Greece Eyes New Deal As Deadline Approaches

Greece remains confident a new debt deal with its eurozone creditors will be achieved after crisis talks broke up without agreement in Brussels.

The country rejected a draft proposal put forward by European finance ministers that would see an extension of Greece's international bailout package following three hours of talks on Monday evening.

Dutch finance minister Jeroen Dijsselbloem, who chaired the meeting, said Athens now has until Friday to request an extension or risk seeing the bailout expire at the end of the month.

If that happens the Greek state and its banks could face a looming cash crunch.

Greece's finance minister, Yanis Varoufakis, said negotiations will continue, adding he has "no doubt" an agreement will be reached that would be "therapeutic to Greece and for Europe".

Video: Greeks Back New Economic Strategy

But he added his country will not implement recessionary measures such as pension cuts and VAT hikes.

Greece's anti-austerity Syriza government recently swept to power on a promise to scrap the bailout as it stands.

But with Greece running out of money, Maltese finance minister Edward Scicluna said the country faces "disaster" unless it extends the bailout, which is due to end on 28 February.

"Greece has to adjust, to realise the seriousness of the situation," he said.

Video: A Guide To Greece's Economic Woes

"It all depends on the realisation by Greece of the real seriousness of the situation because time is running out."

Mr Dijsselbloem said a "positive outcome" was still possible if Greece asked for the extension by the end of the week.

He said further talks are dependent upon Greece requesting a bailout.

"Given the timelines we have... we can use this week but that is about it," he said.

Video: Osborne Fears Greek 'Chaos'

"The general feeling in the Eurogroup is still that the best way forward would be for the Greek authorities to seek an extension of the programme."

Many in the financial markets think a failure to secure agreement will leave Greece little option but to leave the euro.

European stock markets fell on Tuesday in reaction to the deadlock, with Greek banks suffering losses of up to 10% in early trading, though hopes a deal will be done later reversed those losses.

Mr Varoufakis and other European finance ministers remain in Brussels for routine talks on the EU economy today though Greece is expected to dominate.

Video: What Is Greece's Future In Europe?

The Chancellor George Osborne arrived for the talks warning of "severe" consequences for economic recovery in Europe without a deal, saying he wanted to see "competence not chaos."

Speaking after last night's meeting, Sky's Economics Editor Ed Conway said: "The ball is once again in Greece's court. European finance ministers leaving the talks said it was now up to Greece and its prime minister and ministers to request an extension to the deal.

"Otherwise the Eurogroup are not going to continue talking and there is the real prospect increasingly of Greece either defaulting or leaving the euro.

"The big problem is that Greece is potentially going to run out of money quite soon."

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Center Parcs Picks Banks For £2.5bn Listing

By Mark Kleinman, City Editor

The owner of Center Parcs, one of the UK's biggest privately owned leisure companies, has hired investment banks to prepare a £2.5bn stock market listing.

Sky News has learnt that Blackstone, the company's owner, picked Bank of America Merrill Lynch and Morgan Stanley on Monday to act as global co-ordinators of an initial public offering, which could take place as soon as this year.

Barclays and Deutsche Bank have also been appointed to work on the listing.

The appointment of the banks comes three months after Blackstone rejected a joint takeover offer from BC Partners and the Canada Pension Plan (CPP) which is understood to have valued Center Parcs at about £2bn.

Blackstone is understood to have rejected that offer on the grounds that it undervalued Center Parcs, although as part of what is known in the City as a dual-track process, it is likely to sound out sovereign wealth funds and other buyout firms alongside its planning for an IPO.

Sky News revealed last year that Rothschild, the investment bank, had been hired by Blackstone to undertake a review of strategic options for the business, which it has owned since 2006.

BC and CPP may continue to work together on a revised takeover bid for the leisure group, which recently reported that its newest site in Woburn Forest was trading strongly.

The fifth village to open in the UK, it recorded a 99% occupancy rate during the three months since its launch, underlining the popularity of Center Parcs resorts and its growth potential.

Company insiders say Blackstone's period of ownership has enabled the creation of hundreds of jobs across the holiday village operator's locations.

Center Parcs recently kicked off discussions with tourism authorities in Ireland about constructing a resort there.

Profits at Center Parcs jumped by 10% to £20.6m in the year to April on sales up 4% to £314.6m.

The company is run by Martin Dalby, who became chief executive in 2000.

