#EurozoneCrisis: #Disappointing #USjobsdata #sparks #stockmarketrally - #liveupdates • Just 148,000 #new jobs #created in US #lastmonth • #Bondpricesjump, #dollardrops Earlier: • #Coop #exboss #grilled - #highlights start here • #Summary of the #keypoints The Gherkin and Canary Wharf at sunrise in the City of London. Photograph: Stefan Rousseau/PA theguardian/business/2013/oct/22/market-delayed-us-jobs-non-farm 4.23pm BST Northern Irelands construction industry is finally out of recession, according to the Royal Institute of Chartered Surveyors. Our correspondent Henry McDonald has the details. The institute has reported the first rise in building workloads in five years . During the downturn the industry lost 26,000 jobs or around 30 per cent of its workforce in the province. We are talking about small improvements from a low base and key challenges remain, said the institutes spokesman in Northern Ireland Jim Sammon. Finance is tight, private sector activity remains scarce, and public sector demand remains constrained. We urge the Northern Ireland Executive to encourage and nurture a recovery by increasing infrastructure spending, he said. But there was also a reality check from shopping giant Asda which has been comparing incomes among shoppers and consumers in Northern Ireland to their counterparts in the UK. Henry explains: Asdas latest income tracker found that families in Northern Ireland had the lowest spending power of all UK regions. After all the bills are paid Northern Ireland households had only £60 of discretionary income left to spend. This compares to the UK average of £157. Business Research, an economic consultancy, draws up a monthly income tracker for the Asda supermarket chain, examining spending habits and discretionary incomes across the UK.It concluded that discretionary incomes in Northern Ireland were 3.5% lower in September than the same month in 2012. 4.19pm BST US best paid bosses While Americas economy struggles, the countrys top 10 best paid executives took home at least $100m each, and two received upwards of one billion dollars each. The best remunerated boss was Mark Zuckerberg, Facebooks co-founder, who cashed in when the social network floated. The figures come from GMI Ratings annual poll of executive compensation:. Zuckerbergs total compensation topped $2.27bn – more than $6m a day. His base salary was $503,205 but the vast majority of his enormous payday came from exercising 60m Facebook share options when the company went public last year. Heres the story: US CEOs break pay record as top 10 earners take home at least $100m each And heres a list of those lucky Top Ten CEOs 4.03pm BST Share on Wall Street are romping higher following the disappointing US jobs data,with the S&P 500 hitting yet another record high. The Dow Jones index jumped 100 points at one state, and European markets are also hitting five-year highs. The rally comes as more investors calculate that the Federal Reserve will keep pumping money into the system for some time, following the news that the US labour market was already weakening before the Shutdown struck. I fear were back into the world where Bad News is Good News, because it forces central banks to maintain ultraloose monetary policy: Years of cheap money have screwed up markets — Chris Adams (@chrisadamsmkts) October 22, 2013 Joshua Raymond, chief marketing strategist at Cityindex.co.uk, comments: US payrolls came in sharply below market forecasts with only 148,000 jobs created, giving the Federal Reserve some added breathing space before they may be forced into tapering stimulus. Today’s jobs data effectively locks in the idea that we are very unlikely to see the Fed taper stimulus this year as the weaker turn for US data locks in an accommodative monetary policy stance. One thing to keep an eye on will be revisions to Septembers job report as we don’t yet know how much of an effect the partial government shutdown has had on the accuracy of the data compiled. 3.30pm BST The Royal Mail flotation has taken another twist today, with the news that a leading activist hedge fund has amassed a 5% stake. A regulatory filing from Royal Mail this afternoon showed that The Childrens Investment Fund now owns more than 58 million of the Royal Mails 1bn shares, giving it a 5.8% stake (thus triggering the announcement). This appears to make TCI the biggest private shareholder (the government was left with more than 30% of the stock after the float.) TCI, based in London, is well-known for taking stakes in companies and agitating for change, so Royal Mails management could face a rough ride. It was founded a decade ago by manager and philanthropist Chris Hohn, who co-founded the Childrens Investment Fund Foundation (CIFF) charity with his wife to help under-privileged children in the developing world. Business secretary Vince Cable had promised that responsible, long-term investors would be favoured in the allocation process. Its not clear how many shares TCI received in the float, and how many it has mopped up since. #royalmailshares So much for popular capitalism if hedgies TCI owns 5%..t.co/qdMBZ4qCRu — David Gow (@gowdav) October 22, 2013 Shares in Royal Mail have dropped today, down 1% at present to 492p. They floated at 330p. Updated at 3.51pm BST 3.01pm BST Co-op Group chief stepping down A co-operative bank branch sign. Photograph: John Stillwell/PA The Co-operative Groups chairman, Len Wardle, is to step down, as the turmoil surrounding the organisation