see less strict rule enforcement and greater volatility than a world dominated by the US.

More than one major currency would play a decisive role, intellectual property rights would be harder to enforce and yet globalisation would continue.

All of which would suggest the decline of US economic hegemony and the rise of China is perfectly compatible with an increasingly integrated global economy.

But that doesn't mean globalisation in an era of multiple economic powers will be like globalisation in a unipower era.

The roots of the deglobalisation of the 1920s and the 1930s can be found well before the Great War.

British policymakers in particular began to fret about the relative decline of the UK economy and the rise of other powers from the 1870s onwards.

The reaction of many was to drop their traditional desire for an open, trading world economy and turn towards the empire.

As one historian has put it: "[In the 1880s and 1890s] international exhibitions were replaced by colonial exhibitions; companies reorganised on an imperial basis; even education and patterns of travel to some extent became imperial, rather than cosmopolitan."

As Capital Economics have argued the future of global trade deals may well be regional, rather than global.

It's hard not to detect the whiff of geopolitics in the US attempt to sign a grand deal in Asia, excluding China. Meanwhile, China's international economic strategy (as analysed by former UBS chief economist George Magnus) is following a similar regional pivot, aiming to bind together diverse countries in a "New Silk Road Economic Order".

The globalisation of the 1980s to 2000s was genuinely global; the globalisation of the 2010s and 2020s may be much more regional.

The globalisation of the last 30 years may have contributed to lower interest rates, slower wage growth and booming asset markets.

It remains unclear if "regionalisation" would do the same.

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Does the changing nature of the global economy mean that the world is about to experience - or is already experiencing - a period of deglobalisation, as in the interwar period? The closely integrated global economy of the late 19th century - a time of widespread and fast-growing trade, global capital flows and high migration - unravelled in the interwar period.

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Thought this would be rather relevant and something good to relate to if a question comes up about the EU in the Exam. Airbus has warned that their investment in the UK would drop if it exited the EU.

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The European aerospace and defence giant Airbus would reconsider investment in the UK in the event of Britain leaving the European Union.

Paul Kahn, president of the 16,000-employee Airbus UK, said Britain must compete for international investment.

"The best way to guarantee this is by remaining part of the EU," he said.

Earlier, Chancellor George Osborne said in a speech to the CBI employers' group that he wants the UK "to be in Europe, but not run by Europe".

Prime Minister David Cameron has promised a referendum on the UK's EU membership by the end of 2017, and the matter has been rising up the political and business agenda.

On Monday, the chairman of construction equipment firm JCB said the UK should not fear an exit from the EU.

And on Wednesday, the president of the CBI, Sir Mike Rake, said businesses should "speak out early" in favour of remaining in a reformed EU.

Mr Kahn, speaking to the BBC's industry correspondent John Moylan, said that with a UK referendum on leaving the EU perhaps less than 18 months away, companies like Airbus needed to be at the forefront of the debate.

"I believe that it is vital for a company such as Airbus to come out and make a stand in favour of Britain remaining in the European Union," he said.

'Reconsider investment'

Airbus, the world's second-largest planemaker after Boeing, employs 6,000 people at its site at Broughton, north Wales, where it assembles the wings for all Airbus aircraft.

Several thousand more people are employed at Filton, near Bristol, designing wings and testing landing gear.

He stressed that if Britain were to leave the EU, the company would not suddenly close.

But he added: "If after an exit from the European Union, economic conditions in Britain were less favourable for business than in other parts of Europe, or beyond, would Airbus reconsider future investment in the United Kingdom? Yes, absolutely."

Airbus is one of Europe's biggest industrial enterprises spanning civil aviation, defence and space, with operations in Germany, France and Spain.

If Britain were to leave the EU Mr Kahn suggested the company could face more red tape in areas such as work visas and trade barriers.

He said he was not "blindly supporting Britain's membership of the EU", adding: "I welcome the UK government's intentions to deliver positive and hoped-for reforms - which would create a leaner and more efficient EU."

'Priced out'

His comments came on the day that Mr Osborne told business leaders at the CBI that the government would be fighting for a reformed Europe.

He acknowledged in his speech that some businesses might "want us to leave the EU come-what-may. And there are also those, including some in this room, who want us to go further into a more federal Europe".

But the chancellor said: "Our position - which I think is shared by the majority of British people and a majority of British businesses - is that we want Britain to be in Europe, but not run by Europe.

"The problem of making the single currency work is inevitably drawing its members toward ever-closer integration. We don't want to be part of that integration.

"The challenge for us is to ensure that while this happens we protect the single market, and make sure the EU continues to work in the interests of all 28 member states, including Britain."

Europe, he said, had "priced itself out of the global economy" with a raft of rules, regulations and red tape.

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The European aerospace and defence giant Airbus would reconsider investment in the UK in the event of Britain leaving the European Union. Paul Kahn, president of the 16,000-employee Airbus UK, said Britain must compete for international investment. "The best way to guarantee this is by remaining part of the EU," he said.

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The main measure of UK inflation turned negative in April for the first time on record, with the rate falling to -0.1%.

It is the first time Consumer Price Index (CPI) inflation has turned negative since 1960, based on comparable historic estimates, the Office for National Statistics said.

The biggest contribution to the fall came from a drop in air and sea fares.

Bank of England governor Mark Carney said he expected inflation to remain very low over the next few months.

But Mr Carney added that "over the course of the year, as we get towards the end, inflation should start to pick up towards our 2% target".

The latest inflation figures show that transport costs were 2.8% lower in April than the same time a year ago, while food was 3.0% cheaper.

Chancellor George Osborne said the inflation figure should not be mistaken for "damaging deflation".

He added that the lower cost of living - driven by last year's fall in oil prices - would be a welcome relief for family budgets, in an environment in which average wages were finally beginning to rise.

"Of course, we have to remain vigilant to deflationary risks and our system is well equipped to deal with them, should they arise," Mr Osborne added.

Shadow chancellor Chris Leslie said: "Any relief for households is welcome, but this month's figures reflect global trends and [that] doesn't change the reality that many are still struggling to pay the bills.

"The government must clearly guard against the risk that business investment might be deferred. We need stronger action now to raise productivity to deliver sustainable growth and rising living standards."

The latest inflation figure means that a basket of goods and services that cost £100 in April 2014 would have cost £99.90 in April this year.

The last time CPI inflation was negative, according to estimates by the ONS, was March 1960, when prices were 0.6% lower.

Analysis: Robert Peston, BBC economics editor

The last time we saw a price fall in the UK was March 1960, before even I was born, when there was a drop (probably) of 0.6%.

So my natural impulse is to say that deflation has arrived in Britain - because there is no other word in the English language than "deflation" to describe this phenomenon.

However many of those who define themselves as "serious economists" (that's not me, by the way - I'm a hack) are desperately anxious that I and you don't use the "d" word - for two reasons.

One is that they say proper deflation is a long term term trend of declining prices, and they believe - almost certainly correctly - that these current price falls won't endure much more than a month or two.

The other is that proper deflation is pernicious: if we believed that prices were set to fall month after relentless month, we would spend less - in the hope of picking up bargains later - and our bosses would pay us less.
Read Robert's blog in full
Inflation as measured by the Retail Prices Index (RPI) in April remained unchanged from the month before at 0.9%.

'Mild and benign'

Ian Stewart, chief economist at Deloitte, said the fall was "likely to prove short-lived and positive for growth".

"Falling prices raise consumer spending power and help keep interest rates low. This looks like the mild and benign variety of deflation, which is good news for consumers and for growth," he said.

Andrew Sentance, senior economic adviser at PricewaterhouseCoopers and a former member of the Bank of England's Monetary Policy Committee, said he did not expect the fall in prices to be sustained.

"Once the impact of the big drop in oil prices drops out of the annual inflation rate, it will move back up to 1-2% over the next year or so. With wage inflation picking up, we may soon be considering the prospect of above-target inflation," he said.

"In the meantime, flat or slightly falling consumer prices are good for growth, boosting real consumer spending power. So a temporary period of slightly negative inflation can be good for the UK economy."

Analysis: Anthony Reuben, BBC head of statistics

Almost nothing changed between March and April's inflation figures.

The ONS says that the thing that did move, which was the price of air fares and sea fares, was depressed by the timing of Easter.

The prices that are used to calculate the CPI are collected in a few days in the middle of the month.

In 2014, Easter fell during those days, which meant transport fares were inflated.

This year it didn't, so fares were lower, which means today's tiny deflation may be seen as a technical effect.

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The main measure of UK inflation turned negative in April for the first time on record, with the rate falling to -0.1%. It is the first time Consumer Price Index (CPI) inflation has turned negative since 1960, based on comparable historic estimates, the Office for National Statistics said.

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Greece could run out of cash in 2 weeks!

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Greece could run out of cash in 2 weeks!

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Bjorn Dominick

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Sky News - First For Breaking News From The UK And Around The World

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Sky News - First for Breaking News, video, headlines, analysis and top stories from business, politics, entertainment and more in the UK and worldwide.

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The report said faster growth would see inflation rise and unemployment fall.

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The report said faster growth would see inflation rise and unemployment fall.

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Bjorn Dominick

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Eurozone economic growth will be slightly stronger this year than previously forecast, according to the European Commission's latest forecast.

It predicts 1.5% growth this year, up 0.2 percentage points from its forecast in February, thanks to cheaper oil, a weak euro and stimulus measures.

The improvement was despite a much gloomier outlook for Greece, which saw forecast growth cut to 0.5% from 2.5%.

The report said faster growth would see inflation rise and unemployment fall.

For 2016, the Commission kept its forecast of 1.9% for the eurozone.

"The European economy is enjoying its brightest spring in several years, with the upturn supported by both external factors and policy measures that are beginning to bear fruit," said Pierre Moscovici, commissioner for economic and financial affairs, taxation and Customs.

"But more needs to be done to ensure this recovery is more than a seasonal phenomenon," he added.

The falling price of crude oil has helped to reduce business costs, while the weak euro helps exporters. And the European Central Bank has injected money into the 19-nation eurozone.

'Uncertainty'

The recovery is being powered by Germany, Europe's biggest economy, which is forecast to see growth of 1.9%, followed by 2% next year. Spain's recovery is predicted to continue, with growth of 2.8% in 2015 and 2.6% the following year.

The sharp cut in the forecast for Greece comes as a new round of debt talks between Greece and its creditors gets under way this week.

"In light of the persistent uncertainty, a downward revision [for Greece] has been unavoidable," Mr Moscovici said.

The EU report predicted that the Greek economy would rebound in 2016 with growth of 2.5% - but only if a deal was reached with its creditors to extend the bailout.

Mr Moscovici is due to meet Greek finance minister Yanis Varoufakis in Brussels later on Tuesday as part of a continuing round of debt talks with the EU and International Monetary Fund.

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Eurozone economic growth will be slightly stronger this year than previously forecast, according to the European Commission's latest forecast. It predicts 1.5% growth this year, up 0.2 percentage points from its forecast in February, thanks to cheaper oil, a weak euro and stimulus measures.

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Economic Growth in the US has also slowed down considerably to 0.2%. Similar to the UKs 0.3% figure in the first quarter of 2015. Slower growth has been put down to less construction and exports.

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The US economy "all but stagnated" in the first three months of the year, growing at an annual rate of just 0.2%, official figures show.

The growth figure was far lower than expectations. Analysts had forecast growth would be about 1%.

Harsh winter weather for a second year dampened consumer spending, while energy companies struggling with low oil prices cut investment.

The strength of the dollar also hurt exports, which fell by 7.2%.

A strike by dock workers at normally busy West Coast ports also hindered growth.

But the US Commerce Department said there were signs that activity was picking up in the second quarter.

The US growth figure much lower than the previous three months, when the economy expanded at an annualised pace of 2.2%.

Analysis: Linda Yueh, BBC chief business correspondent

The dollar has risen on the back of expected rate rises by the Fed, and has hit the highest level in more than 10 years against its trading partners.

That has hit the ability of US exporters to sell their wares overseas. Tellingly, services exports continued to grow by 7.3%, since selling services isn't very dependent on the price, but rather relies on the quality of what's proffered. It's also not dependent on ports.

A strong dollar, though, helps consumption and imports, which registered positive growth of 1.8%.

In other words, a strong dollar makes imports cheaper and keeps down price rises. Those imports feed into consumption, which expanded by 1.9%.

That's not the strongest growth rate, since there are also reports that the cold weather made consumers reluctant to venture out and spend.

But it's a positive growth driver alongside investment, which also expanded by 2%. The final component of GDP, government spending, contracted by 0.8% due to continued cutbacks by state and local governments.

So, what growth the US economy eked out was due to private consumption and investment.
Read Linda's blog in full
The Commerce Department did not say how much impact the weather, the strong dollar and the ports disruptions had had on growth.

But economists estimated that the unusually cold weather in February could have affected economic growth by as much as half a percentage point, with the port disruptions reducing growth by a further 0.3 percentage points.

Growth in consumer spending, which accounts for more than two-thirds of US economic activity, slowed to 1.9%. That compared with 4.4% growth in the fourth quarter of 2014.

Oil price

The extreme winter weather also meant construction output slowed, while lower oil prices led to a slowdown in US oil production and a reduction in investment.

Business investment in mining, exploration, shafts and oil wells plunged by 48.7% in the quarter, the Commerce Department said.

US oil field services provider Schlumberger has cut its capital spending plans for this year by about $500m to $2.5bn, while Halliburton has reduced investment by about 15% to $2.8bn.

However, economists believe that most of the cuts to investment by energy companies have already taken place, and so energy-related spending will not weigh on growth as much in the second quarter of the year.

Paul Ashworth, chief US economist at Capital Economics, said the US economy "all but stagnated" in the first quarter.

But he added that while the 0.2% annualised gain might raise fears that the recovery was somehow coming off the rails, he anticipated a "marked acceleration in growth" over the remaining three quarters of this year.

"Over the past 12 months, the economy has expanded by 3% and we would expect it to continue growing at around that pace this year too," he added.

The first quarter growth figures come ahead of the outcome of the latest US Federal Reserve meeting.

While no change in interest rates is expected, the Fed's statement will be studied for clues as to when the central bank might start to raise rates.

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The US economy "all but stagnated" in the first three months of the year, growing at an annual rate of just 0.2%, official figures show. The growth figure was far lower than expectations. Analysts had forecast growth would be about 1%.

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Bjorn Dominick

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The rate of economic growth halved in the three months to the end of March, official figures show, marking the slowest quarterly growth for two years.

The UK economy grew by 0.3% in the quarter, the Office for National Statistics (ONS) said.

That compares with 0.6% in the last three months of 2014.

The figures, which come nine days before the general election, suggest a "temporary" slowdown in the economy, analysts said.

The ONS said the economy was 2.4% larger than the same period a year earlier.

Growth of 0.5% in the services industry was offset by a 1.6% fall in the pace of economic output in construction.

The UK services sector accounts for around three quarters of economic growth, with construction, manufacturing and production accounting for the remaining quarter.

'Critical moment'

The Chancellor, George Osborne, said: "It's good news that the economy has continued to grow, but we have reached a critical moment. Today is a reminder that you can't take the recovery for granted and the future of our economy is on the ballot paper at this election."

But Labour's shadow chancellor, Ed Balls, said: "While the Tories have spent months patting themselves on the back these figures show they have not fixed the economy for working families."

Liberal Democrat Chief Secretary to the Treasury Danny Alexander, said the figures were still progress but a warning too.

He added it was vital his party were part of the next government to ensure the "fair and balanced approach needed to secure this recovery".

Scottish National Party (SNP) finance spokesman and Scottish Finance Minister John Swinney said the growth figures demonstrated the need for the "end of austerity and for greater investment in the economy".

"The lesson I take from that is that we have a chance in the election next Thursday to start to invest again in our economy by ending the austerity and spending cuts of the UK government," he said.

Vicky Redwood, chief UK economist at Capital Economics, said the figures would not help the coalition parties with just nine days to go until the general election.

But she added the slowdown in the economy "should just be temporary" and that quarterly economic growth should return to between 0.7% and 0.8% later in the year.

Analysis: Robert Peston, BBC economics editor

For reasons no one can quite explain, construction in Britain has been lousy for six months.

The production industries have been especially hurt by the oil price collapse, which has led to something of a crisis in the North Sea. Excluding oil and gas, quarter-on-quarter growth would have been 0.1 of a percentage point higher at 0.4%.

But nor has manufacturing been sparkling: it showed growth of just 0.1%. And perhaps because of the strengthening pound, the growth rate of our manufacturers has progressively decelerated in a straight line from 1.4% a year ago

More unexpectedly, some service industries in which the UK is a world leader - finance, engineering and architecture - have had a poor few months.

One possible explanation of their slowing growth is that demand for our services and goods in important export markets - especially China and the US - may be a bit worse than official figures show. That could be a sign of trouble ahead.

So thank goodness for our domestic-facing services.

Or to put it another way, if we weren't a nation of shoppers and restaurant eaters, there would be very little growth at all. The output of distribution, hotels and restaurants increased by 1.2% in the quarter - only slightly slower than at the end of last year.
Read Robert's blog in full
The figures represent a first estimate of economic growth and are based on less than half of the total data required for the final output estimate.

But the ONS said that while estimates are subject to revision as more data become available, the revisions are typically small between the preliminary and third estimates.

ONS chief economist Joe Grice said: "The economy expanded a little more slowly in the first quarter of 2015 than we've seen in the past two years and that's largely due to the services sector, where growth has eased to 0.5%.

"In addition, there has been a further fall in construction output that itself takes around 0.1% off the GDP growth rate. But, as always, we warn against reading too much into one quarter's figures."

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The rate of economic growth halved in the three months to the end of March, official figures show, marking the slowest quarterly growth for two years. The UK economy grew by 0.3% in the quarter, the Office for National Statistics (ONS) said. That compares with 0.6% in the last three months of 2014.

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What in the world does China own?

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With an estimated $4 trillion (£2.7tn) of foreign reserves stashed away in various sovereign wealth funds, China has plenty of cash to splash.

