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Retail sales have "fizzled out" in recent weeks and will remain under pressure for some time to come, a gloomy survey from the CBI has warned.

A balance of 2% of retailers said sales volumes fell in the first two weeks of June - the first decline for a year - as anxious consumers cut back on clothing, groceries and big ticket items, the CBI's monthly retail trends survey found.

Consumers are "feeling the pinch" as wages fail to keep pace with the rising cost of living, while future hikes in energy bills are expected to intensify the squeeze, it warned.

Economists said the figures were "very worrying" for the country's growth prospects because consumer spending accounts for 64% of the economy.

 

 

Education Secretary Michael Gove has warned headteachers there is a "moral duty" to keep schools open during next week's strike.

In a letter to schools, he said it was the Government's view that industrial action over planned pensions changes was not justified, and that the interests of pupils should be put first.

In a separate letter to local authorities Mr Gove said he was "particularly concerned" that school closures would affect working families and single parents.

Around 300,000 teachers are expected to join picket lines next Thursday as part of a wider public sector strike over pensions and cuts to jobs, services and pay.

Teaching unions have backed the walkout in protest at the Government's planned pension changes, which they say will leave them paying in more, working longer and receiving less when they retire.

 

House prices fell at their fastest annual rate for 19 months during May as buyers continued to stay away from the market, figures show.

Homes lost 4.2% of their value during the past year, based on average prices during the three months to the end of May, compared with the same three-month period of the previous year, according to Halifax.

It was the biggest annual drop recorded since October 2009 and left the average home costing £160,519.

Prices also continued to drift lower on a quarter-on-quarter basis, which is generally seen as a smoother indicator of market trends, with homes losing 1.2% of their value on this measure, unchanged from the drop recorded for the three months to the end of April.

The typical home now costs 1.4% less than it did at the start of the year, although prices edged ahead by 0.1% during May itself, following a steep 1.4% drop in April.

 

 

Banks could see bonuses cut, dividends limited or lending levels restricted if their activities are considered too risky, the head of their new regulatory body, the Prudential Regulatory Authority, has said.

Hector Sants, who will lead the PRA, promised the new body will be tougher and more intrusive than current regulator, the FSA, and make its own judgments on the risks posed by a bank's activities.

The "central presumption" is that regulators cannot rely on what banks tell them and must carry out their own analysis, he said in a speech in London. Being focused just on financial stability will also help it avoid some of the mistakes made in the run-up to the credit crunch, he added.

In extreme cases, the new approach could mean a bank being forced to stop trading and wind itself down if the situation is deemed serious enough,

The former banker is currently chief executive of the FSA, but that organisation is being abolished and he will move over to run the PRA under the new regulatory regime coming into force next year.

In an attempt to avoid a repeat of the crisis that prompted taxpayer-funded bail-outs of Northern Rock, Royal Bank of Scotland and Lloyds Banking, the overseeing of the UK financial markets will now be handled by two bodies.

 

 

The royal wedding could be hit by April showers, forecasters have warned.

Much of the UK has been bathed in sunshine over the Easter Bank Holiday weekend, but weather experts now say that there is a risk of heavy rain falling on Prince William and Kate Middleton's big day.

Central London and Bucklebury, Berkshire, where Kate grew up, could both see rainfall as the celebrations for the happy couple get under way. The temperature for the royal wedding is likely to be in the high teens, compared to highs of 27C in London over the holiday weekend.

Plans are in place to ensure the wedding goes without a hitch, whatever the weather. If it rains, Prince William and Kate Middleton will leave Westminster Abbey in the Glass Coach, rather than the open-top 1902 State Landau.

Meanwhile, it has emerged that the couple will spend a private moment together with their families during the wedding service, away from the watching eyes of the world.

 

The former head of news and current chief reporter of the News of the World have been arrested on suspicion of phone hacking in London, sources said.

Ian Edmondson, 42, and Neville Thurlbeck, 50, were held by Scotland Yard detectives when they attended separate police stations in south-west London by appointment on Tuesday morning.

