Times getting tough for savers

Inflation figures released today show the Consumer Prices Index (CPI) decreased during March from 4.4% to 4.00%.

To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 5.00% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 6.67%.

Basic rate taxpayers can choose from 25 accounts that negate the effects of tax and inflation, all but one of which are fixed-rate ISAs. There are no inflation-beating accounts available to higher rate taxpayers and, worrying for everyone, there are no accounts available for any taxpayer that beat RPI at 5.3%.

The effect of inflation on savings means that £10,000 invested five years ago allowing for average interest, inflation and tax at 20% would have the spending power of just £9,587 today.

Sylvia Waycot, spokesperson for, said:

"Whilst a fall in inflation is welcome, it won't change the fortunes of the nation's savers who are still battling against shrinking spending power and a lack of inflation-beating savings accounts.

"CPI is still double the Government's 2% target, which spells desperate times for savers who have almost nowhere to place their money to beat inflation.

"Pensioners trying to supplement their income with interest will feel the ensuing pain the most.

"Over the last six months the number of savings accounts that beat inflation for basic rate taxpayers has dropped successively from 118 to 25 today, 24 of which are fixed rate ISAs.

"Cash ISAs limit the amount of investment and therefore return, which is yet a further hindrance when trying to make ends met."

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It may have fallen, but inflation is still too high

This weeks surprise fall in inflation to four per cent has been greeted with caution by business leaders.

Birmingham Chamber of Commerce says that despite the fall, inflation is still running at twice the level targeted by Government.

Chamber President Christine Braddock said: "The drop to four per cent from last month's 4.4 per cent is not what we anticipated. But it still remains high.

"It does put businesses under pressure, and cuts into margins - in our latest Quarterly Economic Survey, nearly a third of Birmingham manufacturers (29 per cent) cited inflation as their biggest concern.

"Inflation is still being driven by the rising cost of oil. This has inflated the price of petrol at the pump, transport costs and utility bills.

"We are renewing our call on the Bank of England Monetary Policy Committee to hold its nerve and not increase interest rates. Although inflation hurts business, low interest rates are benefiting them, especially the worst hit manufacturers."

In the Chamber's recent Quarterly Economic Survey, it was revealed that exporters were benefitting from the low interest rate and the organisation said that this needed to be sustained in the next three months.

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BMI baby to axe flights from Manchester and Cardiff airports

Airline, BMIbaby, has announced it will stop flights from Manchester and Cardiff airports at the end of this summer.
The budget airline has blamed the economic down-turn for the cuts, which will come in late October, saying they needed to concentrate on more established routes.
Four BMIbaby planes will be redeployed to Belfast, East-Midlands and Birmingham airports.
Staff will also be moved to new locations.
The 69 positions as Cardiff will be moving and 64 of the 97 positions at Manchester also being redeployed.
A BMIbaby spokesman said: "In the current economic climate it is essential for BMIbaby to focus on airports where the airline already has a strong market presence and where there are strong growth opportunities for the BMIbaby business.
"Therefore BMIbaby has optimised their current flying programme and as a result of this BMIbaby will cease operations from Cardiff Airport and from Manchester Airport at the end of the summer 2011 flying programme."
Currently the airline operates 40 flights a week from Manchester and 30 a week to European destinations from Cardiff.
They added that parent company British Midland International (BMI), who has recently been taken over by Germany’s Lufthansa, would retain a ‘significant presence’ at Manchester airport.
Andrew Harrison, managing director of Manchester Airport, said: "We understand BMIbaby's reasons for the decision and remind our passengers that the destinations will still be served by other carriers in the winter.
"We continue to see strong growth from carriers such as Monarch, Ryan air, Flybe, EasyJet and at Manchester and are confident of a strong summer programme that will still include BMIbaby. We'll also still see the airline group presence at Manchester with BMI keeping a significant presence and BMIbaby will still be flying from one of our airports at East Midlands."
BMIbaby plans to introduce seven new routes from Belfast and two from East Midland’s airport.

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More effect and costing less – the serious Fraud Office

The Serious Fraud Office says it is stronger, faster and leaner and has published a report highlighting its continued progress - to deliver more for less. Whilst its conviction rate remains high for the year - at more than 80% - it is increasingly using an innovative approach to deliver justice for both the public and victims of economic crime.

For example the SFO has recovered £7 million, from a company that was not directly involved in corruption but had benefited through share dividends based on profits that had arisen as a result of contracts won through corruption. This year in total more than £64 million has been identified for payments to victims and will be enforced through the courts as compensation or voluntary payments to them. In one case alone £33 million was returned to victims even before the alleged fraudsters went to trial. The funds were restrained following legal action in the courts and the SFO has worked with the courts and the Swiss authorities to return the money to victims.

During the past four years the SFO has halved the time it takes to investigate a case and, though the budget has reduced year on year over the past five years, the SFO is now dealing with more cases - over 100 compared to just over 60 five years ago.

SFO Director Richard Alderman said: "I am pleased with our performance in 2010-11. Investigation times have been slashed, conviction rates remain high and huge sums of money are being returned to the victims of economic crime. All of this is being done at less expense to the public purse."

Indeed the report highlights that running the SFO costs just 64p for each person in the UK - down 9p per person than in 2009-10. Improving technology is proving a key springboard to success. The SFO's cutting edge criminal investigation and IT systems now allow it to process evidence faster than ever before (up to 2000% faster). In 2010-11 the SFO processed over 70 million documents.