Despite the recent slowdown in the country's GDP, most developed economies would dream of an annual growth rate of 7%.

No wonder then that annual Chinese investment overseas has grown eightfold over the past 10 years to reach more than $140bn in 2013.

Somewhat surprisingly, there was a modest slowdown in 2014, with investment in the first half lower than a year earlier, largely due to a fall in spending on energy projects.

But this dip is likely to be short lived, for the simple reason that population growth and, more importantly, the exploding middle classes mean China's voracious appetite for resources will continue to grow.

The US has been the largest recipient of Chinese money over the past decade, largely due to a burst of investment since 2012 - this time last year, Australia was the number one destination over the previous 10 years.

In the first half of last year, however, investment in the UK matched that in the US, as it cemented its place as China's favourite European country to invest in - at $24bn it received more than double France's $11bn.

China has made investments and signed contracts all over the world, but Africa in particular has piqued its interest. China, the world's second largest economy, has done business in 34 African countries, with Nigeria top of the pile at $21bn. Ethiopia and Algeria have attracted more than $15bn, with Angola and South Africa each drawing in almost $10bn.

The reason is simply Africa's wealth of natural resources.

At the other end of the scale, political tensions help explain why China has invested almost as much in Mongolia ($1.4bn) as it has in Japan ($1.6bn), the country it recently overtook in the league of the world's most powerful economies.

Resources are what China needs, particularly to meet demand for energy that is predicted to triple by 2050.

That is why investment in energy has dwarfed that in other sectors since 2005, with almost $400bn committed to securing power for China's population, which currently stands at almost 1.4 billion.

Investment in energy actually dipped slightly last year, with that in other areas such as transportation, property and technology taking up much of the slack. Energy investments tend to be large-scale and dominated by state-owned companies, so the temporary lull has meant less state and more private investment. In some cases, this makes Chinese money more palatable to host countries.

Metals are another key area of investment, as these are needed in construction and industry to help fuel China's rapidly expanding economy.

The Chinese state has made some staggeringly large investments in individual companies and projects, most of which are, unsurprisingly, in the energy sector.

CNOOC, for example, spent $15bn on Canada's Nexen in 2013, while other state-owned energy companies have wracked up multi-billion dollar deals in recent years.

Outside of energy and resources, finance has also attracted some serious money, with Morgan Stanley and Standard Bank the biggest recipients of Chinese cash.

Biggest investments by company, 2005-present

Source: Heritage Foundation/American Enterprise Institute

They may not represent the same kind of outlay, but China has also invested in some household names across the world, from IBM and Barclays to Ford and General Motors.

In percentage terms they may not add up to much, but they still represent a hefty outlay in dollar terms. Some names may be something of a surprise.

Selected other investments by company

Source: Heritage Foundation/American Enterprise Institute

Download the full data from the Heritage Foundation.

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With an estimated $4 trillion (£2.7tn) of foreign reserves stashed away in various sovereign wealth funds, China has plenty of cash to splash. Despite the recent slowdown in the country's GDP, most developed economies would dream of an annual growth rate of 7%.

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Growth in 2014 ended up being 0.2% high than the predicted 2.6%. This is after growth for the final quarter of last year has been calculated. Perhaps a point that the Conservatives will no doubt use in the campaign.

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The UK's economy grew at a faster pace than initially estimated last year, revised official figures show.

The economy grew by 0.6% in the final three months of 2014, up from the previous estimate of 0.5%, the Office for National Statistics said.

The unexpected increase meant growth for the year was 2.8%, higher than the earlier estimate of 2.6%.

The revised rate marks the highest pace of annual growth since 2006, when the economy grew by 3%.

An expansion in both production and services as well as household spending helped to drive the increase, the official data suggested.

But the biggest contribution to the revised figure was a strong performance of exports, the ONS said.

'Vulnerable'

The revised figure was revealed alongside data showing that the UK's current account deficit - the gap between the income paid to, and received from, the rest of the world - narrowed in the final quarter of last year.

The deficit in the three months to December was £25.3bn, down from the record-high of £27.7bn recorded in the previous quarter.

But for the year as a whole, the deficit widened to 5.5% of GDP, marking the largest annual deficit since records began in 1948.

UBS economist David Tinsley said the large deficit largely reflected weakness in UK overseas earnings "which may turn around if the eurozone recovery heats up".

"Still, regardless of the cause, funding a deficit of this size makes the UK vulnerable in a year when political uncertainty is relatively high," he added.

'Touch pessimistic'

Separately, UK consumer confidence rose to its highest level in more than 12 years in March, a survey from researchers GfK showed.

And separate figures from the ONS showed that the financial well-being of UK households improved last year.

Overall, economists suggested the figures boded well for the UK economy this year.

Analysis: Robert Peston, BBC economics editor

The UK's economic performance, in the round and as it touches people, is definitely improving - and looks good compared with competitor nations, especially those across the Channel.

GDP or national income per capita is 4.8% above where it was at the election - although it is still 1.2% below its peak at the start of 2008, before the Great Recession and financial crisis.

And if we measure our well-being by how much we spend, then things are definitely better - since household consumption per head is 3% higher than it was in the middle of 2010.

That said, many would argue that our recovery remains unbalanced and far too dependent on consumer spending: that we are experiencing "same-as-it-ever-was" growth, of the boom-and-bust variety.
Read Robert's blog in full
"Given the outlook for consumer spending, the Office for Budgetary Responsibility's forecast of 2.5% for 2015 looks a touch pessimistic, and could come under some upward pressure in the coming months," said Ben Brettell, senior economist at Hargreaves Lansdown.

Martin Beck, senior economic advisor to the Ernst & Young economic forecaster ITEM Club, said he remained confident about its prediction that GDP would expand by close to 3% in 2015.

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The UK's economy grew at a faster pace than initially estimated last year, revised official figures show. The economy grew by 0.6% in the final three months of 2014, up from the previous estimate of 0.5%, the Office for National Statistics said.

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Overview & diagram to help your understanding

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Governments and central banks like there to be "just enough" growth in an economy - not too much that could lead to inflation getting out of control, but not so little that there is stagnation. Their aim is the so-called "Goldilocks economy" - not too hot, but not too cold.

One of the main tools they have to control growth is raising or lowering interest rates. Lower interest rates encourage people or companies to spend money, rather than save.

But when interest rates are at almost zero, central banks need to adopt different tactics - such as pumping money directly into the financial system.

This process is known as quantitative easing, or QE.

How does it work?

The central bank buys assets, usually government bonds, with money it has "printed" - or, more accurately, created electronically.

It then uses this money to buy bonds from investors such as banks or pension funds. This increases the overall amount of useable funds in the financial system. Making more money available is supposed to encourage financial institutions to lend more to businesses and individuals.

It can also push interest rates lower across the economy, even when the central bank's own rates are just about as low as they can go. This in turn should allow businesses to invest and consumers to spend more, giving a knock-on boost to the economy.

What are the risks?

The biggest concern is that pumping more money into the economy could ultimately lead to an inflation problem.

When inflation is close to zero, as it is in the UK and the eurozone at the moment, a bit more upward pressure on prices can be seen as a good thing. But some politicians and economists have opposed the idea of QE in principle, because they believe in the long run there's a danger that it could create too much inflation.

Others argue that the extra money has just bolstered the price of some assets such as shares and property in some countries.

Who has tried QE?

Both the Bank of England and the US Federal Reserve embarked on QE in the wake of the 2008 financial crisis in an attempt to stimulate economic growth.

Between 2008 and 2015, the US Federal Reserve in total bought bonds worth more than $3.7 trillion.

The UK created £375bn ($550bn) of new money in its QE programme between 2009 and 2012.

Then in August 2016, the Bank of England said it would buy £60bn of UK government bonds and £10bn of corporate bonds, amid uncertainty over the Brexit process and worries about productivity and economic growth.

The eurozone began its programme of QE in January 2015 and has so far pumped in $600bn of extra money. Originally the programme was set to run until September 2016, but it has now been extended until at least March 2017.

QE was first attempted by Japan's central bank to arrest a period of deflation following its financial turmoil in the 1990s. There is disagreement about whether the initiative had the intended effect of stimulating the Japanese economy.

Has QE worked?

Its effect is hotly contested and hard to measure. Over the last few years, the US economy has stabilised and unemployment has fallen steadily. Some credit QE for the recovery, at least in part.

European Central Bank governor Mario Draghi said in June 2015 that the policy had "contributed to a broad-based easing in financial conditions, a recovery in inflation expectations and more favourable borrowing conditions for firms and households".

In the UK, it was introduced for similar reasons and it has been argued that its introduction in 2009 helped credit conditions and overall financial stability.

Are there any losers from QE?

QE pushes up the market price of government bonds and reduces the yield, or interest rate, paid out to investors. In other words, investors have to pay more to get the same income.

If market interest rates are lower that depresses the value of a currency because it becomes less attractive to foreign investors.

The US's programme of QE also kept the value of the dollar lower than it might otherwise have been, a factor not welcomed in some emerging economies. Since the end of QE in the US and with the prospect of interest rate rises there, the dollar has regained strength.

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Governments and central banks like there to be "just enough" growth in an economy - not too much that could lead to inflation getting out of control, but not so little that there is stagnation. Their aim is the so-called "Goldilocks economy" - not too hot, but not too cold.

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The price of oil has risen over fears that shipments may be attacked as Saudi Arabia carry out air strikes on Yemen rebels. For the UK this will perhaps help our oil prices to rise again, bringing inflation away from its current 0% level.

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Oil prices rose and shares fell after Saudi Arabia, the world's biggest crude exporter, and its allies launched airstrikes on rebel targets in Yemen.

The move has raised concerns that the conflict could spread in the oil-rich Middle East and possibly disrupt supplies from the region.

Brent crude climbed nearly 6% to $59.78 a barrel, but then dipped to $57.88.

West Texas Intermediate crude futures, the US benchmark, rose to $50.68 a barrel.

Pressure on the oil price eased after it became clear there was no immediate threat to Middle East oil shipments. However, fears remain that Iran could be drawn into the conflict, and these concerns weighed on European share markets on Thursday.

In Germany, an economy heavily dependent on oil imports, the Dax share index was more than 1.3% lower by mid-afternoon. Paris's Cac 40 index and London's FTSE 100 were both more than 1.2% lower.

In the US, the Dow Jones was down 0.6%, and the dollar also fell against the Swiss franc and the yen, traditionally seen as haven currencies in times of uncertainty.

Yemen is located along an important international shipping route for global energy producers. But the country is sliding towards civil war.

Houthi rebels receiving support from Iran have marched on the southern Yemeni port city of Aden, where Yemen's President Abdrabbuh Mansour Hadi took refuge after he was forced him to flee the capital, Sanaa.

Saudi Arabia, supported by regional allies the United Arab Emirates, Bahrain, Qatar and Kuwait, launched airstrikes on Thursday aimed at halting the rebel advance.

Iran and Saudi Arabia are both members of the Organisation of Petroleum Exporting Countries, the group that produces about 40% of the world's oil. Oil exports to Europe pass through the narrow Red Sea strait between the port of Aden and Djibouti.

However, the current glut in global oil stocks, built up in part thanks to US shale production and plentiful output from Russia and other producers, means there is unlikely to be an acute crisis in supply.

"Just because Saudi and others conducted air strikes doesn't mean the oil market becomes suddenly tight," said Masaki Suematsu, manager of the energy team at brokerage Newedge Japan in Tokyo.

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Oil prices rose and shares fell after Saudi Arabia, the world's biggest crude exporter, and its allies launched airstrikes on rebel targets in Yemen. The move has raised concerns that the conflict could spread in the oil-rich Middle East and possibly disrupt supplies from the region.

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ByThe inflation rate in the UK fell to 0% in February. Due to falling prices in electronics. A worrying path to deflation which could slow down economic growth, however the stabilising oil prices may help to counteract this.

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UK inflation rate fell to 0% in February, the lowest since records began, official figures show.

Lower prices for food and computer goods helped to cut the rate from 0.3% in January, official figures show.

February's figure is the lowest rate of Consumer Prices Index (CPI) inflation since estimates of the measure began in 1988.

The drop in the CPI measure was sharper than many analysts had expected, with most expecting a rate of 0.1%.

The February figure means that the cost of living is the same as it was a year earlier.

It is worth pointing out that CPI only became the main measure of inflation in 2010. Before that the Retail Price Index, which includes housing costs and mortgage payments, was used. That index was negative for much of 2009.

Ben Brettell, senior economist at Hargreaves Lansdown, said the UK "took another step towards deflation" in February.

"It looks likely the rate will drop below zero at some point in the coming months, and hover around zero for most of the year," he said.

Analysis: Robert Peston, BBC economics editor

For now at least, the fall in the price of food, games, petrol and energy, if it persists for a few months, is good news for most of us - because it increases our spending power and our pounds go further.

In other words we feel and are a bit richer.

But if stagnation in prices were to go on for longer, if it were to turn into fully fledged deflation, that would be worrying.

The point is that if we thought that the price of things we don't normally have to buy at any particular moment - household goods like washing machines for example, or motor cars - was on a firmly downward path, we would probably defer purchases of those things, and that would depress economic activity.

Read Robert's blog in full.

Low inflation could support UK economic growth, business lobby group the British Chambers of Commerce (BCC) said.

"We remain convinced that there is very little risk of a long period of deflation," said David Kern, BCC chief economist.

"Inflation in the service sector, which accounts for 80% of the UK economy, remains firmly above the government's 2% target, and core CPI inflation in February was 1.2%.

"Together with higher earnings, lower inflation is boosting people's spending power, and will contribute to economic growth in the year ahead," he said.

Rain Newton-Smith, director of economics at business lobby group the CBI, said: "Despite inflation dropping to zero, it is unlikely we will see falling prices for a prolonged period, particularly as the pressure from lower oil prices fades."

However, she added: "With the Monetary Policy Committee still alert to the risk of very low inflation becoming entrenched, a rise in interest rates anytime soon seems off the cards."

Last week, the Bank of England's chief economist Andy Haldane said rates were as likely to need cutting as raising in the immediate future.

Cheaper energy

In February, the Bank said that inflation could turn negative temporarily in the spring because of falling oil prices.

Cuts in energy bills are among the factors likely to push inflation lower in March, according to economists.

But unlike in the eurozone, where prices are already showing annual falls, many economists think UK consumer demand will remain steady in the face of falling prices, due to robust employment growth and signs of a pick-up in wages.

Falling prices for food, laptops, tablets and computer peripherals contributed to the fall in February's CPI measure, the Office for National Statistics (ONS) said.

The ONS figures also showed the rate of Retail Prices Index (RPI) inflation fell to 1% from 1.1%.

Political pitches

Chancellor George Osborne told reporters that zero inflation was "good news for families", and that voters faced a choice in the general election on 7 May.

"Frozen prices are a first for the British economy. This zero inflation is driven by falling petrol prices and falling food prices, so it's good news for families," he said.

However, Labour said inflation is falling around the world "because global oil prices have plummeted, yet in Britain wages continue to be sluggish."

"A few months of falling world oil prices won't solve the deep-seated problems in our economy," said said Cathy Jamieson, Labour's shadow Treasury minister.

Liberal Democrat Chief Secretary to the Treasury Danny Alexander said: "Coming alongside good growth and record numbers of jobs, Liberal Democrats in government are delivering a stronger economy and a fairer society."

"It's yet another month that sees earnings pulling ahead of prices, which will be a great help to millions of families."

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UK inflation rate fell to 0% in February, the lowest since records began, official figures show. Lower prices for food and computer goods helped to cut the rate from 0.3% in January, official figures show. February's figure is the lowest rate of Consumer Prices Index (CPI) inflation since estimates of the measure began in 1988.

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National Minimum Wage is to rise by 20p to £6.70 for over 21s and to £3.30 for Apprentices. Increases will also be made for other age groups. This increase in minimum wage will be the biggest since 2008

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The national minimum wage will increase by 20p an hour to £6.70 from October, the government has announced.

The changes will benefit more than 1.4 million workers.

The hourly rate for younger workers will also rise, and for apprentices it will go up by 20% - or 57p - to £3.30 an hour.

The rates were recommended by the Low Pay Commission but the government has gone further than the 7p an hour increase suggested for apprentices.

Prime Minister David Cameron said the across-the-board increases would offer "more financial security" to workers.

Labour said the minimum wage had been "eroded" since 2010 while unions said the increases would not address "in-work poverty".

The 3% increase in the national minimum wage for adult workers is the biggest real-terms rise in seven years.
Analysis by economics editor Robert Peston
For those of us fortunate enough to earn considerably more than the national minimum wage, a 3% rise to £6.70 may sound pretty derisory.

It is equivalent, for example, to just two and half flat-white coffees in a famous coffee chain, and would allow the recipient of that wage to rent a one-bedroom place in a dowdier part of London, so long as he or she didn't eat, use power, pay council tax or wear clothes.

Not big bucks.

But when David Cameron and Nick Clegg say it is the "largest real-terms increase" since 2008, they are not simply making a point about how badly low-paid workers have done (before tax and benefits) since then.

Because what has been happening to inflation - its fall to a low of 0.3% in January - makes the 3% increase better than a poke in the eye.
Read Robert's full blog
It was recommended by the Low Pay Commission - the independent body that advises the government on the minimum wage.

The statutory minimum for 18 to 20-year-olds will also go up by 3% from October, from £5.13 to £5.30, and by 2% for 16 and 17-year-olds, taking the rate to £3.87, as the Low Pay Commission advised.

But the government has rejected the commission's proposed 7p an hour increase in the apprenticeship rate, choosing instead to increase it by 57p an hour.

The rate applies to apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the national minimum wage for their age.

'Worse off'

Announcing the changes, Mr Cameron said: "At the heart of our long-term economic plan for Britain is a simple idea - that those who put in, should get out, that hard work is really rewarded, that the benefits of recovery are truly national.

"That's what today's announcement is all about, saying to hardworking taxpayers, this is a government that is on your side. It will mean more financial security for Britain's families and a better future for our country."

