Bitcoin Setback: New Central Bank Warning

India's biggest Bitcoin trading platform has suspended operations after the country's central bank warned of the risks of using virtual money.

Confirmation that BuySellBitCo.in had closed its platform came just over a week after the currency's value more than halved following a similar warning from China's central bank.

That move, on December 18, prompted China's biggest trading platform to ban Bitcoin deposits in yuan.

BuySellBitCo.in said on its website: "We are suspending buy and sell operations until we can outline a clearer framework with which to work," adding that the move was "to protect the interest of our customers".

Bitcoin, which can be stored either virtually or on a user's hard drive and offers a largely anonymous payment system, had begun gaining popularity in India.

The emergence of Bitcoin and other virtual currencies in India has come despite a traditional preference for assets backed by property and other tangible goods.

"There is no underlying or backing of any asset for virtual currencies and as such their value seems to be a matter of speculation," the central bank said in its December 24 advisory.

The "huge volatility in the value of virtual currencies has been noticed", it added.

The central bank stopped short of issuing a ban or any curbs on Bitcoin or other virtual currencies.

However, because the currencies were not authorised by any central bank or monetary authority there was no established recourse for customers in the case of problems, it said.

The People's Bank of China last week ordered financial institutions not to provide Bitcoin-related services and products and cautioned against its potential use in money-laundering.

At the last rate posted by BuySellBitCo.in, which was conducting about 12 million rupees worth of Bitcoin transactions monthly, one Bitcoin was selling for 48,039 rupees ($776), local media said.

The dollar worth of a Bitcoin rocketed to a $1,200 peak in early December but fell back sharply when China issued its guidance.

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Apple Strikes iPhone Deal With China Mobile

Apple has finally secured a deal to bring the iPhone to China Mobile, the world's biggest network, opening the door to a massive sales boost.

The state-owned network has more than 750 million subscribers.

The latest iPhone 5S and 5C will go on sale in the country from January 17, with analysts forecasting a sales surge of anywhere between 10 and 25 million over the next year.

China's granting of 4G licences earlier this month is thought to have helped the deal as the faster network is compatible with the iPhone.

In a statement promoting the deal, Apple and China Mobile said they were "excited" to finally be working together.

Apple CEO Tim Cook said: "Apple has enormous respect for China Mobile and we are excited to begin working together.

"China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world's largest network."

While popular around the world, the iPhone has faced tough competition in China from cheaper Android smartphones made by the likes of Samsung. Collectively, Android phones far outsell iPhone models.

Apple's cheaper 5C model, which was released earlier this year, was widely seen as an attempt to crack the Chinese market.

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Britain's Economy 'Could Overtake Germany'

Britain could overtake Germany to become Europe's largest economy, according to new research by an economic think-tank.

The Centre for Economics and Business Research (CEBR) predicts the UK's GDP will move ahead of France by 2018, then leapfrog Germany by 2030.

Douglas McWilliams, the CEBR's chief executive, told The Daily Telegraph that Britain could become even stronger outside the European Union.

"My instinct is that in the short-term, the impact of leaving the EU would undoubtedly be negative," he said.

"My suspicion is that over a 15-year period, it would probably be positive."

But the report says Britain is also forecast to fall behind the accelerating economies of India and Brazil.

The UK's GDP will grow from more than £1.59 trillion in 2013 to £2.6 trillion in 2028, compared with China, which is predicted to be in top position with a GDP of £20.5 trillion, ahead of the US with an estimated £19.7 trillion

Japan will fall from its steady position in the global league of third to fourth by 2028, overtaken by India and followed by Brazil, Germany and the UK.

A treasury spokesperson said Britain's "hard work is paying off" with positive growth and job creation, but warned there is still work to be done. 

The spokesperson said: "The economy is growing, the deficit is falling and jobs are being created and while this report is encouraging, the job is not yet done. So the government will go on taking the difficult decisions needed to secure a responsible recovery for all."

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Global Rough Diamond Trade Thrives In Antwerp

By Robert Nisbet, Europe Correspondent

In four unprepossessing streets in the centre of Antwerp, a secretive, centuries-old business is conducted behind bulletproof glass where a handshake and the Yiddish word "mazel" seals the deal.

The international diamond trade has been centred in the city since the 15th century. It is estimated that 85% of the global trade in rough diamonds passes through Antwerp, worth €43bn (£36bn) every year, equivalent to the GDP of Slovenia.

You would imagine that the crippling single currency crisis which continues to hold Europe in its grip would have had an icing effect on expensive ice, but business is booming, even as a quarter of Antwerp's young people struggle to find work.

£36m worth of stones bought or sold in Antwerp each year

We went to find out why, gaining access to one of the most secure buildings in the country guided by the entrepreneur Vashi Dominguez, who runs a successful UK-based diamond business from mine to retail.

It was fairly clear from the outset that news cameras aren't welcome in the diamond quarter. A police officer was dispatched to check our credentials after a CCTV camera filmed us on the pavement, while private security guards watched us warily from doorways.

After surrendering our passports, and with a prior appointment, we were allowed inside one 10-storey concrete building, in which trades valued at €1bn (£837,000) take place every month.

In a simple room with a series of substantial tables - and an even larger safe built into the wall - Vashi showed us three cut diamonds with a combined value of £2m as well as a scattering of smaller rough stones.

The four Cs still determine the price of a finished stone: cut, colour, clarity and carat (the weight, with a carat equivalent to one fifth of a gram), but the value of unusual, or "fancy" diamonds has been increasing dramatically at auction since the financial crisis began.

Vashi Dominguez: 'Prices are rising because demand is increasing'

Vashi explains that as government bonds and currencies have become less attractive to investors since the start of the crisis in 2008, they have turned to valuable commodities like gold and gems.

"Prices are rising because demand is increasing. That's due to the slowdown and more interest from buyers in the east like China and India as well as other developing countries such as Brazil," he explains.

"There's another factor too: there has been a lack of major discoveries of new mines and some mines that have been discovered can't be built into viable businesses because the extraction process is so costly."

A massive new mine is being prepared in Canada, and De Beers continues to chip new diamonds out of Jwaneng mine in Botswana, but prospectors are working hard globally to establish new deposits.

The location of the current mines and trade patterns shifting eastwards could threaten Antwerp's pre-eminence as a diamond hub. More business could switch to Dubai, which is closer to southern Africa.

That's reflected in a change in the religion and ethnicity of the traders: the diamond quarter has been conspicuously Jewish, but more Indians are moving into the business, and into the area.

At the moment, Antwerp is still keeping its nose ahead of those rival cities looking to snatch its diamond tiara. It's an irony that the booming gem trade is based in a continent where economies have lost their lustre.

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Cheques: Smartphone Scans Could Ensure Future

People will be able to use their smartphones to make a payment by cheque under new Government proposals.

There were plans to kill of cheques from 2018, but because of a public outcry the plans were scrapped and the Government now describes cheques as a "crucial" part of the British payments landscape.

However, it believes that by bringing them into the modern age, it could cut the length of time it takes to process a cheque payment from up to six days to two at the most.

Barclays plans to pilot technology early in the new year to allow people to scan cheques using a smartphone or tablet.

If successful, the full launch of cheque imaging will be rolled out on its mobile banking app for the second half of 2014. 

The Government wants to introduce legislation to speed up cheque payments and will consider making the process faster by allowing banks to use images rather than paper as they do now. The technology is already widely used in the US.

Using a smartphone would make the process much quicker

"Cheque imaging" does not require a hard copy of the cheque to be present at every stage of the paying-in process. That means that time which would have been spent transferring it between different banks and central clearing depots is cut as well as the overall cost.

Under the proposals, people without smartphones would be able to use similar technology at cashpoints or branches or, if they prefer, to continue paying in paper cheques as they do now.

Despite the increasing popularity of new technologies such as online banking and mobile payments, nearly £840bn of cheques were processed last year - accounting for 10% of all payments made by individuals.

Financial Secretary to the Treasury Sajid Javid said: "This Government is determined to create a banking sector that works for consumers and serves businesses.

"We want to see more innovation so that customers see the benefits of new technologies ... We want to take the very best of the current system and make it better.

"We want cheques to have a crucial role in the ongoing success of the UK."

The plans were welcomed by consumer campaigners and businesses.

John Allan, national chairman of the Federation of Small Businesses, said: "Speeding up cheque payments into business accounts is to be welcomed as many find the current process frustratingly slow.

"Using smartphones is an interesting idea which should allow firms in areas, particularly where bank branches are closing, to be able to accept cheques as a method of payment."

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Obama Signs Budget Deal And Defence Bill

President Barack Obama has signed a bipartisan budget bill and a defence bill, marking a modest end to a challenging year for the White House and Congress.

The president put his signature on both hard-fought bills while on holiday with his family in Hawaii.

