British Bank Body Hands Libor To US Exchange

By Mark Kleinman, City Editor

The administration of the controversial Libor benchmark interest rate will be handed to a US stock exchange under a deal to be announced on Tuesday that will remove it from British oversight.

Sky News understands that NYSE Euronext, owner of the New York Stock Exchange, has seen off competition from financial data providers including Thomson Reuters to win a contract to oversee the scandal-hit benchmarks.

An announcement is expected to be made to the New York Stock Exchange later on Tuesday, according to people familiar with the situation.

The UK Treasury is understood to be co-ordinating the announcement in London.

The buyer is understood to be paying a token sum of £1 to acquire BBA Libor Ltd, the company which has previously had responsibility for administering Libor.

The choice of an American company to oversee the crucial benchmark rates is significant because of the fierce criticism of Libor's oversight by US regulators.

So far, three banks - Barclays, Royal Bank of Scotland and UBS - have been fined more than £1.5bn by regulators for their role in the global rate-rigging scandal, with a queue of others waiting to settle.

A review of the rates by Martin Wheatley, chief executive of the Financial Conduct Authority (FCA), found that the rate was open to manipulation and made a series of recommendations including sharply reducing the number of rates set as part of the process.

The new Libor administrator will still be subject to FCA regulation and supervision, according to a source close to the situation.

The British Bankers' Association and the Treasury were unavailable for comment.

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IMF Upgrades UK Growth Forecast For 2013

The International Monetary Fund (IMF) has upgraded its 2013 growth forecast for Britain, reinforcing claims of green shoots of economic recovery.

The IMF is now predicting growth of 0.9% this year, up by 0.3% since its last report in April when it downgraded the UK's prospects.

The move will provide a boost for Chancellor George Osborne's deficit-busting plans as it almost entirely reverses the IMF's earlier growth forecast cuts, which came amid warnings over the impact of austerity.

It sparked a war of words with the Treasury in April when it slashed its growth outlook and said Mr Osborne should consider changing his plans in the light of "lacklustre" private demand.

But the IMF's latest World Economic Outlook reveals a brighter picture for the UK economy following a raft of recent encouraging reports, with growth of 1.5% also pencilled in for next year.

The Washington-based body said global growth would "remain subdued" as it cut its forecast for world output by 0.2% this year and next, to 3.1% and 3.8% respectively.

It said slower growth in countries such as China would drag on the global performance and cautioned authorities in the eurozone that they would have to continue 'doing what it takes' to keep the debt crisis at bay.

China's growth forecast for 2013 has been cut by 0.3% to 7.8% and by 0.6% to 7.7% for 2014.

The IMF also said the recession in the eurozone area will be deeper than initially feared this year, with activity contracting by 0.6%, although it is forecasting the recovery to start next year with growth of 0.9%.

Growth in the US will also be more muted, according to the IMF, which is predicting expansion of 1.7% in 2013, down 0.2% since its April report.

It said: "Downside risks to global growth prospects still dominate: while old risks remain, new risks have emerged, including the possibility of a longer growth slowdown in emerging market economies.

"Especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals."

The IMF said the massive money-printing drives worldwide "should continue until the recovery is well established".

Stock markets have been hammered in the past month after the US Federal Reserve said it planned to start tapering its asset-buying programme, as long as the economy continued to improve.

"Clear communication on the eventual exit from monetary stimulus will help reduce volatility in global financial markets," the IMF added.

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M&S Clothing Sales Continue To Unravel

Retailer Marks and Spencer has seen a continued decline in its troubled clothing department, according to its latest trading update.

It said like-for-like clothing sales declined by 1.6% during the 13 weeks to the end of June.

Clothing sales have been a particularly disappointing area for the retailer in recent years.

It overhauled key staff in the department in an attempt to reconnect with shoppers but has been unable to halt the section's decline for eight straight quarters.

Meanwhile, like-for-like food sales increased 1.8% in the quarter and total UK like-for-like sales were up 0.3%.

The food business contributes over half of M&S sales.

The retailer's annual general meeting is to be held at 11am today.

The performance will ratchet up the pressure on management to deliver a swift turnaround when new season ranges start hitting the shops on July 25.

In May, the company revealed a pre-tax annual profit of £665.2m for 2012/13, down 6% on a reported profit for 2011/12 of £705.9m.