continues to swirl. Co-op Group just announced that Wardle will make his decision official at the next half-yearly meeting of members on 2 November, and depart in May 2014. The news comes a day after US hedge funds forced it to surrender control of its Bank yesterday. In a statement, Wardle said he should be replaced by an independent chairman. On 2 November I intend to give the membership my notice that I will relinquish my Chairmanship in May 2014. In August this year, I informed the Board that it was my intention to step down at the end of my term of office whilst also making clear that I wanted to drive hard the reforms to modernise the Group. During the last year, we have appointed Euan Sutherland as Group CEO and started the changes that I believe will make The Co-operative Group stronger than ever. The Co-operative is at its best when it is reforming and I want this change to continue. I want to persuade our members that The Co-operative Group should now look to an independent chair to lead the business, working side-by-side with the members who represent the movement. I am immensely proud to have led the Group and to have chaired The Co-operative over the last six years. The Groups CEO, Euan Sutherland, commented: Firstly, I want to thank Len for his leadership and commitment to The Co-operative over the last six years. Under his guidance we have made significant progress on beginning the reform which we will announce as planned in May 2014. I look forward to working with colleagues and members to ensure that we return the business to growth over the coming years. As I covered extensively this morning, Sutherlands predecessor was very critical of the Co-op Groups structure while being quizzed by MPs today. Peter Marks said partly blamed the problems at Co-op Bank on the fact the organisation has a toe in too many areas. 2.41pm BST Wall Street has opened a little higher on the back of the US jobs data, with the Dow Jones up 28 points, or 0.17%, in early trading. The S&P 500 and Nasdaq are also gaining a little. 2.30pm BST Back to the UK briefly -- the bosses of Britains largest energy firms are being hauled before MPs to explain the recent rash of price hikes, after tariffs jumped by upwards of 8%. Big six energy firms to face MPs following price hikes 2.27pm BST Wall Street correspondent Dominic Rushe flags up one cheerful note -- the drop in the US jobless rate, to 7.2%, was caused by more people getting jobs rather than simply dropping out of the labour market altogether. Dom writes: Septembers fall appears to be driven by employment growth, one bright spark in an otherwise lacklustre report. The largest job gains were in construction, wholesale trade, and transportation and warehousing. Employers have now added an average of 185,000 positions each month over the last year as of September, but gains have slowed in recent months. The number of long-term unemployed (those jobless for 27 weeks or more) has remained high and was little changed in September at 4.1 million. These individuals accounted for 36.9% of the unemployed. The unemployment rates for teenagers (21.4%), black people (12.9%) and Hispanics (9%) also remained high and unchanged. 2.25pm BST Stock markets in Europe have pushed higher on the back of the disappointing jobs data from America. The FTSE 100 is up 30 points at 6684, a gain of 0.46%, having hit the highest intraday level since the start of August. Germanys DAX is up another 0.8% and heading for yet another record high. The prospect of yet more Fed stimulus is getting traders drooling, even though the real message from todays Non-Farm Payroll is that the US labour market is weak. 2.12pm BST Barclays also reckons the Fed will keep stimulating for several more months... Zing! Barc shifts from Dec to March for its tapering call. — Katie Martin (@katie_martin_FX) October 22, 2013 2.09pm BST Stock markets will climb higher by Christmas as the Federal Reserve keeps pumping money into the US economy, predicts Joe Rundle, head of trading at ETX Capital. Rundle reckons the Fed might not start tapering its bond buying programme until the middle of next year: Jobs generation remains weak, other facets of the US economy are also suffering from weakness – yesterday’s weaker existing home sales report for example and more importantly, fiscal uncertainty in the US remains. Lawmakers will have to re-address the debt limit and funding for the Treasury early next year; this makes the Fed’s job much harder in terms of an exit plan for QE. At the same time, if the trigger is not pulled by current head Ben Bernanke before he leaves at the end of 2013, it will be the duty of the incoming Fed President who could be Janet Yellen – an endorser of loose monetary policies [low interest rates and accommodative easing tools], otherwise known as a dove in the market. ...Most likely it will be mid-2014 or late before we see the first tapering shot fired. Risk assets are to remain well supported through to year-end; S&P500 to hit 1810 by end of 2013, FTSE100 to hit 6850. 