Wonga profits from loan demand

17 September 2012 Last updated at 04:54 ET

Money lender Wonga has announced a sharp jump in profits, thanks to strong demand for credit during the downturn.

Net profit more than trebled to £45.8m in 2011, from £12.4m in 2010. Revenue grew at a similar rate, to £185m.

The number of loans made by the company quadrupled to almost 2.5 million, taking the total number of loans made since launch in 2007 to six million.

Wonga offers short-term loans of up to £1,000, but has been criticised for its high interest rates.

Earlier this year, the firm was also criticised by the Office of Fair Trading for using aggressive and misleading debt collection methods.

The firm said the incidents were isolated and took place a long time ago. It has also defended its high interest rates, arguing that the firm merely offers short-term loans that help people and businesses with cashflow problems.

"It is not about the desperation of customers - we reject about 60% of applicants," Wonga boss Errol Damelin told the Reuters news agency.

"This is about a service that is important to people, because they do run out of cash from time to time."

17 Sep, 2012

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India makes move to boost lending

17 September 2012 Last updated at 03:18 ET

India central bank has lowered the amount of money that banks need to keep in reserve, in a bid to boost lending and spur domestic demand.

The Reserve Bank of India (RBI) cut the Cash Reserve Ration (CRR) by 25 basis points to 4.5%.

However, the bank left its key interest rate unchanged at 8%.

The CRR cut, which will inject 170bn rupees ($3.15bn; £1.94bn) into the market, comes as India's economic growth has slowed.

"I think this is a reasonably prudent move, which will add to liquidity in the system," said Gajendra Nagpal, chief executive of Unicon Financial Intermediaries.

Inflation concerns

The RBI was under pressure to lower the cost of borrowing, in order to help ease the burden on businesses and households.

However, analysts said the bank had been wary of the impact of such a move on consumer price growth.

Data released on Friday showed that the inflation rate rose to a higher-than-expected 7.55% in August, from a year earlier. Most analysts had expected the rate to be about 6.95%.

Last week, the government announced a 14% increase in diesel price, a move that is expected to result in a further increase in consumer prices.

Analysts said the RBI's decision not to reduce interest rates shows that the central bank is still concerned about the high inflation rate.

"[The] RBI is fighting a lone battle against inflation. One can argue that inflation still remains stubbornly high and substantial easing is not possible," said Mr Nagpal of Unicon Financial Intermediaries.

17 Sep, 2012

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India party ministers may quit

17 September 2012 Last updated at 00:52 ET

A key political ally is to meet on Tuesday to decide on whether or not to withdraw from the Indian government.

The Trinamool Congress party has demanded that the government scrap its decision to open up India's retail sector to global supermarket chains.

Separately, India's opposition parties have called for a nationwide strike on Thursday to protest the decision.

Delhi's plan is aimed at reviving a flagging economy, but small shops fear they will be put out of business.

Last year, the government was forced to suspend a similar plan amid protests.

On Saturday, Mamata Banerjee, the leader of the Trinamool Congress party and chief minister of West Bengal state, gave Delhi 72 hours to reverse the new policy and warned she could withdraw from the government.

Media reports suggest federal ministers belonging to the party may quit in protest, but Ms Banerjee is likely to continue supporting the government.

Ms Banerjee has said her party will have to take "hard decisions" if the federal government does not roll back its decision to open up the retail sector.

Under the government's proposal, global firms - such as Walmart and Tesco - will be able to buy up to a 51% stake in multi-brand retailers.

Multinational retailers already have outlets in India, but they deal with smaller retailers. This decision allows them to sell directly to Indian consumers.

Indian Prime Minister Manmohan Singh has said that the reforms "will help strengthen our growth process and generate employment in these difficult times".

17 Sep, 2012

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Oil trading near four-month high

17 September 2012 Last updated at 02:45 ET Continue reading the main story

Oil prices rose for the eighth session in a row, with Brent crude trading near a four-month high, boosted by the Federal Reserve's move last week to stimulate the US economy.