Deputy Prime Minister and Lib Dem leader Nick Clegg said the announcement meant "whether you're on low pay or starting your dream career through an apprenticeship, you will get more support to help you go further and faster".

Business Secretary Vince Cable urged the Low Pay Commission earlier this year to look at increasing the apprentice rate by £1 an hour but the government decided against this.

Mr Cable said the increase now being envisaged was a "small sum" but it sent a "signal that we want young people to see it (apprenticeships) as a promising career, as increasing numbers are".

Labour has promised the minimum wage would rise to £8 an hour over the course of the next parliament if it wins in May.

"This is our aspiration. We are more ambitious for the British people than this lot in office," shadow business secretary Chuka Umunna told the BBC.

Labour has said a quarter of apprentices are not being paid the minimum wage and it was "absolutely committed" to enforcing it in government.

UKIP leader Nigel Farage said an influx of unskilled labour from across Europe had driven down the cost of labour in the UK and the "minimum wage had become the maximum wage" for many British workers.

"Rather than helping people on low pay it has put a glass ceiling on them," he told the BBC's Daily Politics.

The national minimum wage has increased broadly in line with average earnings since 2006 and was at its highest relative to average earnings growth in October 2013.

'Politicisation'

CBI director-general John Cridland said it was "positive" that the government had accepted the Low Pay Commission's recommendations on the adult and youth rates.

But, he added, it was "disappointing" that ministers had chosen to increase the apprentice rate by more than suggested, saying he was worried by the "politicisation" of the commission.

And free-market think tank, the Institute of Economic Affairs, said the Low Pay Commission was straying away from its remit and being used "as a vehicle to reduce inequality".

"The minimum wage was introduced to eliminate perceived exploitative pay at the bottom end of the jobs market, taking into account the prospect that minimum wages set too high would lead to fewer job opportunities," said its director-general Mark Littlewood.

"Today's announcement flies in the face of that principle."

Frances O'Grady, the general secretary of the TUC, said the rate increases go "nowhere near enough to end in-work poverty", and should have been "much bolder".

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The national minimum wage will increase by 20p an hour to £6.70 from October, the government has announced. The changes will benefit more than 1.4 million workers. The hourly rate for younger workers will also rise, and for apprentices it will go up by 20% - or 57p - to £3.30 an hour.

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E-cigarettes and craft beers in updated inflation basket

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E-cigarettes and craft beers in updated inflation basket

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E-cigarettes and specialist "craft" beers have been added to the basket of goods used to measure the UK's inflation rate.

To comment it is evident that consumers buying habits are changing.

- Ollie

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E-cigarettes and specialist "craft" beers have been added to the basket of goods used to measure the UK's inflation rate.

The additions are part of the Office for National Statistics' (ONS) annual revision of the basket.

The cost of music streaming services has been added as well, but sat-navs have been dropped.

The basket of goods currently contains 703 items and services, of which 13 are new this year after eight were removed.

The inflation rate currently stands at a record low of 0.3%, as measured by the Consumer Prices Index.

Price survey

The ONS said that e-cigarettes had been added because many smokers were using them.

Sales of "craft" beers have been brought in because more money is being spent on them, along with a rise in the shelf space devoted to those beers in shops and supermarkets.

Although only around 700 items have their prices tracked each month, many are measured in several places. So 110,000 prices are collected from 20,000 shops in the UK, with another 70,000 prices measured online.

Revisions to this year's basket continue to reflect the fast-moving change in the use of technology.

For 2015, the cost of music streaming services has been included, along with subscriptions to online console computer games.

Headphones have been added too, as well as mobile phone accessories such as covers and chargers.

However, sat navs are no longer included. "Partly because many drivers now navigate using smart phones, but also because some new cars now come with sat-navs built in," the ONS said.

Recent years have seen additions to the basket of the cost of video streaming services, e-books, tablet computers and smartphones.

Out have gone DVD recorders, Freeview set-top boxes, the cost of developing colour films and mobile phone downloads.

Chilled pizza

Frozen pizza

Liver

Home killed beef, braisingsteak

Oven-ready joint,gammon/pork

Oven-ready joint

Sweet potato

White emulsion paint

Protein powder

Satellite navigation device

Specialty beer

Cut flowers, lilies

E-cigarettes

Foreign exchange commission

Coloured emulsion paint

Mobile phone accessory

Headphones

Games consoles onlinesubscription services

Music streaming subscriptionservices

In and out

Items in the basket may be introduced or dropped to reflect changes in how much people are spending on them, and also to reflect new categories of spending.

So the cost of protein powders for gym-goers is now being measured to reflect the wider group of sports food supplements.

The ONS said this was "a distinct and growing sector not previously covered within the class".

Other changes are made each year to improve the coverage of an existing category of goods.

That explains the introduction of headphones to improve the coverage of audio-visual equipment.

In a similar move, sweet potatoes have been added to the vegetable category.

"This is an area of the basket where there is much variability in price changes so it is beneficial to collect across as broad a range of items as possible," the ONS said.

Likewise, melons have been added to the fresh fruits whose prices are measured.

Yoghurt drinks have been dropped, partly because less is being spent on them.

But other items, such cut lilies, have been left out because they are simply a variation on other items still in the index and it has been judged that dropping them will have no effect on the accuracy of the overall basket.

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E-cigarettes and specialist "craft" beers have been added to the basket of goods used to measure the UK's inflation rate. The additions are part of the Office for National Statistics' (ONS) annual revision of the basket. The cost of music streaming services has been added as well, but sat-navs have been dropped.

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Brazil has raised its interest rates to the highest in 6 years, at 12.5%. This is to try an hold back its inflation, which in February was at 7.4%, 0.9% above the government target. Economists now predict the Brazilian economy will contract by 0.5%.

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Brazil's central bank has lifted interest rates to a six-year high of 12.75% to restrain inflation.

Inflation in Brazil, Latin America's largest economy, was at a 12-year high in February of 7.4%. The government's target is 6.5%.

Brazil's economy had been one of the world's fastest growing, but looks to have stalled in 2014.

Economists are now predicting that the economy will contract by more than 0.5% this year.

In a statement, Brazil's central bank said: "In assessing the macroeconomic scenario and the outlook for inflation, the Copom [the bank's monetary policy committee] decided unanimously to raise the rate by 0.5 percentage points, to 12.75%."

Tax move

On Wednesday, official figures showed industrial production in Brazil fell 5.2% in January compared with last year.

Brazil, once one of the fast-growing Bric economies that also include Russia, India and China, is struggling as demand for its commodities slows.

The country's president, Dilma Rousseff, is trying to force through measures to cut the country's deficit by cutting spending and raising taxes, but is facing stiff political opposition.

An attempt to increase taxes was rejected by the president of Brazil's Senate.

On top of that, a corruption scandal at the state-owned oil giant Petrobras is adding to uncertainty and curbing the company's investment plans.

Brazil's move to raise rates goes against the global trend for rate cutting. This week, India cut interest rates and China has also been easing monetary policy to try to boost economic growth.

Brazil's currency, the real, fell by 2% on Wednesday, touching an 11-year low at one point.

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Brazil's central bank has lifted interest rates to a six-year high of 12.75% to restrain inflation. Inflation in Brazil, Latin America's largest economy, was at a 12-year high in February of 7.4%. The government's target is 6.5%. Brazil's economy had been one of the world's fastest growing, but looks to have stalled in 2014.

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China has set its target growth rate at 7% for 2015. This is lower than last years 7.5%., but is perhaps due to last years growth being the slowest is 24 years.

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China, the world's second-largest economy, has set its growth target at about 7% for this year, the government said.

The announcement was made by Premier Li Keqiang at the start of the National People's Congress on Thursday.

The target is lower than 7.5% set last year, which was missed after China grew at its slowest pace in 24 years.

The new target is in line with China's plan to guide the economy towards slower and more sustainable growth.

China's economy expanded by 7.4% last year from 7.7% in 2013, following a cooling of the property market, slowing factory activity and easing business and government investment.

Growth of 7% in 2015 will mark the country's weakest expansion in a quarter of a century.

Other targets

Premier Li also said the government would have a consumer inflation target at about 3%, down from 3.5% in 2014.

The country's annual inflation hit a five-year low in January of 0.8% - below expectations of a 1% rise. Factory deflation also worsened - highlighting persistent weakness in the economy.

Mr Li said that the economy would face greater difficulties this year, compared to the previous one.

Over the weekend, China cut interest rates for the second time in three months to boost lending and growth in the economy.

The government also pledged to rein in local government debt and deepen reforms of state-owned businesses.

It aims to create 10 million jobs and keep the urban unemployment rate at 4.5% or below.

In an attempt to push for financial reforms, Mr Li announced that a trial of a trading link between its Shenzhen and Hong Kong stock markets would be launched at an "appropriate time".

The move comes after a link between the Shanghai and Hong Kong stock exchanges was established in November - allowing investors to trade stocks on both exchanges.

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China, the world's second-largest economy, has set its growth target at about 7% for this year, the government said. The announcement was made by Premier Li Keqiang at the start of the National People's Congress on Thursday. The target is lower than 7.5% set last year, which was missed after China grew at its slowest pace in 24 years.

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Cameron has decided to try influence pensioners votes by protecting their benefit system. This will theoretically lead to more seniors voting for Cameron.

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Sky News - First For Breaking News From The UK And Around The World

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Sky News - First for Breaking News, video, headlines, analysis and top stories from business, politics, entertainment and more in the UK and worldwide.

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Government is advised to rise the minimum wage by 3%. Meaning for over 21s, the minimum wage would be £6.70 and £3.87 for 16 - 18 year olds. Still a low amount but would worth £416 to over 21 full time workers. This rise would be above the current inflation rate.

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The independent body that advises the government on the minimum wage is to recommend an increase of 3%, Business Secretary Vince Cable has announced.

He said the above inflation rise in the adult rate from £6.50 to £6.70 an hour would be the biggest since 2008, worth £416 a year to a full-time worker.

Each year, the Low Pay Commission submits recommendations on the future level of the minimum wage.

The increase, yet to be accepted by the government, would apply from October.

A 3.3% increase - from £5.13 to £5.30 - is recommended for 18 to 20-year-olds, along with a 2.2% increase to £3.87 for 16 to 17-year-olds.

Last year Chancellor George Osborne said the minimum wage would be £7 by 2015 had it kept pace with inflation.

But Mr Cable told the BBC the chancellor had made a "statement of fact" rather than actually recommending a £7-an-hour rate.

His own plea for a £1 increase in the minimum wage for apprentices, to bring them into line with the rate paid to 16 and 17-year-olds, was rejected by the commission, with the apprentice rate instead set to rise by 7p to £2.80.

Katja Hall, of the CBI, welcomed the commission's "careful balance".

"Any artificial increase due to political expediency will help no-one and ultimately damage one of the most successful government policies in recent years," she added.

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The independent body that advises the government on the minimum wage is to recommend an increase of 3%, Business Secretary Vince Cable has announced. He said the above inflation rise in the adult rate from £6.50 to £6.70 an hour would be the biggest since 2008, worth £416 a year to a full-time worker.

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The UK trade deficit is at its highest since 2010 and is now at £34.8bn. Its said that the reason for this is a £14.6bn fall in he value of exported goods compared to previous years.

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The UK's trade deficit widened last year to £34.8bn, the biggest gap since 2010 according to the Office for National Statistics (ONS).

It said a fall in exports was largely to blame for the rising trade deficit. The value of exported goods fell by £14.6bn compared to the previous year.

Imports of goods fell for the first time since 2009, down by £7.3bn.

For December the deficit widened to £2.9bn from £1.8bn in November, which was more than economists expected.

Oil impact

December was a very unusual month as oil imports surged by 37%. Economists say that firms are stockpiling oil because the price has fallen so sharply.

So despite a fall in the price of oil, the actual value of oil brought into the UK jumped by more than 20% and contributed to a widening trade deficit in December.

Economists say, however, that if you strip out the effects of oil, the outlook for the trade situation is still not great.

"Whilst December's trade data are not as bad as they first appear, the strong pound and weak demand from the eurozone are likely to prevent a material improvement in the external position in 2015," said Paul Hollingsworth, UK Economist at Capital Economics.

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The UK's trade deficit widened last year to £34.8bn, the biggest gap since 2010 according to the Office for National Statistics (ONS). It said a fall in exports was largely to blame for the rising trade deficit. The value of exported goods fell by £14.6bn compared to the previous year.

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The Eurozone has been experiencing deflation. The solution found appears to be quantitive easing.

Bjorn

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There have been two important, connected economic developments in Europe.

New official figures from Germany show that prices have fallen, by 0.5%, over the previous 12 months.

Meanwhile the Danish Central Bank has cut one of its main interest rates for the second time in a week.

It is a rate paid to commercial banks for excess funds parked at the central bank. It was already below zero. Now it is even lower - minus 0.5%.

It means banks have to pay to leave money at the central bank, above certain specified limits.

Negative interest rates are another example of the strange financial world that has emerged in the aftermath of the financial crisis.

What is the connection between falling prices - or deflation - in Germany and the Danish central bank? It is about Denmark's 35-year policy of tying its currency, the krone, to the euro, and before that to the German mark.

That peg has come under increasing strain as the European Central Bank, the ECB, has taken steps to combat deflation.

Falling prices arrived for the eurozone as a whole last month. Germany was an exception to the pattern, but provisional figures for January show that is no longer the case. Deflation in Germany suggests the eurozone will experience faster falls in prices in the months ahead.

There is a debate to be had about whether deflation really is a problem and if so how serious, but the ECB clearly thinks it is.

The steps it has taken to address low inflation, and then deflation, have made it harder for financial market investors to make money in the eurozone.

The ECB cut interest rates and last week launched its quantitative easing programme, which also tends to reduce returns on financial assets.

So investors piled into other currencies, including the krone, pushing it higher, though not so high that it has gone above the top of the central bank's target band.

The Danish central bank's rate cuts are intended to offset that pressure.

Does it sound familiar? The Swiss central bank recently gave up its attempt to cap the value of the franc and allowed it to rise. It would be a bigger loss of credibility for Denmark to do the same, because the peg to the euro has been the central element of its economic policy for so long.

In addition, Denmark is a smaller financial system and it is not an established magnet for internationally mobile money in the way that Switzerland is.

Those are reasons why the Danish currency peg may survive. But the attempt to preserve it has already taken the Danish National Bank into some unusual territory.

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There have been two important, connected economic developments in Europe. New official figures from Germany show that prices have fallen, by 0.5%, over the previous 12 months. Meanwhile the Danish Central Bank has cut one of its main interest rates for the second time in a week.

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Dawn - Is this a supply or demand side shock? Read this article

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Dawn - Is this a supply or demand side shock? Read this article

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The UK economy saw its highest growth last year at 2.6%. This is the highest growth since 2007 and shows that our economy is actually doing pretty well, and in some cases, better than the rest of Europe. The growth shown is 0.9% higher than in 2013, so hopefully 2015 will expand our economy even more.

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The UK's economy grew by 2.6% last year, the fastest pace since 2007 and up from 1.7% in 2013, official figures have shown.

Figures from the Office for National Statistics (ONS) showed the economy grew by 0.5% in the final three months of 2014.

That was a slowdown from 0.7% growth recorded in the previous three months.

Economists were mixed over whether the loss of momentum in the final quarter might be temporary or prolonged.

The ONS's chief economist, Joe Grice, said it was "too early to say" if this slowdown would persist.

"The dominant services sector remains buoyant while the contraction has taken place in industries like construction, mining and energy supply, which can be erratic," he said.

But Nancy Curtin, chief investment officer at Close Brothers Asset Management, said the fourth-quarter figure "hardly set the world alight... and it's clear that [the economy] is slowing".

She said: "There are clouds looming large on the horizon, and the general election is the biggest of these. Investors don't like uncertainty."

The services sector grew by 0.8% in the quarter, but construction contracted by 1.8%. Manufacturing grew by just 0.1%, its worst performance since the start of 2013.

"The main disappointment with growth in the fourth quarter was that it looks unbalanced on the output side of the economy at least," said Howard Archer, chief UK economist at IHS Global Insight.

But Chancellor George Osborne said the figures showed the economy was "on track". He warned that the international economic climate was "getting worse", and so the government must continue with its economic strategy.

Shadow chancellor Ed Balls said the slowdown in fourth-quarter growth was a concern, and that "Tory claims that the economy is fixed will ring hollow with working people" whose "wages are down by £1,600 a year since 2010".

'At odds'

The ONS figures are the first estimate of fourth-quarter growth and could be revised up or down as more economic data for the three months is gathered by the statistics office.

Economists at the Centre for Economics and Business Research (CEBR) said they "wouldn't be surprised if the ONS figures are revised up over time, painting a stronger picture for economic performance at the end of the year".

The construction data which dragged down the fourth-quarter figures were "surprising and at odds with other indicators and surveys" which presented a healthier picture, the CEBR said.

Tuesday figures mean the UK was among the best-performing of the all the major economies in 2014. US growth figures are due to be published on Friday, with the International Monetary Fund (IMF) estimating expansion of 2.4% for the year.

The IMF forecasts UK growth of 2.7% in 2015. However, Samuel Tombs, of consultancy Capital Economics, has predicted growth of 3%.

"With the recent halving of oil prices providing a timely boost to households' discretionary spending power, credit still becoming cheaper and pay growth on an improving trend... the best days of the UK's recovery may still lie ahead," he said.

Analysis: Robert Peston, BBC economics editor

How significant is the slowdown in the British economy, given that the dominant service sector is still booming, but construction is shrinking and manufacturing almost back to flatlining?

The deceleration is not surprising, in view of the flatlining of the UK's main trading partner, the eurozone.

And two of the negative influences, a fall in energy supply of 2.8% and in construction of 1.8%, are in industries that tend to be volatile.

That said, it does give pause for thought that growth is now apparently being driven to a large extent by retail and consumer spending.