2.05pm BST This graph also shows how job creation in America remains subdued: Jobs Market in one chart: No wonder Fed hasnt tapered. Jobs trend is nothing to celebrate t.co/KCvN1Pd5cP pic.twitter/eqJVeZ6CsS — Steven Russolillo (@srussolillo) October 22, 2013 2.03pm BST The weak US jobs report shows that the Federal Reserve was quite right last month, when it decided not to start to taper (or slow) its programme of buying $85bn of government bonds and mortgage debt. Economist Justin Wolfers flags up that US job creation is faltering - an average of just 143, 000 new hires were made each month between July and September, compared to 209,000 per month at the end of 2012. Slowing average jobs growth worries me: 2012 Q4: 209k 2013 Q1: 207k 2013 Q2: 182k 2013 Q3: 143k. — Justin Wolfers (@JustinWolfers) October 22, 2013 1.53pm BST David Nicholls, alliance manager at UKForex, agrees that the US labour markets looks too weak for the Fed to start tapering its bond-purchase scheme: Today’s non-farm payroll data (148K vs 182K expected) is another nail in the coffin for tapering anytime this year. The numbers just aren’t supporting an immediate move by the Fed, and the dollar is softening further as a result. It’s also difficult to see that October’s data is going to be any more positive given the recent government shut down. We expect data to continue to support a delayed tapering decision this year – and that will weigh heavily on the US dollar. 1.49pm BST Our first take on the Non-Farm Payroll is here: The US unemployment rate remained at the lowest level since 2008 in September, according to figures released on Tuesday that were delayed by the federal government shutdown. According to the Bureau of Labor Statistics, the unemployment rate remained little changed at 7.2%, with the economy adding 148,000 jobs. But the US economic recovery remains fragile, with employers adding jobs at a slower rate than the previous month. US jobless rate little changed at 7.2% as recovery stays on sluggish pace 1.47pm BST Bonds jump, dollar slides after Non-Farm Payroll The price of US Treasury bills is jumping on the news that the US jobs market was weaker than expected in September. This has driven down the interest rate (yield) on 10-year bonds to a three month low. The dollar also took an immediate dive, pushing the pound up almost half a cent to $1.6183. That backs up the idea that the Federal Reserve wont start tapering its QE programme for some months.... 1.42pm BST The early reaction from analysts and economists is that Septembers non-farm payroll report means the Fed will keep stimulating the US economy at its current rate until 2014. An increase of just 148,000 new jobs is quite a miss compared to the consensus of 180,000 (some bullish analysts expected to see a >200,000 reading). Non farm payroll numbers probably tapers expectations of tapering... — Swordfish Research (@SwordfishGary) October 22, 2013 Worst part of jobs report: Soft hiring in September ahead of the shutdown, July’s pathetic performance (+89,000). — Jeffry Bartash (@jbartash) October 22, 2013 So to recap if September payrolls are this disappointing - what will the October numbers be like? #NFP - not good I suspect — Michael Hewson (@mhewson_CMC) October 22, 2013 ooof - 148k jobs. small upward revisions. And this is before the shutdown. — James Saft (@jamessaft) October 22, 2013 Question of the day - will Yellen taper in her first year as Fed chief? On the evidence so far: no. — James Saft (@jamessaft) October 22, 2013 1.37pm BST Experts on Bloomberg TV are agreed that this is a bad jobs report, particularly in the private sector where just 126,000 new jobs were created in September. This is not what the Federal Reserve is looking to see before it starts to ease its $85bn/month quantitative easing programme, one suggests. 1.34pm BST The US labour force participation rate is unchanged, at 63.2%. 1.33pm BST Previous US unemployment data has been revised, too. The Bureau of Labour Statistics says 193,000 new jobs were created in August, up from 169,000 new jobs. But Julys data has been downgraded, to 89,000 new jobs from 104,000. 1.30pm BST Non-Farm released Breaking: 148,000 new jobs were created in America last month. Thats less than expected. The jobless rate is down, though, from 7.3% to 7.2%. 1.29pm BST City forecasts for non-farm payroll vary considerably, as ever - the consensus is that 180,000 new jobs were created in America last month, leaving the jobless rate unchanged at 7.3%. US September payrolls data is due at 13:30 BST/08:30 ET. The market is expecting 180K for NFP and a 7.3% unemployment rate — Sigma Squawk (@SigmaSquawk) October 22, 2013 Updated at 1.29pm BST 1.27pm BST US jobs data imminent Right, time for the next order of business - the delayed US jobs data. The Non-Farm payroll for September, showing how many new jobs were created in America last month, is due out any moment (8.30am New York, or 1.30pm BST) Its been delayed by more than two weeks by the US government shutdown, and economists are eager to learn how the labour market was performing before Capitol Hill plunged the country into uncertainty in that row over the US budget and the debt ceiling..... 1.16pm BST Summary That really was quite a session between Peter Marks and the Treasury committee over Co-ops lurch into crisis (highlights start here). The key points, I think, are: • His warning that the Co-operative Group was, and is, spread too thinly, which helped to drive Co-op Bank into such difficulties. That is going to fuel fears over the mutuals future, now two US hedge funds have taken control of the Bank via its refinancing. • The admission that Co-op should never have merged its financial service arm with Britannia Building Society. If he had a crystal ball, hed not have done it. (why dont board rooms include crystal balls as standard fittings?)