Chief Executive Phillippa Williamson said: "We have transformed our digital forensics capability which allows us to respond quickly to court requirements. In one case we were able to identify and produce over 47,000 emails overnight to satisfy a judge's order. Such speed of response would have been impossible in the past.

There is no doubt the SFO could do even more given greater powers and we are pressing for them. The Government is committed to combating economic crime and with the powers to deal fraudsters a body blow that white collar criminals have previously been able to avoid. These powers are still a matter for discussion. In the meantime the SFO's skills will continue to bring fraudsters to book; deliver justice to victims and provide value for money."

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90 jobs to go at Express & Star newspapers

Media group Midland News Association (MNA) publisher of the Express & Star newspaper, has announced that it will axe around 90 jobs in the Black Country and Shropshire.

MNA has said this is a reaction to "difficult trading conditions", which has prompted an angry response from union chiefs.

It is understood that around 60 jobs will go from the group's Black Country and Staffordshire offices, with 30 being cut in Shropshire, representing about ten per cent of the firm's workforce.

Members of the company's staff council were informed of the news at a meeting on Wednesday, and letters went out to all staff on Thursday.

A 30-day consultation process has begun, with volunteers being sought.

The National Union of Journalists is not fully recognised by the company, although it has many individual members.

Chris Morley, Northern and Midlands organiser for the NUJ, said: "This is an absolutely devastating blow for all our members. It comes on top of huge cuts in the recent past.

"As a union we believe that the future for newspapers can only lie in quality news, and to produce quality news you have to have good journalists, and you have to have enough of them to make sure you can provide that level of service to readers.

"We fear that if large numbers of journalists are made redundant that the Express and Star and Shropshire Star's ability to do that will be diminished, and that in the long term that then puts further pressure on th remaining staff.

"We do want to work with the company to find the best possible solution to the problem they claim they have."

The company shed 120 jobs in October 2008 when it merged the business functions of the Express and Star and Shropshire Star, saving £3m.

MNA managing director Alan Harris said: "Like every other newspaper publisher, the MNA is facing very difficult trading conditions and there seems to be no sign of improvement.

"If we are to continue to invest for the future in our publications, both in print and online, then we must make some cost savings.

"The board fully understands that this is a very difficult time for all staff and we are doing our very best to keep everybody informed of what is happening."

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Sales rise at Jaguar Land Rover

In a huge boost for the firm, Jaguar Land Rover today announced record sales figures for March across a range of key international markets - notably in the UK, China and India.

JLR combined sales were up 22% in March compared to a year before, and 14% up for the first quarter as compared to the same period in 2010.

And in contrast with disappointing car sales in the UK more generally, Land Rover in particular beat its previous UK sales record set in 2010 with sales of 11,400 for the month of March - the highest monthly figure in the firm's 63 year history.

Sales in the emerging economies of China, India and Russia surged - with March sales up by 33%, 61% and 47% respectively. Sales in the critical North America market were also up by an impressive 24%.

This continued Land Rover's strong run so far in 2011, with the brand's sales up by 15% overall for the first quarter of 2011, on the back of a very positive consumer reaction to the 2011 Year versions of the Range Rover, Range Rover Sport, Freelander and Discovery models.

That comes before the launch, later this year, of the new Range Rover Evoque, which will be a smaller, more fuel efficient Range Rover.

Jaguar also delivered, with overall sales up by 8% for the first quarter of 2011, with success for the new flagship XJ model and continued growth for the XF. India saw Jaguar sales up by a staggering 3500% - the brand's strongest ever month there, with sales in China up 6%, Korea up 29%, Russia up 70%, Germany up 49% and Japan up 34%.

The ongoing success of the XF is welcome for the firm as the model will be 4 years old this year, and is due for a facelift towards the end of the year which will take styling cues from the new XJ. The XF line up may also be extended, with an estate version of the car a distinct possibility, and with the range featuring a more fuel efficient 2.2 litre diesel -probably with stop-start technology.

Add in a facelift for the XK, a possible two-seater F-type sports car, a smaller Jag that could take on BMW's top selling 3 series - perhaps echoing the lines of the stunning R-D6 concept car of a few years ago - and maybe even a Jaguar crossover car, and one can start to picture a stable of Jaguar models that for the first time could compete across the range with the likes of BMW and Mercedes.

JLR Assembly in India a step nearer - despite import duty changes

Meanwhile JLR is set to begin assembly in India by the end of May, according to some recent media reports. It is thought that to begin with the Pune assembly facility will produce Freelander models.

Assembly in India will help JLR to grow sales in the burgeoning Indian market, as the firm will be able to sell at prices closer to those of rivals such as BMW, Audi and Daimler, which already assemble at plants there.

JLR currently exports Jaguar and Land Rover models to India, but these imports cars attract a tariff of over 100%. In contrast, imported knock-down kits will soon attract levies of 30% (up from 10% but below a recently proposed 60%) where there are pre-assembled engines or gear boxes, or just 10% when engines and gear boxes are assembled in India.

While the recent duty changes in India in effect make assembly in India less profitable for JLR than first thought, the very rapid growth in the local market combined with the fact that this is Tata's home market make local assembly a continued priority for the firm.

JLR is also in talks with Indian suppliers to supply more components to JLR generally, which are 30 to 40% cheaper than those manufactured in Western markets.

While in the future that might affect some component suppliers here in the UK, overall the sales and production boost for JLR of late will bring positive news for the industry.

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