We were supposed to be rebalancing, towards manufacturing and investment. And although there has been a bit of that over the past couple of years, it appears to be petering out.
Read Robert's blog in full

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The UK's economy grew by 2.6% last year, the fastest pace since 2007 and up from 1.7% in 2013, official figures have shown. Figures from the Office for National Statistics (ONS) showed the economy grew by 0.5% in the final three months of 2014.

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"excessive reliance on monetary policy tends to enrich the owners of property and at the same time will not relieve the downward pressure on wages."

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Billionaire investor George Soros has warned that the aggressive stimulus policy rolled-out by the European Central Bank (ECB) could "reinforce inequality" in the EU.

The ECB committed to injecting at least €1.1 trillion (£834bn) into the ailing eurozone economy.

Mr Soros added that the measures could have "serious political repercussions".

But he emphasised that he expected the ECB's policy to drive economic growth in the European Union.

Speaking at a dinner at the World Economic Forum in Davos, the 84-year-old, who was born in Hungary, voiced concerns that an "excessive reliance on monetary policy tends to enrich the owners of property and at the same time will not relieve the downward pressure on wages."

Economic reform

The ECB's favoured method, known as quantitative easing, amounted to a "very powerful set of measures," said the financier, and had "exceeded the very high expectations of the markets."

However he twice cautioned that quantitative easing would "increase inequality between rich and poor, both in regards of the countries and people".

Asked if he worried that the newest round of quantitative easing, which essentially pumps more money into the eurozone, would lead some EU states to delay economic reforms, Mr Soros said that if there were growth, it would actually make it easier for countries like France to change their financial systems.

He also said there was another powerful way of boosting the Eurozone economy.

'This time it's final'

"There is one large untapped source of triple-A credit, and that is the European Union itself - that has practically no debt, but it has taxing power," he said, urging the EU to spend more on financing infrastructure projects, such as energy pipelines, electricity networks and even roads.

Mr Soros, who initially became famous for having made $1bn by betting on the devaluation of the pound sterling in 1992, spent the rest of the evening discussing political issues, particularly the crisis in Ukraine.

"I have finally retired from managing my own money," he said, adding:

"This time it's final".

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Billionaire investor George Soros has warned that the aggressive stimulus policy rolled-out by the European Central Bank (ECB) could "reinforce inequality" in the EU. The ECB committed to injecting at least €1.1 trillion (£834bn) into the ailing eurozone economy. Mr Soros added that the measures could have "serious political repercussions".

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Low Growth & High Unemployment weakening the European Union

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Low Growth & High Unemployment weakening the European Union

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Please read this.

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A top official at the European Central Bank (ECB) has warned that unemployment and low growth are undermining the foundations of the European Union.

Speaking at the World Economic Forum in Davos, Benoit Coeure, a member of the executive board of the ECB, said the bank could not create lasting growth as that was down to governments.

He urged governments to speed up economic reform.

On Thursday the ECB launched a €1.1 trillion economic stimulus plan.

Mr Coeure said: "We've done our part on Thursday. Others have to do their part."

He said there was "nothing" the ECB could do to lift the growth rate of Europe in a "lasting way".

"We can make it cheaper to invest, but people have to want to invest and that is the role of finance ministers, that is the role of government," Mr Coeure said.

'Entrenched unemployment'

Mr Coeure said the ECB would be making that point at the Eurogroup meeting on Monday when the ECB holds talks with finance ministers from the eurozone.

"With low growth, entrenched unemployment - people being dragged out of the labour market - we are seeing the whole political foundation of the European project being weakened. This cannot last for too long," he said.

"Being patient is just a risk we don't want to take."

Record low interest rates have failed to boost the 19-country euro area.

So, the ECB plans to buy €60bn bonds each month from banks until the end of September 2016, or even longer, in what is called quantitative easing (QE).

QE in theory increases the supply of money, something that keeps interest rates low and encourages borrowing and therefore spending.

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A top official at the European Central Bank (ECB) has warned that unemployment and low growth are undermining the foundations of the European Union. Speaking at the World Economic Forum in Davos, Benoit Coeure, a member of the executive board of the ECB, said the bank could not create lasting growth as that was down to governments.

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Read this.

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A crackdown on tax avoidance and evasion by people who HM Revenue & Customs call "mass affluent" netted 60% more money in 2014, a report says.

HMRC's Affluent Unit covering UK residents on annual incomes over £150,000 - or wealth over £1m - raised £137.2m in tax, up from £85.7m in 2013.

The report was written by law firm Pinsent Masons, using data from HMRC.

Critics said the unit, which works with HMRC's High Net Worth team covering the super-rich, could collect much more.

The Affluent Unit, set up in 2011, doubled in size in 2013 with the recruitment of an additional 100 tax inspectors. About 500,000 UK residents fall into its remit.

"This surge in extra revenue from Affluent Unit tax investigations serves as a reminder that HMRC is widening its lines of inquiry," said Pinsent Mason's head of litigation and compliance James Bullock.

"People who would just consider themselves moderately successful professionals and business people are now also coming under the scrutiny of HMRC's specialist units," he said.

He added that the tax office had been given new powers to pursue tax avoidance in what looked like "a much more aggressive approach to prosecutions targeted at professionals and entrepreneurs".

'Poor success rate'

The investigation success rate is way below anything that could be expected
Richard Murphy, Tax Research

HMRC's ability to investigate people has been made easier by a computer system called Connect. Costing £45m, Connect was launched in the summer of 2010 and designed by the defence contractor BAE Systems.

The computer system collects data on people from multiple sources, including banks, local councils, and even social media.

Treasury minister David Gauke said that the jump in extra tax being collected shows that the Affluent Unit was "a success... We are determined to give HMRC the powers and support that they need".

He said there was a change in the public mood towards tax avoidance and evasion. "The public expect people to pay the right amount of tax under the law to help fund our services."

He added: "HMRC are winning a lot of their court cases, and we are seeing that a lot of people are preparing to pay up rather than litigate for years."

However, tax expert Richard Murphy, from Tax Research, said: "HMRC is supposed to collect £167bn of income tax this year, of which at least a quarter will be from the top 1% of income earners.

"In that case, to collect just £127m as a result of investigations into this group when the official tax gap is £35bn suggests that much less attention is given to them than any other group."

He added: "The investigation success rate is way below anything that could be expected given that we know tax avoidance is mainly undertaken by the wealthiest.

"If these statistics prove anything it is that HMRC need many more resources to collect tax from those most likely to owe it."

Last year, the Treasury unveiled controversial plans to give HMRC the ability to withdraw outstanding tax directly from people's bank accounts.

Following opposition, it was agreed that tax inspectors would hold a face-to-face meeting with taxpayers before any money is taken.

The Direct Recovery of Debt plans are due to come into force this year.

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A crackdown on tax avoidance and evasion by people who HM Revenue & Customs call "mass affluent" netted 60% more money in 2014, a report says. HMRC's Affluent Unit covering UK residents on annual incomes over £150,000 - or wealth over £1m - raised £137.2m in tax, up from £85.7m in 2013.

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South Korea growth hits six year low in fourth quarter

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South Korea growth hits six year low in fourth quarter

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The economy grew a seasonally adjusted 0.4% in the October to December period from the previous quarter when growth hit 0.9%.

Fourth quarter growth of 2.7% from a year ago also missed market forecasts.

Economists said a slump in infrastructure spending and exports had a big impact on the country's growth. - Ollie

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Growth in Asia's fourth largest economy, South Korea, fell to a six year low in the fourth quarter of last year.

The economy grew a seasonally adjusted 0.4% in the October to December period from the previous quarter when growth hit 0.9%.

Fourth quarter growth of 2.7% from a year ago also missed market forecasts.

Economists said a slump in infrastructure spending and exports had a big impact on the country's growth.

Construction investment fell by a seasonally adjusted 9.2%, the worst since 1998 as weaker tax revenue led the government to cut back spending on projects.

Barclays economist Wai Ho Leong said that annual growth of 3.3% in 2014 had fallen below the bank's forecast of 3.5%.

"[Growth will] remain soft in the first quarter of 2015 before reaccelerating from the second quarter as the pass-through of lower oil prices rekindles global external demand," he said in a note.

Rate cut ahead?

The disappointing data could lead the country's central bank to cut interest rates again to boost the economy, according to economists.

The Bank of Korea has cut the interest rate in three steps since the current easing cycle began in May 2013.

The most recent move came in October when it cut the base rate to a record low of 2%.

However, last week the central bank did cut its growth forecast for this year to 3.4% from an earlier forecast of 3.9%, anticipating the slowdown in the economy.

The central bank is set to meet on 17 February.

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Growth in Asia's fourth largest economy, South Korea, fell to a six year low in the fourth quarter of last year. The economy grew a seasonally adjusted 0.4% in the October to December period from the previous quarter when growth hit 0.9%. Fourth quarter growth of 2.7% from a year ago also missed market forecasts.

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Pirated content now makes up around a quarter of all internet traffic. That's a fivefold increase in the past five years. The Motion Picture Association of America estimates that this is costing the top US studios alone over $20 billion a year in lost revenue.

While pretty much all major global entertainment content is available online within a five minute search (and often even before airing or playing in theatres), the content industry continues to stick to an arcane set of rules of strict distribution, such as geographical restrictions and holdback windows for releasing content. It is a distribution model that has been tried and tested over decades, and a whole industry was built on carefully parsing out rights.

Given the sheer demand and ease of access to pirated content, however, these strict rules are leading to a generation of consumers who are unaware that online piracy is, in fact, illegal. Lines between so-called pirates and passionate fans are blurred, especially in a world where content consumption has no borders, yet legal access to content is most often not even an option. For the industry, it's a 750 million-person problem, or I dare say, at least for a large subset of it, an opportunity.

What if the content industry were to treat pirates as fans? What if the industry gave fans a choice to watch what they wanted - regardless of the country they were in or device they were using - while charging prices that changed depending on demand? Simply make the content available legally, but charge what the market bears.

Perhaps it's time to start exploring a new approach. This new approach would target markets that the big American studios haven't traditionally distributed to, or at least not beyond a limited set of new titles. It would rely on access and the invisible hand of the market. Let's call this approach dynamic pricing of content.
From pirates to gladly paying fans
Let's briefly look at the possible implications of working with fans: A NetNames study, funded by NBC Universal, discovered that 432 million people worldwide "explicitly sought" copyright-infringing content online. This was in January 2013, when the internet population was a third smaller than it is today. Adjust for internet adoption and about 10% growth in piracy every year, and we could be looking at 750 million fans a month. This doesn't include those who searched for illegal content but didn't download it. 750 million. And growing. That's more than a third of the global online population. The content owners don't even have to find them. The fans find them. Untapped and concentrated demand. Beautiful.

Besides the NBCU study, a great deal of data suggests that pirates would consider paying for content if they had a reasonably priced option. So assume you convert 5% of these 750 million pirates into paid users. That's 37.5 million people. It's not quite the size of Netflix, but it's still big. Now imagine if each of them pays on average $5 a month. We could be talking billions in revenue. Even at 1% conversion, it's huge. Geo-block and leave out the 15% of them that are in the US, and it's still huge. It's also additive - studios don't have to trade volume for margin. That's the beauty of treating pirates as fans.

Piracy is just a manifestation of demand, yet the typical response from Hollywood has included threats of ten years in jail, hijacking the browsers of paying customers, raids, and on and on. Studios can't go on fighting their adoring fans, especially with fans who pay on average far more for studio content than any other group.

Dynamic pricing isn't new or novel, but it just might be the right approach at the right time. It's not that complex, either. You can just take a leaf out of the e-commerce book and adjust for dozens of variables, such as how recent the content is, the country of viewership, competitor pricing, social chatter, the number of torrents seeded or leached, or the quality of the original video file. You can also track search terms and adjust prices in anticipation, or even involve the search giants - get them to seed it to paid users and give them a cut. Both sides would win.
From Hollywood to Happy Valley
Would fans living in countries where HBO is not available pay $100 for a season of Game of Thrones? Maybe. $50 for a simulcast of a new release if they're in Asia? Likely. $10 for a six-month-old title still not on Netflix? Yeah, for sure. $2 in India? Yes, if not more. And it's not just the Hollywood content. This summer, BBC's Happy Valley was the number one global trending topic on Twitter, but you couldn't watch it outside of the UK. Six million people watched it in a week. That's almost 10% of the UK population. Think how well it would have done if it was available through dynamic pricing, even after the UK broadcast ended, at $30 for the series of six episodes.

In order for dynamic pricing to work, the studios need to go all-in, making some of their latest and greatest shows available. They could even make some of their long-tail shows - that they're not monetising anyway - available for free, so they can upsell fans on their newer shows. Once this model has been fined-tuned, no part of it would eat into their existing revenue base. The model uses technology to reduce theft, reach new fans, and in the process increase the size of the revenue pie for all involved in making this great content.
Global first
New-media players, like Netflix, are starting to set the trend of going global first, finding the fans where they are. After measuring the success of Breaking Bad that cost them $1 million per episode to license for the US, Netflix is taking the sequel of the show (Better Call Saul), to 50 countries online.

It's no surprise that the more progressive major content creators are also exploring the global-first model, even at varying prices. HBO has also taken its platform global, and has made Game of Thrones available within days of its airing in the US. Although it hasn't quite opened it up to the vast majority of the countries the show's fans are in, at least it's now experimenting with offering shows without a cable subscription, and offering its HBO Go service, at different prices, outside the US. This is just the start, and now we need Hollywood to take a leap of faith.

There are reasons to say no, from the fear of setting a precedent of negotiating with pirates, to "breaking" what's working, or creating price transparency. Studios may even feel they are being put into zugzwang - a chess term that describes a situation where a player is forced into making a move that would put them at a disadvantage. They might think it makes more sense to pass when it's their turn. Coming from both the studio and technology sides, let alone as a fan, I worry that the only wrong move here is not moving at all.
Author: Razmig Hovaghimian, Chief Executive Officer and Co-Founder, Viki Image: George R.R. Martin, author of the "Song of Ice and Fire" fantasy series that is the basis of the television series "Game of Thrones", gestures during his masterclass at the Neuchatel International Fantastic Film Festival (NIFFF) in Neuchatel July 10, 2014. REUTERS/Denis Balibouse , and was formerly a Senior Vice President at NBC Universal. He is a contributor to the World Economic Forum's Norms and Values in Digital Media project, whose new report is now live.

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Pirated content now makes up around a quarter of all internet traffic. That's a fivefold increase in the past five years. The Motion Picture Association of America estimates that this is costing the top US studios alone over $20 billion a year in lost revenue.

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Dawn - The World Economic Forum is taking place in Davos. Please watch this for Home Learning - we will discuss this Monday

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Dawn - The World Economic Forum is taking place in Davos. Please watch this for Home Learning - we will discuss this Monday

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The Growth Summit: Jobs and Opportunity for All

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The Growth Summit, taking place 2-3 May 2023 at the World Economic Forum's headquarters in Geneva, Switzerland, will bring together business, government, civil society, international organizations and academic leaders working across sectors, industries and geographic boundaries.

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Dawn - Why extreme inequality hurts the rich. Read this article and comment here please.

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Dawn - Why extreme inequality hurts the rich. Read this article and comment here please.

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Extreme inequality could affect the rich "unless that is they never want to leave their fortified, hermetically sealed, lavishly appointed bunkers." - Ollie

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"We could have developed a vaccine for Ebola years ago if we had chosen to allocate the resources to the appropriate research".

That is what a senior and respected medical scientist, a man who would be seen as a world authority on such matters, said to me.

So why wasn't the cure found?

The relevant research didn't happen because Ebola was seen for a long time to be a disease only of the poor, especially in Africa - and therefore the giant pharmaceutical manufacturers couldn't see how to make big money out of an Ebola medicine.

Today of course it is clear that Ebola is a global threat - and hence there is a mad rush to find a treatment.

What the preventable tragedy of Ebola shows is that in a globalised world the interests of rich and poor are frequently the same - although it is hard for businesses to recognise this mutuality of interest when driven to make short-term profits.

This solidarity between those with least and those (us) with most is also lost when governments are under pressure from voters to use tax revenues only in ways that demonstrably benefit a domestic population.

Perhaps the most important point is that when decisions about who gets what or how investment funds are allocated are left to markets, the outcome may seem to benefit only the rich but the consequence may end up hurting rich and poor alike.

There are all sorts of reasons why such increases in inequality are troubling

Which is a powerful argument for why the widening gap between the rich and poor, in wealth and income, is bad for everyone - even the super wealthy, unless that is they never want to leave their fortified, hermetically sealed, lavishly appointed bunkers.

The point is that the operation of markets in the circumstances of modern globalisation both leads to extreme concentrations of wealth and increasingly irrational outcomes when it comes to the dispersion of funds to combat threats or promote public goods.

It is one of the reasons why the likes of the IMF and senior politicians of left and right are no longer blithely regarding the widening gap between rich and poor as a perhaps irksome but nonetheless necessary spin-off of the greater imperative of promoting growth.

Partly it is just the jaw-dropping pace and scale of how a century of narrowing inequalities has gone into dramatic reverse.

To be clear, Oxfam's claim today that by 2016 the richest 1% could own as much or the same as the bottom 99% is not wildly implausible.

Credit Suisse's Global Wealth Report for 2014 showed that the 0.7% of the world's people with assets more than $1m controlled 44% of all the world's wealth.

And recent influential research by Emmanuel Saez and Gabriel Zucman, of the University of California, Berkeley and the LSE respectively, shows that America's top 0.1% - or 160,000 families who are worth $73m each on average - hold more than a fifth of all US wealth, the same proportion as the bottom 90% of America's people.

There are all sorts of reasons why such increases in inequality are troubling, and not just for those at the bottom of the income and wealth pyramid.

One is that aspirational people on lower incomes have massive incentives to take on too-great debts to support their living standards - which exacerbates the propensity of the economy to swing from boom to financial-crisis bust.

Another is that the poor in aggregate spend more than the rich (there are only so many motor cars and yachts a billionaire can own, so much of the super-rich's wealth sits idle. as it were), and therefore growth tends to be faster when income is more evenly distributed.

