Lloyds' Libor Fine To Help Armed Forces

Millions of pounds of fines imposed on Lloyds Banking Group for manipulating lending rates will go to military good causes.

The Prime Minister, along with the Chancellor George Osborne, made the announcement on a visit to a Royal Marines base in Poole, Dorset.

"Lloyds bank have been fined £100m for manipulating the market," Mr Osborne said.

"That is a terrible thing to have done but I'm making sure the money is being put to good use.

"It's going to help soldiers returning with injuries, to make sure they get long-term care; it's going to help families while their loved ones are away in the military.

"In other words, people who have demonstrated the worse of values in the City are going to be supporting those who've demonstrated the very best of British values in the Armed Forces."

Lloyds apologised for manipulating the Libor rate

The UK's Financial Conduct Authority (FCA) fined Lloyds £105m, and it was also heavily fined by US regulators, with the overall penalty coming to £218m.

Lloyds manipulated Libor - the interest rate banks charge one another - and also tried to rig fees payable to the Bank of England under a scheme supporting banks during the financial crisis.

The Libor rate - the basis of trillions of dollars of financial transaction - is set daily and is also a reflection of an institution's credit worthiness.

So if it is low, the perception is a bank is a safe bet to deal with.

The implication is that during the 2008 bank crisis the rate may have been manipulated to make some banks look healthier than they were.

Lloyds apologised for the "unacceptable" actions of individuals involved in the conduct and said its previously lax culture was to blame.

It said: "The manipulation of submissions covered by the settlements took place between May 2006 and 2009 and the individuals involved have either left the group, been suspended or are subject to disciplinary proceedings."

More than £2bn has now been paid by banks globally to regulators over alleged manipulation, including £390m by RBS.

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RBS To Pour Billions Into Yawning Pension Gap

By Mark Kleinman, City Editor

Royal Bank of Scotland (RBS) is to pour billions of pounds extra into its pension scheme during the next decade to fill a ballooning deficit exacerbated by years of low interest rates.

Sky News can reveal that the state-backed lender is to plough almost £1bn into the scheme annually for the next three years as it seeks to eliminate a deficit valued in May at £5.6bn.

The gap, which refers to the value of the scheme's liabilities minus the value of its assets, was disclosed in the small print of RBS's detailed half-year results statement, published on Friday morning.

RBS said: "In May 2014, the triennial funding valuation of The Royal Bank of Scotland Group Pension Fund was agreed which showed that the value of the liabilities exceeded the value of assets by £5.6bn at 31 March 2013, a ratio of 82%.

"To eliminate this deficit, RBS will pay annual contributions of £650m from 2014 to 2016 and £450m (indexed in line with inflation) from 2017 to 2023.

"These contributions are in addition to regular annual contributions of approximately £270m in respect of the ongoing accrual of benefits as well as contributions to meet the expenses of running the scheme."

The additional contributions agreed with RBS's pension trustees will mean the bank paying in £920m a year until 2016, falling to £720m annually between 2017 and 2023.

An analyst said the extra funding reflected the impact of quantitative easing and low interest rates, which were themselves precipitated by the recession that was triggered by the 2008 banking crisis.

In its 213-page results announcement, RBS reiterated warnings made earlier this year about the possible impact of a Yes vote in next month's Scottish independence referendum on its credit rating and on its broader business and financial position.

It also said formally for the first time that its failure to persuade its Government shareholder to support the payment of higher bonuses posed a risk.

The bank said: "The Group's changing strategy has led to the departure of many talented staff.

"Following the implementation of CRD IV and the Government's views on variable compensation, there is now a restriction on the Group's ability to pay individual bonuses greater than salary, which may put the Group at a competitive disadvantage.

"An inability to attract and retain qualified personnel could have an adverse impact on the implementation of the Group's strategy and regulatory commitments."

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World Cup Betting Surge Boosts William Hill

William Hill says it got a boost from the World Cup with an 80% increase in betting compared with the 2010 tournament.