At the time boss Marc Bolland said: "In a challenging market, M&S sales grew by 1.3%. Three of the four parts of the business made strong progress.

"We are working hard to get the general merchandise performance back on track."

The 129-year-old group serves 21 million customers a week from 766 UK stores.

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Award-Winning Singer Lauryn Hill In Jail

Grammy-winning singer Lauryn Hill has begun serving her three-month prison sentence for failing to pay about $1m (£670,000) in taxes over the past decade.

Hill is serving her time at a federal prison in Danbury in the state of Connecticut, Ed Ross, a spokesman for the Federal Bureau of Prisons, said.

Inmates at the minimum-security prison live in open dormitory-style living quarters and are expected to do jobs such as maintenance, food service and landscaping.

Hill, who started singing with the Fugees as a teenager in the 1990s before releasing her multi-platinum 1998 album The Miseducation Of Lauryn Hill, pleaded guilty last year in New Jersey to failing to pay taxes on more than £1.2m earned from 2005 to 2007.

Hill posing with fellow Fugees Wyclef Jean and Pras Michel

Her sentencing also took into account unpaid state and federal taxes in 2008 and 2009 that brought the total earnings to about £1.5m.

Her lawyer had requested probation, arguing that Hill's charitable works, her family circumstances and the fact she paid back the taxes she owed should be taken into account.

During her sentencing in May in Newark, New Jersey, Hill described how she failed to pay taxes during a period when she had dropped out of the music business to protect herself and her children - she has six in total.

She explained that the treatment she had received while she was in the entertainment business was the reason she decided to leave it.

Assistant US Attorney Sandra Moser acknowledged Hill's creative talent and work on behalf of impoverished children, but called Hill's explanation for her actions a "parade of excuses centring around her feeling put upon" that did not exempt her from her responsibilities.

After she is released from prison, she will be under parole supervision for a year, the first three months of which will be spent under house arrest.

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Corruption Seen To Be Growing In UK, Report

Corruption in the UK is increasing, according to the world's largest public opinion survey.

Transparency International said a tally of respondent views indicated the perception of media corruption increased significantly since the publication of its 2010 survey, when less than 40% believed the sector had a corruption problem.

The UKI results also show a crisis of trust in politics, with only 1% of interviewees believing the UK political system free of problems.

Of the people surveyed, 67% viewed political parties as being affected by corruption, and 55% believed parliament had a corruption problem.

A staggering 90% of the UK survey said that the UK Government is run by a few big entities acting in their own interest.

Of the 91% who would be willing to report corruption, 40% would want to make that report to a Government hotline - which currently does not exist.

Some 62% of people also thought that the Government's actions are ineffective in tackling corruption.

The UK charity's results were part of a Berlin-based Global Corruption Barometer 2013, which surveyed 114,000 people in 107 countries.

This year the figure has risen to 69%, placing it as the sector people believe to be most affected by corruption.

Globally, more than half of respondents in the survey think that graft has worsened over the past two years, and a quarter reported having paid officials a bribe in the last 12 months.

The wide survey by the charity also found that people have least trust in institutions meant to help or protect them, including police, the courts and political parties.

Respondents also believed official anti-corruption efforts had deteriorated since the 2008 start of the world financial and economic crisis.

It found that 27% of respondents had said they had paid a bribe to a member of a public service or institution in the past 12 months, revealing no improvement from previous surveys.

The group pointed to a link between poverty and graft. Eight of the 10 countries with the highest bribery rates are African, a Transparency spokesman said.

In 36 countries, respondents viewed police as the most corrupt, 20 countries view the judiciary as the most graft-ridden and in 51 countries political parties were seen as the most corrupt institution.

People's appraisal of government efforts to stop corruption was worse than before the financial crisis began in 2008, falling to 22% now from 31% then.

Still, the group said that there was a growing will to fight back, with two-thirds of those who were asked to pay a bribe saying they had refused.

Transparency International chair Huguette Labelle said: "Bribe paying levels remain very high worldwide, but people believe they have the power to stop corruption.

"And the number of those willing to combat the abuse of power, secret dealings and bribery is significant."

She added: "Governments need to make sure that there are strong, independent and well-resourced institutions to prevent and redress corruption.