Among the options on which Rothschild is advising Blackstone and Center Parcs' board is a further refinancing that would enable shareholders to land a big payday ahead of a sale or stock market listing.

Center Parcs had a brief and not especially successful spell as a public company before being taken private by Blackstone in 2006.

Blackstone, BAML and Morgan Stanley declined to comment on Tuesday.

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PM: Young Unemployed Will Work For Benefits

Young people out of work or not in education or training for six months will need to do unpaid work to claim benefits, David Cameron has announced.

The reforms mean people aged between 18 and 21 will have to do 30 hours of community work each week and 10 hours of job-hunting to qualify for benefits.

The work will begin from day one of their claim. It could involve preparing meals for elderly people or working at charities.

Prime Minister David Cameron said the reforms would end long-term youth unemployment and stop young people being "sucked into a life on welfare".

The scheme - called the Community Work Programme - extends already-announced Conservative plans to abolish Jobseeker's Allowance, replacing it with a Youth Allowance.

Video: Young To Have To Work For Benefits

The Youth Allowance means those still on benefits after six months have to carry out community work or take up and apprenticeship, 

Under the plans announced today, benefits claimants will be required to undertake an apprenticeship or community work from day one of signing on if they have been out of employment, education or training for six months prior to claiming benefits.

Mr Cameron announced the scheme during a speech in Hove saying young people needed the work experience to help them find jobs.

He said: "That well-worn path - from the school gate, down to the Job Centre, and on to a life on benefits - has got to be rubbed away." 

He added: "They drift from school to worklessness to benefits and not enough is asked of them. Now of course, the best thing is for young people not to fall into inactivity in the first place.

"But if they have drifted into a life of inactivity, then it's pretty clear what these young people need. They need work experience. They need the order and discipline of turning up for work each day.

Video: March: Welfare Capped At £119bn

"So a Conservative government would require them to do daily community work from the very start of their claim, as well as searching for work. From day one they must play their part and make an effort."

Department for Work and Pensions research in 2013 found nearly two-thirds (64%) of benefits claimants who were put on community work schemes were still claiming benefits after two years.

The same research found that 66% of benefits claimants who did not do community work were also still claiming benefits, while only 64% of those given intensive job search support were still on benefits after two years.

However, Downing Street insists there is research to show work placements are more helpful in moving people off benefits.

Questions were also raised over the Conservative claims that it would apply to 50,000 new 18 to 21-year-olds each year.

With new laws that all youngsters will have to stay in education or training until age 18, there will be few 18 to 21-year-olds that can have been out of work for six months before signing on.

Video: Sept: Osborne's Fair Welfare Pledge

Most will sign on as soon as they leave school or training at 18 until they find employment.

A Liberal Democrat spokesman said: "These placements are not designed to help someone into work, more to punish. Just like the Tory plans to axe housing benefit for young people, it's all stick and no carrot.

"Young people should be given help and support into the workplace, help at job centres and the opportunity to get on in life, not just written off as feckless and lazy."

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Aldermore Cuts IPO Valuation As Profit Soars

By Mark Kleinman, City Editor

One of Britain's fastest-growing challenger banks will unveil a surge in profits on Tuesday even as it draws up plans to float on the stock market at a significant discount to a previous attempt last year.

Sky News has learnt that Aldermore is to announce that annual pre-tax profit in 2014 more than doubled to approximately £50m for the first time, up from £22.4m the year before.

Insiders said the figures would include a return on equity for the second half of the year of about 19% - higher than almost every one of its listed peers across Europe - underlining its attractiveness to prospective investors.

Aldermore, which provides banking services to consumers and small and medium-sized businesses (SMEs), is one of the most prominent new lenders to be established since the financial crisis.

A source close to the bank said that it could announce its intention to float on the London Stock Exchange by the end of the month, although the timing could yet slip.

It is understood to be planning to sell £75m of new shares, with backing already provisionally in place from a string of blue-chip institutions.

However, Aldermore is expected to price its shares at a substantial discount to a plan last autumn which would have seen the bank valued at £800m at the mid-point of its price range.

The listing was aborted because of choppy equity markets, leading directors to conclude that it should be "priced to go" this time around.

The proposed initial public offering (IPO) will seek a valuation for the bank of between £600m and about £650m, they added.

Tuesday's results announcement will not include any substantive comments about its IPO plans, the source said.