The pair were questioned on suspicion of conspiring to intercept communications and unlawfully intercepting voicemail messages.

These are the first arrests since the Metropolitan Police reopened its inquiry into claims that staff at the top-selling Sunday newspaper hacked into the answerphone messages of celebrities, politicians and Royals.

Scotland Yard has endured a torrent of criticism over its handling of the original case, which led to the conviction of the News of the World's royal editor, Clive Goodman, and private investigator Glenn Mulcaire in 2007.

In January the force launched a fresh investigation, codenamed Operation Weeting, after receiving "significant new information" from the paper's publisher, News International.

 

Stamp and collectibles trader Stanley said it expects to bring in a princely sum for royal wedding memorabilia next month.

The company said the wedding between Prince William and Kate Middleton should give a one-off boost to revenues and profits through sales of commemorative stamps, mugs and coasters among other collectible items.

Gibbons said the event will also lift trade at recently-acquired collectibles firm Benhams, as the company specialises in first-day covers - postage stamps sent on their first day of issue - which are expected to sell particularly well on April 29.

Stanley Gibbons reported an 8% rise in pre-tax profits to £4.5 million in the year to December 31, while sales were up 13% at £26.4 million.

A number of products will be on offer around the wedding, including an album pulling together all the commemorative stamps issued for the occasion.

The company will also have a special royal wedding section in its store at The Strand, London.

 

Photo by Alex Segre

 

The "big six" power suppliers should sell off up to a fifth of their electricity output in a move to "break the stranglehold" they have over the market, the energy watchdog has said.

The major suppliers "failed to play it straight" with consumers, according to regulator Ofgem, and have eight weeks to comply with a series of radical proposals to overhaul the industry or face a referral to the Competition Commission.

The reforms include reducing the number of tariffs suppliers offer to avoid confusion over price and improving transparency by appointing an independent accounting firm to investigate the suppliers' books.

An additional investigation into Scottish Power's standard credit prices has also been launched.

Ofgem launched its review in November after it emerged that price hikes had seen suppliers' profit margins soar by 38%.

photo by conservativeparty

A leading economic forecast group has predicted an £8 billion windfall for the Chancellor due to stronger tax revenues and lower spending.

But the Ernst & Young ITEM Club said George Osborne must resist temptation to offer give-aways in this week's Budget and warned it was still early days on the "long and challenging road" to balancing the public finances.

ITEM, which is the only forecasting group to use the Treasury model of the economy, said public sector borrowing was on track to undershoot its target by around £8 billion in the financial year to the end of this month.

The Office for Budget Responsibility, the Government's watchdog, predicted borrowing of £148.5 billion in November, but the ITEM Club has forecast £140.2 billion, with tax receipts coming in around £4 billion ahead of expectations.

Andrew Goodwin, senior economic adviser to the Ernst & Young ITEM Club, said it was still too early to judge whether the improved fiscal position can be sustained over the rest of the parliament, particularly as the recent surge in commodity prices has added more uncertainty to economic growth prospects.

 

photo by conservativeparty

 

George Osborne has delivered a strong hint that a 1p fuel duty hike due next month will be scrapped amid fears over soaring oil prices.

The Chancellor told the Conservative Spring conference in Cardiff that he had "heard" protests from motorists being "squeezed" by rising costs at the pump.

Signalling he was ready to ease the pressure by dropping the increase in his Budget later this month, Mr Osborne told delegates: "We've got another of the Labour Party's pre-prepared rises in petrol tax coming this April - one penny above inflation. When it costs £1.30 for a litre of petrol, £80 to fill up a family car, I know people feel squeezed."

He added: "And I say this to people watching: I hear you."

Despite Liberal Democrat doubts, the Treasury is still believed to be looking at the idea of a "fair fuel stabiliser" - where duty is reduced or raised to offset oil price movements.

The Chancellor also said the crucial March 23 package would include a series of measures to boost growth and tackle the "forces of stagnation" in Britain's economy. Among the "greatest scandals" under Labour was that for every 10 private sector jobs created in the South, just one had been created in the North and Midlands, he said.