... ...and the insistence that the ill-fated deal to buy hundreds of Lloyds branches was not a bad decision. • Marks refusal to take full personal responsibility. He tried to pin the blame for the Co-op Bank/Britannia merger on the two chief executives. And while he conceded being the driving force behind the Lloyds bid, he said former Co-op Bank CEO Neville Richardson had played the main role. • The declaration that a hedge fund cant be ethical will worry any Co-op Bank customer who is worrying about its future. As Marks put it: Hedge funds exist to maximise profits...to be ethical, you cant do that. This raises the issue of whether Co-op Bank should continue to use the co-operative title, now its under the control of two US hedge funds. As Marks said its not a Co-op any more. Its not a Co-op is it says Marks about the new Co-op bank — Jill Treanor (@jilltreanor) October 22, 2013 And Markss comments on why its so hard for a mutual bank to compete also suggest the era is over. • We still dont know exactly how the Co-op was allowed to continue with the Lloyds branch bid until Spring 2013, despite concerns over its capital position. Marks blamed the PRA regulators for moving the goalposts and forcing the Co-op to seek more capital. • MPs didnt look convinced. The Treasury committee seemed sceptical on occasions, and incredulous on others, as Marks tried to avoid taking blame. As Brooks Newmark put it: It says it on the tin. You were the leader . And Andrew Tyrie appeared most unimpressed at the sight of another executive explained how decisions were taken collectively. Wheres the individual accountability?... Updated at 1.24pm BST 12.28pm BST Andrew Tyrie Andrew Tyrie. Parliamentlive.tv After more than two hours of grilling, Andrew Tyrie releases Peter Marks from the Thatcher Room. Its not been an easy morning for you, or anyone else, Tyrie remarks. But a lot of people have lost money out there, not just bond holders, so its important that the session took place. Any final words? Marks, who cant have enjoyed the session one little bit (the accusation of selective amnesia was probably the low point), says that hes spent his life working for the Co-op. What has happened is a tragedy for the company, customers, and him personally. However, despite everything, Marks believes the Co-operative Group (whose history dates back to the Rochdale pioneers of the 19th century), still has a good future. Peter Marks, former CEO of Co-operative Group Photograph: Parliamentlive.tv 12.15pm BST Marks defends his record Andrew Tyrie is returning to the question of Peter Markss own role in the Co-ops failures. Didnt you make very big mistakes? Marks tries to shimmy the question. Taking over Britannia was indeed a mistake, but Project Verde (the aborted bid for Lloyds branches) wasnt. That deal would have given the Bank the market share it needed, and fixed many of the regulators worries. He also insists that the Verde project had everyones support , this wasnt Peter Marks going gung ho. He also defends another scheme, Project Unity, which was designed to allow Co-op Group to sell its products across its various operations. 12.06pm BST John Thurso MP John Thurso MP Photograph: /Parliamentlive.tv John Thurso MP is asking if mutuals have a future - was the Co-ops Banks mutual status responsible for its problems, or was it a straightforward case of bad management? Peter Marks doesnt believe its mutual status was the cause, except it couldnt raise capital as easily as a PLC (which could tap the equity markets for funds). So is the model viable, Thurso asks? Marks: its very hard for a mutual to be a real, serious competitor in the UK banking market, which he dubs a high volume, low margin business, subject to costly regulation and high capital reserve requirements. Updated at 12.06pm BST 11.58am BST Brooks Newmark becomes the latest MP to question Peter Marks, and to question his claim that he is not responsible for the blunders that caused Co-ops present problems. He dismisses Marks argument that he was only a non-executive director of Co-op Bank at the time of the Britannia merger, saying he cannot absolve responsibility for mistakes. Newmark accuses Marks of being in complete denial: It says it on the tin. You were the leader says Newmark as he presses former Co-op boss — Jill Treanor (@jilltreanor) October 22, 2013 Newmark is also homing in on KPMG, who advised Co-op on both the Lloyds branch deal and the takeover of Britannia building society (details here). Did they botch the job and give bad advice? Marks argues that the advice was right at the time, and again cites Britains economic problems (an excuse which the committee dont appear impressed with) 11.51am BST Marks suggests the Co-op should get some credit for walking away from the deal to buy hundreds of branches of Lloyds. 11.50am BST Were back on the issue of Co-ops structure, with Peter Marks repeating his earlier warning that the Group is spread over too many areas - from supermarkets to travel via funerals and legal services. If I failed at anything, it was not getting the Group board to heed my warnings, Marks says. Andrew Tyrie pounces. If we look for the documentary evidence of these warnings, will we find it? Probably not, Marks concedes. No evidence of your devastating critique? Marks suggests not, but is sure his former colleagues will remember.... 