Just over 20 million bets were placed, worth £227m, with three-quarters of punters betting online rather than in a betting shop. Sixty percent of online bets were placed on phones or tablet devices.

Overall, there was a 146% growth in mobile betting compared with the first six months of 2013.

The biggest wager on the World Cup was $350,000 (£207,000) on Argentina to beat Iran, placed in Nevada.

Lionel Messi scored in the 91st minute to edge the match 1-0.

A 22-year-old student from Cheshire pulled off the most remarkable bet, winning £240 after staking 80p for Germany to be 5-0 ahead at half time against Brazil. The odds were 300/1.

William Hill said the best results for punters were Brazil's 3-1 win against Croatia, Switzerland's 2-1 victory over Ecuador, and Germany's 7-1 thrashing of Brazil.

Brazil's thrashing earned one punter £240 from an 80p bet

Despite the spike from the Brazil tournament, the group's half-year operating profit fell 2% to £176.9m - but this was better than expectations. Its pre-tax profit was down 15% year-on-year to £121.8m.

The World Cup surge helped to take the edge off some big losses for bookies at the start of the year, particularly when a number of favourites won in the Premier League.

An increase in duty on gaming machines, unveiled in the Budget, also hit the sector.

New chief executive James Henderson has just taken over William Hill from Ralph Topping, who spent 44 years at the company, six of them as boss.

The firm said it will continue its strategy of expanding overseas and continue growing the online part of its business.

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One Direction Album Is World's Biggest Hit

Chart-toppers One Direction had the biggest selling album in the world last year - the sixth year in the last seven a British act has topped the global sales chart, according to new figures.

The group's third album, Midnight Memories, sold four million copies in just six weeks, data from the music industry trade body BPI shows.

Home-grown acts accounted for one in every eight album sales around the world in 2013.

Robbie Williams' Swings Both Ways was the 18th biggest seller, while David Bowie's comeback album The Next Day came 35th.

Adele's 21, now more than three years old, and Babel by Mumford and Sons also notched up strong sales.

Gennaro Castaldo, a spokesman for the BPI, said: "For home-grown talent to have recorded the world's biggest selling album six out of the last seven years is a phenomenal achievement that says a great deal about the popularity of British music around the world.

"Aside from the obvious contribution to British exports, this success underlines the vital role our music and artists play in promoting the appeal of British culture around the world."

In the UK itself, British artists accounted for just over half (52%) of all album sales in 2013.

American acts were the next most popular, accounting for a third of all albums purchased.

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BA Owner IAG Announces Profits Of £182m

International Airlines Group, the owner of British Airways and Iberia, has announced a half year operating profit of £182m (€230m).

The company says the results are £208m (€230m) better than 2013, when it made a £26m loss.

IAG's chief executive, Willie Walsh, told Sky News the turnaround in Iberia had been "stunning" and said it was buying eight Airbus A350-900 aircraft for the airline, as well as eight A330-200 planes.

Mr Walsh said: "Iberia has taken significant steps to restructure its business and the progress made so far means that we can bring new long haul aircraft into the airline's fleet.

"These orders demonstrate our commitment to make Iberia competitive."

More than 3,000 jobs have been cut at the Spanish airline and nearly 1,600 more losses have been announced.

IAG's second quarter operating profit was £301m (€380m), up some £107m (€135m) on last year, as the lucrative spring and summer seasons deliver a big increase in passenger numbers.

Thousands of jobs have been cut at Spanish carrier Iberia

Mr Walsh also told Sky that BA and Iberia were both taking action over the current outbreak of the ebola virus in some African countries.

"Anyone flying into the areas is provided with a briefing from our health services," he said.

"That's a comprehensive briefing which outlines all the issues that people should be aware of.

"I'm satisfied that the measures at the airports where outbreaks have been identified are working, and are working well."

Mr Walsh also defended baggage handling company Swissport, which has been criticised over problems at Gatwick Airport.