The bill signing marks one of Mr Obama's last official acts in a year beset by a partial government shutdown, a near-default by the Treasury, a calamitous health care rollout and near-perpetual congressional gridlock.

The budget bill was not the grand bargain that Mr Obama and congressional Republicans had initially sought.

Mr Obama is in Hawaii with his family for the Christmas holiday

It does, however, end the cycle of fiscal brinkmanship for now and prevents another government shutdown for nearly two years.

The bill reduces automatic across-the-board spending cuts, restores about $63bn over two years and includes a projected $85bn in other savings.

The president also signed a comprehensive defence bill on Thursday that cracks down on sexual assault in the military.

Under the legislation, military commanders no longer will be permitted to overturn jury convictions for sexual assault.

Its signing caps a year-long campaign led by women in the Senate to address the scourge of rape and sexual assault in the US military.

The bill also gives military personnel a 1% pay raise and provides $552.1bn for the regular military budget, plus $80.7bn for the Afghanistan war and other overseas operations.

Mr Obama signed the two bills and several others in private, without reporters present, after an early-morning trip to the gym at the Marine Corps base near his vacation rental in Oahu.

With the last vestiges of 2013's legislative wrangling behind him, the president's attention turns now to major challenges and potential bright spots in the year ahead.

In late January, Mr Obama will give his fifth State of the Union address, setting his agenda for the final stretch before the 2014 midterm elections render him less able to focus Washington's attention on his own priorities.

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Barclays Fined £2.3m For 'Records Failure'

Barclays has been fined $3.75m (£2.3m) by a US regulator over an alleged decade-long failure to properly keep electronic records, emails and instant messages.

The Financial Industry Regulatory Authority (FINRA) said that from 2002 to April 2012, Barclays failed to preserve order data, trade confirmations, account records and other information in a format that prevented their alteration or erasure, known as "Write-Once, Read-Many" or "WORM."

It also said Barclays failed to properly retain attachments to some Bloomberg emails from May 2007 to May 2010, and failed to properly retain about 3.3 million Bloomberg instant messages from October 2008 to May 2010.

FINRA said that once Barclays' system encountered an attachment to an instant message that it had processed earlier on a given day, it would stop accepting instant messages for that day.

"Ensuring the integrity, accuracy and accessibility of electronic books and records is essential to a firm's ability to meet its compliance obligations," FINRA enforcement chief Brad Bennett said in a statement.

Barclays did not admit or deny wrongdoing but agreed to a censure and the entry of FINRA's findings.

A spokeswoman for the British bank declined to comment.

Barclays - along with its major UK counterparts - has been no stranger to financial penalties over its past behaviour.

It was recently spared a penalty for its role in the widespread rigging of benchmark euro rates because it blew the whistle on what was happening but it was previously fined £290m by regulators following an earlier probe into the Libor rate-rigging scandal.

Barclays has set aside billions of pounds to cover the costs of settling the payment protection insurance mis-selling scandal while it is also subject to a separate probe by the Financial Conduct Authority and other world regulators into the alleged manipulation of foreign currency markets.

In November, the former regulator charged with boosting compliance at Barclays, Sir Hector Sants, quit his post as a result of a stress-related illness.

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Pound Hits Two-Year High Against Dollar

The pound has hit its highest level against the US dollar for nearly two-and-a-half years amid Britain's buoyant economic recovery.

Sterling rose to 1.65 dollars, a level not seen since August 2011, as strong economic figures continue to provide a boost and spur expectations that the Bank of England will move to raise interest rates earlier than expected.

A report from the Centre for Economics and Business Research (CEBR) on Thursday predicted the UK would become Europe's largest economy within two decades, overtaking France and Germany.

The UK recovery has been picking up pace in recent months and official figures saw growth data revised higher last week.

Figures correct at 16:06 GMT Friday December 27

The Office for National Statistics (ONS) said growth in 2012 was 0.3%, up from a previous estimate of 0.1%, while the figure for the first quarter of this year was revised up from 0.4% to 0.5% and for the second quarter from 0.7% to 0.8%.

A stronger pound is good news for tourists, as it boosts their spending power.

UK holidaymakers have up to 28% more spending money for their trips as a result of the pound's recent strength, according to a Post Office Travel Money survey.

It has also helped bring down UK inflation, by making it cheaper for Britain to import goods and services.

But the gains in sterling could provide a headache for manufacturers and exporters, as a stronger pound makes products more expensive for overseas buyers and therefore could dampen demand.

The Bank's Monetary Policy Committee recently warned that a significant increase in the pound's strength could pose risks to the recovery, while it could also dent the Government's aims to rebalance the economy towards manufacturing and exports.

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NatWest 'Hit By Fourth Online Banking Glitch'

NatWest has been hit by a cyberattack, leaving customers unable to access online accounts.

The bank's online banking service was disrupted after it was deliberately bombarded with internet traffic.   

Twitter users tweeted to say they could not access their bank accounts to pay bills or transfer money.

@TomGilchrist wrote: "Do other banks computer systems/services go down as much as NatWest? I assume not. Time to move banks I think."

@AleexReid tweeted: "Just joined Santander. Fed up with NatWest. Another computer failure tonight. #welldone."

A NatWest spokesperson said: "Due to a surge in internet traffic deliberately directed at the NatWest website, some of our customers experienced difficulties accessing our customer web sites this evening.

"This deliberate surge of traffic is commonly known as a distributed denial-of-service (DDoS) attack.

"We have taken the appropriate action to restore the affected web sites. At no time was there any risk to customers. We apologise for the inconvenience caused."

At the beginning of December all of RBS and NatWest's systems went down for three hours on one of the busiest shopping days of the year.

The group chief executive Ross McEwan described that glitch as "unacceptable" and added: "For decades, RBS failed to invest properly in its systems.

"We need to put our customers' needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on."

RBS and NatWest also came under fire in March after a "hardware fault" meant customers were unable to use their online accounts or withdraw cash for several hours.

A major computer issue in June last year saw payments go awry, wages appear to go missing and home purchases and holidays interrupted for several weeks, costing the group £175m in compensation.

This latest problem is the fourth time in 18 months RBS and NatWest customers have reported problems with the banks' services.

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Millions Stress About Finances 'Every Day'

By Poppy Trowbridge, Consumer Affairs Correspondent

In the UK, 18.1 million people feel stressed about their finances every day, according to new research seen by Sky News.

Financial worries are even greater than concerns over health, or even job security, the data from MoneySuperMarket shows.

In a poll of 2,005 British adults, 19% said it is their current financial situation which is the main cause of stress, and a further 17% say it is their future financial situation.

Only 13% say they are most stressed out by their health, and 11% by their job.

Clare Francis, editor-in-chief at MoneySupermarket, said: "Anxiety about money is on the rise for many adults.

"We've experienced a difficult economic climate in 2013, with the cost of living rising, interest rates remaining low, rents remaining high, and wages remaining the same.

"Unfortunately, I expect that the New Year will be just as tough."

The Organisation for Economic Co-operation and Development's recently upgraded their estimates for UK growth to 1.4% this year and 2.4% next year, higher than its previous 0.8% and 1.5% forecasts.

Despite this, nearly 75% of those surveyed believe their money stress will get worse next year.

According to the research, 52% of adults said they frequently or occasionally worry about the state of their finances, with women worrying more than men.

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Npower To Pay £3.5m To Vulnerable Customers

Npower has agreed to pay £3.5m to vulnerable customers after an Ofgem investigation found the energy firm breached sales rules.

Regulator Ofgem said the failings of doorstep and telesales staff meant customers were not able to make informed decisions on whether to switch suppliers.

The company remedied the shortcomings by September 2012 but has agreed to make a payment of at least £25 to each of its customers who receive the Warm Home Discount.

Ofgem said npower gained insufficient information about a customer's consumption to enable them to decide whether to switch.

It also failed to ensure that comparisons between the price of npower's supply and that of the customer's current supplier were always based on the tariff that customers were on.

And information on when some consumers would receive their direct debit discount and how direct debit levels would be reviewed was also found to have been inaccurate.

Npower said it would write to customers affected by rule breaches

Sarah Harrison, from Ofgem, said: "npower has done the right thing by stepping forward and recognising that, whilst it was making changes to improve its sales processes, weaknesses remained which affected consumers' ability to compare supplier offers fairly.

"These issues have been fully addressed by npower and Ofgem welcomes the company's actions and its agreement to pay £3.5m to directly benefit vulnerable consumers.

"Ofgem will continue to hold companies to account to ensure rules to protect energy consumers are met and that the market works for consumers in a simpler, clearer and fairer way."

Paul Massara, npower's chief executive, said: "We've worked very closely with Ofgem as they've investigated these previous issues. It's good to draw a line under this, so we can focus on our goal of becoming number one for customer experience by the end of 2015."