The central bank said on Thursday that it would inject $40bn (£25bn) a month into the economy.

Brent crude for November delivery was up 26 cents at $116.92 a barrel, while US crude was up 1 cent to $99.01.

There are fears that high oil prices could hamper economic recovery.

The Fed's announcement that it would start a third round of bond-buying, known as quantitative easing, has been dubbed QE3.

"The big question is how long this Fed-inspired rally will continue, as QE3 was the last bazooka to be used in the central bank's arsenal," IG markets said in a report.

"For the time being, [the oil price] has given a powerful shot in the arm for global markets."

But Victor Shum, managing director of consultancy IHS Purvin & Gertz, said the current price "doesn't do any favours" for a global economy that is struggling to get back on track.

"A price rally like we are seeing now is only going to do more damage," he said.

But he added that he did not expect this level of trading to last.

"Fundamentals at the moment are not indicative of these prices, and I don't see oil being able to sustain this rally."

17 Sep, 2012

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Economy may be recovering - Major

16 September 2012 Last updated at 08:11 ET

Sir John Major tells Andrew Marr UK economic recovery begins "from the darkest moment"

The British economy may have passed its "darkest moment" and an economic recovery may be under way, former Prime Minister Sir John Major has said.

He said falling unemployment and a rising stock market indicated Britain was now on a "slow road to recovery".

Sir John also urged Tory MPs to rally round David Cameron's leadership and dismissed suggestions Boris Johnson could mount a leadership challenge.

He said the Conservative Party had learnt regicide was "not a good idea".

Speaking on the BBC's Andrew Marr Show on the 20th anniversary of Black Wednesday - the day Britain had to pull out of the European Exchange Rate Mechanism - Sir John said that Britain may already have weathered the worst of the economic storm.

He likened the current economic situation to that of the early 1990s when Chancellor Norman Lamont predicted he could see the "green shoots" of recovery - a comment that was seen as a major gaffe that jarred with people's everyday experience of falling living standards.

'Long-running sore'

Sir John said: "Normal Lamont was taken to pieces by commentators for suggesting there were green shoots. But in retrospect we can see that Norman was right.

"Recovery begins from the darkest moment. I'm not certain, but I think we have passed the darkest moment."

Continue reading the main story

David Cameron is prime minister. He is going to remain prime minister and he is going to contest the next election"

End Quote Sir John Major

"There are some oddities in the figures at the moment: Why in the depths of this recession is employment growing? Why is industrial production going up? Why has the stock market risen?

"There are things happening out there that will become apparent and we don't quite know why or how. My guess - and this is something a minister can't say but I can - is that in due course we will find that we passed the bottom."

The former prime minister, who negotiated Britain's opt-out from joining the euro, said he thought the eurozone crisis would lead to a two-tier Europe - with closer integration for euro members.

He said the process could take up to 10 years and would spark a UK referendum on Britain's relationship with the European Union.

"What you're now seeing, out of failure and not success, is the euro core looking to integrate further, much more towards a federal structure," he said.

"That offers an opportunity for us to clean up one of the long-running sores of British politics, which is our relationship with the rest of Europe."

Amid speculation that some Tory MPs are unhappy with David Cameron's leadership, Sir John - who faced questions over his leadership as prime minister - backed Mr Cameron to lead the Conservatives into the next election.

'Attractive and able'

It was not surprising, he said, for people to be critical of the leadership when "times are tough" and divisions within a party were "an inevitability of politics".

"I would have thought that if the Conservative Party has learned anything in the last 20 years, it's learnt that regicide is not a good idea," he said.

He praised Mayor of London Boris Johnson - whose popularity is seen as having increased following the Olympics - as a "very attractive and able and intelligent politician" who is doing a "supremely good job" in London.

But, he added: "Boris isn't in Parliament. Boris hasn't said he wishes to become prime minister - quite the reverse.

"The belief that suddenly everything is going to change - you're going to have a leadership challenge and you're going to have a replacement of the prime minister - I think isn't in the real world.

"David Cameron is prime minister. He is going to remain prime minister and he is going to contest the next election and I very much hope he's going to win it."