"Too many people are harmed when these core institutions and basic services are undermined by the scourge of corruption."

The report was unveiled as Spain's El Mundo newspaper published ledgers allegedly showing original handwritten entries of payments from an illicit slush fund operated by the ruling People's Party.

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Fraudster Held After 'Catch Me' Twitter Taunt

A fraudster who cheekily tweeted to US authorities to "catch me if you can" after skipping her trial for an insurance scam is now behind bars.

Wanda Podgurski was captured on July 4 in Rosarito Beach, Mexico, a popular retirement spot for American expats only 15 miles south of San Diego.

She pleaded not guilty on Monday to failure to appear while free on bail.

The 60-year-old was sentenced in absentia by a California court last month to more than 20 years in prison and ordered to pay more than $1m in fines and restitution.

Three weeks after her initial tweet on June 5, Podgurski's Twitter feed read: "Help find me before I con anyone else."

Two other posts were links to stories about her vanishing act.

Her profile stated: "On the run possibly in Iran."

New Twitter messages have appeared on the account

Newer unverified messages since her capture appear to show she was tired of life on the run.

"For justice sake, I am glad you caught me," reads one tweet.

Podgurski follows 32 people and agencies, many of them FBI branches and other law enforcement authorities. 

The District Attorney's Office declined to say how authorities tracked down the taunting fugitive, saying only that information from her Twitter account was turned over to its Computer and Technology Crime High-Tech Response Team, known by the acronym Catch.

Podgurski was convicted of receiving $664,555 in disability payments in January.

While earning $44,000 a year as a clerk for rail service Amtrak, she allegedly held six insurance policies with premiums that topped $60,000.

She made claims with all six insurance companies after reporting that she fell at her home in August 2006.

Private investigators working for the insurers reported seeing her walk up and down stairs without assistance and drive to the shops.

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Flight Delays After Air Traffic Control Glitch

Travellers have been delayed by a computer glitch that forced air traffic controllers to restrict the number of planes flying across the south of England.

Air traffic control company Nats said the "technical problem" happened at its control centre in Swanick, near Southampton.

The number of flights taking off from airports was reduced, causing what were described as minimal delays to some flights at Heathrow.

At Gatwick in West Sussex, only flights heading for Jersey in the Channel Islands were affected.

Southampton Airport reported "a widespread air traffic control issue" that was affecting all flights.

Around late morning Nats said it had fixed the problem.

The company went on: "Operations are now returning to normal and we are working with the airports, airlines and (Europe-wide organisation) Eurocontrol to clear the backlog of flights to ensure disruption is kept to a minimum.

"Outbound delays from the UK have generally been limited to 20 minutes.

"We regret any inconvenience this technical problem has caused. However, our first priority will always be the safety of the flying public."

Problems with Nats computers affected some flights when it first moved to the Hampshire site about 10 years ago, but the centre has worked well in recent years.

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UK Coal Calls In Administrators Over Daw Mill

Britain's largest coal miner has gone into administration, with the loss of 350 mining jobs.

The move comes after an underground fire closed its most profitable mine at Daw Mill colliery in Warwickshire last March.

Management confirmed the decision and said it was a result of the problems that the fire created for UK Coal, both UK Coal Mine Holdings Ltd (UKCMHL) and UK Coal Operations Ltd (UKCOL) sought administrators.

UK Coal said in a statement: "Following the devastating fire that closed the Daw Mill deep mine in March 2013, it is announced today that a way forward has been found for the remaining mines and 2,000 employees."

Chief executive officer Kevin McCullough said: "Today is very much a day of mixed emotions, but this is the best outcome that it was possible to achieve.

"Entering administration and the subsequent restructuring was the only way we could preserve any of the business and while I'm delighted we've saved 2,000 jobs, we've also had to make some very difficult decisions.

"I'm pleased that we managed to transfer 120 of our Daw Mill colleagues to our other mines following the fire. Our thoughts today also rest with the 350 colleagues who will now, regrettably, be made redundant as a result of Daw Mill closing."

Production of coal from Daw Mill represented around a third of UK Coal's revenue and the forced closure of the mine had threatened the ongoing viability of UK Coal Operations' remaining two deep mines and six surface mines.

David Kelly, Rob Hebenton and Ian Green from PwC have been appointed administrators of the companies by Birmingham High Court following an application by the directors.