Consumer Focus director Adam Scorer said: "Mis-selling is the original sin of energy competition. Npower had misled customers by phone and on the doorstep from 2010.

"Ofgem is right to make sure action is taken and that companies compensate consumers directly."

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Mortgage Misery For Millions If Rates Go Up

By Ed Conway, Economics Editor

Around four million families would not have enough cash to pay their mortgage if interest rates rose to barely half the rate they were before the crisis, according to Bank of England research.

The warning from the Bank comes amid growing speculation that it may begin to consider lifting the cost of borrowing within months.

Research published in the Bank's Quarterly Bulletin sketches out a worrying picture for UK households in the event of an increase in the cost of borrowing.

The Bank's statistics show that if rates rose by 2.5% to a level of 3%, more than half of the eight million families with mortgages would not have enough in their monthly budgets to afford the increased interest payments.

They would be forced to cut their spending or work longer hours.

However, the Bank said that if families' incomes increased by 5% in the coming years, then the proportion of mortgage-holders struggling to manage their payments would be around a third.

Insiders also pointed towards the fact that at present investors only expect interest rates to reach 1.7% by the end of 2016 - significantly lower than the 3% level in the Bank's scenario.

The shock would not be limited to those with mortgages. The Bank's report also found that almost 5% of small businesses in the UK faced a 50% or greater chance of defaulting if interest rates rose by four percentage points.

However, the report also found that for many families the current debt burden decreased over the past year.

The proportion of mortgagors struggling to pay for their accommodation remained relatively unchanged; the share of households worried about their debt levels dropped from 46% to 39%.

The most strain over the past year was felt by those who rent their home. The Bank's research shows that the number of renters who face credit card and unsecured loan interest bills of more than a fifth of their incomes has risen from 800,000 to 1.1 million this year.

The worry is that the households most exposed to debt problems are those who are renting, are unable to rely on the capital value of their home, and who have had to take out large loans to sustain their lifestyles.

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Ban Payday Loan Ads On Kids' TV, MPs Say

Payday lenders should be banned from advertising on children's television to stop young people believing that getting money is "easy", MPs have urged.

The Business, Innovation and Skills Committee (BIS) recommended stopping advertising on programming aimed at children after hearing fears that the next generation is being "groomed" towards borrowing money.

Recommendations by MPs also included tackling nuisance emails and texts to people who are "at their lowest ebb", forcing lenders to contribute cash towards debt advice and improving the way they share information.

Wonga says it does not advertise on children's TV channels

The committee heard evidence from consumer campaigners who warned that "cartoon puppets" used on payday lenders' adverts suggested that taking out a loan can be fun.

Martin Lewis, founder of consumer website MoneySavingExpert.com, said: "From our own research, we know children ask their parents to get a payday loan to buy them toys.

"Whilst parents have the power to say no, it's evidence that kids see this dangerous type of niche borrowing as part of everyday life."

Wonga, one of Britain's most high-profile payday lenders, is well known for its TV ads featuring a trio of elderly puppet characters named Betty, Joyce and Earl who explain the process of taking out a short-term cash loan to viewers.

But a Wonga spokeswoman said: "The idea that Wonga advertises on children's TV channels or programmes is a myth.

"We have a strict, long-standing policy not to advertise in this way."

The Consumer Finance Association (CFA), whose members include The Money Shop, Quick Quid and Cash Converters, also said its members do not advertise on children's TV channels.

Committee chairman Adrian Bailey said: "It is worrying that our children are being exposed to such an extent to adverts that can present payday loans as a fun, easy and appropriate way to access finance.

"Children's programmes are simply not an acceptable place for payday loan adverts."

The rapid expansion of the payday firms and a rocketing number of calls for help being made to charities by people drowning in debt are "not unrelated", he said.

The committee called for a levy paid by payday firms, under regulatory requirements, to be ringfenced by the Money Advice Service. This money could be used to boost the provision of debt advice to struggling borrowers.

The estimated size of the payday loan sector has doubled over a five-year period to be worth around £2.2bn.

Payday lenders have come under intense criticism this year, with the Office of Fair Trading (OFT) referring them to the Competition Commission for a report due out in 2014.

The Government announced plans last month to place a cap on the total cost of a payday loan.

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National Grid To Ask Firms To Ration Power Use

Businesses may be asked to switch off their electrical equipment next winter in exchange for payment.

The National Grid says it could pay firms to cut their energy use on winter evenings in 2014 to help it cope with greater demand for energy use than it can provide.

The move, which has echoes of the blackouts in the early 1970s, comes amid warnings from the regulator Ofgem about the risk to the country from power shortages by the middle of the decade.

Ofgem says National Grid would offer businesses the chance to reduce their electricity use between 4pm and 8pm on weekdays in return for a payment.

The amount of money they are given would depend on how much they are prepared to accept in negotiations with the National Grid.

Britain's electricity network provider has not decided if it will definitely implement the scheme as it is too early to determine if it has enough energy supply for next winter.

A spokesman said it will make the decision in the new year.

The measure is one of two being being considered to help it cope with the possibility of tighter electricity supplies next winter.

The other gives National Grid the ability to agree contracts with power stations to provide extra reserve power.

Mothballed gas-fired plant and other generators would compete for these contracts.

A spokesman for National Grid said: "We welcome Ofgem's approval of the two new balancing services which are sensible measures to have in place for the next few winters with tighter margins.

"These services are an insurance policy and will be used as a last resort if electricity margins tighten."

Ofgem chief executive, Andrew Wright, said: "Our latest assessment on security of electricity supplies published this summer showed that electricity margins are set to tighten more quickly than previously expected in the middle of the decade.

"This is mainly because older coal power stations will close sooner.

"Britain has one of the most reliable power systems in the world, but with margins tightening there can be no room for industry complacency on security of supply.

"Therefore we have approved these new tools to act as an extra insurance policy that is available for National Grid to protect consumers' power supplies."

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Festive Decorations Firm Calls In Administrator

By Mark Kleinman, City Editor

The company which puts up Christmas decorations in major UK shopping centres including Bluewater and Lakeside will on Friday fall into administration after axing its entire 190-strong workforce.

Sky News has learnt that Fuzzwire, which has contracts with many of the largest British property companies, is to call in FRP Advisory, the professional services firm, to oversee the administration.

Around 65 of the jobs at Yorkshire-based Fuzzwire were full-time, with the remainder split between part-time roles and about 80 self-employed contractors, many of whom are former military personnel responsible for the precarious task of erecting and dismantling the decorations.

The redundancies were made earlier this week by directors of Fuzzwire, insiders said.

Fuzzwire was formed from the merger of the sector's two major players, Centre Design and LDJ Design and Display, but is understood to have experienced difficult trading and cashflow problems in recent months.

The company also has contracts with malls such as Newcastle's Metro Centre and Canary Wharf in London.

Fuzzwire's contracts have already been transferred to MK Illuminations, an Austrian-owned company, reassuring shopping centre-owners that the decorative displays currently in place will be removed in the new year.

It is unclear whether MK Illuminations will hire the same contractors to undertake the work.

Andrew Sheridan, a partner at FRP, said in a statement issued to Sky News: "The assignment of Fuzzwire's UK contracts was made in order to safeguard the sound management of the Christmas decorations already in place and to ensure a smooth operational framework is in place to allow for their removal seamlessly to timetable in the new year and to ensure there is a continuing relationship for reinstallation of decorations at a range of shopping malls at future seasonal periods in 2014 and beyond."

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Christmas Debts 'Won't Be Cleared Until June'

The average family is going to take on debts this Christmas that will take until June to pay off, it has been claimed.

The Trades Union Congress has carried out research that shows that the typical family will add £685 to its borrowing by the time the festive season is over.

That will take a family on an average income 24 weeks to pay off, the labour organisation claims.

Last Christmas, one in six families borrowed money to pay for food, drinks and presents, with households borrowing an average of £654 per adult (Men £1,000, women £547).

Using average weekly earnings and savings data the TUC estimated that it took average-income earners 20 weeks to pay off this debt.

This year, consumer debt has increased by 4.9 per cent. The TUC's calculations estimate that it will take four more weeks for an average-income earner to pay back the extra debt burden they will take on.

If a minimum wage worker were to borrow the same sum it would take them an entire year working full-time to pay it off.

The TUC says the findings underline how ordinary people are not benefiting from the recovery and are instead facing a bigger struggle to pay off their debts.

The study has emerged on the day when the Bank of England has warned of the scale of the debt burden weighing on British families.

According to the TUC, British workers are currently suffering the longest real-wage squeeze since the 1870s, with inflation rising faster than wages for the last 42 months.

It says the government needs to make fairer pay rewards a priority.

Nicola Smith, head of economic and social affairs at the TUC, told Sky News: "It's to do with the fact that is an expensive time of the year for everybody, and with wages hardly having kept up with prices for the last four years, with family incomes under historic pressure, just meeting the basic costs of Christmas is going to mean a lot more people having to rely on credit."