11.45am BST No it doesnt - Co-op Group ex-CEO Peter Marks (at TSC) on whether Groups 30% stake left in Co-op Bank means it retains control. — Joseph Cotterill (@jsphctrl) October 22, 2013 Which was not quite the message by his successor yesterday. t.co/8srgHilcWD — Joseph Cotterill (@jsphctrl) October 22, 2013 11.43am BST Co-op ex boss: Hedge funds cant be ethical Can a hedge fund be ethical, asks Pat McFaddon MP, pointing to the fact that two US hedge funds now have control of Co-op Bank. No, Peter Marks replies. Hedge funds exist to maximise profits...to be ethical, you cant do that. In that case, McFaddon asks, should it really be called the Co-op Bank if its not the Co-op? Marks says its difficult for him to answer that, but concedes the point. Its not a Co-op is it says Marks about the new Co-op bank — Jill Treanor (@jilltreanor) October 22, 2013 11.38am BST Peter Marks blames the City regulators for moving the goalposts on capital reserves, triggering the £1.5bn capital shortfall at the Bank. He also insists that the Co-operative Group took seriously the warnings from Andrew Bailey, the Bank of Englands top regulator, about capital reserves and risk management. 11.35am BST Marks selective amnesia continues - one moment says never attended group audit committee, then corrects himself - cracking under pressure? — James Quinn (@jamesrquinn) October 22, 2013 11.34am BST Asked about who took the decision to abandon the bid for Lloyds branches, Marks calls it a collective decision Of the Group or the Bank? Both, Marks replies. Updated at 12.59pm BST 11.33am BST Marks wasnt asked by FSA why Richardson left but would have said there was a disagreement — Jill Treanor (@jilltreanor) October 22, 2013 Richardson has previously said he was concerned about Verde and project unity (a mgmt project) — Jill Treanor (@jilltreanor) October 22, 2013 11.29am BST Jesse Norman MP asks Marks if he could face criminal charges for acting as a shadow executive chairman. Why? Because Marks says he was a driving force behind the failed bid for Lloyds branches despite not being the Co-op Bank CEO. Marks says not, insisting the Co-op Group board unanimously voted to look at this deal, as did the board of the Bank. Marks denies suggestions that he acted as shadow executive director of the co-op bank #coopbank — James Quinn (@jamesrquinn) October 22, 2013 11.28am BST Andrew Tyrie, the highly respected chairman of the Treasury committee, is asking a lot of follow-up questions. Not a good sign.... Andrew Tyrie seems wholly unconvinced by Marks testimony - often jumping into pursue other members questions when answers not forthcoming — James Quinn (@jamesrquinn) October 22, 2013 11.24am BST Peter Marks: Im feeling very sad Ruffley then reads out details of an interview given by Marks when he stepped down from the Group this year, about how he had risen from humble roots to the top. How does he feel today? Feeling very sad. Ex Co-op boss tells MPs he is feeling very sad — Jill Treanor (@jilltreanor) October 22, 2013 11.20am BST Now its David Ruffley MPs turn. He warns Peter Marks that his selective amnesia had better stop, and demands better answers about when the former Group boss became aware of Lloyds Banking Groups concerns about its capital weakness Were there really no alarm bells ringing a year ago? Marks insists that it only became clear at the start of this year that there was a capital shortfall (which led to the £1.5bn capital raising exercise, in which Co-op Group will only hold 30% of its Bank). Marks says cant remember Lloyds getting nervous in Dec 2012 re co-op banks capital - David Ruffley accuses him of selective amnesia — James Quinn (@jamesrquinn) October 22, 2013 Updated at 11.23am BST 11.17am BST A reminder: the session is being streamed live here. 11.12am BST Mark BarnierGarnier MP tells Peter Marks that Lloyds had become aware a year ago that the Co-op Bank was undercapitalised. When did he learn this? Marks says cant remember the details of discussions over capital shortfalls. Barnier is quite surprised. Surely youd remember when you first learned that your big deal started to crash? Marks replies that the deal wasnt crashing at that stage. Marks greeted with incredulity as he says cant recall Lloyds warning about Co-op bank capital in 2012 — Jill Treanor (@jilltreanor) October 22, 2013 Updated at 11.32am BST 11.07am BST Marks also denies shirking responsibility for Co-op Banks woes, saying he was absolutely prepared to take the blame for other deals that he was fully involved in. The Lloyds bank branch deal doesnt fall into this area, he claims. 11.06am BST Andrew Tyrie questions whether tragedy is the right term to use for Co-op Banks woes -- surely a tragedy is something unavoidable. This mess was quite avoidable. Marks disputes this, and agrees with the suggestion that the Co-op Bank was an innocent victim of the financial crisis. 10.58am BST Marks repeats that the Co-op Banks slide into the hands of two US hedge funds is a tragedy, but claims it could be a good thing for the wider Group. It will force the Co-operative Group to focus on key areas and not stretch its capital, he suggests, harking back to his earlier warning that the organisation is spread too thinly. 10.57am BST Labour MP John Mann savages Peter Marks over the situation at Co-op Bank today, accusing Peter Marks and colleagues of being totally out of your depth when trying to grow the Co-op so rapidly. Thats why two US hedge funds are taking control of the Co-op, right? Marks replies that those two funds are only taking majority control of Co-op Bank, not the wider Group. Marks says he helped to guide the Group through the worst recession in living memory. Did you make disastrous errors, John Mann inquires: Marks say that its harsh to use the word disastrous, but concedes there were certainly errors. 