Airport Staff Held Over Total Oil Deaths
23 Oct, 2014 - Business News - Markets reports and financial news from Sky

Russian officials investigating the plane crash that killed the Total oil company boss and three others have detained four more members of staff at Moscow's Vnukovo airport.

Christophe de Margerie was killed when the private plane in which he and three others were travelling collided with a snowplough.

Those being held include a snow plough driver, a trainee air traffic controller, her supervisor, the head of the airport's air traffic controllers and the head of the runway cleaners' department.

"The investigation suggests that these people did not respect the norms of flight security and ground operations, which led to the tragedy," the powerful Investigative Committee said.

The snowplough driver, who investigators accuse of being drunk at the time of the incident, has appeared in court for a hearing to decide whether he should be formally arrested, as investigators want.

Vladimir Martynenko insisted he was lost, not drunk.

"When I lost my bearings, I myself didn't notice when I drove onto the runway," the 60-year-old said.

Snow ploughs are seen at Moscow's Vnukovo airport

"The plane was running up to takeoff and I practically couldn't see it because my equipment was on. There weren't even any lights, nothing."

Interfax news agency reported the driver had admitted drinking coffee with a liqueur before driving the snowplough and that tests afterwards found a small amount of alcohol in his blood.

Video: Total Boss Killed In Crash

The Vnukovo airport has announced the resignations of its general director and his deputy "due to the tragic event" following accusations the management was guilty of "criminal negligence".

Neither of the two airport directors who resigned is being detained.

Members of Mr de Margerie's family are planning to fly his body home, to be buried in Normandy, northern France.

The 63-year-old, who was married with three children, was the grandson of Pierre Taittinger, founder of the eponymous champagne and luxury goods dynasty.

An outspoken critic of the West's sanctions against Russia over the Ukraine crisis, he was greatly admired by President Putin, who described him as "a true friend of our country, whom we will remember with the greatest warmth".

Total has revealed Thierry Desmarest - who was both chairman and chief executive at Total from 1995 to 2007 - is to return as chairman of the group.

Ad-Free Facebook Rival Raises $5m Investment
23 Oct, 2014 - Business News - Markets reports and financial news from Sky

An ad-free social network which styles itself as a rival to Facebook for the privacy conscious has raised millions in new venture funding.

Chief executive Paul Budnitz said the money will be used on product development - including building the back-end infrastructure to cope with its growing user base.

The number of people using the site soared last month, going from tens of users to hundreds of thousands in a matter of weeks.

At one point, the invite-only site was receiving up to 50,000 requests per hour and had to freeze applications because its servers could not cope.

The Paint Ball Hosted By Kidrobot

Mr Budnitz hopes to fix the site's digital infrastructure with the $5.5m (£3.4m) of new funding from investors.

The company's manifesto guarantees an ad-free experience on the site, and says it will never sell user data to advertisers.

Instead, it is likely to make money by charging for micro-transactions and other optional features.

To show its commitment to the public promise, its co-founders have now converted the company into a public benefit corporation in Delaware, which means it has to prioritise and provide "a benefit to society" alongside profits for shareholders.

Mr Budnitz said: "This company will never have ads and will never sell user data.

"We've basically enshrined, in the most powerful legal way possible, our mission into the company."

EU Seeks Extra £1.7bn From UK Economy
24 Oct, 2014 - Business News - Markets reports and financial news from Sky

Britain is facing a demand from the European Union for an extra £1.7bn because of the success of the economy.

The increase would add almost a fifth to the UK's annual contribution of £8.6bn.

A spokesperson for the European Commission said it was fair because it was like personal taxation - the more a person earns, the more they have to pay.

Commission spokesperson  Patrizio Fiorilli said: "Britain's contribution reflects an increase in wealth, just as in Britain you pay more to the Inland Revenue if your earnings go up."

The demand is intended to reflect improvements to Britain's economy since 1995.

Video: Does EU Membership Benefit UK?

The change in each state's contribution is a result of changes in the way the EU calculates gross national income.

A Commission spokesman said it was mainly due to the fact that the economic strength of EU's member states had increased or decreased relative to each other.

Preliminary figures seen by the Financial Times suggest that Britain is facing the largest adjustment in the amount it is required to pay compared to other members states.

