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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.

photo by Daveand sue

 

A re-enactment of the moment 75 years ago when a Spitfire took to the air for the first time has taken place.

The iconic fighter, piloted by Carolyn Grace, made a lap of Southampton International Airport with its undercarriage down, just like the 1936 test flight that paved the way for the aircraft to become a mainstay of the RAF during the Second World War. She then treated the crowd to a display of aerobatics over the airport.

The aircraft, built in 1944 and credited with shooting down the first German plane on D-Day, had earlier been seen by thousands who came out in chilly conditions to see it fly over its birthplace, Southampton.

It was designed by the famous RJ Mitchell at Supermarine's factory in the south coast port and first flew from the then Eastleigh airfield - now Southampton International Airport.

 

Photo by Graphicmail

 

The Government has been urged to declare a moratorium on new employment laws for a year and reverse a planned increase in fuel duty to boost small businesses.

The Federation of Small Businesses said the UK's five million smaller firms needed a stable economy to help create jobs in the wake of cuts in the public sector.

In a briefing to MPs in Westminster ahead of the Budget on March 23, the business group said a series of measures were needed, including a national insurance holiday for small companies and help for employers to take on more apprentices.

FSB chairman John Walker said: "The Budget must provide economic stability and look to ways to nurture entrepreneurship and allow small firms to grow in order to create employment opportunities.

 

Britain is looking to open up a new dialogue on security co-operation with Moscow, four years after breaking off contacts with the Russian security service following the murder of Alexander Litvinenko.

Russian Foreign Minister Sergei Lavrov is in London for talks with David Cameron and Foreign Secretary William Hague as the coalition Government continues its efforts to rebuild relations with the Kremlin.

The killing of Mr Litvinenko, a dissident former KGB officer who was poisoned with radioactive polonium-210 in London in November 2006, has cast a long shadow over relations between the two countries.

The following year the then Labour government broke off all links between Britain and the FSB - the post-Soviet successor to the KGB - after Russia refused to extradite another ex-KGB man, Andrei Lugovoi, wanted by police for the killing.