29 April 2014 Last updated at 05:54

Business Live: Tuesday 29 April 2014

    06:01: Rebecca Marston Business reporter, BBC News

    Good morning. It looks like a fun one ahead, with the first official growth estimate for the UK economy this year released at 09.30. Plus, what scenario the Bank of England will use to test bank strengths. Stay on this page.

    06:02: Howard Mustoe Business Reporter

    Good morning, everyone. You can get in touch through bizlivepage@bbc.co.uk or twitter: @bbcbusiness

    UK ECONOMY 06:10: Radio 5 live

    Top topic on Wake Up to Money is a discussion on that first official estimate of gross domestic product for the first quarter. The new, extended programme (now from 05.15) has a Radio 4 "Just a Minute"-style round up of economists' views. Complete with piano music. "We're expecting that number to be 0.9%", says Chris Williamson, Markit expert.

    UK ECONOMY 06.16: Radio 5 live

    Wake Up to Money makes the point that this is the first estimate of GDP for the quarter - and economist Chris Williamson says we should "take the number with a pinch of salt". There'll be few salt pots in sight later, reckons Business Live, with all the excitement.

    BANK MISCALCULATION 06:25: Radio 5 live
    Bank of America building

    Bank of America overnight reports it miscalculated losses related to its takeover of Merrill Lynch. Bad news for shareholders, as it will now cut its dividend payout to them and rein in its share buyback. Another bank, "another debacle," says US market commentator Douglas McIntyre from 24/7 Wall Street.

    UK ECONOMY 06:34: BBC Radio 4

    More scepticism about the GDP numbers on the Today programme. Kevin Daly, senior economist at Goldman Sachs, says: "It misses and is not designed to capture the value of things that give us happiness but are not sold. The value of nature, time we spend with our children. As Robert Kennedy said, 'GDP measures everything except that which makes life worthwhile'." Lyrical.

    UK ECONOMY 06:43: BBC Radio 4
    Last week, retail sales figures showed a rise of 4.2% compared with the year before.

    Another estimate for 0.9% economic growth on Today. This from Goldman's Kevin Daly. But, he says, because this number is a first estimate and will be revised when new information is collated "if you want the latest information on the underlying growth in the UK economy it is much better to look at business surveys".

    PAYM 06:50:

    Twenty million bank account holders will have no immediate access to the new Paym mobile payment technology. The technology allows people to pay or receive money using a phone number, but without giving out their bank details.

    BP PROFITS 07:10:

    Oil giant BP has just reported profits of $3.2bn.

    BP PROFITS 07:15:
    BP sign

    BP's profits of $3.2bn are the underlying replacement cost profit for the first quarter of this year. These are higher than in the fourth quarter of last year but well down on last year's first quarter of $4.2bn.

    BP PROFITS 07:20:

    The oil giant has upped the dividend payout to shareholders by 8.3% to 9.75 cents per share, despite the profit fall.

    WHITBREAD 07:25:

    Whitbread, which owns Costa coffee shops and Premier Inn hotels, says pre-tax profit for the fiscal year rose a shade to £347m from £343m a year earlier, as a rise in sales was offset by a higher costs. Like-for-like sales were up 4.2%.

    SERCO WARNING 07:36:
    Police in front of Serco van

    Outsourcing giant Serco released a statement after the markets closed last night. It is getting ready for new boss Rupert Soames and is having a clear-out. Short but striking: "We may need to reassess the level of risk implicit in the assumptions underlying our forecasts. This may in turn require a material downward revision to expectations, and for us to review the appropriateness of our financing position." Could be some share price fun when the market opens.

    FOXTONS 07:46:
    estate agent sold signs

    The estate agent chain says sales commissions in the first three months of the year were £17.6m, up 41.1% on the previous as property prices rise and it opens new branches - one in Beckenham in south east London. Lettings sales were flat as more people choose to buy rather than rent.

    WHITBREAD 08:03: Radio 5 live

    Andy Harrison, chief executive of Whitbread, is on 5 live, talking abut the economy. "The UK economy inside the M25 goes from strength to strength. The issue is what's going on outside the M25," he says. "Real disposable income has fallen for the past few years" although "there are encouraging but early signs of improvement" for the rest of the country.