The Netherlands, another country that is being asked to pay more, is being asked for an extra £509m.

By contrast, France is due to receive a rebate of £0.8bn, Germany £618m, and Poland £250m.

Britain's surcharge is due for payment on 1 December - just days after the crunch Rochester and Strood by-election.

The vote to decide who takes the seat hangs on a knife edge with David Cameron's Tories struggling to fight off a challenge from anti-EU Ukip.

Mr Cameron held talks on Thursday evening with Dutch counterpart Mark Rutte, who is also facing a large demand for more cash, on what can be done to challenge the demands.

The surcharges are likely to overshadow a European Council summit in Brussels, where Mr Cameron is meeting leaders of the 27 other EU States, some of which are looking forward to reductions in their contributions.

Several Conservatives MEPs have already spoken out against the surcharge, saying Britain is being punished for its success.

Downing Street said the UK will be challenging the demand.

A source said: "It's not acceptable to just change the fees for previous years and demand them back at a moment's notice.

"The European Commission was not expecting this money and does not need this money and we will work with other countries similarly affected to do all we can to challenge this."

Amazon Bleeds Value As Microsoft Delights
24 Oct, 2014 - Business News - Markets reports and financial news from Sky

Shareholders headed for the fulfillment centre exit door on Thursday night as Amazon posted disappointing numbers though Microsoft investors had more to cheer.

Amazon's stock price tumbled 11% in after-hours trading in New York - the result of a deepening quarterly loss of $437m (£272m) compared to a figure of $41m in the same period last year.

Revenue jumped to $20.6bn from $17.1bn.

The profit performance is explained by the world's largest online retailer's decision to keep investing heavily in its offering and new products at the expense of returns for shareholders.

Its forecast for Christmas sales was also cited by analysts as a reason for the latest sell-off, with Amazon stock already 22% lower this year.

The company said it expected holiday revenue of between $27.3bn and $30.3 billion - below expectations.

180614 AMAZON PHONE Fire Phone

Amazon launched a smartphone, the Fire, earlier this year and has been offering a set-top video streaming device, a streaming video service and several tablets and e-book readers.

The company has also been investing in services for its loyalty programme, Prime, adding grocery delivery services and music streaming for Prime members as well as offering original TV shows such as the critically acclaimed "Transparent" starring Jeffrey Tambor.

It confirmed in August plans to buy the video game streaming service, Twitch, spending the best part of $1bn on the acquisition.

But it is increasingly clear that what investors want more than revenue growth, is a solid profit.

In a conference call with analysts, chief financial officer Thomas Szkutak defended its strategy and said the company is focused on "using its capital wisely so that over time we get good returns on invested capital."

Rival Microsoft's quarterly figures were well received in comparison.

A scene from the Xbox One "Call of Duty: Advanced Warfare" game is demonstrated

The tech firm's profit and revenue sailed past expectations as chief executive Satya Nadella's push to embrace cloud computing and diversify into mobile devices helped lift sales by 25%.

Revenue from cloud services, including software delivered over the Internet, more than doubled last quarter at a time when some of Microsoft's better-known segments are slowing.

Shares jumped over 3% in after-hours trading having risen 33% in the past 12 months.

Microsoft still makes most of its money from selling traditional software for businesses and home computers but Nadella wants a shift towards software that can be easily accessed online and on the move.

The company confirmed it was to ditch the Nokia name on smartphones following the firm's purchase of the brand.

Costs related to the acquisition ate into profits to the tune of almost $1bn, with net income of $4.54bn supported by strong sales of Surface tablets and Xbox gaming consoles.

Tesco Shares Continue Tumble After Downgrade
24 Oct, 2014 - Business News - Markets reports and financial news from Sky

The market value of the country's biggest retailer continued its slide on Friday after its debt rating was cut to one level above junk status.

The decision - by credit-ratings agency Moody's - was announced after the FTSE 100 closed for business on Thursday evening following a trading session that saw Tesco's share price fall 6.5%.

It meant the supermarket chain, which had confirmed on Thursday morning that its accounting scandal had been wider than previously thought, had lost more than 50% of its value over the past 12 months.

Its stock fell by more than 3% in early trading on Friday in the wake of Moody's move.

The agency cut its long-term debt rating on Tesco from Baa2 to Baa3.