Some passengers have faced long delays collecting their bags, with some told to go home without them.

He said: "I think Swissport is a good company - they provide us with services around the world ... To be fair to them, it's not all their fault because Gatwick was affected by some adverse weather which meant schedules were running well off plan and aircraft were arriving at a time where they did not have resources in place.

"I apologise to any of our customers who've been affected by the services provided to us by Swissport.

"But ... all the handling agencies at Gatwick are working to ensure all that all of our customers, and customers of other airlines can get away on their holidays."

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L&G To Launch £500m Urban Regeneration Fund

By Mark Kleinman, City Editor

Legal & General, Britain's biggest pension fund manager, is in talks about creating a £500m investment vehicle that will be used to finance major UK urban regeneration projects.

Sky News has learnt that L&G is in detailed talks with several sovereign wealth funds and overseas pension funds about the new venture.

An agreement with a co-investment partner could be struck within the next week or so, according to a person close to the discussions, although it may not be finalised by the time L&G reports half-year results next Wednesday.

The new fund would see L&G acting as the investment principal, taking decisions about which UK regeneration and infrastructure projects to back.

The FTSE-100 insurance and pensions group is understood to be holding discussions with sovereign investors in Europe, the Middle East and Asia about ploughing hundreds of millions of pounds into the fund.

Once it is operational, L&G hopes to secure further commitments from other investors, the source said.

The venture will reflect the ongoing diversification of L&G's activities under the leadership of Nigel Wilson, its chief executive, and comes as the Government seeks greater private sector involvement in infrastructure development across the country.

Mr Wilson believes that direct investments represent an under-utilised opportunity to drive growth for insurers, and wants L&G to target socially useful projects in areas such as housing, education, transport and energy, which have the potential to generate high rates of return.

L&G has already established a significant presence in the UK housebuilding sector, acquiring a sizeable stake in Cala Homes, a Scottish-based group, last year.

Cala is now being groomed for a stock market flotation as its backers seek to exploit buoyant conditions for the housebuilding sector.

Mr Wilson has also engineered L&G's expansion into direct lending to major companies, announcing the purchase of a 40% stake in Pemberton Asset Management last month.

That deal included an initial commitment to invest €250 million in Direct Lending through the Pemberton platform to UK and European companies, with an intention from L&G to make further commitments to the platform in future.

Paul Stanworth, managing director of Legal & General Capital, said:

"The UK and Europe have been too dependent on bank financing, and this impacts particularly on businesses wishing to invest and expand.

"Creating a new channel to deploy longer-dated institutional money in the mid-market sector will help drive economic recovery at a time when bank balance sheets are constrained, as well as creating a further asset class for direct investments by insurance companies and other institutions."

L&G declined to comment on the talks with sovereign wealth funds about the new vehicle.

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Gatwick Fliers Advised Over Swissport Problems

Passengers at Gatwick are being advised to pack essential items in their hand luggage ahead of more possible disruption at the airport this weekend.

Baggage-handling company Swissport is under fire after many travellers reported waiting several hours for their bags to make it off planes last weekend.

Some were even told to go home without their luggage and the airport hit out at the company, saying it had "failed to meet standards".

A spokeswoman for travel organisation Abta said: "We hope people can pass through Gatwick smoothly this weekend. But if people are concerned it would be a good idea for them to put essential items in their carry-on bags.

"Both Gatwick and Swissport are putting on extra people and we are confident this should help address the problem."

Swissport has called up 40 extra staff to help, and Gatwick itself is also drafting in extra manpower to help ease any delays during one of the airport's busiest weekends.

However, it is understood that Swissport is using staff on zero-hours contracts who could be reluctant to work unsocial hours.

The baggage problem was at its worst late on Saturday evening and into the early hours of Sunday.

Gatwick Airport is scheduled to have one of its busiest weekends

Swissport, which operates at 263 airports in 45 countries, has denied the problems at Gatwick were down to zero-hours workers.