She said the problem was that most growth in the economy was being provided by consumption and because pay was not keeping up with prices, the extra money people had to spend on buying goods was coming from borrowing.

"People are having to borrow to make up the extra spending that is driving growth in the economy," she said. "It's really worrying that that does not provide us with a sustainable basis for a recovery going forward."

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BlackBerry: £2.7bn Loss As Revenue Plunges

BlackBerry has reported a loss of £2.7bn ($4.4bn) in its third quarter, as its market share has continued to slide.

The makers of mobile phones and other electrical products also said that its revenue dropped by 56% in the same period.

BlackBerry, which at its peak was the third biggest manufacturer in the market, has been struggling to compete as Apple, Samsung and other smartphone makers have come to dominate the market.

The results are the Canadian firm's first under new chairman and interim chief executive John Chen.

Mr Chen said: "The most immediate challenge for the company is how to transition the devices operations to a more profitable business model."

The shares of BlackBerry, which was previously known as Research In Motion, tumbled more than 7% in pre-market trading.

During the quarter, which ended November 30, 2013, BlackBerry sold 1.9 million mobile phones, compared to 3.7 million in the previous quarter.

The launch of the BlackBerry 10 has failed to turn around fortunes

This year's launch of BlackBerry 10, its revamped operating system, and fancier devices - the touchscreen Z10 and Q10 for keyboard loyalists - was supposed to rejuvenate the brand and lure customers.

But the much-delayed phones failed to turn the company around and have led to a billion-dollar loss last quarter and a multibillion-dollar loss in the third quarter.

BlackBerry also announced it is entering a five-year partnership with Foxconn, the world's largest manufacturer of electronic products.

Foxconn will jointly develop and manufacture certain new BlackBerry devices and manage the inventory of them.

BlackBerry reported revenue of £730m ($1.2bn), down 56% in the same quarter last year.

Its adjusted loss from continuing operations was £216m ($354m), or 67 cents per share.

Analysts polled by FactSet, on average, expect a loss of 43 cents per share on revenue of £1.02bn ($1.66bn).

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UK GDP: Economy Growing Faster Than Expected

Britain's economy has grown faster than expected, despite fears there is underlying fragility.

The Office for National Statistics said British gross domestic product (GDP) grew by 0.8% in the third quarter, confirming previous estimates.

Annual GDP grew by an upwardly-revised 1.9% in the third quarter or three months up to the end of September, compared with output a year earlier, the ONS added on Friday. The prior estimate had stood at 1.5%.

At 0.8%, the quarter-on-quarter rate marked the fastest pace for more than three years.

The data came at the end of a week in which Britain announced a larger-than-expected drop in unemployment.

Also on Friday, the ONS said the government's public sector net borrowing requirement, excluding taxpayers' money used to rescue banks, rose to £16.5bn in November compared with £15.6bn a year earlier.

Ahead of the data, Standard and Poor's confirmed its top AAA credit rating for Britain, noting the government's commitment to reducing its budget deficit even if the deep austerity measures continue to slash public sector jobs.

Offsetting these losses has been a pick-up in jobs created by the private sector.

But the growth data comes as a jittery retail sector slashed prices ahead of Christmas, suggesting it fears the public's ability to spend is being restricted by wages that have yet to rise.

Howard Archer, chief European & UK economist at consultants IHS Global Insight, said: "Markedly rising employment and a robust housing market will likely underpin consumer spending over the coming months.

"If the recovery is to be sustained at a healthy pace, it really does need a marked, extended pick up in business investment and for exports to improve markedly."

The growth rate will be hailed as good news for the Chancellor amid sustained concerns over the pressure on living standards from families' static incomes.

A Treasury spokesperson said: "Today's data show that the recovery has been stronger than previously thought and that the government's long-term economic plan is working.

"But risks remain and the job is not done, so the government will go on taking the difficult decisions needed to deliver a responsible recovery for all."

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Christmas Shoppers To Spend £12bn In Four Days

By Emma Birchley, Sky News Reporter

Shoppers are expected to spend £12bn in just four days as they make the most of slashed prices and promotions, according to retail forecasters.

The deals are being offered as a fierce battle for sales rages both on the high street and online.

Alan Dadswell relies on Christmas to keep his shop Toys 'N' Tuck in Southend-on-Sea going and he says discounts are crucial.

He said: "To get people to spend the money they have got to feel they are getting a bargain and we have got to give them a bargain. We have to hunt with our suppliers to do good deals to get people in to the store."

A sluggish autumn has put added pressure on retailers.

But with 74% of shops offering deals, 13 million people are expected to shop on the high street on the last Saturday before Christmas.

It will help that many people finished work for Christmas on Friday.

Offering discounts at Toys 'N' Tuck in Southend-on-Sea is crucial

But Diane Wehrle, from the shop footfall monitors Springboard, says shoppers are getting increasingly canny.

She said: "Tactics definitely come into it. Shoppers are becoming much more savvy than they used to be. They understand that retailers are slashing prices. They understand they are doing one-off specials and they wait for them.

"So they perhaps go window shopping before the Christmas trading period starts, look out for what they want to buy and then buy them when they are on offer."

Lizzy Clarke, armed with bags of gifts in Southend, has made the most of the offers.

"They've got some great deals ... 75% off in some stores and I've just bought some jumpers that cost me £30 last week and this week have cost me £7," she said.

But Rob Antoniazz, who is unconvinced, said: "The decent items in good shops are never up for sale because the demand is there to buy them."

Tesco's distribution centre in Erith, Kent, has gone into overdrive

Half of the money being spent in the four days to the end of Monday will be on food, with £900m going towards online groceries.

Tesco has sold twice as many turkeys over the internet than last year. At its distribution centre in Erith, Kent, staff are working around the clock preparing orders.

Simon Belsham, the managing director of Online Grocery for the chain, said: "This is a really busy time of year for us. It really reflects that customers are looking for more and more convenient ways to shop for their Christmas presents and Christmas food."

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Tobacco Boss Quits Helm Of Silk Cut-Maker

By Mark Kleinman, City Editor

The executive who orchestrated Japan's biggest-ever takeover of a British company has quit his role at the helm of the manufacturer of Benson & Hedges and Silk Cut.

Sky News has learnt that Pierre de Labouchere, the president and chief executive of Japan Tobacco International (JTI), resigned with immediate effect.

The departure of Mr de Labouchere, who led Japan Tobacco's £7.5bn acquisition of Gallaher International in 2007, surprised analysts, who said they expected that the exit of such a senior executive would have been the subject of a public announcement.

JTI accounts for over half of its parent's global earnings and through its ownership of Gallaher's brands, which also included Mayfair, it now jostles with Imperial Tobacco for leadership of the UK cigarette market. British American Tobacco has a vast international presence but a comparatively small share of the UK market.

Mr de Labouchere has been replaced by Tom McCoy, previously the chief operating officer.

In a statement issued on Friday, a JTI spokesman said: "I confirm that Mr. Pierre de Labouchere has decided to resign from his position as President and Chief Executive Officer of JTI as of December 18th.

"Mr Thomas A McCoy has been appointed President and Chief Executive Officer of JTI. He brings in-depth knowledge of the business and a wealth of experience to this new responsibility. His 14 years with JTI have generated a proven track record of success in leading the international tobacco business at JTI."

JTI declined to comment on the reasons behind Mr de Labouchere's sudden departure but insiders said that another senior executive responsible for the company's mergers and acquisitions activity had also quit in recent days, suggesting some kind of strategic disagreement.

Mr de Labouchere, one of the most senior Frenchmen in a major Japanese company, led the takeover of Gallaher having previously been president of JR Reynolds' international operations, which were acquired by JTI in 1999.

JTI's UK operation is run directly by Jorge da Motta, who took over earlier this year.

He warned on his appointment that "the most challenging dynamic for the UK business is the high tax regime and the corresponding high level of non-UK duty paid cigarettes at a time when the Government is consulting on plain packaging".

"This makes the threat to legitimate businesses both small and large significant and dangerous," he added.

Headquartered in Geneva, JTI recorded sales of $11.8bn (£7.2bn) in 2012. The company has operations in more than 120 countries and about 25,000 employees.

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Ireland Bailout Exit 'Not End Of The Road'

Ireland's finance minister has warned of continuing pain ahead as the country prepares to officially exit its bailout.

At a news conference in Dublin ahead of Sunday's milestone, Michael Noonan told reporters "this isn't the end of the road" but pledged there would never be a repeat of its financial collapse because of the measures taken to prevent such a crisis.

He acknowledged the sacrifices made and losses suffered by ordinary people since the nation went cap-in-hand to the EU and International Monetary Fund (IMF) for a €85bn rescue package in 2010.

He said: "The real heroes and heroines of the story are the Irish people.