10.53am BST Andrew Tyrie Andrew Tyrie. Treasury committee chairman Andrew Tyrie is digging down into the details of who was actually taking the decisions that led to Co-op Banks slide into trouble. Marks isnt taking individual responsibility for the failed bid for Lloyds branches, saying that Neville Richardson (the Co-ops Banks former) boss took most of the key decisions. Tyrie says it looks like another example of everyone collectively moving forward together, and no-one actually running it. He asks Marks if hes read the Banking Standards Commissions report into the sector, and Marks concedes that he hasnt read it thoroughly. Whats the Commissions key recommendation? Marks doesnt know. Its that there should be individual responsibility for key decisions, Tyrie replies,. Peter Marks Peter Marks Photograph: /Parliamentlive.tv 10.42am BST Marks agrees that he was the driving force behind Co-ops bid for the Lloyds branches, calling it a great opportunity to deliver the scale that Bank needed. But wasnt it a catastrophic misjudgement, asks Jesse Norman MP ? No, Marks says, arguing that Co-op Banks fundamental problem was a lack of capital. This deal would have brought much-needed capital in. Updated at 10.44am BST 10.39am BST Onto the details of Co-ops Banks failed bid for the branches being spun off by Lloyds (known as Project Verde) Was Peter Marks aware of political interference with the Verde process? Not that Im aware of, he replies. 10.37am BST Peter Marks seems reluctant to take too much blame for the Co-op Banks troubles, pointing out that he wasnt personally regulated by the Financial Services Authority to run a bank. Hes also pinned responsibility for the Britannia merger on Neville Richardson, Britannias chief executive at the time who became head of Co-op Bank, and former Co-operative Financial Services boss David Anderson: Marks says David Anderson and Neville Richardson were largely to blame for Britannia merger which led to co-op losses — James Quinn (@jamesrquinn) October 22, 2013 10.28am BST The Treasury committee are trying to get a handle on exactly who to blame for Co-ops woes. Marks argues that we all have to take some degree of responsibility, including me. He has concedes that Co-op Banks ethical reputation has been damaged by the PPI scandal, in which it is paying out over £200m in compensation. 10.24am BST Co-op Bank was forced into trouble by its take-over of the Britannia Building Society in 2009, Marks agrees. With hindsight, he wouldnt do it again. If had a crystal ball wouldnt have done Britannia merger, Peter Marks tells MPs — Jill Treanor (@jilltreanor) October 22, 2013 10.20am BST Former Co-op chief Peter Marks went on to warn that the Co-operative Group is spread too thinly. Marks, who stepped down in May 2013, is being asked by Andrew Tyrie about structural problems at the Group. He says: I think there are areas of governance within the Co-operative that absolutely need to change. So why didnt you change then, Tyrie inquires. Marks replied that he wasnt on the board of the Group. He than warns that the group, which runs supermarkets, pharmaceutical branches, funeral services, insurance and banks, is simply involved in too many different operations. It was, and still is, stretching its capital over too many businesses, Marks added. Ex Co-op boss Marks tells MPs he warned Co-op Group board it was stretching its capital too thin — Jill Treanor (@jilltreanor) October 22, 2013 Marks tells MPs he wasnt on the board of Co-op Group and couldnt have changed governance — Jill Treanor (@jilltreanor) October 22, 2013 Updated at 10.23am BST 10.12am BST Ex-Co-op boss: Banks problems are tragic Over in Westminster, MPs on the Treasury committee are starting to quiz Peter Marks, the former chief executive of the Co-operative Group. Marks is facing questions over the Co-ops ill-fated attempt to buy hundreds of bank branches from Lloyds. That bid was scuppered by the discovery of a capital shortfall in Co-op Bank, which eventually led yesterday to the Group losing majority control of its Bank after a battle with US hedge funds. My colleague Jill Treanor is there, and reports: Ex Co-op boss Peter Marks tells MPs bank problems a tragedy — Jill Treanor (@jilltreanor) October 22, 2013 The session is being streamed live here - although it has been a little flakey... 9.59am BST #Germany New Parliament to convene for the first time in a few minutes. Livestream → t.co/uVJH8EjJOn #Bundestag — Yannis Koutsomitis (@YanniKouts) October 22, 2013 9.55am BST UK public finances, the key charts This chart, from todays UK public finances, shows how tax receipts rose 7% year-on-year in September, after a weaker August: Government current receipts, to September 2013 Photograph: ONS And this graph shows how cumulative borrowing since April is lower than a year ago: UK cumulative public sector net borrowing, to October 2013 Photograph: ONS 9.50am BST UK public finances show improvement Just in: the UK borrowed less than expected in September, thanks to an increase in tax revenues. Britains Public Sector Net Borrowing, excluding the cost of financial interventions, came in at £11.072bn, beating forecasts of £11.2bn and better than last years £12.067bn. The Office for National Statistics reported that central government accrued current receipts rose to £44.8bn, up £2.9 billion