House Price Growth 'Hits New Three-Year High'

House prices have recorded their fastest growth in almost three years in a further sign that the market is gathering pace, according to a new study.

Nationwide said the annual increase of 1.9% registered in June pushed average UK prices to £168,941, marking the strongest year-on-year uplift seen since September 2010.

On a month-on-month basis, house prices rose by 0.3% in June, marking a slight slowdown compared with a 0.4% rise recorded the previous month.

The building society said that Government efforts to kick-start the market, as well as a lack of available homes to choose from, are helping to bolster house prices.

However, there are big regional divides, with prices in London now standing at a new all-time high at £318,214 on average, which is 5% above their previous 2007 peak.

Nationwide's chief economist, Robert Gardner, said London "has seen the greatest recovery in prices of any region".

By contrast, prices across the UK are still around 9% below their pre-crisis peak.

Prices in England are currently 5% lower than those seen in 2007, while they are 13% down in Wales, 12% lower in Scotland and have plummeted by 53% in Northern Ireland compared with their 2007 levels.

Ten out of 13 areas across the UK have seen house prices increase over the last year, while three - Scotland, Northern Ireland and Yorkshire and Humberside - have seen falls.

London has seen the strongest annual growth at 5.2%, followed by East Anglia, which saw house prices increase by 3.6% year on year.

Northern Ireland recorded the biggest year-on-year drop in house prices, with a 2.1% fall taking them to £108,116 on average. Scotland saw the second biggest fall, with a 1.2% slide pushing prices to around £134,611.

Meanwhile, prices rose in Wales by 1.2% year on year to reach £133,432 typically.

Among England's cities outside London, Newcastle saw the biggest housing market jump year on year, with prices up by 11% to reach £173,296 on average, while Liverpool saw the biggest annual drop, with an 8% slide taking prices to around £142,454.

A string of recent studies have pointed to signs that the housing market is picking up, helped by Government initiatives such as Funding for Lending, which gives lenders access to cheap finance and has prompted a sharp increase in mortgage availability as well as lenders slashing their rates.

Schemes such as Help to Buy, which will be fully launched next year, have been introduced to help borrowers with smaller deposits and there have been reports of more first-time buyers entering the market in recent months.

The Council of Mortgage Lenders, which represents banks and building societies, recently said that May was the best month it has seen for mortgage lending since 2008.

Mr Gardner said the recent house price jump is likely to be down to a number of factors, including the increase in mortgage availability brought about by the Funding for Lending scheme.

Some signs of a modest improvement in the economy may also be boosting buyers' confidence and at the same time there are "few signs" that the supply of housing is increasing significantly, he said.

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EU Summit: Cameron Claims Rebate Victory

The Prime Minister has slammed an EU summit "ambush" aimed at shaving hundreds of millions of pounds off Britain's rebate.

David Cameron said proposed changes could have slashed the rebate by £1.5bn over the 2014-2020 budget period and that he found the way negotiations had been conducted "immensely frustrating".

He said: "I am frustrated I have to go through that battle all over again.

"But in this town you have to be ready for an ambush at any time, and that means lock and load and have one up the spout, and be ready for it.

"And that is exactly what I did."

The late-night dispute in Brussels centred on whether the agricultural grants to new EU members should be included in calculations for the UK rebate.

Herman Van Rompuy said youth unemployment was the summit's priority

French negotiators are said to have argued that the rural development spending should be excluded from the sums - potentially reducing the £3bn annual rebate by 10% - around £300m a year - according to the PM.

However, Mr Cameron was adamant that the issue was settled in the UK's favour by EU leaders back in February.

Downing Street sources indicated that European Council president Herman Van Rompuy had assured him the position had not changed, and the agricultural spending would be included in rebate calculations.

Speaking after the talks, Mr Cameron said the rebate was "completely secure".

He added: "It is, and I won't lie, it is immensely frustrating sometimes, the way this organisation works.

"In February, in the conclusions, it was written that the British rebate would continue as before...