"They have had their taxes increased, they have had their services cut drastically - some of them including public servants have had very serious pay cuts.

"Everybody has had cuts in their pensions as well. But they have continued to support the government."

Mr Noonan said those who had suffered the most were the hundreds of thousands who lost their jobs and homes.

Cutbacks and tax rises led to protests as the Celtic Tiger economy crashed

More than 200,000 people were forced to emigrate in the wake of the collapse of the Celtic Tiger economy - brought about by the bursting of Ireland's property bubble which crippled the banking sector.

The country will officially exit the bailout programme on December 15, allowing it to properly re-enter the money markets after raising just €5bn in the past year.

The money it was loaned by the so-called troika - made up of the IMF, European Central Bank and European Commission - will start to be paid off in 2014.

Mr Noonan was speaking on the day the European Commission released its final tranche of bailout funding to the country while the IMF was to follow suit.

Commission president Jose Manuel Barroso congratulated the Irish government and people for the achievement.

"Thanks to their efforts and sacrifices, Ireland will now be able to finance itself through its own efforts," Mr Barroso said.

"Today's result would not have been possible without the solidarity and significant financial support of the other EU member states." Those countries also include the UK, as it provided separate bilateral loans.

Public Expenditure Minister Brendan Howlin said the bailout exit would give "much greater control over our own destiny into the future" but he cautioned there would be no spending spree.

Both he and Mr Noonan warned there will be no cause for the country to "go mad" on Monday following the exit, insisting the government will have to remain committed to making "prudent" economic and social decisions.

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Cameron Holds Airport Summit As Row Looms

By Mark Kleinman, City Editor

David Cameron has held a secret summit with the head of a panel reviewing options for expanding Britain's airport capacity as he braces for a major row to erupt on the issue next week.

Sky News has learnt that the Prime Minister met Sir Howard Davies on Wednesday to discuss the Airports Commission's interim report, which will be published on December 17.

Political tensions are running high ahead of the report amid speculation that it will shortlist just three favoured options, each of which includes the construction of at least one new runway at Heathrow Airport.

Boris Johnson, the Mayor of London, has expressed fury over reports suggesting that his idea for a new four-runway hub airport in the Thames Estuary has been sidelined.

People close to the Commission's work said that Sir Howard had been irritated by the speculation, suggesting that much of it had been inaccurate.

The panel is understood to have outlined three Heathrow-centric proposals: a third runway at the UK's biggest airport; a bigger expansion comprising two new runways there; and an additional runway there alongside a second runway at Gatwick.

That could mean only two viable proposals would be taken forward, since the owners of Gatwick have insisted that they will not build a second runway if Heathrow is also allowed to expand.

Mr Cameron is understood to have urged Sir Howard to include in next week's report an alternative option that does not involve a new runway at Heathrow.

That could mean a revival of the London Mayor's proposal or an expansion focused on London's third airport, Stansted.

A Downing Street spokesman said: "The Airports Commission is independent of Government and its work is a matter for it. It will deliver its interim report next week. The final report to Government is due in 2015.

"Part of the Airport Commission's remit is to engage with representatives from across the political spectrum. As the Airports Commission have made clear, Sir Howard Davies has met with political representatives in all parties, which includes the Prime Minister, as part of this process, but they have not been given a copy of the draft report."

Sir Howard met George Osborne, the Chancellor, earlier this week while Sky News understands that Mr Johnson met the Transport Secretary, Patrick McLoughlin, on Thursday to discuss a range of issues including the Airports Commission's review.

A Whitehall official pointed out that Mr Johnson had consistently said that he would assist the Commission's work but would "not necessarily be bound by its conclusions".

A spokesman for the Mayor declined to comment on his meeting with Mr McLoughlin, although Mr Johnson said publicly on Wednesday that if only three options remained after next week's report, each of which included expanding Heathrow, "that would be scandalous".

The publication of an interim report, which will set out several options meriting further analysis ahead of a formal recommendation after the 2015 general election, was supposed to defuse political tensions over Britain's future aviation capacity.

However, Sky News understands that the Government will publish an official response in the new year, underlining the difficulty it faces in navigating an issue that will feature in the manifestos of all the main parties in 18 months' time.

Stewart Wingate, Gatwick's chief executive, said: "Gatwick's case for a second runway is compelling. Compared to Heathrow we are cheaper, quicker, have a significantly lower environmental impact and we are the most deliverable solution.

"Heathrow's answer for passengers is to re-establish their monopoly which will mean high fares forever, and huge environmental damage to their local communities."

The requirement for new runway capacity has become more pressing as the south-east's airports reach bursting point.

Rival European hubs in Frankfurt and Paris are growing rapidly, while Dubai is expected to overtake Heathrow as the biggest airport by international passengers within two years.

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HS2 Report: High-Speed Rail 'Essential To UK'

High-speed rail is "essential for the UK", according to a report by a committee of MPs.

The risk of not going ahead with the project "significantly outweigh the risks of doing so", the House of Commons Transport Committee has said.

The MPs suggested that the second phase, from Birmingham to the north-east and north-west, should be built at the same time as the first London to Birmingham phase to get trains running ahead of 2033.

However, they warned the £50bn project should not delay other vital transport projects.

Their report also criticised the Department for Transport for "unqualified" claims the project would bring £15bn benefit to the economy.

Bacombe Lane in the Chilterns where a viaduct will be build for HS2

The cost of the project in its entirety is estimated at £42.6bn with £7.5bn needed for the high-speed trains. Of this £42.6bn, a total of £14.56bn is contingency.

In its report, the committee said: "The Department for Transport's (DfT's) communications about HS2 should emphasise that the estimated cost is £28bn, not £50bn, and that cost increases to date have largely been due to the decision to undertake more tunnelling and other work to mitigate the impact of the project on people living near the route."

The report added: "The project is now commonly regarded as costing £50bn and rising. This has led to exaggerated references to HS2 requiring a 'blank cheque' from Government."

In their report, the MPs said the incoming HS2 Ltd chairman Sir David Higgins should report to ministers by the end of 2014 "on options for speeding up HS2".

The first phase of the scheme, from London to Birmingham, is due for completion in 2026. The second, Y-shaped section from Birmingham to northwest and northeast England is due to be finished in 2032/33.

A map of the woodlands affected by HS2

Campaigners have raised concerns the project will destroy vast swathes of England's countryside. The Woodland Trust has calculated that 21 ancient woodlands will be destroyed or significantly damaged by the first phase.

Joe Rukin, campaign manager for the Stop HS2 group, said that it was clear the latest inquiry "was going to be a cheerleading whitewash when the Transport Committee only called people who support HS2 to give evidence".

Transport Secretary Patrick McLoughlin welcomed the committee's finding that the North-South railway was what he called the "best long-term solution" for increasing capacity.

Shadow transport secretary Mary Creagh said that, although Labour supports HS2, "three years of Government delays and mismanagement has caused costs to balloon".

She added: "Incompetent ministers have only recently launched the consultation on phase 2 of the route, despite the fact that it was being worked on when Labour were in government."

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House Approves Budget Deal In Bipartisan Vote

The House has given sweeping bipartisan approval to a budget bill backed by both President Barack Obama, his Democratic allies and a big majority of the chamber's Republicans.

The 332-94 vote sends the measure to the Senate, where Republicans are more skeptical.

The Democratic-led chamber appears sure to adopt the measure next week and send it to Mr Obama for his signature - avoiding the prospect of another damaging partial government shutdown and allowing the White House to concentrate on boosting the economy.

Mr Obama's press secretary, Jay Carney, hailed the vote, saying it "shows Washington can and should stop governing by crisis and both sides can work together to get things done".

The package was drafted by a congressional odd couple of House Budget Committee Chairman Paul Ryan and Senate Budget Committee Chairman Patty Murray.

The agreement would set overall spending levels for the current budget year and the one that begins on October 1, 2014.

That straightforward action would probably eliminate not only a new shutdown but also reduce the opportunity for the periodic brinkmanship of the kind that has flourished in the current three-year era of divided government.

The measure would erase $63 billion in across-the-board cuts set for January and early 2015 on domestic and defence programmes, leaving about $140 billion in reductions in place.

On the other side of the budget ledger, it projects savings totaling $85 billion over the coming decade, enough to show a deficit reduction of about $23 billion over the 10-year period.

Supporters of the measure easily beat back attacks on it from conservative activists.

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RSA Boss Quits Over Insurer's Irish Woes

Shares in More Than insurer RSA tumbled 19% on opening on Friday after its chief executive resigned amid the crisis in its Irish division.

Simon Lee, whose job was on the line after two recent profits warnings, stood down with immediate effect.

He held the job for two years and will receive his contractual entitlement of £824,000 in lieu of 12 months' notice, paid on a monthly basis.