or 7.0% compared with September 2012. The ONS explains, though that the monthly data needs treating with caution: The higher receipts in September 2013 (compared with September 2012) came from taxes on production and taxes on income and wealth. However, the relatively large increases seen in taxes on income and wealth have been affected by monthly volatility. These are related to timing effects which offset the falls seen in August. The ONS also reported that Britains underlying Public Sector Net Borrowing since the start of April has now reached £56.7bn, 9.4% lower than a year ago. By other measures, though, borrowing is actually up this year (due to various one-off factors like putting the Royal Mail pension fund onto the public books last year) Ill post some charts now.... 9.27am BST Charlie Bean, one of the Bank of Englands deputy governors, has urged Europe to crack on and implement banking reform. In a wide-ranging speech to the Society of Business Economists, Bean said it was important that Europe used the window created by Mario Draghi, who he credited with saving the euro from break-up. Bean said: The euro area is no longer in existential crisis, in part as a result of the willingness of the European Central Bank (ECB) to take redenomination risk off the table through its Outright Monetary Transactions programme. The countries of the euro-area periphery have also made progress in restoring competitiveness and rebalancing the composition of demand, though there is still quite a way to go. Member states are working towards the creation of a functional banking union, which has the potential to break the link between sovereigns and banks. And in preparation for becoming the euro-area banking supervisor, the ECB is planning a rigorous review of the quality of banks’ assets, to be followed by a set of stress tests and, if necessary, recapitalisation. Provided these carry credibility with the market, this could do much to restore confidence in the euro-area banking system. Bean also said the UK recovery was gaining traction (we get new GDP data on Friday), and also defended the BoEs forward guidance (which means interest rates shouldnt rise until the labour market improves). Can we expect recovery to be sustained, or is there a danger it will prove short-lived? Charlie Bean’s latest speech t.co/XOdzWvIYeV — Bank of England (@bankofengland) October 22, 2013 9.13am BST Over in Luxembourg, Jean-Claude Junckers long grip on power could finally be slipping. Although Junckers party won the most support in Sundays elections, it lost three seats - dropping to just 23 of the 60 seats in parliament. Opposition parties are beginning coalition talks, as Reuters reports this morning: Luxembourg Prime Minister Jean-Claude Juncker was facing the end of a 19-year run in power on Tuesday after the centre-right Democratic Party (DP) said it would begin coalition talks with would-be partners, the Socialists and the Greens. Junckers Christian Social Peoples Party (CSV) has led governments in the tiny state between France, Germany and Belgium for all but five years since World War Two, but lost three seats in an election on Sunday to leave it with just 23 in the 60-seat parliament. That was the partys worst showing since 1999. The Democratic Party and the Socialists both won 13 seats and the Greens six. We will contact them to come together tomorrow to see if there is a possibility to work together in the coming five years, DP leader Xavier Bettel told RTL television. Its a realistic option. Juncker was a familiar face in the dark days of the eurozone crisis, as leader of the Eurogroup of finance ministers (he stepped down at the end of 2012). Now, his position as Luxembourgs PM could be at risk.... 9.00am BST Heads-up. Greek MPs will vote today on whether to withdraw funding from parties whose members face serious criminal charges – the latest step in the clampdown against the extremist Golden Dawn group. Kathimerini explains: Greeces conservative-led government and leftist opposition SYRIZA have reached a common position, with the leftist party confirming last week that it will vote in favor of the bill, which has been drafted by Interior Minister Yiannis Michelakis after extensive consultation with the Parliaments opposition parties. Last week MPs voted by an overwhelming majority to lift the immunity of six Golden Dawn MPs, opening the way for a broadening of a criminal investigation into the ultra-right party, which is the real target of the bill being voted on on Tuesday. 8.52am BST Economist Shaun Richards fears Ofgems clampdown on energy tariffs is too late. It looks as though Ofgem is trying to close the stable doors after the energy prices have bolted! t.co/oa4ii2Sww8 — Shaun Richards (@notayesmansecon) October 22, 2013 Updated at 8.52am BST 8.48am BST Downbeat news from Lufthansa has sent the German airlines shares down almost 4% this morning. In an unscheduled update, Lufthansa warned that restructuring costs will wipe €200m off operating profits this year, with various project costs costing another €100m. More here. CEO Christoph Franz has been implementing a radical shake-up of the company, cutting thousands of jobs and shifting more traffic to its budget offering, Germanwings. Analysts had expected the company to deliver operating profits of around £917m -- it now says itll be between €600m and €700m. 8.35am BST A pretty mixed start to European stock market trading, with the FTSE 100 creeping higher (up 0.1%) the German