Angela Merkel was expected to challenge the PM over claims of GCHQ snooping

"It is frankly not acceptable for it to be left to the last minute and then an attempt at reopening it, and an ambush at 1am at the end of a European Council meeting.

"I think this is no way for an organisation to conduct itself."

The PM said there had been progress at the talks on reducing the burden of EU regulation but that the pace of change was "not fast enough".

He announced the creation of a task force of six business leaders to investigate the impact of red-tape on UK firms and come up with suggestions on how to cut it ahead of the next EU summit.

Sky News Deputy Political Editor Joey Jones said there had been "fairly acrimonious" discussions but the rebate issue appeared to be settled - for now.

But he said other European leaders are likely to raise the rebate again in the future if David Cameron presses ahead with plans to renegotiate Britain's relationship with the EU.

Earlier, it emerged that the European Parliament had backed down after months of resistance to spending restraint as the seven-year EU budget was agreed.

The ceiling for spending from 2014-2020 will fall for the first time to 908bn euro (£776bn), as national leaders agreed in February.

The 136bn euro (£116bn) budget for 2014 is nearly 6% lower than this year.

But there is still criticism that administration costs will be rising, while MEPs claim they have negotiated guarantees that the full budgets will be used - unlike previous years when there have been large underspends.

Mr Van Rompuy has declared improving the job prospects of young people the main theme for the two day gathering.

Some 5.6 million are out of work in the eurozone, and in Greece and Spain the unemployment rate has rocketed to over 50%.

The council president is emphasising the need for money to be pumped into projects that could boost their employment chances.

But Mr Cameron also hopes to urge looser labour market rules and deregulation to help small and medium sized companies.

The PM has staked Britain's continuing membership of the EU on his ability to negotiate fundamental reform of it - with an in-out referendum due to be held in 2017 if the Tories win the general election.

Mr Cameron could also face questions at the summit from German Chancellor Angela Merkel and others after it emerged that eavesdropping agency GCHQ has been mass-monitoring global phone and internet traffic.

Berlin has openly challenged the validity of the Project Tempora surveillance operation, the existence of which was revealed by US National Security Agency whistle-blower Edward Snowden.

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BlackBerry Shares Fall Sharply After Results

BlackBerry has reported a net loss of $84m (£55m) for the first quarter of the year, missing analysts' forecasts and sending shares down by 17%.

The Canadian phone maker has been trying to turn around its fortunes with the release of new handsets, the Q10 and Z10, which launched earlier this year.

However, despite a 13% rise in shipments to 6.8 million, the firm's report did not give a breakdown of how many sales the new phones achieved in their first full quarter on sale in the US.

BlackBerry's revenue for the three months to June 1 was $3.1bn (£2.03bn), missing analysts' expectations of  $3.37bn.

The quarterly results represent a loss of 16 cents (10p) per share. They are a big improvement on the same time last year though, when it lost $518m (£340m).

The company has been struggling to keep customers tempted by the likes of flagship touchscreen handsets such as Apple's iPhone and Samsung's Galaxy S4. The two manufacturers own nearly three-quarters of the global smartphone market.

BlackBerry's reputation also took a hit when its phones were hit by much-publicised service disruptions in 2011.

The firm's golden hope in stopping its decline is the Z10 and Q10 offering.

Model Lily Cole helped launch the Q10 in the UK in April this year

The Z10 disposed of the company's trademark Qwerty keyboard in favour of a full touchscreen, while the Q10 combined the two features.

Some analysts doubted their appeal because of their small screen size compared with competitors but BlackBerry previously claimed that initial demand was strong.

Announcing the latest financial results, company CEO Thorsten Heins said: "We are still in the early stages of this launch, but already, the BlackBerry 10 platform and BlackBerry Enterprise Service 10 are proving themselves to customers to be very secure, flexible and dynamic mobile computing solutions.

"Over the next three quarters, we will be increasing our investments to support the roll out of new products and services, and to demonstrate that BlackBerry has established itself as a leading and vibrant player in next generation mobile computing solutions for both consumer and enterprise customers."