RSA said a review of its Irish business found it will need to strengthen reserves by £130m, on top of the £70m hit identified last month after a routine internal audit uncovered a financial black hole in the division.

RSA has lost a third of its value over the past year (correct at 08:52 GMT)

With this month's storms in the UK and Scandinavia costing it another £25m in claims, RSA warned of a further reduction in earnings for this year and an impact on next year's dividend payout for shareholders.

RSA chairman Martin Scicluna will take on Mr Lee's duties while a successor is found.

He said: "Simon felt it was in the best interests of the group that he step down to enable a change in leadership."

Mr Scicluna also announced a review of the group's businesses, which will be completed by the time of full-year results in the spring.

Philip Smith, the head of RSA's Irish division, resigned at the end of last month after he was suspended alongside two other executives pending the review's outcome.

It relates to a surge in bodily injury claims in the motor insurance market, which requires its reserves to be strengthened by £130m.

RSA will also inject £135m of capital into RSA Insurance Ireland to ensure that its solvency ratio is maintained above 200%.

Auditor PwC is currently carrying out the review of the Irish business and is expected to file its report next month.

The plunge in RSA's share price on the FTSE 100 was said by Barrie Cornes, an insurance sector analyst at Panmure Gordon stockbrokers, to have placed RSA on the radar screens of rivals looking to acquire some of its better performing businesses.

He added: "We would highlight the emerging markets business as being one which RSA might be 'forced' to sell but we suspect that the Canadian and Scandinavian businesses are the parts that competitors would be particularly interested in."

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Apple Probe: China Factory Overtime 'Excessive'

An inquiry into alleged sweatshop conditions in Chinese factories that make Apple gadgets has found improvement, but there are still concerns about excessive working hours.

The Fair Labor Association (FLA) released its findings after being tasked by the California-based tech giant with looking into allegations about the plants run by its largest supplier, Foxconn.

Problems that were previously identified included students on internship programmes being forced to work long hours on overnight production shifts, high numbers of suicides and industrial unrest among employees.

The report concluded Foxconn factories in Longhua, Chengdu and Guanlan had reached virtually all the goals they were set.

Apple said in a statement: "We are proud of the progress we have made together with the FLA and Foxconn,

Foxconn employees staged violent protests last year

"Our suppliers must live up to the toughest standards in the industry if they want to keep doing business with Apple."

Excessively long working hours remain a problem, however.

The FLA said more than half of the 170,000 employees at the Foxconn factories exceeded China's legal limit of 36 monthly overtime hours from March through October.

Foxconn plants in Longhua and Chengdu consistently limited workers' time on the clock below 60 hours per week during the review period, according to the FLA.

That met the labour group's standards but surpassed China's legal limit of 49 hours per week.

Apple said it had reduced excessive overtime at Foxconn and other suppliers, cutting the average working week to 53 hours, which the company said was well below industry norms.

Conditions at Pegatron remain a concern

"We will continue to provide transparency by reporting working-hours compliance each month on our website and we are committed to reducing overtime even further," Apple said.

Foxconn's progress was "a significant step in the right direction," said FLA president Auret van Heerden.

Even as conditions at the Foxconn factories plants improve, there are recurring complaints about abuses at other Chinese facilities that make Apple products.

The charity China Labor Watch said in a recent report that it uncovered a wide range of violations during an examination of factories in Shanghai and Suzhou run by Apple contractor Pegatron Corp.

The alleged problems included sexual discrimination, excessive working hours, poor living conditions and pollution.

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Food Poverty: 1.5m UK Pensioners Struggling

By Ashish Joshi, Sky News Correspondent

More than 1.5 million British pensioners are now living in food poverty - and the situation is set to worsen this winter, according to new research.

The Centre for Economics and Business says a quarter of over-65s have had to make cutbacks on food over the past three years, and over one million are malnourished or at risk of malnutrition because they are struggling to afford basic nutritious food.

The reason is that while the cost of living has continued to rise, incomes have not kept pace.

Increasing food prices in particular have hit the elderly the most.

The study shows over-65s will spend an average of £699 on food between October and December this year - that's an increase of £138 compared to the same quarter five years ago.

And by 2018 there will be an additional increase of £297 on top of that bill. It all adds up to the over-65s being harder hit than any other demographic.

Members describe the lunch clubs as a lifeline

Raina Barnes, 82, from Perivale, Middlesex, has been attending the Age Concern lunch club in Greenford for the past few months. Hot meals and warm company are provided by the charity.

Mrs Barnes, who was widowed last year, remembers when a £30 shop would easily last a few weeks. These days, she says, you get "hardly anything" for that amount.

"I think the supermarkets are taking us for a ride. One minute they're putting their prices down. The next they're going higher. You've only got a certain amount of money to spend," she says.

"All the basics like bread, milk and eggs are the things you need all the time. I mean eggs have just gone up terrible. You just have to see how it goes."

Sharing the dinner table with Mrs Barnes is 88-year-old Harry Thomas, a World War Two veteran. Mr Thomas says he shops around to compare the best prices in local supermarkets.

"It's a very hard thing these days for people, the price of things. You go to one shop and the price might have been dropped and you go to another and the price goes up a little bit.

"You never know what to buy. All I do is look at the price and say 'too high' and I don't bother."

Danny Woolcott, 87, has been a regular at the lunch club for more than six years. The retired mechanic, from Southall, visits three times a week.

He blames the Government for "letting pensioners down".

"I would like to see any government looking after the elderly people of this country.

"The people who brought this country along are being neglected badly and I think it's disgusting the way things have been left, honestly and truthfully."

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Ireland's Bord Gais Energy Sold To Centrica

British Gas owner Centrica is in line to take over the energy supply arm of Ireland's state-owned Bord Gais as part of a £1bn deal.

The group is part of a consortium that would pick up a business with more than 700,000 Irish household and business customers in the sale, as well as a gas-fired power station in Cork.

The consortium has been named preferred buyer in a sale of Bord Gais assets, in a deal struck as Ireland prepares to end its international bailout.

The announcement came hours after Centrica said it was quitting its planned £2bn Race Bank wind farm scheme off the Norfolk coast, selling the project to Denmark's DONG Energy for £50m.

Centrica has shifted from renewable energy investment to gas

The Irish deal saw the Dublin government pushing for a £1.2bn sale but eventually accepting the lower price.

Ministers said the international investment was a strong vote of confidence in the market and the Irish economy and would provide additional funding for investment in infrastructure and jobs.

As part of the deal, Brookfield Renewable Power is understood to be in line to pick up existing onshore wind farms and others being developed, while iCON Infrastructure will take on a gas pipeline network in Northern Ireland.

The sum being paid by each member of the consortium has not been disclosed.

Talks will now begin on finalising the sale, which is expected to complete early next year.

Bord Gais's assets were offered to international investors as part of the disposal of state assets under Ireland's EU-IMF bailout programme, which it is expected to exit within days.

Centrica sees the Irish deal as a growth opportunity in an adjacent market to the one currently served by British Gas, which has 12 million residential customers in the UK.

Its exit from Race Bank, announced on Thursday, was part of a broader strategy shift which includes focusing more on gas investments.

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Versace: Italian Fund Steps Off £900m Catwalk

By Mark Kleinman, City Editor

Italy's sovereign wealth fund is close to bowing out of the race to buy a stake in Versace as a trio of international private equity firms battle to invest in one of the world's best-known fashion houses.

Sky News understands that Fondo Strategico Italiano (FSI) is expected to miss out on the shortlist to acquire 20% of family-owned Versace in a deal likely to value the company at about £900m.

Blackstone and CCMP Capital, two New York-based firms, and Investcorp of Bahrain were informed on Friday that they were being considered as Versace's new investment partner.

A final round of bidding is expected before the end of the month.

The elimination of FSI, which is run by a former Merrill Lynch banker, is surprising after it was reported to have tabled the highest bid for the shareholding.

The Italian fund also has a joint venture with the Gulf state of Qatar, which last year bought the rival Italian fashion brand Valentino as well as luxury properties in Milan and Sardinia.

A person close to the Versace stake sale said it was now likely that FSI would miss out although it remained possible that it could re-enter the process.

It is unusual for some of the private equity firms left in the bidding to pursue a minority stake in a company so vigorously.

The global prestige of Versace, however, has proved to be a significant attraction. The opportunity to expand the business aggressively is said to have encouraged a belief among the bidders that its profitability can be grown rapidly.

The family, led by the largest shareholder Allegra, is understood to be open to the idea of a stock market listing in Milan in 2016 or later.

Donatella Versace, the designer behind the brand since the murder of her brother Gianni in 1997, and who owns 20% of the company, is playing a leading role in the negotiations over the stake sale.

Closely-held Italian companies such as Versace have been forced to open themselves up to external investment by the long stagnation in Italy's economy.

Versace was itself close to going under when Gian Giacomo Ferraris joined as chief executive from Jill Sander in 2009.