16 Sep, 2012

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Panasonic in China factory halt

16 September 2012 Last updated at 23:35 ET

Japanese electronics maker Panasonic has suspended some of its operations in China after anti-Japan protesters attacked two of its factories.

The firm said its factory in Qingdao will remain shut until 18 September.

The attacks are a part of wider protests that have spread across China and hurt other firms, including Toyota.

They started after Japan said it had agreed a deal to buy a chain of disputed islands in East China Sea from their private Japanese owner.

A spokesperson for Panasonic told the BBC that the firm would continue to monitor the situation over the next two days.

17 Sep, 2012

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UK's 'top piracy city' revealed

17 September 2012 Last updated at 00:44 By Dave Lee Technology Reporter

Manchester has been named the piracy capital of the UK, according to a new study seen exclusively by the BBC.

The research said there were more illegal downloads per person in the city than any other in the country, followed by Nottingham and Southampton.

The statistics, from monitoring service Musicmetric, conclude that in the first half of 2012, UK users illegally shared over 40 million albums and singles.

An industry group said the data showed piracy "remains a significant problem".

The data, collected independently by Musicmetric and seen exclusively by the BBC, is believed to be the biggest analysis of its kind to be conducted.

It monitored the global activity of BitTorrent files - a method of obtaining files by downloading from many users at the same time.

The data's release came as measures to attempt to curb illegal downloading began to take hold, such as the blocking of popular piracy websites and the relegation and removal of search results from Google.

Musicmetric's findings said that singer Ed Sheeran was the most pirated act in the UK for the first half of 2012, followed by hip-hop duo Rizzle Kicks and Barbadian megastar Rihanna.

The data suggested that Ed Sheeran's 2011 album + (Plus) was illegally downloaded an average of 55,512 times every month, and was the most popular download in over 460 towns and cities in the UK.

Legal UK sales of his album in the first half of 2012 hit the 448,000 mark - making it the fourth most popular album behind releases from Adele, Emeli Sande and Lana Del Rey.

Download nation

Globally, the research suggested that the UK is a significant on the world stage as a country of illegal music downloaders.

The country was placed second in the world in terms of pure volume of illegal activity, with Musicmetric logging 43,263,582 downloads in the first six months of this year.

The US topped the list, with 96,681,133 downloads tracked in the same period.

Italy (33,158,943), Canada (23,959,924) and Brazil (19,724,522) made up the remainder of the top five.

Rihanna's latest album - Talk That Talk - was found to be the world's most pirated release - Musicmetric tracked 1,228,313 downloads for the title in the first half of 2012.

In its analysis of the UK's data, Musicmetric has estimated that 345 million individual tracks made up the torrent files downloaded by British music fans.

According to the British Phonographic Industry (BPI), the UK's music industry body, the figures were having a "significant effect on investment in new music".

"According to their data, there are more illegal downloads in the UK still than there are legal purchases," the BPI's chief executive Geoff Taylor told the BBC.

"[It] compares to about 240 million tracks that were sold legally. A lot of people are getting very rich from stealing other people's things.

"That's wrong, and we think that musicians deserve to be paid for what they do, just like everyone else."

However, Loz Kaye, leader of the Pirate Party UK - who will be attempting to become Manchester's next MP in the next election - said the complaints of record labels is "protectionism".

"We need to remove the barriers for actual artists to connect with their business and their fans," he told the BBC.

"The truth is, why [music industry figures] are complaining so much is that with a properly functioning internet, and a properly functioning economy, the big players are no longer necessary."

17 Sep, 2012

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Small firms in 'finance struggle'

16 September 2012 Last updated at 22:30 ET

Small firms are struggling to raise the money they need to expand, according to a survey by business leaders.

The Federation of Small Businesses (FSB) found that 42% of those who applied for a loan said they were turned down.

The FSB said that while companies were weathering the recession well, business confidence was declining.

The British Bankers' Association said lenders were continuing to provide credit to customers.