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Chancellor Courts Bankers For RBS Break-Up

By Mark Kleinman, City Editor

The Treasury has begun the search for advisers to map out the future structure of Royal Bank of Scotland (RBS) as it wrestles with a break-up that could delay a mass share sale for years.

Sky News understands that Treasury officials issued a tender document in recent days to recruit an investment bank to assist with a quick-fire review that will play a crucial role in determining the timetable for reprivatising RBS.

The review follows George Osborne's announcement in his Mansion House speech last week that an investigation of whether a 'bad bank' should be established to house RBS's toxic assets would report back by the autumn.

The idea has faced hostility from City shareholders in the bank, which is 81%-owned by British taxpayers, who believe it would prove chaotic and delay the point at which the Treasury would be able to start selling its RBS shareholding.

"We will only sell our stake in RBS when we feel the bank is fully able to support our economy and when we get good value for the taxpayer," Mr Osborne said.

"There's no doubt that, despite all the progress of recent years, RBS remains weighed down by too many poor assets - loans issued in the boom that have gone bad and may take a long time to improve.

"The question is - do we remove those poor assets from RBS, and set up what's known as a Bad Bank?

"This would then enable RBS to focus on the good parts of its business – supporting the British economy and maximising the benefits for the taxpayer.

"Opinion is divided – some say the disruption isn't worth it; others that it's the only way we'll really restore our banking system to health."

The Chancellor said the review would examine a "broad range" of RBS's assets, but with a focus on Ulster Bank, its troubled Irish subsidiary, and its UK commercial real estate holdings.

"We will establish a Bad Bank if it meets our three objectives. If it supports the British economy; if it's in the interests of taxpayers - and if it accelerates the return to private ownership. But if the review reveals that it would not achieve these things, then we won't do it," Mr Osborne added.

UK Financial Investments, the agency which manages taxpayers' stakes in RBS and Lloyds Banking Group, has also kicked off a search for banking advisers as the Chancellor mulls his options for selling the state's 39% stake in Lloyds.

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Starbucks Losses Hit £30m In Last Tax Year

By Pete Norman, Sky News Online

Starbucks UK reported a net annual loss of more than £30m for the 12 months to September 30, according to newly-released documents.

Accounts filed with Companies House show that Starbucks Coffee (UK) Ltd reported a total turnover of £413.39m in 2011-12, compared to £397.7m in 2010-11.

Gross profit was £70.5m, however after administrative losses of £98.2m - including royalty and licensing fees of £26.48m - the loss for the 2011-12 tax year amounted to £30.4m, the company said.

The net loss in the tax year 2010-11 was £32.8m. In 2009-10 the loss after tax of £34.2m, while in 2008-9 it was £52m and in 2007-8 the loss was £46m.

The directors of the company took home a combined £1.08m for the year ending September 30, up from £590,319 in the previous year.

The figure for directors includes shares that have vested in the period. No director shares were vested in financial year 2010-11 (FY11).

A Starbucks spokesman told Sky News: "All full and part-time employees of Starbucks receive shares as part of their pay.

"Over half of the remuneration provided to our directors last year comprised vested equity shares."

He added: "The reason for the increase is that the directors took the decision to sell some of their vested shares in FY12.

"These shares could have been granted at any point during the directors' tenure with the company, and can be sold once vested."

In real terms, it means salaries for the three directors have risen by around  10%.

The accounts show that the highest paid director of the company received a total package of £708,019, including £116,560 in relocation benefits.

The top director's pay was increased 90% from the previous year, when it amounted to £372,440

Starbucks was grilled by MPs last October over why the company had paid no UK corporation tax for three years, despite total sales of £1.2bn in the period.

It confirmed that the company had only made a UK profit once in the 14 years it had been trading in the country.

The subsequent public furore led to Mr Engskov telling Sky News, in December, that the company decided to "take action".

It announced that the UK firm would pay HM Revenue and Customs (HMRC) £20m over two years but critics slammed it as a gift and not a legal requirement.