DAX flat, and the French CAC down 0.2%. The excuse is that traders are waiting for those US jobs numbers at 1.30pm BST: Good morning. Markets open fairly flat. #FTSE at 6657 +3pts. NFPayrolls today so lots are treading water. — Joshua Raymond (@Josh_CityIndex) October 22, 2013 Mike van Dulken of Accendo Markets agrees, saying: US jobs will be the driver for a break one way of the other. Or much ado about nothing? Asian markets had also been mixed overnight, although Australias A&P/ASX 200 did gain another 0.4% to a new five-year high. 8.29am BST Ofgem hits ScottishPower with £8.5m penalty and tightens tariff rules Energy giant ScottishPower is to pay £8.5n to customers after an investigation by regulator Ofgem found that the group provided misleading information through its doorstep and telesales agents. Photograph: Scottish Power/PA After taking quite a mauling in recent weeks over its handling of the energy market, watchdog Ofgem is showing its teeth in two ways this morning. It has told Scottish Power to repay £8.5m to customers for breaking mis-selling rules, after finding that the agents who knocked on doors and phoned households to suggest they change energy supplier had misled customers. Ofgem said the penalty would directly benefit vulnerable consumers and compensate consumers that were misled by Scottish Power (which ended doorstep visits in 2011). In a statement, senior partner Sarah Harrison declared: Todays announcement is a clear signal to energy suppliers of the consequences of breaching licence obligations and of the importance of taking action to put things right for consumers when they go wrong. Ofgem has also announced that new rules on energy prices come into effect today, as a time when customers are reeling from large hikes in tariffs. Details are here. The key points: • it will prevent firms from raising the price of fixed-term deals (sounds fair - the clue is in the name, after all). • Firms also wont be allowed to simply roll a customer over onto a new fixed-term contract when their existing one ends. • Simpler tariffs will come in from December, with customers also getting clearer information in March 2014. A case of better late than never? Theres also nothing here to prevent a company hitting consumers with the hefty price hikes seen in recent days. As Ofgem boss Andrew Wright explains, the idea is to help customers vote with their feet, to keep the industry playing fair: In an era of rising prices it is vital that competition works as effectively as possible. Our reforms seek to give consumers the tools they need to find the best energy deal for them and to ensure that suppliers have to treat them fairly. Updated at 9.34am BST 8.09am BST Oil price drops The oil price has dropped again overnight, with a barrel of US crude dropping to $98.79 - its lowest level since early July. US crude dropped through the $100 mark yesterday, as data showed an rise in oil inventory levels. Traders are also calculating that the economic damage cause by the US shutdown will mean less demand. Could be good news for motorists, if it feeds through to the pumps... Updated at 8.09am BST 7.54am BST Non-Farm Payroll, the wait is over.... Good morning, and welcome to our rolling coverage of events across the financial market, the global economy, the eurozone and the business world. Investors and economists are waiting with eager anticipation for Americas unemployment data, eighteen days late thanks to the disruption caused by the US government shutdown shutdown. After a Beckettian wait, we finally find out at 1.30pm BST how many jobs were created across the US last month -- a key measure of the health of the worlds largest economy at the start of autumn. Forecasts for the Non-Farm Payroll vary widely (as ever). The consensus is that 180,000 new job were created last month -- there could be some lively action if this prediction is way off beam. Under normal circumstances, the jobs data would indicate if the Federal Reserve is close to turning down the tap on its $85bn/month stimulus package. But the disruption caused by Americas government shutdown has thrown that up into the air. Markets flat like a pancake ahead of delayed US jobs data. Nikkei Ends Up 0.1% at 14,713.25. — Holger Zschaepitz (@Schuldensuehner) October 22, 2013 However you look at todays #NFP, its going to disappointing, for the simple reason that its presence doesnt herald an incoming weekend! — Will Hedden (@WillHedden_IG) October 22, 2013 What else is afoot? Well, UK public finances are released at 9.30am - showing how much Britain borrowed to balance the books in September. While in Parliament from 10am, MPs will be questioning the former boss of The Co-operative Group, Peter Marks, a day after the company surrendered control of its Bank to its bondholders (front page news in todays paper) Bad news that RT @hendopolis: GUARDIAN: End of an era as Co-op loses control of bank #tomorrowspaperstoday #BBCPapers pic.twitter/CM3oAt8qyb — Neil Halton (@NeilHalton) October 21, 2013 Eurozone-wise, well be watching Greece (where the Troika of lenders return next week), Portugal (whose finance minister ruled out a second bailout yesterday), and Italy (where opposition to the 2014 budget was growing). Ill be tracking the main events through the day - let me know what Ive missed! Updated at 7.56am BST theguardian/business/2013/oct/22/market-delayed-us-jobs-non-farm
Posted on: Tue, 22 Oct 2013 15:37:26 +0000
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