The private equity bidders all have experience of investing in luxury goods. One of CCMP's senior advisers, Robert Singer, is already a board member at Versace, which recorded sales of nearly £400m last year.

None of the firms shortlisted for the Versace stake would comment on the process.

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Business Round-Up And Week Ahead

Sky's Naomi Kerbel offers a round-up of what's coming up in the week's business news.

:: Monday December 16

On Monday, the Federation of Small Business will release its quarterly review looking at how regions and sectors have performed in the fourth quarter.

:: Tuesday December 17

The Airports Commission is expected to release a shortlist of locations in the South East of England for a new runway on Tuesday. 

:: Wednesday December 18

Wednesday sees the UK release its unemployment figures for the three months to November. Last month's figures showed that unemployment fell by 48,000 in the three months to September with the rate at 7.6%.

:: Thursday December 19

Business high fliers join Jeff Randall for his annual Christmas special on Thursday. See it first on Thursday 19th December at 7.30pm.

:: Friday December 20

On Friday both the US and the UK will give final GDP readings for the third quarter. Last month's readings showed the US at an annual rate of 3.6% and the UK 0.8% up on previous quarter.

Tweet your business stories to @SkyNKTweets

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Business Round-Up And Week Ahead

Sky's Naomi Kerbel offers a round-up of what's coming up in the week's business news.

:: Monday December 9

On Monday, eurozone finance ministers will gather in Brussels ahead of Tuesday's Economic and Financial Affairs Council meeting.

:: Tuesday December 10

Wall Street banks will get clarity on Tuesday on a controversial ban on betting with their own money. The U.S. Commodity Futures Trading Commission is to hold a public meeting on the Volcker rule.

:: Wednesday December 11

On Wednesday, investors in the Co-operative Bank will vote on the proposed £1.5bn recapitalisation plan which will see the Group cede control of the bank to bondholders and several US hedge funds.

:: Thursday December 12

Sports Direct reports half year results on Thursday. The sports retailer bought 20 JJB Sports stores and all of its stock when it went into administration in October 2012.

:: Friday December 13

And on Friday, the Royal Institution of Chartered Surveyors releases its housing market forecast for the coming year.

Tweet your business stories to @SkyNKTweets

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Qantas Sinks To 'Junk' Status In Airline War

The credit standing of embattled Australian airline Qantas has been downgraded by a leading rating agency to "junk" status.

Standard & Poor's reassessment of the world's second oldest airline comes after the carrier issued a shock profit warning and slashed jobs on Thursday.

Qantas revealed a half-year loss of £165m and said it would axe 1,000 jobs as it struggles under the weight of record fuel costs, fierce competition from subsidised rivals and a strong Australian dollar.

In response, S&P cut the airline's rating from BBB-, the lowest investment grade, to BB+ and placed it on a credit watch with negative implications.

Qantas shares closed 3.74% lower on Friday, having lost more than 10% on Thursday.

CEO Alan Joyce has taken a 38% pay cut as the airline struggles

At one point on Thursday its share price dropped more than 17%.

The BB+ rating puts Qantas in what is known as "junk" status among professional investors, increasing the cost of financing for the carrier and restricting access for investors that do not put their money in lower-rated companies.

"The downgrades reflect our view that intense competition in the airline industry has weakened Qantas' business risk profile to 'fair' from 'satisfactory' and financial risk profile to 'significant' from 'intermediate'," S&P said.

"We don't expect Qantas to recover to a credit profile commensurate with a BBB- rating in the near term."

The move comes after another ratings agency, Moody's, on Thursday put the airline's investment-grade BAA rating on review for a potential downgrade, saying the forecast conditions were "outside the rating expectation".

Qantas chief executive Alan Joyce admitted the challenges facing the airline were "immense" and "urgent" action was needed.

"Since the global financial crisis, Qantas has confronted a fiercely difficult operating environment - including the strong Australian dollar and record jet fuel costs, which have exacerbated Qantas' high cost base," he said.

Industrial action has hit passengers in recent years

"The Australian international market is the toughest anywhere in the world."

As well as axing 1,000 jobs, Mr Joyce said he would take a 38% pay cut while the airline would conduct a review of spending with top suppliers and put in place a salary and bonus freeze.

The airline claims domestic rival Virgin Australia, which is majority-owned by state-backed Singapore Airlines, Air New Zealand and Etihad, is waging a campaign to weaken it in the lucrative domestic market with cheap seats underwritten by foreign cash injections.

Mr Joyce has been lobbying the government for the easing of restrictions that limit foreign ownership in the national carrier to 49%, or state intervention to shore up Qantas.

But Prime Minister Tony Abbott said government help was unlikely and said: "If we subsidise Qantas, why not subsidise everyone?"

Qantas - originally an acronym for Queensland and Northern Territory Aerial Services - was founded in 1920 by two Australian former First World War pilots.

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Domino's Pizza Shares Sliced As Boss Quits

Britain's biggest pizza delivery firm has seen its share price fall flat after its boss decided to quit.

Domino's Pizza's share price dropped more than 9% in early Friday trading after it confirmed that chief executive Lance Batchelor would leave next year.

The company was already due to make a trading statement on Friday, December 13.

Its share price has eased around a third in the last year.

"Lance has been offered a new role in a significant private equity backed company and as a result has tendered his resignation," Domino's chairman Stephen Hemsley said in a statement.

"His new company operates in a non-competing sector."

Domino's said Mr Batchelor would stay with the firm until April 30 and added that it had begun the search for a replacement.

The negative investor sentiment to Mr Batchelor's departure shows how much the market has placed on his leadership at the company.

Domino's has had a string of successes since the recession as cost-conscious consumers moved from dining out at restaurants to eating takeaways at home.

It has also embraced online ordering technology, with more than 55% of all orders last year being made through the internet.

It said that in 2012 one-in-five orders was made on a mobile device - double the rate in the previous year.

Domino's full-year results to the end of 2013 are expected to show an even greater mobile device ordering take up.

It sold 61 million pizzas in 2012 and opened a record 69 stores.

London-listed Domino's now operates more than 800 stores and operates and franchises outlets in several other countries, including Ireland, Germany and Switzerland.

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E.ON Dual Fuel Price Tariff To Go Up By 3.7%

Energy supplier E.ON has announced an average price rise of 3.7% for its dual fuel customers, effective from January 18.

The company said the increase in the dual fuel tariff will add an average of £48 to customers' bills.

Consumers with electricity only variable tariffs will also be hit by a 3.7% rise, equal to £20 on their annual payments.

Meanwhile, customers using variable gas tariffs can expect to see an increase of 4.6% - around £37 - to their bills.

The company said in a statement: "For the second year running E.ON has announced an increase later than any other major supplier and has once again shown it is working hard to limit the impact on its customers by announcing a lower average percentage rise than any other major supplier."

The firm said it is offering simpler discounts to customers.

It added that a price alert will automatically inform customers of cheaper deals it may offer in the future.

Chief executive Tony Cocker acknowledged any price rise is dreaded by customers but said his company would improve advice and practical measures for customers.

The price rises incorporate a change to the Government levy system that is calculated into bills.

But Mr Cocker admitted future price rises may occur by 2016.

He said: "Whilst there can be no guarantees, the likelihood of further price rises over the next 18 months caused by an increase in the cost of social and environmental obligations has receded due to the recent action taken by the Government."

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JCB To Create 2,500 Jobs In £150m Expansion

Construction machinery maker JCB has announced a plan to create 2,500 jobs as part of a £150m investment programme.

The company said it would expand its operations in Staffordshire and create the jobs by 2018.

It estimates that the job boost would add another 7,500 for companies that supply it with goods and services.

The decision was made as Chancellor George Osborne visited its facilities and comes a day after he delivered the Autumn Statement.

Mr Osborne told Sky News: "Investment in the infrastructure here has allowed this company to announce 2,500 jobs, which is all part of an economy that's growing and investing in the things that matter.

"Of course the job is not done yet but we have to stick with that plan."

Mr Osborne has committed Government funding to unlock economic growth in Staffordshire with a major road improvement project on the A50 trunk road in Uttoxeter.

The JCB plan is part of a wider global growth strategy to expand sales and increase market share.

In April JCB put on a display at its new location in Brazil

It has already launched new facilities in Brazil, and the £150m JCB project in Britain is the single largest investment in the company's history.

JCB said it will build a 350,000 square-foot factory in Beamhurst to replace a smaller site in Rugeley.

The family-owned company will now build its own vehicle cabs rather than outsource their construction.

JCB said it would also expand its production facilities for hydraulic cylinders at Rocester.

The company is also to build a new factory on the Harewood Industrial Estate in Cheadle, to expand existing earthmoving facilities.

The firm admitted it still required planning permission from the local authorities in Staffordshire.