The Coal Authority quango will take responsibility for Daw Mill while the Pension Protection Fund (PPF) will be responsible for the UK Coal pension scheme, which will hold asset on behalf of 7,000 members.

The PPF becomes a creditor to the firms and the pension fund deficit currently stands at £500m.

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Royal Mail Staff To Get Free Shares In Sale

By Mark Kleinman, City Editor

Tens of thousands of Royal Mail staff will receive free shares worth as much as £300m as part of the privatisation of the postal operator, the Government will announce on Wednesday.

Sky News can reveal that ministers have decided after months of deliberations that Royal Mail employees will be handed the shares for free rather than at a discount.

As a further sweetener, staff will be guaranteed a proportion of the retail element of the initial public offering (IPO), meaning that postal workers could end up owning significantly more than 10% of Royal Mail.

Vince Cable, the Business Secretary, will set out the details in a statement to the House of Commons on Wednesday afternoon.

The share giveaway to staff will encompass 10% of Royal Mail's equity, in accordance with the Postal Services Act that paved the way for the sell-off of the company two years ago.

At an overall valuation of between £2.5bn and £3bn, that would value the employees' stake at up to £300m.

Roughly 150,000 of Royal Mail Group's 165,000 staff are expected to be included in the share distribution, with workers at the European parcels subsidiary GLS likely to be excluded from the deal.

A rough valuation of employees' windfalls would mean each eligible member of staff could receive shares worth more than £2000, although that would depend on the value of Royal Mail's shares when it floats on the London stock exchange.

UK-based staff will not receive all of the shares on the day that Royal Mail becomes a public company - assuming that a flotation is able to proceed. Under the Act, the Government pledged to hand 10% of the company to staff by the time the state's shareholding is reduced to zero, a process that could take several years. Whitehall sources said the share giveaway to staff would take place in several tranches.

Members of the public will also be able to buy shares in Royal Mail through intermediaries, a website and possibly through Post Office branches, although a deal has not yet been finalised with the Post Office, which is now a separately-owned organisation.

People close to Mr Cable, who has been working alongside Michael Fallon, the Business Minister, on the privatisation plans, dismissed the prospect of a 'Tell Sid'-style public information campaign such as those which accompanied the major state sell-offs of the 1980s.

Ministers hope the free share offer and the guaranteed component of the retail offering will be sufficient sweeteners for staff as union bosses continue to oppose the privatisation.

The Government is expected to attempt to sell up to 60% of Royal Mail in the initial phase of the privatisation, although that will depend on the demand from City institutions.

The Department for Business, Innovation and Skills and Royal Mail both declined to comment ahead of Wednesday's announcement.

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Rupert Murdoch Recalled By Commons Committee

Rupert Murdoch has been invited to re-appear before the Commons Culture, Media and Sport Committee.

It comes after a tape recording emerged of him apparently telling journalists he regretted the level of co-operation given by News UK - formerly News International - to the investigation into illegal payments.

No date has yet been agreed, but it is not expected to be until the autumn. He last appeared before MPs in July 2011.

The news came as Scotland Yard said it will "fully assess" the contents of the tape recording of his comments in a meeting with News UK journalists.

Mr Murdoch is executive chairman of News Corp, which owns The Sun, The Times and The Sunday Times, as well as the Wall Street Journal and other titles around the world.

Mr Murdoch last appeared before MPs in July 2011

Critics have insisted the tape showed his real attitude to the crises that have engulfed his empire, in contrast to the contrition he displayed when giving evidence to the committee two years ago.

Mr Murdoch was recorded describing the treatment of journalists who had been arrested as a "disgrace" and suggesting that he regretted the extent to which the company had co-operated with the investigation.

The audio, obtained by the Exaro investigative website and broadcast by Channel 4 News, was said to have been made during a meeting with journalists from The Sun at his British newspapers' headquarters in Wapping, east London, in March.

Mr Murdoch is heard complaining about the way the police behaved, saying the process would put all newspapers out of business.

When one of the journalists present questioned why so much material had been handed over to the police, Mr Murdoch indicated that he believed it had gone too far.

Mr Murdoch is also chairman and chief executive of 21st Century Fox, which owns 39.1% of Sky News' parent company, BSkyB.

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