Richard Sargent, 23, a wheelchair basketball player for Team GB who returned on Sunday from holiday in Egypt's Sharm el-Sheikh, had to wait more than four hours for his wheelchair.

"I was left stranded in baggage reclaim. I was not asking for special treatment, just to be able to freely move around the terminal and use the toilet," Mr Sargent told the Daily Telegraph.

Swissport denied problems were due to zero-hours contract workers

Some 276,000 passengers are expected to use the airport this weekend and Swissport says it is doing all it can to avoid a repeat of the delays.

It said: "Nothing that has happened during the past week gives an indication that this weekend will cause the baggage chaos being suggested.

"In order to accommodate the expected higher level of movements this weekend, Swissport has continued its policy of recruitment to Gatwick and increased its ramp staff accordingly."

It added: "The summer peak season puts pressure on all baggage handling companies.

Gatwick, in West Sussex, is currently lobbying for an extra runway

"Swissport is disappointed that we have fallen below our standards during this time and will do all possible to ensure the travelling public are not inconvenienced in any way."

Willie Walsh, the boss of the company that owns BA and Iberia, has also defended Swissport.

He told Sky News: "I think Swissport is a good company - they provide us with services around the world.

"To be fair to them, it's not all their fault because Gatwick was affected by some adverse weather which meant schedules were running well off plan and aircraft were arriving at a time where they did not have resources in place."

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US Unemployment Rate Ticks Up To 6.2% In July

The US economy has generated 209,000 new jobs in July, fewer than expected even as the upward trend remains steady.

The unemployment rate ticked up to 6.2% from 6.1% as more Americans started looking for work.

The figure for July was well below the 298,000 surge reported for June.

However, July also marked the sixth straight month that employment has expanded by more than 200,000 jobs, a stretch last seen in 1997.

The cooling in hiring is unlikely to change perceptions about strong economic growth in the third quarter.

The economy grew at a 4% annual pace in the second quarter after shrinking at a 2.1% rate in the first three months of year.

While restocking by businesses lifted the figure, growth is seen remaining sturdy for the rest of 2014.

The employment report is closely watched by financial markets around the globe.

It is set to garner even more attention in the months ahead, as investors seek to gauge when the Fed is likely to raise benchmark interest rates from near zero, where they have been since December 2008.

Job gains were broad-based in July.

Services industries employment accounted for the bulk of the gains, adding 140,000 positions. That compared to 232,000 jobs in June.

Manufacturing payrolls increased for the 12th month in a row, adding 28,000 jobs in July.

Construction jobs advanced for the seventh consecutive month, with July payrolls rising 22,000. Government employment increased by 11,000 jobs.

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High Street Revival 'Has Shown Little Impact'

By Frazer Maude, Sky News Correspondent

The self-titled "Queen of Shops" has come under fire after her Government-backed bid to revive the High Street has shown little impact.

Wolverhampton was one of 12 town centres chosen to pilot retail guru Mary Portas' High Street revival. It got a £100,000 share of the £1.2m in funding.

That helped finance the opening of five retail outlets. Three of them have been a success, one has diversified, and the fifth went under.

Nick Pitt, manager of the local shopping centre, chaired the Wolverhampton Portas Project. He sees it as a success for the town centre.

"A hundred thousand pounds is good value. And it rallied businesses around to come together in a very selfless way to help people get into business," he told Sky News.

"It was quite a humbling experience. I see people who'd never had the opportunity before to have their own shop and now they have.

"And those people are still helping us now to help other people get into business. And we're determined to do it again."

The celebrity trouble shooter was brought in by the Government two years ago to breathe new life into our struggling High Streets.

But some of her key recommendations, like a reduction in business rates and free parking, were ignored.

Some £1.2m in funding was set aside two years ago to boost business

Labour MP and chair of the Government's Business Select Committee, Adrian Bailey, is critical of the scheme, saying: "Overall, and I would emphasise it time and time again, you will not change the basic problems of the High Street just by putting in these sort of pilots.