JCB chairman Lord Bamford said: "Our plan to create 2,500 high-quality manufacturing jobs locally is clear evidence of the important link between infrastructure improvement and job creation.

"The Chancellor's decision to invest in the regional infrastructure means JCB can continue to invest locally, which is good for Staffordshire and good for Britain, especially given the wider benefits to our UK supply chain."

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RBS Sued In £150m Pre-Crash Advice Battle

Royal Bank of Scotland and a leading rating agency are being sued for £150m over so-called toxic products in the global financial crash.

Sixteen European institutional investors have launched legal action against Standard and Poor's (S&P), and the UK taxpayer-backed RBS, over losses stemming from 2007 and 2008.

"We have created a foundation in the Netherlands and it has filed a claim in the district court in Amsterdam," the executive director of Bentham IMF, John Walker, said.

Bentham IMF is a litigation finance company providing investment capital to plaintiffs for large disputes in the United States and abroad.

S&P told Sky News it would defend the legal action

A court official in the Dutch capital confirmed the filing, saying "proceedings are under way in this regard".

The investors from Austria, France, Germany and Switzerland want the damages over financial products which collapsed during the crisis.

Approached by Sky News, RBS - which is 81% owned by taxpayers - declined to comment on the dispute.

S&P told Sky News: "This claim has no merit and we will oppose it vigorously.

"The ratings on these securities, which date back to 2005-6, were assigned in good faith based on the information available to us at the time."

The complex products, known as constant proportion debt obligations (CPDOs), were created in 2006 and given a top AAA credit rating by S&P's before their value crashed, Mr Walker said.

RBS became involved in a hostile takeover bid of the Dutch ABN Amro

He previously estimated that CPDO notes worth up to €2bn (£1.67bn) were issued in Europe in the three years before the collapse.

They were issued by a branch of the Netherlands' third-biggest bank ABN Amro - which in itself was later taken over by the RBS.

Mr Walker alleged that S&P's used a model created by ABN Amro to evaluate the CPDOs.

"What we are saying is that Standard & Poor's is guilty of negligence and intentional misconduct by allocating triple-A ratings, the highest, to these products," he said.

"Without the rating, investors would not have bought the product, one of the material causes for the crisis," Mr Walker said.

Fred Goodwin was the RBS boss who headed the ABN takeover

Betham IMF filed the claim in the Netherlands as ABN Amro was based there and because Dutch procedures were "cheaper and faster" than in Britain, where RBS is based.

An S&P spokesman told Sky News: "In May this year, we filed an action in the London courts challenging the jurisdiction of the Netherlands in any such claim and that action has now been served on the Dutch claimant.

"S&P has never had a presence in the Netherlands and its CPDO ratings were assigned in the UK."

Betham IMF won a world-first lawsuit against the ratings agency last year on behalf of 13 Australian towns that lost US$16.5m (£10m) on synthetic CPDO derivatives.

It was the first time a ratings agency had stood trial over the complex derivatives, whose collapse was seen as a major cause of the 2008 global meltdown.

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Cath Kidston To Bloom In £250m New Year Sale

By Mark Kleinman, City Editor

Cath Kidston, the retailer known for its floral-print product ranges, is eyeing a new year sale jackpot that could net its eponymous founder at least £50m.

Sky News can exclusively reveal that TA Associates, the buyout group which bought 60% of Cath Kidston in 2010, is planning to put the company on the market in 2014 and is expected to seek well over £250m for the fast-growing business.

UBS, the investment bank, has been appointed to handle the sale, insiders said on Friday.

A successful sale, which is expected to attract interest from dozens of private equity firms as well as sovereign wealth funds, pension funds and other retailers, would underline Cath Kidston's status as one of the biggest success stories in the British retail sector.

Last week, the London Stock Exchange named it as one of 1000 companies "to inspire Britain" because of its growing international customer base.

On Thursday, the company opened its new flagship shop next to the department store Fortnum & Mason on London's Piccadilly, selling 20,000 product lines displaying the distinctive patterns which have become synonymous with the brand.

Cath Kidston now has nearly 200 shops across the UK, Europe and Asia, including a store opened in Shanghai last month.

It is unclear whether Ms Kidston plans to sell any of her shares as part of the deal or whether TA will be the only investor to offload its stake.

The company's founder remains actively involved with the business and is not expected to leave after any new takeover. A stock market flotation is not thought to have been ruled out by TA.

Cath Kidston has seen an explosion in sales in recent years, while earnings before interest, tax, depreciation and amortisation rose 13% to £21m for the year to March 31. At a pre-tax level, losses narrowed sharply to £0.6m for the 12-month period.

At the time of the sale to TA, Ms Kidston said: "We are delighted to have found a fantastic partner in TA Associates whose expertise and international reach will help us to take the business to the next stage of its development.

"We now have the necessary partner in place to expand the brand internationally in Asia and other markets whilst enhancing our core offer in the UK."

Founded by its namesake in 1993, Cath Kidston has positioned its products as 'affordable yet aspirational', a factor that analysts say has contributed to its success during a tough economic climate and brutal period for UK high streets.

A spokesman for Cath Kidston declined to comment on Friday.

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Corbett To Log Out Of Moneysupermarket Chair

By Mark Kleinman, City Editor

Gerald Corbett is to step down as chairman of Moneysupermarket, the online price comparison business, seven years after steering it through its stock market debut.

Sky News understands that Mr Corbett, the former head of Railtrack, will relinquish the reins at Moneysupermarket next year.

Russell Reynolds, a headhunting firm, has been appointed to oversee the search for Mr Corbett's successor. It will be led by Moneysupermarket's senior independent director Michael Wemms, a former Tesco executive.

Mr Corbett's exit will come at a sensitive time for the price comparison sector, which is braced for a wide-ranging review by the City watchdog, the Financial Conduct Authority (FCA).

Announcing the inquiry, Clive Adamson, the FCA's director of supervision, said last week: "We've all used a price comparison website so we know how simple they make buying motor, travel or home insurance.

"We don't want to lose that convenience, but we do need to ask the question, 'does cheapest equal best?'

"We want to get to a place where consumers that use these sites buy with the confidence knowing that they have all the relevant facts."

The review comes in the wake of an explosion in the growth of sites such as GoCompare, Comparethemarket and Moneysupermarket, with millions of consumers now turning to them before buying financial and other products.

Moneysupermarket, which was founded by Simon Nixon in 1993, is one of the few major sites not to have direct ties to a major insurance company, a relationship that is partly behind the FCA's interest in the sector.

Mr Nixon became deputy chairman in 2009 and is not a candidate for the chairmanship, according to insiders.

Mr Corbett is stepping back to concentrate on his other roles, which include chairing Britvic, the soft drinks producer, and Betfair, the online betting exchange.

Moneysupermarket has grown profits from £33.7m in 2006 to £66.5m last year, and now has a market value of close to £1bn.

A Moneysupermarket spokesman declined to comment on Friday.

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US Jobless Rate At Lowest For Five Years

The unemployment rate in the United States dropped to 7% in November, the lowest figure for five years.

The sharp drop in the rate, from 7.3% in October, was unexpected and raised the odds that the Federal Reserve could soon begin moving away from its huge stimulus plan.

Meanwhile, the number of non-farm jobs in November went up by a net total of 203,000, which beat analysts' expectations.

The strengthening job market is likely to fuel speculation that the Federal Reserve may scale back its bond purchases when it meets later this month.

The economy has now generated an average of 204,000 jobs from August through November. That is up from 159,000 a month from April through July.

Many of the November job gains were in higher-paying industries. Manufacturers added 27,000 positions, the most since March 2012. Construction firms gained 17,000. The two industries have created a combined 113,000 jobs in the past four months.

Another month of robust hiring follows other positive economic news.

The economy expanded at an annual rate of 3.6% in the July-September quarter, the fastest growth since early 2012, the government said.

Still, nearly half that gain came from businesses building their stockpiles. Consumer spending grew at the slowest pace since late 2009.

Greater hiring could support healthier spending as job growth has a dominant influence over much of the economy.

If hiring continues at the current pace, a virtuous cycle starts to build. More jobs usually lead to higher wages, more spending and faster growth.

Roughly half the jobs that were added in the six months through October were in four low-wage industries - retail, hotels, restaurants and entertainment, temp jobs and home health care workers.

The Fed has pegged its stimulus efforts to the unemployment rate and chairman Ben Bernanke has said the Fed will ease its monthly purchases of $85bn (£51bn) in bonds once hiring has improved consistently.

The bond purchases have kept long-term interest rates low.

The recent economic upturn has been surprising. Many economists expected the government shutdown in October to hobble growth, yet the economy motored along without much interruption.

Early reports on holiday shopping have been disappointing.

The National Retail Federation said sales during the Thanksgiving weekend - probably the most important stretch for retailers - fell for the first time since the group began keeping track in 2006.

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