Video: Tesco's Woes In Detail

A statement said: "We have downgraded Tesco's ratings because of the materially reduced trading profit for the first half of fiscal 2015 that is affected by the rapid structural changes in the UK retail grocery market as well as the ongoing uncertainties related to the investigation by the FCA into Tesco's accounting irregularities."

Moody's added that Tesco's credit rating remained on review for further downgrade.

The chain had confirmed a 92% fall in profits as it booked a £263m profits overstatement and said its chairman was to step down.

Video: Ex-Investor Wants Tesco Redress

Sales fell by less than the market had been expecting but analysts said investors were disappointed that the chain's new chief executive Dave Lewis - who replaced Philip Clarke after he was sacked in the summer - was not planning an assault on prices.

Tesco, which remains the market leader by a huge margin - has seen that dominance eaten away over the past few years as rivals, particularly hard discounters, raised their game and capitalised on poor household spending power.

Economy: Third Quarter Growth Slows To 0.7%
24 Oct, 2014 - Business News - Markets reports and financial news from Sky

UK economic growth slowed in the third quarter of the year, according to the first official estimate of GDP for the period.

The Office for National Statistics (ONS) measured GDP growth of 0.7% in the period, down from output growth of 0.9% in the previous three months.

It charted a slowdown in manufacturing, saying expansion was its weakest for 18 months amid concerns for the world economy, particularly in the euro area which is the country's biggest trading partner.

More follows...

Magners Bid For Pub Firm Spirit Turns Sour
24 Oct, 2014 - Business News - Markets reports and financial news from Sky

A takeover bid by the cider firm behind the Magners brand for Spirit Pub Co, has been rejected.

Spirit, which has 1,200 UK pubs under the Chef & Brewer and Taylor Walker names, did not disclose the details of the approach but said Ireland-based C&C Group had until 20 November to submit a formal offer.

C&C is the second company vying for control of Spirit, with the UK's largest pub retailer and brewer Greene King already in talks on a cash-and-stock deal valued at £723m.

C&C, which also produces cider under the Bulmers name, said it hoped to use Spirit's network of pubs to improve its access to English drinkers but that there was no certainty it would make a firm offer.

It added that the tie-up would allow it to "match the recognition it enjoys in its other core markets", Scotland and Ireland.

Its shares fell 7% in early trading following Thursday's announcement, with The Times newspaper reporting that C&C was offering 115p-per-share in cash and stock, with at least a third in cash.

That would top Greene King's current offer of 109.5p-per-share.

Greene King, which has 2,000 pubs, restaurants and hotels, said last month it expected to make a further statement on its interest in Spirit.

UK's Surcharge Row: Nine Questions Answered
24 Oct, 2014 - Business News - Markets reports and financial news from Sky

What is the European Commission asking for from the UK?

Britain has been told it has to pay an extra £1.7bn (€2.1bn) towards the European Union budget.

This is being called a one-off bill which would add about a fifth to the UK's annual net contribution of £8.6bn.

Why the increase?

The extra money is being demanded because the UK economy is doing better relative to other countries in Europe.

The surcharge also comes from changes in how the EU calculates countries' gross national income (GNI), including more hidden activities like illegal drugs and prostitution.

The European Commission's statistics agency Eurostat looked at how member economies have performed since 1995.

And they re-adjusted the contributions according to the pace of their growth in recent years.

A statement on the EC website read: "On 17 October the Commission adopted its draft amending budget 6 for 2014.

"Though the overall GNI-based own resource does not increase, DAB6 proposes to amend Member State's GNI contribution to the EU budget based on the latest data on the evolution of Member States' wealth."

Do any other countries have to pay more?

The Netherlands has been asked to stump up an extra €642m into the EU budget.

Do any countries have to pay less?

France is set to get a rebate of €1bn and Germany is due to receive a €779m rebate as they have been overpaying.

Eurostat gross national income of UK, France and Germany

Why is the UK government angered by the extra demand?

A Downing Street source said: "It's not acceptable to just change the fees for previous years and demand them back at a moment's notice."

Video: Farage: EU Surcharge 'Outrageous'

"The European Commission was not expecting this money and does not need this money and we will work with other countries similarly affected to do all we can to challenge this."

Britain is now facing calls to refuse to pay the extra money and David Cameron is sure to challenge the additional demand at a meeting now in Brussels.