So President Obama's State of the Union address, which is expected to contain a proposal to tax the assets of the wealthy, perhaps should be seen as a belated attempt to promote economic and social stability that would benefit even the wealthy - who will nonetheless attempt to stymie him in Congress.

As it happens I am in the process of finishing a two-part Radio 4 documentary about all of this, due for broadcast in a few weeks.

And what is striking is the growing realisation - even by the extreme privileged, who are about to fly in their private jets to Davos to save the world from itself, at the annual gathering of the World Economic Forum - that it is no longer enough simply to argue that equality of opportunity is all that matters.

Or rather, there can be little equality of opportunity in a world where there is the kind of inequality of outcome we haven't seen since the early decades of the last century.

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"We could have developed a vaccine for Ebola years ago if we had chosen to allocate the resources to the appropriate research". That is what a senior and respected medical scientist, a man who would be seen as a world authority on such matters, said to me. So why wasn't the cure found?

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Inflation falling to 0.5% last month is behind the MPC keeping interest rates unchanged this month. It's looking likely to remain at this level for some time. Why?

Will this help the Conservatives in the looming general election?

Read this article.

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Maybe George Osborne will be seen as a lucky chancellor, because the fall in oil prices and the rate of inflation has happened at the most perfect time for the Tories - and presumably the Liberal Democrats too - in relation to the electoral cycle.

But there is a caveat, to which I will return.

Here is his bliss. The spending power of businesses and households has been significantly increased by tumbling oil prices.

In fact the Bank of England's minutes released today suggest that the halving in the oil price could add a full percentage point to global GDP or income growth within a year.

Here is one way of seeing the windfall to consumers. Private sector pay rose 2.1% in the three months to November. Inflation was just 0.5% in December.

But what makes all this even better for our spending power is that the descent of inflation towards zero has - almost certainly - delayed the day when the Bank of England raises its interest rate.

In fact market interest rates, including mortgage rates, have already fallen, in the expectation that the rate at which the Bank of England lends to banks will not increase until the end of this year or even next year.

There is no chance of an interest rate rise wiping the smile or smirk off George Osborne's face before May's general election.

That has been guaranteed by the decision a few days ago of the two hawks on the Bank of England's Monetary Policy Committee to stop pressing for an immediate interest rate hike and to join the rest of the committee in voting to maintain the policy rate at 0.5%.

So Mr and Mrs Feelgood-Factor may - perhaps to everyone's surprise - be casting their votes in May.

Which is not to say that ministers can rationally claim credit for the oil-linked windfall. But they'll try - and if voters have a bulge in their wallets, they may feel better disposed towards the government.

Miserly pay rises?

Ah, but what about that caveat?

Well the Bank of England points out that 40% of pay settlements will be agreed in April, around the time when the Bank expects inflation to be a big fat nought, nothing, zilcherama.

And the Bank says there is a better than evens chance that inflation will turn negative after that.

So there is a danger, the Bank says, that companies could use the absence of inflation to award miserly pay rises.

And that could do two things: it could turn our current benign low inflation into demand-crushing deflation, where falling prices precipitate lower spending and growth; and it could keep Mr and Mrs Feelgood locked indoors, a long way from the polling booths.

In fact the reason the two Bank of England hawks have abandoned their demand for higher interest rates is that they don't want to encourage employers to go for deflationary pay settlements.

But the balance of probabilities is that millions of British people will feel a bit more prosperous in the spring.

That said, the bill after the election may turn out to be steeper than we hitherto thought.

Because, with the unemployment rate now 5.8% and still falling, albeit at a reduced rate, spare capacity in the economy is disappearing.

So, as the Bank warns, after oil and energy prices have stabilised, domestic prices and inflation could bounce pretty fast.

The return to a world where inflation is a greater danger than deflation could be nearer than we think.

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Maybe George Osborne will be seen as a lucky chancellor, because the fall in oil prices and the rate of inflation has happened at the most perfect time for the Tories - and presumably the Liberal Democrats too - in relation to the electoral cycle. But there is a caveat, to which I will return.

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Good news, unemployment has fallen again by 58,000 to 1.91 million (5.8%) the lowest in 6 years and a sign of an improving economy.

A good post Matt - do you know the reasons for this fall in Ue and wasn't there something about real earnings that you could have mentioned

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The number of people out of work in the UK fell by 58,000 to 1.91 million, its lowest level for more than six years, in the three months to November, official figures indicate.

The unemployment rate now stands at 5.8% of the adult working population, the Office for National Statistics (ONS) said.

In total, there are now 30.8 million people in work.

The ONS said wage growth had also continued to outpace inflation.

In the September to November period, average earnings excluding bonuses were up 1.8% from a year earlier. Including bonuses, earnings rose by 1.7%.

It is the second consecutive month that both measures of earnings growth have been above the inflation rate.

Inflation, as measured by the consumer price index, stood at 1% in November and then fell to 0.5% in December as global oil prices tumbled further.

The number of people claiming Jobseeker's Allowance in December fell by 29,700 to 867,000, the 26th consecutive monthly reduction, said the ONS.

The ONS figures showed the east of England and the south-east (76.6%) had the highest rate of employment, whiles Wales (68.7%) had the lowest.

The unemployment rate was highest in the north-east of England (8.5%) and lowest in the south-west (4.4%), the ONS said.

Slowing growth

However, there were signs that growth in employment is easing, with the fall in unemployment its smallest since the three months to September 2013.

The number of jobless 16 to 24-year-olds also increased by 30,000 to 764,000 - the first quarterly rise since June to August 2013.

David Kern, chief economist at the British Chambers of Commerce, said the figures suggested the UK economy might be gradually slowing.

"The modest upturn in average earnings growth is a positive development. However, wage growth will only be sustainable if it is matched by increased productivity. The focus of economic policy must remain on sustaining and improving economic growth," he added.

Howard Archer, chief European and UK economist at IHS Global Insight, said the rate of improvement could have now peaked.

"We expect unemployment to fall appreciably further during 2015, but likely at a modestly reduced rate compared to the overall drop seen in 2014," he said.

Work and Pensions Secretary Iain Duncan Smith said the latest figures were a positive sign for the economy.

"We now have unemployment falling below 6% for the first time, which is a really, really important moment to mark. Jobs are being created and salaries are rising, meaning that increasing numbers of people are feeling the security and hope for the future," he added.

However, Business Secretary Vince Cable warned there was "more to be done".

"Youth unemployment remains too high. That is why we will continue to encourage firms to invest in the UK and equip British workers with the skills they need to compete in the jobs market," he added.

Shadow Work and Pensions Secretary Rachel Reeves said: "Today's fall in overall unemployment is welcome, but wages remain sluggish. Today's figures also show a worrying rise in youth unemployment. The government should bring in a compulsory jobs guarantee to get young people into work."
Rate vote
In separate economic news, Bank of England policymakers voted unanimously to keep interest rates on hold in January, minutes from the meeting revealed.

This is the first time since July last year that all nine members of the Bank's Monetary Policy Committee (MPC) have voted to leave rates unchanged.

Two members of the MPC, Martin Weale and Ian McCafferty, have been voting for an interest rate rise since August. However, the latest minutes showed the MPC thought a rate rise now might cause below-target inflation to become entrenched.

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The number of people out of work in the UK fell by 58,000 to 1.91 million, its lowest level for more than six years, in the three months to November, official figures indicate. The unemployment rate now stands at 5.8% of the adult working population, the Office for National Statistics (ONS) said.

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The IMF has lowered its estimate of global economic growth in 2015 by 0.3%. Due to many economies slowing, including China's.

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The International Monetary Fund (IMF) has lowered its forecast for global economic growth for this year and next.

The IMF now expects growth of 3.5% this year, compared with the previous estimate of 3.8% which it made in October.

The growth forecast for 2016 has also been cut, to 3.7%.

The downgrade to the forecasts comes despite one major boost for the global economy - the sharp fall in oil prices, which is positive for most countries.

The IMF expects that to be more than offset by negative factors, notably weaker investment.

That in turn reflects diminished expectations about the growth prospects for many developed and emerging economies over the next few years. If business expects weaker growth, there is less opportunity to sell goods and services and so less incentive to invest.

Deflation concerns

The eurozone is a case in point. The IMF does expect the recovery there to continue, but not strongly. It is estimating growth of 1.2% in the euro area this year and 1.4% in 2016.

For the European Central Bank, the immediate priority is to tackle the deflation, or falling prices, now under way.

Speaking to the BBC, the IMF's chief economist, Olivier Blanchard, said deflation was an adverse and worrying force, but it was "not the kiss of death... in itself, it's not going to derail the recovery".

However, he acknowledged that it was possible that deflation could set off the eurozone's debt crisis once again. Falling prices are particular problem for debtors, because their incomes - or for governments, their tax revenues - may fall, but the debt payments often do not.

The slowdown in China is another factor behind the revised forecasts. On Tuesday, official figures showed that China's growth slowed to 7.4% last year, from 7.7% in 2013.

Next year, the IMF growth forecast for China is 6.3%, compared with an average of 10% over the three decades up to 2010.

Mr Blanchard said the IMF was "fairly confident that is going to be an orderly slowdown". The report says that slower growth in China will have important effects in other emerging economies in Asia.

US strength

The sharpest downgrade of all is for Russia, which is forecast to see its economy contract by 3% this year and 1% next. That is the result of the fall in oil prices and what the report calls increased geopolitical tensions - in other words, the crisis in Ukraine and Western sanctions on Russia.

There is also a sharp downgrade for Nigeria, another oil exporter, although even the revised forecast of 4.8% for 2015 still shows strong growth. Without the downgrade, Nigeria's growth would have been very impressive.

There are some exceptions to the pattern of more downbeat forecasts. The major one is the United States, now forecast to grow at 3.6% this year and 3.3% in 2016.

This is well below China's figures, even allowing for the slowdown, but that is to be expected. Emerging economies can grow more rapidly by adopting technology that's already established in richer nations.

For the UK, the forecast for this year is unchanged at 2.7% and is cut slightly to 2.4% for 2016. Mr Blanchard sees the outlook for the UK as favourable, but he said that the weakness of the eurozone could act as "brake" on the British economy.

Crisis over?

So six years on from the most intense phase of the global financial crisis, to what extent have we put it behind us?

Mr Blanchard told the BBC that many countries have, for all practical purposes, done so - notably the US.

But there is another legacy "cramping the style of a number of countries which have very high debt and have to be careful". He says this will take a very long time to rectify. He describes Japan as an extreme example.

His overall assessment: "Some of the legacies are going away. Some of the legacies will take a long time. Things are improving. Not quite as quickly as we would dream, but they do."

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The International Monetary Fund (IMF) has lowered its forecast for global economic growth for this year and next. The IMF now expects growth of 3.5% this year, compared with the previous estimate of 3.8% which it made in October. The growth forecast for 2016 has also been cut, to 3.7%.

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Despite low inflation hitting the Euro Zone badly, Osborne beleives this won't be a problem in the Uk as It is mostly due to external factors such as the drop in oil prices

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Chancellor George Osborne has proposed new rules to ensure governments run a surplus in "normal times".

The Office for Budget Responsibility would have the power to decide when governments could spend more than they were taking in revenue, he said.

Mr Osborne told the Royal Economic Society his plan was for "when the bad times come".

A Labour spokesman said the idea was "chaotic" and it would make different choices to cut the deficit.

Mr Osborne said: "In the good times we stay in surplus - raising more money than we spend and using that to pay down our debts.

"And when the bad times come, the government will have to set out a clear plan to get back to health."

Inflation fall

A Labour spokesman said: "This is totally chaotic from a chancellor who has broken all his promises and missed all his targets on the deficit and living standards.

"Labour's plan will cut the deficit every year and get the current budget into surplus and national debt falling as soon as possible in the next Parliament.

"But we'll make different choices from the Tories, who want to risk cutting public spending back to a share of national income last seen in the 1930s."

Mr Osborne also said he hoped to recoup the taxpayer's investment in 80% government-owned Royal Bank of Scotland.

"Early in the next parliament we will have to make a decision on the timing of any exit programme from RBS," he said.

Oil drop

Mr Osborne said the sharp fall in the UK inflation rate should not be feared.

"We should not confuse this welcome news with the threat of damaging deflation that we see in the eurozone," he said.

His speech on Wednesday came a day after official figures showed the UK inflation rate had fallen to 0.5% in December - its lowest rate since May 2000.

Economists have warned the fall means an outright drop in prices is possible.

The chancellor said the sharp drop in the Consumer Prices Index was "almost entirely driven by external factors such as the oil price", which has more than halved since June, and is "much more welcome than in the eurozone", where inflation has fallen to -0.2%.

'Self-reinforcing spiral'

Mr Osborne said that the UK could experience "a few months of very low or even negative inflation" without any significant risk to the economy.

"There [in the eurozone] the debate has understandably turned to the dangers of deflation - the risk of a self-reinforcing spiral where economic activity falters, consumers defer purchases as prices fall and nominal debt burdens become ever harder to manage.

"Rising real incomes, a recovery spreading to all parts of our economy, and family budgets that can stretch that little bit further - let's celebrate these effects of low inflation, not fear them."

Bank of England governor Mark Carney has also sought to calm nerves over the risk of deflation, saying the UK has the tools to deal with it.

On Tuesday, Mr Carney told the BBC that keeping interest rates at record low levels for longer could be a way of mitigating low inflation.

And Danny Alexander, Liberal Democrat Chief Secretary to the Treasury, said lower inflation was acting "like a giant tax cut for the economy".

Speaking on the Today programme, he said: "There's a big difference between something that is a one-off effect of the sort that we are seeing, compared to the persistent, problematic deflation that you have seen in some countries around the world over different periods in history.

"This helps households around the country with many of the financial pressures that people are facing."

But Labour's shadow Treasury minister, Shabana Mahmood, said the squeeze on wages and living standards meant working people "are £1,600 a year worse off under this government... and falling energy costs are still not being fully passed on to consumers".

Inflation calculator

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Chancellor George Osborne has proposed new rules to ensure governments run a surplus in "normal times". The Office for Budget Responsibility would have the power to decide when governments could spend more than they were taking in revenue, he said. Mr Osborne told the Royal Economic Society his plan was for "when the bad times come".

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Inflation falls to 0.5% in December, once again a result of the large drop in oil prices. This is now the lowest inflation has been since May 2000. Inflation is now way below the target of 2%

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The UK inflation rate fell sharply to 0.5% in December, the joint lowest on record, official figures show.

Inflation as measured by the Consumer Prices Index fell from 1% in November to its lowest rate since May 2000, helped by cheaper fuel prices.

Low inflation could mean lower interest rates for longer, Bank of England governor Mark Carney told the BBC.

However, he said he still expected rates to "move up over the course of the next couple of years".

A fall of inflation below 1% triggers a letter of explanation from Mr Carney to the chancellor.

This is because the CPI rate is more than one percentage point away from the Bank's 2% target.

The Office for National Statistics (ONS) also said that the Retail Prices Index (RPI) measure of inflation fell to 1.6% from 2%.

The ONS said that in addition to falling fuel prices, the drop in inflation was also due to the rises in gas and electricity prices in December 2013 falling out of the equation.

Economists said that a further fall seems likely, bringing the UK closer to the scenario playing out in the eurozone, where deflation has become a problem for policymakers.

Paul Hollingsworth, of Capital Economics, said inflation could fall to about 0.2% in February, and that an outright drop in prices was possible.

Martin Beck, senior economic advisor to the EY Item Club, said a negative reading in February "is now looking more likely than not" as the impact of further oil price falls had yet to feed through.

'Giant tax cut'

Chancellor George Osborne hailed the fall in the inflation rate as good news. He tweeted: "Inflation is 0.5% - lowest level in modern times. Welcome news with family budgets going further & economic recovery starting to be widely felt."

Danny Alexander, Liberal Democrat chief secretary to the Treasury, said lower inflation was acting "like a giant giant tax cut for the economy".

But Labour's shadow Treasury minister, Shabana Mahmood, said the squeeze on wages and living standards meant working people "are £1600 a year worse off under this government... And falling energy costs are still not being fully passed on to consumers".

Keeping interest rates at record low levels for longer could be a way of mitigating low inflation, Mr Carney told the BBC.

But he stressed that the Bank still expected to raise rates gently within the foreseeable future.

"It will be an environment, most likely, that interest rates start to increase and move up over the course of the next couple of years," he said.

Inflation calculator

Economists said the issue of when to raise interest rates looked to be off the agenda for the next few months.

Rain Newton Smith, director of economics at the CBI employers' group, said: "With falling inflation rates and subdued earnings growth, we do not see the first rise in interest rates happening any time soon.

"Even by the end of 2016, the stance of monetary policy is likely to remain loose, providing a bit more breathing space for the UK's recovery," she said.

House prices

And Howard Archer, chief UK economist at IHS Global Insight, said it was unlikely there would be a rate rise "for some considerable time to come".

That is despite house prices continuing to rise, according to the ONS.

Data published on Tuesday showed that prices in the year to November rose 10%, with "strong" growth across most the UK.

The ONS said property values rose 0.2% between October and November, taking the average house price to £271,000, just below the all-time high of £274,000 reached last August.

Concerns about a house price bubble last year heightened expectations that the Bank of England would attempt to cool the market by raising rates.

By Anthony Reuben, BBC head of statistics

There has been much discussion in the past week of whether we are using the right measures of inflation, following the publication of an official report on the subject by Paul Johnson, director of the Institute for Fiscal Studies.

If you have filled a car with petrol recently, you may think that a low rate of inflation of 0.5% feels about right, with lower fuel prices also feeding into the delivery costs of food retailers, for example.

Mr Johnson says we quote too many measures of inflation, which is confusing for people. At the risk of upsetting him, it's worth mentioning that core inflation, which tries to capture underlying factors by excluding volatile prices such as food and energy costs, actually rose from 1.2% in November to 1.3% in December.

Analysts said that could reflect the way that some of the discounts usually seen in December were moved back to Black Friday in November, which made December look relatively more expensive.