    SERCO WARNING 08:14:

    A reminder of Serco's woes. The government accused it of charging for tagging people who were either dead or in jail. That contributed to a one-off cost of £90.5m. Last month it said profit plunged 62%. It was a "difficult year", said acting boss Ed Casey.

    SERCO WARNING Via Twitter Adam Parsons Business Correspondent

    tweets: "Serco shares down 19% following profits warning."

    MARKET UPDATE 08:33:

    London's benchmark FTSE 100 index was led 0.55% higher by drug maker Shire, gaining 4.4% and Whitbread, which added 2.8% after saying comparable sales for the year rose 4.2%. Serco dropped 16% after yesterday's late profit warning. Frankfurt's Dax was up 0.89% and Paris's Cac 40 rose 0.19%.

    Via Twitter Douglas Fraser Business and economy editor, Scotland

    tweets: "Costa coffee sales up 20% last year, like-for-like up 6%, says its owner, Whitbread."

    REDROW 08:56:

    Homebuilder Redrow is updating its shareholders on its performance for the year to date. The average selling price of completed homes was £272,000, up from £226,000 last year.

    LG 09:02:

    South Korea's LG Electronics said first quarter profit more than quadrupled from a year ago as more customers scaled up to larger-sized televisions. Net profit jumped to 93 billion Korean won ($87m; £52m) in the first quarter, compared with 22 billion won in the year ago period.

    • UK economy grows 0.8% in first three months
    • Serco falls on profit warning
    • BP $3.2bn quarterly profit
    UK ECONOMY Via Twitter Anthony Reuben Business reporter, BBC News

    tweets: "Ahead of this morning's GDP numbers: Are the UK economic growth figures reliable?" Something to keep busy with while we're all waiting. Just over five minutes now.

    BALLS EXCLUSIVE 09:27: Radio 5 live

    Take a listen to this morning's Wake Up to Money, which has an exclusive interview with shadow chancellor Ed Balls. He talks about - what else? - the UK economy - but also about long-distance running. Plus there's a debate about the nature of GDP.


    The UK economy grew by 0.8% in the first quarter of the year, according to the Office for National Statistics.

    UK ECONOMY 09:34:

    More from from the ONS. It says that in the first quarter of this year, the economy was estimated to be 0.6% below the peak in the first quarter of 2008. "From peak to trough in 2009, the economy shrank by 7.2%."

    UK ECONOMY 09:40:
    Pound coins

    Looking at the gross domestic product figures on an annual basis, the economy was 3.1% higher in the first three months of this year compared with last.

    Via Twitter Jonty Bloom Business correspondent, BBC News

    tweets: "ONS says storms may have hit construction but not enough to call it a special factor. Agriculture down 0.7% though."

    UK ECONOMY 09:55:

    After all the discussions recently here and elsewhere about whether GDP is a fit measure or not - the ONS points out: "At this stage the data content is less than half of the total required for the final estimate." However, "these are typically small".

    BREWDOG 10:11:
    Bottle of beer

    Light relief is needed as we wade through the main economic news of the week. It comes from Brewdog, which makes Dead Pony Club pale ale. It has responded to the Portman Group ruling about the product's packaging. Portman - "the responsibility body for drinks producers" - said Dead Pony encouraged "rapid drinking." Brewdog isn't happy. Brewdog says Portman is a "gloomy gaggle of killjoy jobsworths" among other, less complimentary things.

    Gas supply station near Kiev

    The Russian gas giant Gazprom reports a 7% fall in net profits for last year, despite sales up by 10%. As ever, political matters feature: sales to the former Soviet states, of which Ukraine is the biggest market, are down by 20%.

    UK ECONOMY 10:38:
    Ed Balls

    The shadow chancellor, Ed Balls, earlier told Wake up to Money in an exclusive interview that even in the growing economy there was "a lot of ground to make up because even if wages are going up faster than CPI [inflation], it's still going to be the case on all sensible estimates that at the next election people will be worse off than a the last election".

    VOLKSWAGEN 10:52:

    Volkswagen posted higher first-quarter profit as sales of Audi and Porsche luxury models rose to record levels. Operating profit at the German group jumped 22% to 2.9bn euros (£2.39bn), beating market forecasts.