The surprise demand was also branded "outrageous" by Eurosceptic MPs in Mr Cameron's Conservative Party.

And it will pile more pressure on the Prime Minister as he fights to defend the seat of Rochester and Strood from UKIP in a by-election on November 20.

What does UKIP think?

Leader Nigel Farage said: "David Cameron once claimed that he had reduced the EU budget - but the UK contribution went up - and now, quite incredibly, our contribution goes up a second time. It's just outrageous.

"The EU is like a thirsty vampire feasting on UK taxpayers' blood. We need to protect the innocent victims, who are us."

Maybe the UK should pay the extra money?

Lecturer Isabelle Hertner said she was in favour of the surcharge. She told Sky News: "It is fair because for many years Britain had a rebate that was negotiated by ex-PM Margaret Thatcher and paid less into the EU budget than it should have paid.

"Whereas Germany and France paid as much as it should have paid, so in a way this is a give-and-take relationship. Sometimes you pay in more, sometimes less.

"For me this is fair and it was a rule that was agreed by the British government and other EU governments in the past."

What does the European Commission say?

Patrizio Fiorilli, an EC spokesman, said the request for more funds "reflects an increase in wealth".

He said: "Just as in Britain you pay more to the Inland Revenue if your earnings go up."

The EC also said the EU budget was about €144bn in 2013 - which it claimed was very small compared to the sum of the 28 EU countries' national budgets (over €6,400bn).

It added that total government expenditure by the 28 EU countries is almost 50 times the EU budget.

When does the UK have to pay the extra money?

Britain will have to make the top up payment by 1 December.

Chancellor Needs Hard Hat For Fight Ahead
24 Oct, 2014 - Business News - Markets reports and financial news from Sky

Ed Conway

It's a rum state of affairs when Britain is apparently punished for having a strong economy.

After all, we've spent the past five or six years telling ourselves that all we desperately need is a bit of growth.

And yet that's how things look today, with the UK fighting off an attempt by the European Union to charge it an extra €2.1bn (£1.7bn) because of the strength of its recovery.

As if to rub it in, that coincides with another set of relatively strong gross domestic product numbers, reminding us that the recovery is indeed in full train.

Now, in truth the EU charge is largely down to long term rather than short term trends - particularly revisions to long-term output levels conducted over the course of the past year or so.

But it nonetheless begs a few questions: first, where will this money come from? Second, is the UK economy really in a position of strength?

The first question is rather awkward for the Chancellor, for while the economy is certainly growing a lot quicker than expected (today's 0.7% growth means GDP is 3% higher than a year ago, and 3.4% higher than before the recession hit in 2008), it isn't bringing in as much tax as had been hoped.

Indeed, while economists had expected the Treasury to reduce the deficit by £10bn, the latest numbers suggest it may end up the same or higher than last year.

Indeed, the OBR had been expecting income tax receipts to rise by 6.5% this year; instead they have fallen by 0.8%.

And when you factor in the extra money the Chancellor will need to pay for the new tax cuts he set out at party conference a few weeks ago, one has to conclude that there simply isn't much cash to spare.

The second question is simpler to answer. The UK economy is doing well at the moment.

Today's growth numbers were more or less in line with expectations, and every sector of the economy - services, production, agriculture and construction - grew at a fair whack in the most recent quarter.

Though don't be fooled by the optics frequently employed by the Chancellor.

You might have assumed, given how many times you've seen George Osborne in a hard hat or (as he was today) in a car factory, that these were the sectors which really drove the recovery.

The detailed figures we got today tell a different story. Since the start of the crisis output in the construction sector is actually down by 8.2%. The output of the motor vehicle sector is, admittedly, up by 4.4% but it has driven growth far, far less than administrative and support activities, up by a whopping 27.8%.

In other words, it is office workers who have driven the recovery, not people in hard hats.

It is the support staff, computer repair engineers and other white collar workers whose sectors have expanded most quickly.

But, to bring things back to the EU once again, the problem is that those office-based sectors don't make and export things overseas.

The one aspect of the economy Britain desperately needs to improve is its balance of trade, which is woefully weak - and, if anything, worsening.

Without an improvement in that, strong GDP or not, Britain's economy will remain imbalanced and potentially vulnerable to future crises.


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