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The UK inflation rate fell sharply to 0.5% in December, the joint lowest on record, official figures show. Inflation as measured by the Consumer Prices Index fell from 1% in November to its lowest rate since May 2000, helped by cheaper fuel prices.

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A good post Ollie - do you think this backs up what we said in class that the GDP growth is being fuelled by the public sector rather than the private sector?

Growth in vehicle sales in the world's largest car market, China, halved last year as the country's economic expansion slowed.

The China Association of Automobile Manufacturers (CAAM) said that sales rose by 6.9% in 2014, compared with growth of 13.9% a year earlier.

To comment it is evidence that the country's economic growth has slowed down but is however still high compared to other economies.

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Growth in vehicle sales in the world's largest car market, China, halved last year as the country's economic expansion slowed.

The China Association of Automobile Manufacturers (CAAM) said that sales rose by 6.9% in 2014, compared with growth of 13.9% a year earlier.

The industry body also expects the market to expand by 7% this year, in line with China's economic growth.

Global carmakers have been grappling with slowing sales in China.

On Sunday, Volkswagen, which is Europe's biggest carmaker and the top selling global brand in China, said its sales in the country rose 12.4% to 3.67 million vehicles last year, compared with growth of 16% in 2013.

Japanese carmaker Toyota missed its full-year sales target in China last year, selling 1.03 million cars compared with its aim of 1.1 million.

However, despite the cooling of the car market in the world's second-largest economy, its size is still much bigger than that of its closest competitor - the US.

More than 23 million vehicles were sold in China last year, compared with an estimated 16.5 million in the US.

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Growth in vehicle sales in the world's largest car market, China, halved last year as the country's economic expansion slowed. The China Association of Automobile Manufacturers (CAAM) said that sales rose by 6.9% in 2014, compared with growth of 13.9% a year earlier.

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Senior figures from the world of sport and entertainment have issued a call for new controls on websites selling event tickets.

They want resale websites to be required to publish the names of ticket sellers and the tickets' face value.

To comment it is a step forward in means of ticket sale control.

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Senior figures from the world of sport and entertainment have issued a call for new controls on websites selling event tickets.

They want resale websites to be required to publish the names of ticket sellers and the tickets' face value.

The call comes in a letter to the Independent on Sunday signed by heads of sporting and cultural bodies and entertainers' management companies.

MPs will debate the rules on Monday; ministers prefer a voluntary approach.

The Department of Culture, Media and Sport has previously said a change in the law would be unnecessary.

Secondary ticketing sites act as marketplaces that allow sellers to charge what they like for concerts, plays and sports events, and often earn a commission from selling on the tickets.

When tickets for a popular event go on sale, they may be snapped up in bulk either manually or using automated software in order to sell them on at a profit.

'Put fans first'

The letter warns that the way the secondary ticketing market currently operates can seriously undermine efforts to ensure fair prices for event-goers.

"It's high time the government stopped sticking up for secondary platforms, and decided to put fans first," the letter continues.

Individuals and organisations behind the letter include the England & Wales Cricket Board, Lawn Tennis Association and Rugby Football Union; the UK Theatre organisation; and managers of the bands Iron Maiden, Arctic Monkeys, Radiohead and One Direction.

They want ministers to give their backing to a set of measures requiring secondary ticketing platforms to publish:

the name of the seller and whether they are affiliated to a larger organisation

the face value of the ticket

the seat number of the ticket

whether the resale contravenes terms and conditions agreed to by the original buyer.

The proposals have been suggested as a change to the Consumer Rights Bill, which is currently going through Parliament.

How do ticket resale websites work?

Ticketing specialist Reg Walker explains: "This is organised and on an industrial scale. I think everyone at one time or another has tried to purchase tickets online, [and] simply not been able to get through because they are blocked out from the system by touts harvesting tickets in bulk using extremely sophisticated software.

"The software hits the primary ticket agent's system with a high-speed connection with multiple identities - different names, different credit cards, different addresses, different email address. It just simply pounds the system far faster than you or I can actually fill out our details.

"Unfortunately, what happens is as soon as tickets are harvested, they are flipped straight over onto a small number of so-called ticket marketplaces. The public are forced then to buy at inflated prices. We've seen £75 tickets go for upwards of £1,200. So some of the mark-ups on these tickets are enormous."

Rod Smallwood, Iron Maiden's manager, added: "At the end of the day we care about the fans, we care about the future of this business and we try not to overload them."

A spokesman for Viagogo, a ticket sales website, said: "We are in favour of making information clearer on our website and have made a number of commitments in our recent discussions with the government.

"However, publishing the original seller's identity is unnecessary because all tickets come with the Viagogo guarantee, while publishing specific seat numbers allows rights owners to cancel tickets which are being legitimately resold. Anyone can see that is not in the consumer's best interests."

'Market abuse'

Arguing on behalf of the proposed regulations in the House of Lords last November, the Conservative peer and former Olympic rower Lord Moynihan said the government had "an opportunity for action on behalf of consumers, the many people who daily find themselves to be the victims of market abuse".

But the government's culture spokesman, Viscount Younger of Leckie, responded: "I believe that a voluntary approach with improved guidance and with better point-of-sale electronic means to control ticketing is the way forward."

Peers defeated the government and voted in favour of adding the measures to the Consumer Rights Bill.

On Monday, MPs will need to decide whether to overturn that decision.

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Senior figures from the world of sport and entertainment have issued a call for new controls on websites selling event tickets. They want resale websites to be required to publish the names of ticket sellers and the tickets' face value.

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China's inflation has slowed down growth of 7.3% whereas inflation has increased to 1.5%.

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China's inflation rate remained near a five-year low in December, edging up to 1.5% from 1.4% the month before.

Sharp rises in the price of some food items were behind the increase, including a 14% rise in egg prices.

Consumer price inflation (CPI) for the whole of 2014 was 2% compared with 2013, well below the government's target of 3.5%.

Analysts suggested the data pointed to persistent weakness in the world's second largest economy.

The producer price index (PPI), which includes wholesale and factory price inflation, fell by a greater than expected 3.3% in December from a year earlier marking the 34th consecutive monthly fall since September 2012. Analysts had expected PPI to fall by 3.1% in December.

China's National Statistics Bureau said the fall was largely due to falling oil prices.

Growth

Together, the inflation numbers point to weak domestic demand across China, which some analysts say may give the government room to cut interest rates and take other measures to boost growth which has slowed to a five-year low of 7.3% in the three months to the end of September.

On Thursday, China said the recent approval of infrastructure projects would not "play the role of using fiscal expenditure as strong economic stimulus in 2015" and that the projects were different to stimulus measures introduced in 2008.

Liu Ligang, an economist with ANZ in Hong Kong, said China's inflation had been "very tepid".

"Going forward, we do see the risk of deflation is rising, especially [as] PPI inflation has been in negative territory for over 34 months," he said.

"That means there's no pass-through effected from PPI inflation into CPI inflation.

"In fact, CPI will continue to be dragged down by PPI inflation in the next few quarters [and] all this suggests the People's Bank of China will need to act more aggressively."

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China's inflation rate remained near a five-year low in December, edging up to 1.5% from 1.4% the month before. Sharp rises in the price of some food items were behind the increase, including a 14% rise in egg prices. Consumer price inflation (CPI) for the whole of 2014 was 2% compared with 2013, well below the government's target of 3.5%.

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There is a strong case for abandoning the Consumer Prices Index (CPI) as the headline measure of inflation, according to Institute for Fiscal Studies head Paul Johnson.

He was commissioned to review the measures of inflation for the UK Statistics Authority (UKSA).

Mr Johnson suggests replacing CPI with CPIH, a measure that includes owner occupiers' housing costs.

His recommendations are not binding on the government or the UKSA.

The authority is now expected to launch a consultation on the report and respond to it later in the year.

The CPI is one of the most important indicators for the economy, because the Bank of England's interest rate-setting Monetary Policy Committee's job is to keep CPI within one percentage point either side of its 2.0% target.
Measures of inflation
CPI - currently the headline rate of inflation, comparable with other European countries

CPIH- CPI with an added measure of owner-occupier housing costs

RPI - the old measure of inflation, now discredited due to problems with methodology

RPIJ - RPI adjusted to solve the methodological problems

Mr Johnson also suggests that the government should move away from using the Retail Prices Index (RPI) for any reason as soon as possible.

It is currently used to determine how much regulated train fares can rise as well as the interest paid on some government bonds and student loans.

RPI had its national statistic status removed in 2013, but at the time it was decided that the problems with the way it is worked out should not be resolved because that would be moving the goalposts on existing things like bonds and some private sector pension schemes.

'Unfortunate'

RPIJ was introduced as a new version of RPI without the calculation problems, but Mr Johnson recommends stopping the production of RPIJ and that having too many measures of inflation is confusing.

On the other hand, at a news conference he said that continuing to pay interest on government bonds using the discredited formulation for RPI instead of changing to RPIJ, a method that meets international standards, was costing the UK £2bn a year.

He said it was "unfortunate that we are where we are" but that it would be difficult to unpick current legal obligations.

He added that there was little demand for index-linked bonds that were not based on RPI because most private sector pensions were still linked to RPI.

While he says that government and regulators should work towards ending the use of the RPI as soon as possible and that it should then stop being produced, he points out that some government bonds currently based on RPI do not mature until 2068, which means it will be difficult to withdraw it any time soon.

'Odd'

In the most recent set of inflation figures, CPI and CPIH both showed inflation of 1.0%.

But, like RPI, CPIH currently has its designation as a national statistic suspended because of concerns about the way it is calculated.

Since it started being calculated in 2006, CPIH has always been either the same as or slightly below CPI. It has never been more than half a percentage point below CPI. But Mr Johnson said he was surprised that CPIH had been so close to CPI, that there may be greater differences in the future and that, when measuring inflation, "it is odd just to leave out owner-occupied housing".

Research conducted as part of the review found that households with the lowest levels of spending had experienced significantly greater inflation recently than those with higher spending.

The review recommended that the Office for National Statistics should begin producing an annual report looking at the impact of inflation on different groups.

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There is a strong case for abandoning the Consumer Prices Index (CPI) as the headline measure of inflation, according to Institute for Fiscal Studies head Paul Johnson. He was commissioned to review the measures of inflation for the UK Statistics Authority (UKSA). Mr Johnson suggests replacing CPI with CPIH, a measure that includes owner occupiers' housing costs.

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http://www.bbc.co.uk/news/business-29896810

This shows the conflicts between employers and employees. If employers were forced to pay extra during holiday's due to some employees working overtime, it would make employers limit the amount of overtime work that can be done. On the other hand it allows employees who work hard to benefit from it leading to higher motivation etc...

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Fat Cat Tuesday - unequal distribution of income? Please post your thoughts....Dawn

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Fat Cat Tuesday - unequal distribution of income? Please post your thoughts....Dawn

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Top business bosses have already earned a year's salary in 2015 on the day dubbed "Fat Cat Tuesday".

Just two days into the new working year, while most workers are still emerging blinking into the grey daylight, weighed down by mince pies after the Christmas break, business chiefs will already have earned a massive £27,200.

That's how much workers in the UK are paid on average each year. The chief executives of the FTSE 100 meanwhile, will pocket £4.72m a year.

The High Pay Centre has called out this disparity between those at the top and the average Joe, despite a high-profile crackdown on bankers' bonuses and more than a few shareholder revolts over pay last year.

Such is the pressure on executive pay from shareholders and the public, Germany has now overtaken the UK to become Europe's capital for well-paid executives, according to a new report.

Deborah Hargreaves, the think tank's director, said: "Fat Cat Tuesday highlights the problem of unfair pay in the UK. For top bosses to rake in more in two days than their staff earn in a year is clearly unfair, disproportionate and doesn't make social or economic sense.

"Politicians need to do more to stand up to big business and the super-rich. We must also give workers the power to force employers to share pay more fairly throughout their organisation."

However, the Institute of Directors (IoD) warned that calling out the pay of bosses of successful businesses risked damaging business and the economy.

"The IoD has often been first out of the blocks when it comes to raising concerns about unjustified rewards, and we've long encouraged greater shareholder activism on remuneration, but the truth is that constructs such as Fat Cat Tuesday add more heat to the debate than light," said IOD head of campaigns Christian May.

"Describing the remuneration of top performing FTSE 100 CEOs as 'unfair' is verging close to the politics of the playground. Nobody supports excessive pay or rewards for failure, but voyeuristic gawping at the salaries of the successful doesn't do much to promote the politics of prosperity. Instead it adds to a creeping anti-business mood that could damage the long-term prospects of the British economy," added May.

The High Pay Centre said the day when chief exec pay surpassed the average salary had arrived earlier this year, as their pay rose by nearly half a million pounds and the average salary in the UK increased by a meagre £200 compared to the previous year, when it took bosses three, rather than two days, to earn the equivalent pay.

Other figures suggest the shareholder spring of 2012 has already pushed down executive pay when it comes to salary, bonuses and pension, but barring the vestment of Long Term Incentive Plans (LTIPs) agreed before then.

Standard Chartered, Burberry and BG Group were among the companies which had remuneration packages challenged by shareholders last year.

On the flipside, it would take the average UK worker 174 years to earn the equivalent of FTSE 100 bosses.

Earn more than the UK average? Check out how long it would take for you to earn the same as them, and nine other top CEOs, by entering your yearly salary in the calculator below.

[calculator id="17"]

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Top bosses have already earned a year's salary in 2015

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Top business bosses have already earned a year's salary in 2015 on the day dubbed "Fat Cat Tuesday". Just two days into the new working year, while most workers are still emerging blinking into the grey daylight, weighed down by mince pies after the Christmas break, business chiefs will already have earned a massive £27,200.

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UK construction grows at slowest pace for 17 months

Good to see you posting Rachel - would be good to see a comment about the economic significance of this.

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Activity in the UK's construction sector grew at its slowest pace for 17 months in December but remains robust thanks to continued growth in housebuilding, a survey has found.

The closely watched Markit/CIPS purchasing managers' index (PMI) fell to 57.6 from 59.4 a month earlier.

The index remains above the 50-mark which indicates growth in the sector.

Housebuilding continued to drive construction activity, but grew at its slowest pace since June 2013.

The weakest construction sub-sector in December was civil engineering, which reported a fall in output for the first time since May 2013.

Despite the slowdown in December, Markit said housebuilders overall had enjoyed their best year since 1997.

Construction companies also reported "a solid increase in new business volumes in December", Markit said.

Confidence

The survey said anecdotal evidence pointed to strong demand for new residential development and a further recovery in construction firms bidding for commercial projects.

Markit also reported signs that wages might be starting to rise in the sector, with rates paid to subcontractors growing almost as rapidly as November's record-high pace.

Economists are forecasting that after several years of falling real wages, 2015 might bring the first year that the UK sees widespread increases in pay since the 2008 financial crisis.

Construction firms pointed to new housebuilding as a key area of growth in 2015. Uncertainty surrounding the general election later this year - at which the main political parties are expected to outline how they would tackle the UK's continuing budget deficit - was expected to weigh on confidence.

Tim Moore, senior economist at Markit, said: "A sharp recovery in housebuilding, as well as resurgent demand for commercial development projects, continued to boost staff recruitment and sub-contractor pay rates across the construction sector in December.

"While new business growth moderated to its lowest for a year-and-a-half in December, UK construction firms are still highly upbeat about their prospects for output growth in 2015."

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Activity in the UK's construction sector grew at its slowest pace for 17 months in December but remains robust thanks to continued growth in housebuilding, a survey has found. The closely watched Markit/CIPS purchasing managers' index (PMI) fell to 57.6 from 59.4 a month earlier.

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This perhaps widens the north-south divide in Britain, relating the HS2. These rises in tickets prices, which were already quite high, mean less people can afford to travel between the north and south, perhaps people will have to leave jobs. A good point Matt - good to see you commenting.

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Rail fare rises that have come into effect in England and Wales are regrettable but necessary, Transport Secretary Patrick McLoughlin has said.

Regulated fares - which include season tickets - increased by up to 2.5%, while the average fare rose by 2.2%.

The government said fares were crucial to funding rail modernisation but trade unions said the increases continued to outstrip wage growth.

Labour said it would enforce a "strict cap on fares".

This year's fare hike will hit passengers particularly hard because wages are rising so slowly
Frances O'Grady, TUC general secretary

Mr McLoughlin told the BBC: "The truth is we're seeing the largest investment we've seen in the railways. Over the next five years Network Rail will invest over £38.5bn.

"I accept that 2.5% is more than the passenger wants to pay. Any increase is regrettable but it is a fact that we're investing record amounts into the industry so that we get better train services."

He added that the government was protecting passengers to some extent by stopping operating companies from increasing individual fares by up to 2% more than they have done.

Salary comparison

The Campaign for Better Transport said the cost of a Milton Keynes to London season ticket had risen by 23.5% - or £930 - since January 2010. The price of a 2015 ticket is £4,888.

The group said this was one of a number of fares to increase by about four times more than average wages over the five-year period.

In terms of wages the latest statistics from the Office of National Statistics (ONS) show that from August to October 2014, average wages, excluding bonuses, were up 1.6% from a year earlier.

Analysis

By BBC transport correspondent Richard Westcott

For 10 years or so, successive governments have taken a conscious decision to get more money out of rail passengers through higher fares.

They get hammered every time they put prices up, even if it's just by inflation, so why do they do it?

The reason is simple. If passengers pay more, the government, and therefore all the other taxpayers, pay less.

And the fact is that the vast majority of commuters, about 95%, don't take the train. Most people drive.

So the argument is that they're getting the people who actually use trains to pay a bigger chunk of the bill.

That's little comfort to commuters who need to find a lump sum of thousands of pounds every year, just to get to work - and who don't feel the quality of their service matches the price tag.

The TUC said the UK had some of the highest rail fares in Europe, and proportionately UK passengers spent more than twice as much of their salary on tickets compared to those in other countries such as Spain, France or Germany.

General secretary Frances O'Grady said: "This year's fare hike will hit passengers particularly hard because wages are rising so slowly. Rail fares are now consuming a huge proportion of people's wages, leaving precious little for other bread-and-butter expenses."