They were also helping customers find alternative sources of funding if the banks could not provide it themselves, the association added.

Nearly two thirds of those in the FSB survey said they thought finance was unaffordable.

About half the 2,600 respondents wanted to expand in the coming 12 months, the survey found.

But the survey suggested the number of refusals had increased - from 40.6% to 42.4% on the previous quarter.

Continue reading the main story

The message is clear - businesses want to grow and invest but they need a helping hand to do so"

End Quote John Walker Chairman, Federation of Small Businesses

The FSB said that, while many small firms would like to expand their businesses, access to funding was proving frustrating.

The federation claimed that a lack of credit had contributed to a marked drop in confidence, and said it welcomed the government's plan to set up a state-owned business bank.

But it warned that the proposals needed to be carefully thought through.

FSB chairman John Walker said: "It isn't surprising that confidence fell back into negative territory as the recession entered its third quarter as growth flatlines.

"The message is clear though - businesses want to grow and invest but they need a helping hand to do so. It is frustrating that bank finance is still difficult to get.

"No matter what is said about demand, more than 40% of applicants have been refused in each quarter this year. This has to change if growth aspirations are to be met."

17 Sep, 2012

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Boots agrees deal with China firm

16 September 2012 Last updated at 22:07 ET

Alliance Boots, one of Europe's biggest pharmacy chains, has agreed a deal to buy a stake in a Chinese firm as it looks to expand in the country.

Boots said it will acquire a 12% stake in Nanjing Pharmaceutical Company Limited, for 560m yuan ($88m; £56m).

China, the world's second-largest economy, is home to more than 1.3 billion people, making it an attractive destination for foreign firms.

Nanjing is the fifth-biggest pharmaceutical distributor in China.

Boots, which first entered the Chinese market in 2008, said that it was aiming at a 20-30% share of the Chinese pharmaceutical distribution market.

"In 10 years, I hope we will be one of the major players in China or we will be, together with other companies, part of one of the major players in China," Stefano Pessina, executive chairman of Alliance Boots, was quoted as saying by the Reuters news agency.

Nanjing operates distribution centres in 12 cities in China and has sales of around 20bn yuan.

Once finalised, the deal will make Alliance Boots the second-largest shareholder in Nanjing.

"We believe that this strategic investment marks an important step in our long term development in Asia," said Mr Pessina.

17 Sep, 2012

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Income levels 'to rise next year'

16 September 2012 Last updated at 10:27 ET

UK households will see a rise in real income levels next year for the first time since the onset of the financial crisis, a study suggests.

Taking inflation into account, incomes are set to rise by 0.5% in 2013, according to the Centre for Economics and Business Research (CEBR).

But they will drop by 0.2% this year, the group said.

Households have struggled in recent years with low or no wage rises and relatively high inflation.

Falling inflation

Many people have seen wage freezes during the economic downturn, with inflation rising sharply between September 2009 and September 2011 to stand at 5.2%, as measured by the Consumer Prices Index.

It has fallen steadily since then to 2.6%, apart from a small rise in the rate of inflation last month.

Unemployment also rose sharply during the downturn, from 1.61 million in May 2008 to 2.59 million in July 2012.

The CEBR said real levels of income would start to pick up as inflation fell further, with middle and low-income families benefiting the most.

Middle-income households would see incomes rise by 1% next year, with lower-income families seeing a rise of 1.5%.

The richest households would see incomes rise by 0.7%, the research estimated. This is because of a drop in top executives' pay and bonuses and the scaling back of some tax allowances.

Similar increases would be seen across the board in 2014 and 2015, it suggested.

'Retail boost'

The CEBR said improvements in real income levels would have a knock effect for struggling retailers.

Over the next 12 months, it predicted retail sales volumes to rise by 2.5%.

"After four barren years, there is finally a glimmer of light at the end of the tunnel for retailers," said CEBR economist Daniel Solomon.

"Conditions will still be tough, just slightly easier than before."

Many retailers have struggled during the UK economic downturn. The economy is officially back in recession after contracting for the past three quarters.

16 Sep, 2012

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