Starbucks recently paid its first 'instalment' of £5m to HMRC for the financial year 2012-13, after it said it would make "certain deductions" relating to royalties paid to other arms of the multinational.

It intends to pay another £5m before September 30 and another £10m in the 2013-14 tax year.

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Google 'Developing Android Console And Watch'

Google is developing a video games console and a watch based around its Android operating system, reports suggest.

The Wall Street Journal (WSJ) says one of the devices could be released as early as this autumn.

Google is increasingly moving from its web and search roots into hardware, bringing out a range of Nexus smartphones and tablets as well as developing wearable technology such as Google Glass.

Quoting people "familiar with the matter", the WSJ claims Google is hoping to release the products before its rivals and says that Apple is preparing its own console as part of its next Apple TV product.

Google is also reportedly working on a second version of its Android-powered streaming device, Nexus Q, that came out last year but was not sold to the public.

App-based gaming on Android and iOS devices continues to grow in popularity and challenge the dominance of consoles like the PlayStation and Xbox.

Any potential Google gaming device will not be the first Android-powered console though.

The newly-released Ouya console already uses Android

Kickstarter project Ouya hit shops this week, with the palm-sized £65 console offering up around 170 downloadable titles at launch and allowing developers to make their own games.

However, initial reports about the quality of the games have been mixed.

The Android system currently powers three-quarters of the world's smartphones, and wearable technology such as a watch is seen as one of the big new frontiers for technology firms.

Samsung confirmed a 'smart watch' product in March but no release date has been announced. Apple is also believed to be working on a similar device, according to technology experts.

Google and Apple have not commented on the latest reports.

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Facebook To Remove Adverts From Adult Pages

Facebook will stop advertisements appearing on pages containing sexual or violent content after a number of companies suspended their campaigns.

Marks and Spencer and BSkyB, the parent company of Sky News, were among those to pull their adverts from the social networking site because of concerns about placement.

It led Facebook to announce a tightening of its review process, preventing promotions from appearing on pages and groups which contain offensive content.

"Our goal is to both preserve the freedoms of sharing on Facebook but also protect people and brands from certain types of content," a spokesman said in a blog post.

"We know that marketers work hard to promote their brands and we take their objectives seriously.

"While we already have rigorous review and removal policies for content against our terms, we recognise we need to do more to prevent situations where ads are displayed alongside controversial pages and groups."

In the first three months of the year, 85% of Facebook's revenue came from advertising - up 43% on the same quarter in 2012.

Advertisers paid a total of $1.25bn (£820m) to promote their products and services to the website's reported 665 million daily active users.

The company is paid around 3% more per advert than it was 12 months ago.

Facebook said its advertising review process will be manual at first but an automated system is expected to launch within weeks.

The spokesman added: "Like any digital platform, we're not going to be perfect but we will be much better.

"We'll continue to work aggressively on this issue with advertisers.

"We're confident the immediate steps we're taking will result in a significantly improved approach to preventing these instances from occurring, and we're committed to making this process work for everyone who uses Facebook."

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The Sky News Business Look Ahead

Sky's Naomi Kerbel offers a look ahead to what's coming up in the week's business news.

:: Monday July 1

Bank of England - Mark Carney's five-year term begins

Croatia - European Union accession

:: Tuesday July 2

Ocado Group interim results

OECD Consumer Price Indices

:: Wednesday July 3

Bowie memorabilia auction at Bonhams

:: Thursday July 4

Monetary Policy Committee Meeting - interest rate decision

European Central Bank Governing Council - interest rate decision 

:: Friday July 5

MPs vote on the EU Referendum Bill

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Gold Tarnish Worsens Amid Commodity Sell-Off

Gold has traded near to its lowest level in almost three years and is on track for its worst quarterly performance since at least 1968.

London early trading on Friday saw gold sit at $1,206 but by 1.45pm it had dropped to $1,191.99.

The hit to the precious metal comes amid continued worries that the United States will wind down its stimulus, puncturing confidence in the metal as an inflation hedge.