RMT general secretary Mick Cash said: "The scandal of Britain's great rail fares rip-off continues with today's hike far outstripping average pay increases, and it will once again hit those at the sharp end of the austerity clampdown the hardest."

Labour shadow transport secretary Michael Dugher said: "David Cameron is presiding over a rip-off railway in Britain. Some season tickets have now risen by over 30% under this government, forcing people to pay thousands of pounds more to commute to work on increasingly overcrowded trains."

Michael Roberts, director general of the Rail Delivery Group representing rail operators and Network Rail, said: "At 2.2%, the average increase in fares in 2015 is the lowest for five years.

He said that for every £1 spent on fares a total of 97p went back into improving the industry.

In Wales, ticket prices on Arriva Trains Wales services will rise by 2.5% or 10p - whichever is greater.

In Northern Ireland rail fares are set separately and have not risen since 2013.

Similarly in Scotland, there will be no rise in 2015 in off-peak fares, which have been frozen since January 2013. Peak fares will rise by 2.5% in line with England and Wales.

On Friday overhead wire problems at Nuneaton in the West Midlands have caused delays on services from Crewe to London. There were also delays in East Anglia and flooding in Wales meant buses had to replace trains between Blaenau Ffestiniog in Gwynedd and Llandudno Junction in Conwy.

The Office of Rail Regulation (ORR) has also said that it plans to complete an inquiry by the end of the month into what caused major disruption to passengers on Saturday 27 December, which saw engineering works overrun and London's King's Cross station close.

Earlier this week, Network Rail chief executive Mark Carne revealed he would not be taking his bonus after Christmas engineering works overran and caused major rail disruption.

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Rail fare rises that have come into effect in England and Wales are regrettable but necessary, Transport Secretary Patrick McLoughlin has said. Regulated fares - which include season tickets - increased by up to 2.5%, while the average fare rose by 2.2%.

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David Cameron’s Christmas is becoming a turkey

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It's easy to fall prey to compassion fatigue at Christmas. You know how it is. You've worked tirelessly all year to improve the lot of the little people with no thought of any public recognition for your efforts and still everyone just complains that you haven't done enough for them.

So you might have claimed to have cut the deficit by half when the actual figure is only a third, but that's the kind of slip of the tongue anyone who had given so much of themselves could make. Damn it, it's hardly your fault if thousands of pensioners will insist on dropping down dead in the cold; the excess winter death statistics, as you so caringly refer to them, cut you to the quick as much as the next man. Especially when the man next to you is all too frequently Iain Duncan Smith. For the last few months, every prime minister's questions has been an election debate rehearsal in miniature and in his last outing before going home to the social niceties of trying to avoid Rebekah Brooks and Elisabeth Murdoch at the Chipping Norton Boxing Day meet, David Cameron had the look of a man who had peaked too early. Nothing was going to plan.

The economy was meant to have been his personal gift from Santa and he wasn't at all happy that the grinch opposite him had already unwrapped it and discarded it as faulty.

"It comes back to the point that the opposition now seem to be basing their entire economic policy on some throwaway remark on the BBC at about 10 past 6 on a Monday morning," the prime minister said snippily, making it sound as if the idea Britain was returning to 1930s levels of public spending as a percentage of national income was an Orwellian plot cooked up by the BBC and some Commies in Camden, rather than a statement of fact contained in a recent report by the Office for Budget Responsibility.

Ed Miliband was a great deal more upbeat. After being a no-go area for the Labour leader for the best part of a year, the economy is now proving to be more equal ground as voters have wised up to the fact that both parties plan more cuts, but would rather be killed by well-meaning incompetence than hardline ideology.

Although the prime minister tried to dig himself out of the hole by arguing state spending was actually at the same levels as in 2002 in real terms, Miliband pushed him back in by saying he couldn't have it both ways. "The right honourable gentleman has spent four years saying that we spent too much; now he is saying that we spent too little."

The Conservative benches were quieter than usual as turkey after turkey stood up to ask a planted question about why the government's long term economic plan was so extraordinarily successful.

Cameron had one last go at offering them a Christmas bonus by triumphantly waving the leaked document on how Labour candidates should deal with the electorate. Its author, Lucy Powell, folded her arms in preparation for her career ending before it had really started.

She needn't have worried because the only new point of interest the prime minister had discovered was something everyone already knew: that the Tories were currently ahead on running the economy.

Though not necessarily for much longer. Determined to get the last word, Cameron opted for seasonal ill-will. "He's a complete waste of space," he yelled. MPs looked around in confusion, not sure quite to whom he was referring. There were a number of possibilities.
Topics

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David Cameron's Christmas is becoming a turkey

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It's easy to fall prey to compassion fatigue at Christmas. You know how it is. You've worked tirelessly all year to improve the lot of the little people with no thought of any public recognition for your efforts and still everyone just complains that you haven't done enough for them.

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In a crisis, they say, it is clear who your friends are. France has been in the grip of an economic crisis for years, but the country is still divided over which of its politicians are friends to the nation and which are enemies.

Economy Minister Emmanuel Macron, who cut his teeth in the Rothschild banking group, launches a series of reforms on Wednesday designed to "unlock" the French economy.

Some French believe that the tough love and new reforms that he is planning are exactly what France needs. Others - including some within his own Socialist Party - see him as taking the nation apart piece by piece.

Aged 36, Mr Macron is the youngest member in Prime Minister Manuel Valls's Socialist government and French commentators are widely predicting a baptism of fire.

Among the key changes are plans to liberalise national bus routes and open up "protected" professions.

Notaries, bailiffs and lawyers are gearing up to defend their interests and aim to turn out on the streets in their thousands in protest.

Mr Macron is standing firm, arguing that "by overprotecting, we end up protecting nothing", quoting France's Nobel economics prize winner Jean Tirole.

And then there is a proposal to extend Sunday shopping to 12 times a year and provide exemptions to selected "zones with strong tourist and economic potential".

Some shops already open on Sundays in the run-up to Christmas.

The festive window displays of the grands magasins (department stores) of Paris draw huge crowds on weekends. Small children are held high against the glass as the smell of chestnuts wafts over the crowd of shoppers, shuffling along the boulevard.

But the number of Sunday licences is strictly limited to five days in a year - a tribute to France's traditionally Socialist values. Local authorities are currently allowed to refuse all such trading on Sundays completely.

Under Mr Macron's plan, all that will change - a step backwards in the eyes of many rebels on the left of the Socialist Party.

But not for Prime Minister Manuel Valls who asked on French TV: "Do we want Chinese tourists to leave to do their shopping in London on Sundays?"
Emmanuel Macron - Hollande's 'right brain'

Philosophy graduate with theses on Hegel and Machiavelli

Aged 25, became assistant to late philosopher Paul Ricoeur

Worked for Rothschild Group 2008-2012, advised Nestle on subsequent purchase of Pfizer subsidiary

Became economics adviser to President Francois Hollande in 2012

Helped draft Hollande's Responsibility Pact, pledging €40bn in tax breaks to companies hiring new workers

Appointed economics minister in August 2014

For one of the Socialist rebels, Sandrine Doucet, the Sunday shopping issue revolves around giving people the chance to rest.

"We shouldn't let go of that tradition," she argues.

"Sunday rest is a Socialist achievement, something we have fought long and hard to achieve. If we lose this right, we'll also lose other rights, because I don't believe that employees will be properly paid for working on a Sunday."

But while left-wing politicians are firmly opposed, a large majority of the public appears to have come round to the changes.

Pollster Gael Sliman from Oxada says that traditional opposition to Sunday opening hours is shrinking. "Seventy per cent of voters we asked recently said they were in favour of it," he said, "and opposition is diminishing towards other kinds of reform too."

Certainly the lunch-time crowds around the Paris shopping district of Les Halles were firmly behind the plan.

"It's a good choice for people who work all week, and on Sunday it's possible to shop with the family," said one man.

One woman pointed out that France had several religions, not just Christianity. A student added that many workers were happy to work on Sundays as they received double pay, but felt they should not be forced to work at weekends.

Oxada's recent poll suggests that 86% of French voters think the government's economic performance is poor.

"Voters don't care about politics at the moment," Mr Sliman says, "they are more pragmatic and less ideological than ever before. They want change."

But Mr Macron is making enemies even among those who approve of his reforms. While some in his party say he is going too far, other colleagues accuse him of moving too slowly. One leading Socialist criticised his lack of ambition.

German Chancellor Angela Merkel told a German newspaper that French plans did not go far enough.

One Socialist colleague of Mr Macron suggested that the minister should decide whether it was Mrs Merkel that he should wish to please, or the voices of his party colleagues.

As Emmanuel Macron is finding out, it is hard to please everyone.

The proof, though, may well be in the results. If he and his prime minister can engineer an upturn in the economy, they will suddenly find themselves a whole lot more popular than they thought. And, with presidential elections due in three years' time, popularity counts.

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In a crisis, they say, it is clear who your friends are. France has been in the grip of an economic crisis for years, but the country is still divided over which of its politicians are friends to the nation and which are enemies.

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- Matt

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While studying can differ for different age groups, many of the things that get in the way are the same. Whether it's your environment or time management skills, it easy for things to discourage you from finishing your homework. With a...

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Lower fuel prices have pushed the UK's rate of inflation down to a 12-year low, official statistics show.

The Consumer Prices Index inflation measure - which assesses the cost of basic household goods - fell to a rate of 1% in November from 1.3% in October.

The fall is being dubbed an "early Christmas present" for consumers.

But some investors are concerned that it could slow the UK's economy, as people delay purchases, expecting prices to fall even further.

Inflation as measured by the Retail Prices Index fell to a five-year low of 2%, down from 2.3%.

Cheaper travel

The Office for National Statistics said falling fuel prices, caused by the decline in global oil prices, have brought the costs of both road and air travel down, with petrol prices down 5.9% in November.

Additionally, food prices fell by 1.7%, helped by supermarket price wars, while recreation and culture prices fell by 0.3%.

Both food and fuel account for a large part of the ONS' inflation calculations.

In the first few months of 2014, UK inflation generally rose, reaching 1.9% in June.

But the recent low rate of inflation means that earnings are finally rising faster than prices, after years of failing to keep up.

The latest report on the rate at which average wages in the UK are growing is due on Wednesday.

'Good news'

The Bank of England, which targets an inflation rate of 2%, warned last month that the rate could drop below 1% in the next six months.

The lacklustre outlook means that the Bank is unlikely to raise interest rates from the historic low of 0.5% for some time.

If inflation falls below 1%, the governor, Mark Carney, would have to write a letter of explanation to the chancellor.

However, Ben Brettell, an economist at Hargreaves Lansdown, says the Bank will not be too concerned by the fall in inflation.

"A fall below 1% now looks likely, but the resulting letter of explanation from Mark Carney to the chancellor should be relatively easy to write," he said.

"A reduction in fuel costs is good news for the UK economy, and can be seen as broadly analogous to a tax cut. It should ease the pressure on household budgets and boost consumer spending."

Indeed, the fall in inflation has been called an "early Christmas present" by politicians and financial analysts.

But falling inflation could be of concern to investors, as the UK moves closer to the eurozone's situation of battling to avoid deflation.

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Lower fuel prices have pushed the UK's rate of inflation down to a 12-year low, official statistics show. The Consumer Prices Index inflation measure - which assesses the cost of basic household goods - fell to a rate of 1% in November from 1.3% in October.

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Here is the link to an extremely interesting article regarding the inflation rate being at a 12 year low of just 1% as fuel costs fall

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Lower fuel prices have pushed the UK's rate of inflation down to a 12-year low, official statistics show.

The Consumer Prices Index inflation measure - which assesses the cost of basic household goods - fell to a rate of 1% in November from 1.3% in October.

The fall is being dubbed an "early Christmas present" for consumers.

But some investors are concerned that it could slow the UK's economy, as people delay purchases, expecting prices to fall even further.

Inflation as measured by the Retail Prices Index fell to a five-year low of 2%, down from 2.3%.

Cheaper travel

The Office for National Statistics said falling fuel prices, caused by the decline in global oil prices, have brought the costs of both road and air travel down, with petrol prices down 5.9% in November.

Additionally, food prices fell by 1.7%, helped by supermarket price wars, while recreation and culture prices fell by 0.3%.

Both food and fuel account for a large part of the ONS' inflation calculations.

In the first few months of 2014, UK inflation generally rose, reaching 1.9% in June.

But the recent low rate of inflation means that earnings are finally rising faster than prices, after years of failing to keep up.

The latest report on the rate at which average wages in the UK are growing is due on Wednesday.

'Good news'

The Bank of England, which targets an inflation rate of 2%, warned last month that the rate could drop below 1% in the next six months.

The lacklustre outlook means that the Bank is unlikely to raise interest rates from the historic low of 0.5% for some time.

If inflation falls below 1%, the governor, Mark Carney, would have to write a letter of explanation to the chancellor.

However, Ben Brettell, an economist at Hargreaves Lansdown, says the Bank will not be too concerned by the fall in inflation.

"A fall below 1% now looks likely, but the resulting letter of explanation from Mark Carney to the chancellor should be relatively easy to write," he said.

"A reduction in fuel costs is good news for the UK economy, and can be seen as broadly analogous to a tax cut. It should ease the pressure on household budgets and boost consumer spending."

Indeed, the fall in inflation has been called an "early Christmas present" by politicians and financial analysts.

But falling inflation could be of concern to investors, as the UK moves closer to the eurozone's situation of battling to avoid deflation.

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Lower fuel prices have pushed the UK's rate of inflation down to a 12-year low, official statistics show. The Consumer Prices Index inflation measure - which assesses the cost of basic household goods - fell to a rate of 1% in November from 1.3% in October.

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The amount of energy people are using in the UK is falling steadily even though the economy is growing, new figures confirm.

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http://www.bbc.co.uk/news/business-30512935

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Pension savers with the smallest pots can be exposed to the highest levels of charges, an independent report has revealed.

The study of management fees has found that many savers in workplace pension schemes face charges of more than 3% a year.

The majority of these are held by savers with pots of less than £10,000.

A body representing providers said that the evidence in the report was largely historic.

The Association of British Insurers (ABI) said that the level of charges has been falling significantly in recent years.

But Pensions Minister Steve Webb said the report had exposed the industry's "guilty secrets and murky past". He has threatened legislation if providers do not provide value for money in pension schemes, although this would not happen before the General Election.

Pensions explained

A defined contribution (DC) workplace scheme is where both the employee and the employer pay contributions each month. Those contributions are usually invested into shares or bonds.

The ultimate size of the pension pot depends on how well those shares and bonds perform, and on the amount of charges that are deducted for management fees every year.

When they retire, savers often use that pension pot to buy an annuity, which will pay them an income for the rest of their lives. These numbers have been falling owing to greater access to savings announced in the Budget.

Under DC schemes, workers carry the investment risk, and there is no certainty about what they will receive in retirement.

Millions saved

The Independent Project Board has been studying the potential level of fees for savers in workplace defined contribution schemes since last year. It concentrated mostly on older, "legacy" schemes.

It found:

Out of £67.5bn of funds being managed, up to £25.8bn could face management charges of more than 1% a year

Of these, up to £8bn of funds being managed could face charges of 2%

Up to £900m of funds being managed could face charges of more than 3%

Some 291 different combinations of charges are in place

An estimated 407,000 savers who have joined schemes in the last three years could face charges of more than 1%

Some savers who leave schemes early could face exit charges of 10%

The government has set a management fees cap of 0.75% for workplace schemes which takes effect from April. However, this only applies to the default scheme for people joining - or automatically enrolled - into a workplace scheme.

Many savers will not be protected by this cap, so the report has criticised some of the high charges they face. The authors have written to providers in this situation and said they expect a justification for any high charges by June next year at the latest.

The pensions minister said he would call in some providers in the new year, expecting quick action, otherwise they could face legislation.

However, the trade body for providers said that changes were already being made.

Huw Evans, director of policy at the ABI, said: "How much people save and for how long can have an important impact on charge levels, and investment performance and quality of scheme governance also matter.

"Providers will welcome the clarity this report provides and will remain absolutely committed to building on the radical changes of the last decade, which have already seen average pension charges fall to their lowest-ever levels for auto-enrolment schemes."

The ABI said that these legacy schemes were regulated, so there should be no requirement for refunds to anyone who has paid high charges in the past. The pensions minister also accepted that securing any compensation of this kind would be a challenge.

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Pension savers with the smallest pots can be exposed to the highest levels of charges, an independent report has revealed. The study of management fees has found that many savers in workplace pension schemes face charges of more than 3% a year. The majority of these are held by savers with pots of less than £10,000.

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The price of Brent crude oil has fallen bellow $59 a barrel for the first time since May 2009.

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Kim Jong Un doesn't like Seth Rogen.

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Sky News - First For Breaking News From The UK And Around The World

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Sky News - First for Breaking News, video, headlines, analysis and top stories from business, politics, entertainment and more in the UK and worldwide.

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Wage growth in the UK is picking up, figures from the Office for National Statistics (ONS) indicate.

In the August-to-October period, average earnings excluding bonuses were up 1.6% from a year earlier. Including bonuses, earnings rose by 1.4%.

It is the first time for six years that both measures of earnings growth have been above the inflation rate.

Meanwhile, the number of people unemployed in the quarter fell by 63,000 to 1.96 million.

The fall was the slowest quarterly fall for a year, leading some analysts to speculate that the rate of improvement may have peaked.

The jobless rate was 6%, matching its lowest level in six years.

The ONS figures also showed that there were 30.80 million people in work in the three-month period, 115,000 more than for the May-to-July period, driven by more people in full-time work.

The number of people claiming Jobseeker's Allowance in November fell by 26,900 to 900,100.

'Decent improvement'

For the month of October alone, pay including bonuses, increased by 1.8%. That compares to an inflation rate of 1.3% in the same month.

November's inflation figures were released on Tuesday and showed it falling further - to a 12-year-low of 1%.

Bank of England policymakers expect that trend to continue.