    UK ECONOMY 11:05:
    Chancellor George Osborne

    Comment from the Chancellor, George Osborne, on the GDP figures: "Today's figures show that Britain is coming back - but we can't take that for granted. We have to carry on working through our long term economic plan."

    Deutsche bank building in London

    Deutsche Bank, Germany's biggest, said net profit fell in the first quarter. Net profit dropped 34% to 1.1bn euros (£907m), compared with 1.7bn a year earlier. The bank said: "Lower client investment activity exacerbated by uncertainty around emerging markets as well as continued low interest rates and a highly competitive environment" were to blame.

    MARKET UPDATE 11:22:

    London's benchmark FTSE 100 index has ticked a bit higher in the wake of the positive economic news. It is now 0.62% up at 6741.75. Drug maker Shire heads the gainers, rising almost 4%. Whitbread has slipped back after a strong gain and is now 0.5% higher. Serco - oh dear - now down 20% after yesterday's late profit warning. Elsewhere, Frankfurt's Dax was up 1% at 9540.35 and Paris's Cac 40 rose 0.4% to 4478.48.

    Spanish flag

    Spain's unemployment rate rose again in the first three months of this year, official figures show. The rate was 25.93%, up from 25.73% in the last three months of last year as the recession continues there. Bond market watchers will know, however, that the government has to pay to borrow has fallen sharply since the depth of the crisis years and is now about 3% for 10-year money.

    STRESS TESTS 11:49:

    European banks will be expected to prove they can survive a drop in GDP of 7% under new, tougher stress tests unveiled by a regulator. It says banks should also be able to withstand a 14% fall in house prices and up to a 19% drop in share prices under a worst-case scenario. European banks have already made several reforms, including raising billions of dollars in capital ahead of the latest tests.

    Via Blog Robert Peston Economics editor

    What do the latest GDP figures tell us about who is winning in the UK economy?


    Although the economy has almost recovered the ground lost since 2008, personal insolvencies rose by 2.5% in the first quarter of this year, compared with the last three months of last year. There were 24,931 cases recorded across England and Wales.

    UK ECONOMY 12:18: Via Email

    Business Live has been sent a clutch of emails from readers about the GDP figures. Mark Berry, Grantham, writes: "I am a self-employed recruitment consultant. I do believe that things are on the right track, and the last thing the country needs is to change direction. It is surely no surprise that after such a disastrous period a few years ago, it will take time for us all to feel better off again."


    An Oxford University study considers whether bankers are "bashed" by the media. It says not. Despite the financial crisis and the number of banking scandals, they found only one quarter of the coverage was "negative" in tone. A similar proportion - 24% - was found to be "positive". It notes: "Claims that financial journalists set out to bash the bankers between 2007 and 2013 are exaggerated." Must try harder.

    UK ECONOMY 12:39: Via Email

    Rosalind, Bournemouth, writes: "Are these figures just plucked from thin air? Everyone knows they are just government jargon!! Construction up? All my husband's family are in construction (skilled) and all seven of them are unemployed."


    UK banks will have to show they hold enough capital to withstand a near 35% slump in house prices and a spike in interest rates to 4%, the Bank of England says. These tests are on top of the ones announced earlier by the EU. Imagine. A 35% fall in house prices...

    Via Twitter Linda Yueh Chief business correspondent

    tweets: "Despite Mt Gox, creditors & investors to re-establish #Bitcoin exchange. My blog: crypto-currencies & future of money."

    BANK STRESS TESTS Via Blog Kamal Ahmed BBC Business editor

    BBC Business Editor Kamal Ahmed has some analysis of the Bank of England's planned stress tests today in his blog. "After missing disastrous housing booms and busts in the past, the regulators this time appear to be saying: 'We're watching and we will act. Honest.'"

    Rebecca Marston Business reporter, BBC News

    That's been a jolly good morning. Stuffed full of news. Ta-ta for now. Back tomorrow. From 0600.

    12:59: Howard Mustoe Business Reporter

    More fun tomorrow, with zero hours contract data from the ONS, no less, among other things. See you then!


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