The price had earlier dropped to $1,180.50 in Asian trading - which was the lowest level since August 3, 2010.

Other key commodities have been hammered over the past three months by concerns that the era of cheap US central bank money is coming to an end.

Oil has also been heading for its weakest quarter in a year but in early afternoon trading Brent Crude was 0.21% up.

Copper, which is essential for both electronic gadgets and construction wiring, looks at its deepest quarterly loss in nearly two years.

The fears have hit gold prices the hardest as funds ditched the metal and physical buyers sat out the rout as bets grew prices could decline further.

"From July onwards, commodity prices should remain softer for two key reasons," Vishnu Varathan, market economist at Mizuho Corporate Bank, said.

"One is while timing may be variable, the impetus is for the US to reduce stimulus not increase it."

"There are bright spots in the US economy which is a reason for reducing stimulus.

"I don't think global growth factors have broadened enough for us to see the kind of synchronised upturn in growth with China, eurozone and the rest following in a very convincing way."

The price of bullion has fallen by as much as 15% since last week after Federal Reserve chairman Ben Bernanke signalled the central bank may reduce its $85bn (£50bn) monthly bond purchases later this year.

He added that the programme may be ended altogether by mid-2014, if the economy improves as expected.

For the quarter, gold is down by nearly 25%, its sharpest quarterly drop on record, based on Reuters data that dates back to 1968.

That puts it on course for its first annual fall after a 12-year rally.

Meanwhile copper is heading for its steepest quarterly drop since July-September 2011, which has come under pressure by concerns over slower growth in top consumer China.

Three-month copper on the London Metal Exchange was steady at $6,730 a tonne, but was down almost 11% for the quarter, its third quarterly loss in a row.

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Crown Post Office Staff Stage Strike Action

By Emma Birchley, East of England Correspondent

Post Office workers have gone on strike over plans to close 70 state-owned branches and a dispute over pay.

The closing Crown branches - which are currently directly managed by Post Office Ltd - would be franchised and put within retailers such as WH Smith, which has already happened in some towns.

Debbie Spiteri, who works at the Dagenham branch in Essex, has been employed by the Post Office for 32 years and said she thought she had a job for life.

"I thought I would be here until I retired in my 60s, but now it looks like I may be made redundant, looking for another job and at my age I didn't want to be doing that," she said.

"I feel sorry for the local people. A lot are elderly and if they have to go somewhere else, they won't. They won't go into a shop to do their business because to them they want the personal touch."

The Post Office insists staff will be transferred to a new employer or offered voluntary redundancy, but the Communication Workers Union predicts 800 jobs will be lost.

Roger Gale, general manager of the Post Office's Crown and WH Smith network, said the changes are needed.

"It's absolutely not a programme of closing post offices," he said.

"We want to retain post office services on the high street but we have to do it in a way that doesn't lose tax-payers' money.

"What we're trying to do is get the Crown Network to a point where it breaks even. It currently loses £37m a year of tax-payers' money and what we're trying to do is to remove that loss."

The 373 Crown offices, which are usually the larger ones, represent just 3% of the total post office network.

But the CWU says its staff deal with a fifth of all customers and handle 40% of financial transactions involving things like banking and credit cards.

Clive Tickner, the CWU's representative for the Dagenham area, questions the timing as the Post Office launches its new current account.

"Ironically, if they close down Crown offices there will be less outlets to transact the current account so I'm very, very concerned that they are eroding away at the Post Office so that there will be nothing left in a few years' time," he said.

There is also concern about the impact on the high street.

Deborah Satchell works at Heathway Dry Cleaners in Dagenham.

She said: "It will affect the local shops because people will go elsewhere to do what they have got to do and it will take the business away from the local community."

The strikes are the seventh round of action in the current dispute and will only affect the Crown branches.

Staff are also calling for a pay rise of 3.5% for 2012/13 and a further rise this financial year, but the Post Office says that is not possible when it is making losses.

Instead, it is offering a series of cash payments totalling up to £3,400 before April 2015.

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