Earlier on BBC Radio 5 live, the Bank of England's deputy governor, Jon Cunliffe, said UK inflation in the coming months was "going to be low".

Analysts were encouraged by the earnings growth.

"Earnings growth is finally starting to open a clear positive gap over inflation, which is serious good news for consumers," said Howard Archer, economist at IHS Global Insight.

"This bodes well for consumer spending in 2015, although it needs to be borne in mind that consumers have faced a prolonged squeeze on their purchasing power.

"Meanwhile, the labour market is still seeing decent improvement, although the underlying rate of improvement is showing signs of moderation," he added.

However, TUC general secretary Frances O'Grady said the figures showed "some long overdue improvements, but at this rate it will take over a decade to recover the real value of people's earnings".
Analysis: Robert Peston, BBC economics editor
It has been a journey of a good six years, give or take the odd blip, but weekly earnings do now seem to be pulling ahead of Consumer Price Index (CPI) inflation.

This is especially true of the private sector, which accounts for 82% of jobs (and rising) - where average weekly earnings rose 2.2% in October, compared with inflation of 1.3% in that month and 1% in November.

The fastest wage growth was 3% in finance and business services - don't curse please, it's unbecoming - and 2.7% in construction.

The shrinking public sector saw a less-than-inflation 0.5% rise.
Read Robert's blog in full
In a tweet, Prime Minister David Cameron said: "Employment is at a record high & average earnings are rising faster than inflation. More to do, but our long term economic plan is working."

Deflation risk

But Rachel Reeves, the shadow secretary for work and pensions, said some groups were still struggling to find work.

"Long-term youth unemployment has risen over the last few months. So there's still much more that the government needs to do."

Separately, minutes from the last meeting of the Bank of England's Monetary Policy Committee (MPC) showed that policy makers again voted 7-2 to keep interest rates on hold at 0.5%.

MPC members Ian McCafferty and Martin Weale continued to vote for a rise in rates to 0.75%.

However, the majority of MPC members felt that pay growth had to accelerate before inflation would begin to approach the Bank's target of 2%.

Coupled with the risk of deflation, analysts said that interest rates could remain at their record low for some time.

"Indeed, given the weight of downward pressure on prices, there is a far from minimal chance that rates could stay on hold throughout 2015," said Martin Beck, senior economic adviser to the EY Item Club.

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Wage growth in the UK is picking up, figures from the Office for National Statistics (ONS) indicate. In the August-to-October period, average earnings excluding bonuses were up 1.6% from a year earlier. Including bonuses, earnings rose by 1.4%. It is the first time for six years that both measures of earnings growth have been above the inflation rate.

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It is quite unusual for an entire country to be able to quote the exact number of a particular subsection of its employment laws.

But the future of Italy's economy and perhaps its government comes down to a debate over Article 18 of the 1970 Employment Law.

Italy's main trade unions have called out their members on general strike in order to protect this article. It essentially protects workers in medium-sized and large firms from being fired. Critics argue that it makes businesses hesitate to hire new workers - for fear of never being able to get rid of them.

As a result, this creates a two-tier job market - a top tier for mostly older workers who have permanent jobs from which they cannot be fired, and a second tier for mostly younger workers who have to survive on unofficial, short-term contracts. Some don't even manage that. Among 15 to 25-year-olds the unemployment rate is 43%.

"It is unthinkable that someone like me is impossible to fire and someone who is 30 has no guarantees," says 46-year-old Prof Giovanni Orsina, from Rome's LUISS University. "To start to build a model that makes it possible to live with flexibility, a regulated flexibility, is sacrosanct."

Economists argue that Italy's rigid labour laws stop the country's economy from growing. Italy's economy is currently in recession. Over the past year, its GDP has fallen by 0.4%. In the decade to 2010, only two countries had lower GDP growth than Italy's - Haiti and Zimbabwe.

International pressure

In recent years, a series of Italian governments has tried to reform or bypass Article 18, without lasting success. Prime Minister Matteo Renzi took office in February 2014 with a promise to create a single-tiered, more fluid job market.

His centrepiece Jobs Act was recently approved by parliament. (The Act is known in Italy by its English-language term - in an attempt to sound dynamic and to echo President Barack Obama's own 2011 American Jobs Act.) But details of its implementation have yet to be agreed.

The International Monetary Fund and European Union both support attempts to change the country's labour laws. The EU is also insistent that Italy stick to the eurozone's strict rule - budget deficits cannot exceed 3%. Mr Renzi has criticised this rule, but says that he will abide by it.

His tougher problem lies with Italy's trade unions. They believe that the existing labour laws protect workers who could otherwise be fired by unscrupulous firms. That is why they have called their strike.

No quick fix

"Italians continue to think that providence will come and solve their problems," says Prof Orsina.

"There is a huge pressure, a typical Italian mechanism, linked to thinking that problems can be solved quickly. And Renzi offered that picture - having arrived without the legitimacy of an election - saying 'I'm here because I'm a problem-solver'. He offered to solve things quickly. But this is a promise that can't be kept. The problems are dense and profound."

There is much that Italy seeks to preserve. The country has an incredibly well-supported, healthy, early-retiring, long-living population. Its members of parliament earn more than any of their EU counterparts. State officials have thousands of chauffeur-driven cars to drive them to work.

But the country's official lifestyle comes at a cost. Its youngest and most educated citizens cannot find work. In 2013, 82,000 Italians emigrated - the highest number for 10 years.

The prime minister hopes that his Jobs Act will persuade them to return.

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It is quite unusual for an entire country to be able to quote the exact number of a particular subsection of its employment laws. But the future of Italy's economy and perhaps its government comes down to a debate over Article 18 of the 1970 Employment Law.

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"These numbers verify the shift in spending patterns happening in the final quarter of the year. Black Friday led to unprecedented demand," said Natalie Berg from Planet Retail.

"What we don't know is to what extent did this simply bring spending forward," she continued. "I suspect it slowed in the first couple of weeks in December."

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UK retail sales rose at their fastest annual rate in more than 10 years in November, thanks to the effects of Black Friday, official figures show.

Sales rose 6.4% compared with November last year, the highest annual increase since May 2004.

On a monthly basis they rose by 1.6%, with growth in all areas for the first time since December 2013.

US-style discounts for Black Friday took off in the UK this year, with stores seeing record sales.

Electrical goods sales jumped 32% from a year earlier and sales at department stores were up 15%, both of which were the biggest increases since records began in 1988, the Office for National Statistics said.

Online sales increased by 12.9% compared with last year.

However, last year Black Friday fell in December, making the comparison more pronounced.

Lower prices

"These numbers verify the shift in spending patterns happening in the final quarter of the year. Black Friday led to unprecedented demand," said Natalie Berg from Planet Retail.

"What we don't know is to what extent did this simply bring spending forward," she continued. "I suspect it slowed in the first couple of weeks in December."

Average retail prices fell by 2% compared with last year, the largest fall since August 2002, mainly due to the large drop in petrol prices.

Prices at food stores were also lower, recording their largest fall in since June 2002.

"The decline in store prices reflects fierce competition in the retail sector and provides further evidence that inflation will fall below 1% in the coming months," said David Kern, chief economist at the British Chambers of Commerce (BCC), a group which represents businesses.

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UK retail sales rose at their fastest annual rate in more than 10 years in November, thanks to the effects of Black Friday, official figures show. Sales rose 6.4% compared with November last year, the highest annual increase since May 2004.

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UK retail sales rose at their fastest annual rate in more than 10 years in November, thanks to the effects of Black Friday, official figures show.

Sales rose 6.4% compared with November last year, the highest annual increase since May 2004.

On a monthly basis they rose by 1.6%, with growth in all areas for the first time since December 2013.

US-style discounts for Black Friday took off in the UK this year, with stores seeing record sales.

Electrical goods sales jumped 32% from a year earlier and sales at department stores were up 15%, both of which were the biggest increases since records began in 1988, the Office for National Statistics said.

Online sales increased by 12.9% compared with last year.

However, last year Black Friday fell in December, making the comparison more pronounced.

Lower prices

"These numbers verify the shift in spending patterns happening in the final quarter of the year. Black Friday led to unprecedented demand," said Natalie Berg from Planet Retail.

"What we don't know is to what extent did this simply bring spending forward," she continued. "I suspect it slowed in the first couple of weeks in December."

Average retail prices fell by 2% compared with last year, the largest fall since August 2002, mainly due to the large drop in petrol prices.

Prices at food stores were also lower, recording their largest fall in since June 2002.

"The decline in store prices reflects fierce competition in the retail sector and provides further evidence that inflation will fall below 1% in the coming months," said David Kern, chief economist at the British Chambers of Commerce (BCC), a group which represents businesses.

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UK retail sales rose at their fastest annual rate in more than 10 years in November, thanks to the effects of Black Friday, official figures show. Sales rose 6.4% compared with November last year, the highest annual increase since May 2004.

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Putin vows that the rouble will re-gain strength - Matt

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The US Federal Reserve has altered its tone on potential interest rate moves.

Its statement, issued on Wednesday after the conclusion of a two-day meeting, said it would be "patient" in deciding when to raise interest rates.

Previously the US central bank said it would keep interest rates low for a "considerable time".

Central banks of necessity speak in highly guarded language, but most analysts interpret this as meaning a rate rise could come in mid-2015.

The US economy has been growing strongly with unemployment falling, conditions that would normally lead to higher inflation and an increase in the cost of borrowing.

However, shrinking economic growth rates in developing countries, most importantly in China, and political instability in Russia and the Middle East have undermined confidence that this growth can persist.

On top of that, oil prices have halved since the summer, bringing down the cost of transport and a wide range of goods.

The Federal Reserve chairman, Janet Yellen, explained that "patient" meant the bank was unlikely to raise rates for "at least a couple of meetings".

That would mean April next year at the earliest.

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The US Federal Reserve has altered its tone on potential interest rate moves. Its statement, issued on Wednesday after the conclusion of a two-day meeting, said it would be "patient" in deciding when to raise interest rates. Previously the US central bank said it would keep interest rates low for a "considerable time".

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Julie Walters is the latest actor to claim that opportunities for young actors in the UK are unequal in today's Daily Mirror. There seems to have been a slew of similar claims in recent months from the likes of Ian Mckellen, Judie Dench, Stephen Morrisey and Stephen McGann.

How would economists illustrate this issue?

If you are an A2 Economics student (and depending on which awarding body you sit), you may well have covered Marginal Revenue Product, drawn the 'walking stick' MRP curve and applied such a theory to inequality of opportunity for females or people from a minority ethnic background in the UK. Could the same be applied to acting?

As with everything in Economics, the strength of the argument comes in its relativity. Is the entertainment industry important enough to worry about inequality? Well, according to Government statistics, the Creative Industry sector (which includes film-making alongside television and music) is now generating £71.4 billion a year and accounts for 1.68 million jobs in the UK. That makes it the fastest growing sector in the UK economy (albeit a relatively small proportion).

You could argue that acting at a high enough level is a rare talent and finding the very best young actors is a difficult process. However, it is interesting that opportunities for young people from poorer backgrounds to find well-paid employment within the football and music industries seem to be greater than in acting thanks to grass-root systems and culture.

The argument put forward is similar to the one used for bemoaning internship opportunities in South East England based national and international firms. The best chance for an inspiring actor to receive adequate training and recognition now exists with attending fee-paying schools; either of the drama variety or those with good dramatic facilities. Thus, a lack of inclusion for those families with poorer incomes and a lower opportunity for talented actors from poorer backgrounds.

Arguments need to be based on statistics and evidence of course, so I'm waiting for someone in-the-know to give a good response to the claims made by Ms Walters et al. I did note that Benedict Cumberbatch's (who is often quoted in these stories as being from a privileged background and educated at Harrow) Sherlock co-star Martin Freeman (who also took the lead in the Hobbit trilogy) was educated at a state school and attended a state-funded college.

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Unequal Opportunities for UK Actors | tutor2u Economics

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Julie Walters is the latest actor to claim that opportunities for young actors in the UK are unequal in today's Daily Mirror. There seems to have been a slew of similar claims in recent months from the likes of Ian Mckellen, Judie Dench, Stephen Morrisey and Stephen McGann.

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UK Inflation at 12 yr low as fuel costs fall

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Lower fuel prices have pushed the UK's rate of inflation down to a 12-year low, official statistics show.

The Consumer Prices Index inflation measure - which assesses the cost of basic household goods - fell to a rate of 1% in November from 1.3% in October.

The fall is being dubbed an "early Christmas present" for consumers.

But some investors are concerned that it could slow the UK's economy, as people delay purchases, expecting prices to fall even further.

Inflation as measured by the Retail Prices Index fell to a five-year low of 2%, down from 2.3%.

Cheaper travel

The Office for National Statistics said falling fuel prices, caused by the decline in global oil prices, have brought the costs of both road and air travel down, with petrol prices down 5.9% in November.

Additionally, food prices fell by 1.7%, helped by supermarket price wars, while recreation and culture prices fell by 0.3%.

Both food and fuel account for a large part of the ONS' inflation calculations.

In the first few months of 2014, UK inflation generally rose, reaching 1.9% in June.

But the recent low rate of inflation means that earnings are finally rising faster than prices, after years of failing to keep up.

The latest report on the rate at which average wages in the UK are growing is due on Wednesday.

'Good news'

The Bank of England, which targets an inflation rate of 2%, warned last month that the rate could drop below 1% in the next six months.

The lacklustre outlook means that the Bank is unlikely to raise interest rates from the historic low of 0.5% for some time.

If inflation falls below 1%, the governor, Mark Carney, would have to write a letter of explanation to the chancellor.

However, Ben Brettell, an economist at Hargreaves Lansdown, says the Bank will not be too concerned by the fall in inflation.

"A fall below 1% now looks likely, but the resulting letter of explanation from Mark Carney to the chancellor should be relatively easy to write," he said.

"A reduction in fuel costs is good news for the UK economy, and can be seen as broadly analogous to a tax cut. It should ease the pressure on household budgets and boost consumer spending."

Indeed, the fall in inflation has been called an "early Christmas present" by politicians and financial analysts.

But falling inflation could be of concern to investors, as the UK moves closer to the eurozone's situation of battling to avoid deflation.

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Lower fuel prices have pushed the UK's rate of inflation down to a 12-year low, official statistics show. The Consumer Prices Index inflation measure - which assesses the cost of basic household goods - fell to a rate of 1% in November from 1.3% in October.

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Wage growth in the UK is picking up, figures from the Office for National Statistics (ONS) indicate.

In the August-to-October period, average earnings excluding bonuses were up 1.6% from a year earlier. Including bonuses, earnings rose by 1.4%.

It is the first time for six years that both measures of earnings growth have been above the inflation rate.

Meanwhile, the number of people unemployed in the quarter fell by 63,000 to 1.96 million.

The fall was the slowest quarterly fall for a year, leading some analysts to speculate that the rate of improvement may have peaked.

The jobless rate was 6%, matching its lowest level in six years.

The ONS figures also showed that there were 30.80 million people in work in the three-month period, 115,000 more than for the May-to-July period, driven by more people in full-time work.

The number of people claiming Jobseeker's Allowance in November fell by 26,900 to 900,100.

'Decent improvement'

For the month of October alone, pay including bonuses, increased by 1.8%. That compares to an inflation rate of 1.3% in the same month.

November's inflation figures were released on Tuesday and showed it falling further - to a 12-year-low of 1%.

Bank of England policymakers expect that trend to continue.

Earlier on BBC Radio 5 live, the Bank of England's deputy governor, Jon Cunliffe, said UK inflation in the coming months was "going to be low".

Analysts were encouraged by the earnings growth.

"Earnings growth is finally starting to open a clear positive gap over inflation, which is serious good news for consumers," said Howard Archer, economist at IHS Global Insight.

"This bodes well for consumer spending in 2015, although it needs to be borne in mind that consumers have faced a prolonged squeeze on their purchasing power.

"Meanwhile, the labour market is still seeing decent improvement, although the underlying rate of improvement is showing signs of moderation," he added.

However, TUC general secretary Frances O'Grady said the figures showed "some long overdue improvements, but at this rate it will take over a decade to recover the real value of people's earnings".
Analysis: Robert Peston, BBC economics editor
It has been a journey of a good six years, give or take the odd blip, but weekly earnings do now seem to be pulling ahead of Consumer Price Index (CPI) inflation.

This is especially true of the private sector, which accounts for 82% of jobs (and rising) - where average weekly earnings rose 2.2% in October, compared with inflation of 1.3% in that month and 1% in November.

The fastest wage growth was 3% in finance and business services - don't curse please, it's unbecoming - and 2.7% in construction.

The shrinking public sector saw a less-than-inflation 0.5% rise.
Read Robert's blog in full
In a tweet, Prime Minister David Cameron said: "Employment is at a record high & average earnings are rising faster than inflation. More to do, but our long term economic plan is working."

Deflation risk

But Rachel Reeves, the shadow secretary for work and pensions, said some groups were still struggling to find work.

"Long-term youth unemployment has risen over the last few months. So there's still much more that the government needs to do."

Separately, minutes from the last meeting of the Bank of England's Monetary Policy Committee (MPC) showed that policy makers again voted 7-2 to keep interest rates on hold at 0.5%.

MPC members Ian McCafferty and Martin Weale continued to vote for a rise in rates to 0.75%.

However, the majority of MPC members felt that pay growth had to accelerate before inflation would begin to approach the Bank's target of 2%.

Coupled with the risk of deflation, analysts said that interest rates could remain at their record low for some time.

"Indeed, given the weight of downward pressure on prices, there is a far from minimal chance that rates could stay on hold throughout 2015," said Martin Beck, senior economic adviser to the EY Item Club.

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Wage growth in the UK is picking up, figures from the Office for National Statistics (ONS) indicate. In the August-to-October period, average earnings excluding bonuses were up 1.6% from a year earlier. Including bonuses, earnings rose by 1.4%. It is the first time for six years that both measures of earnings growth have been above the inflation rate.

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Everyone in the class will be expected to contribute!