"You've got to change the business rates and those obstacles which are deterring people from moving into the High Street in order to provide an imaginative variety of retail offers that people will want to buy into."

Mary Portas was not available for interview, but her CEO David Wood issued a statement to Sky News on her behalf.

It said: "We think there's some justified criticism of the way Government originally implemented the programme and the lack of infrastructure to support the town teams.

"There's also justified criticism of the way the majority of the recommendations were accepted but nothing was done - for example we spoke in the report about parking, business rates, landlords, town-centre-first planning approvals and the like but little was done."

Penny Maudaunt, the newly appointed High Streets Minister, says the scheme has been successful.

"There has been a huge amount of really good work that's gone on locally," she said.

"The pilots have been experiments. There have been a lot of good ideas, some ideas that may not have worked so well, but there are a number of ideas that have worked very well for particular areas and what we have to do is replicate that in other High Streets."

But many businesses say the areas that need tackling are the very ones that Ms Portas highlighted months ago, and which the Government ignored.

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Brady And Ex-M&S Boss To Get Tory Peerages

By Mark Kleinman, City Editor

David Cameron is to hand peerages to The Apprentice star Karren Brady, the former Marks & Spencer (M&S) boss Sir Stuart Rose and a multimillionaire Conservative donor in a wave of appointments that could revive a festering row about membership of the House of Lords.

Sky News can exclusively reveal that Ms Brady and Sir Stuart have been lined up as Conservative members of the upper house.

A Government insider said that Michael Farmer, a co-treasurer of and long-standing donor to the Tories, is also expected to be made a peer when the new list is unveiled.

The appointments of Ms Brady and Sir Stuart will bring two of Britain's most prominent businesspeople into the Lords at a time when the main parties are battling to secure high-profile support from business leaders in the run-up to next year's General Election.

Mr Farmer is less well-known outside the City but earned the nickname 'Mr Copper' after making a fortune from the commodities markets.

He has donated several million pounds to Conservative coffers in recent years and became co-treasurer of the party in 2012.

Another source said Joanna Shields, the former Facebook executive who went on to run Tech City, the London-based hub for technology businesses, had also been mentioned in recent days as a potential appointee, although her presence on the final list could not be verified.

Ex M&S boss Sir Stuart Rose (left, middle) has also been lined up as a peer

The timing of an announcement is unclear, although sources indicated that it could come as soon as next week.

Around 20 new peers are expected to be appointed, with the majority selected by Mr Cameron and Nick Clegg, the Liberal Democrat leader.

New members of the Lords are subjected to a strict vetting process, which the Government source said had now been completed in relation to the latest nominees.

The forthcoming arrivals will increase membership of the Lords to more than 850, reinforcing its status as the second-largest legislative chamber in the world, behind only China's National People's Congress.

The frequent appointment of new peers has sparked criticism about the cost to taxpayers and the ability of the Lords to function effectively as a legislative scrutineer.

It has also led to rows about the propriety of handing peerages to prominent party supporters and donors.

A number of leading business figures, including Lord Myners, the former M&S chairman, and Lord Davies, who ran Standard Chartered, were parachuted into the Lords during the banking crisis and took on ministerial roles.

Both Ms Brady and Sir Stuart have appeared at Conservative annual conferences in recent years, with the West Ham United boss also taking on a role as small business adviser to the Government.

Sir Stuart, who has taken on a string of jobs since leaving M&S including the chairmanship of Ocado, the online grocer, has also been advising the Government on NHS reform.

Reports this week said that Michael Cashman, the ex-EastEnders actor, would be one of three new Labour members of the Lords, while David Willetts, the former universities and science minister, and the former energy minister Greg Barker are said to be in line for peerages after the next election.

A Downing Street spokesman declined to comment, while none of the prospective new peers could be reached for comment.

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