In 2013, Lansdowne Partners and Toscafund injected about £40m into Aldermore in a deal which valued the lender at more than £450m.

Both funds are expected to consider buying additional shares as part of the IPO, which is being led by Credit Suisse, Deutsche Bank and Royal Bank of Canada.

Aldermore is led by Philip Monks, a former Barclays executive, and is majority-owned by AnaCap Financial Partners, a private equity firm.

Under the existing ownership structure, AnaCap holds all of the voting shares in Aldermore, although investors who buy in through the flotation will also gain voting rights.

The bank, which is a user of the Government's Help to Buy housing scheme, said in December that it had lent £4.4bn to customers since it was set up, with customer deposits totalling £4.2bn.

Aldermore is not the only challenger bank eyeing a stock market listing.

Shawbrook Bank is also expected to announce a flotation within the next few weeks, while Metro Bank, which unlike its rivals has a high street branch network, has said that it is likely to target a listing in 2016.

Aldermore declined to comment.

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CBI Upgrades Economic Growth Forecast For 2015

The Confederation of British Industry has upgraded its economic growth forecast for 2015, after inflation fell to a record-equalling low in December.

According to the group, Britain's economy will expand by 2.7% this year - up from its previous prediction of 2.5%.

It said living standards were improving, with strong levels of job creation and wage growth beginning to gain momentum.

The CBI also believes the future looks rosier for businesses, as lower energy prices cut operating costs and free up more cash for investment.

However, it warned political uncertainty ahead of May's General Election - when coupled with Greece's economic turmoil and the Ukrainian conflict - could make it difficult for exporters to secure new orders.

And, as the price of oil has fallen by around 50% since last summer, North Sea oil companies have taken a hit - stymying jobs and investment in the industry.

Katja Hall, the CBI's deputy director-general, said: "UK growth continues to outshine its counterparts in Europe and progress is 'steady as she goes'.

"Now is not the time for complacency, but falling unemployment coupled with improving wage growth and rock-bottom inflation should mean that people see more money in their pockets."

Although the CBI's forecast is now in line with the International Monetary Fund, the Bank of England is predicting economic growth of 2.9% this year.

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US Technology Giants Eye Monitise Takeover

By Mark Kleinman, City Editor

A number of American technology companies are examining takeover bids for Monitise, one of the UK's most prominent manufacturers of mobile banking software.

Sky News understands that FIS, a global behemoth in the payment technologies sector, is one of several potential suitors for Monitise, which put itself up for sale last month.

Monitise executives are understood to have visited prospective buyers in the US last week as the British company seeks additional capital to pursue expansion plans.

Other possible bidders which are said to have expressed a tentative interest include Oracle and IBM, although all of the takeover discussions are said to be at an early stage.

Monitise is due to update the City on its financial performance on Tuesday, when it is also expected to provide investors with some insight into the progress of talks with potential buyers.

In a statement last month, the company said it still aimed to make a pre-tax profit in the 2016 financial year but warned that revenues would be lower than anticipated for the third time in quick succession.

"In light of recent share price weakness, shareholder feedback and industry developments, Monitise announces that it is commencing a review of all options open to the company to maximise value for shareholders," it said.

"The board believes that the company has an exciting future as an independent business, however it recognises that there may be other business which could leverage Monitise's capabilities for digital commerce enablement to significantly accelerate the growth of the business and take maximum advantage of the growth opportunities in the market today."

Monitise, once a stock market darling as it looked set to exploit the explosion in mobile banking and payments applications, has seen its share price plummet amid a string of disappointing statements about revenue expectations.

It brought in blue-chip names including Mastercard and Santander as shareholders last year and now says it has a total user count of 82m, with a target of 200m users by the end of 2018.

However, its transition to a recurring revenue model - as opposed to one based on licences - has pitted it against giants such as Apple and Google, which have moved into the mobile payments space.

IBM and FIS have existing relationships with Monitise, and have been previously touted by City analysts as potential acquirers of the whole company.

A Monitise spokesman declined to comment on Monday.

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Is Greece Edging Closer To Euro Exit?

No-one expected the Eurogroup summit to end all the differences between Greece and the eurozone countries behind its bailout.

But, equally, no-one really expected it to end in the kind of acrimony we saw earlier in Brussels.

In the event, what we have witnessed is yet another demonstration of what happens when the euro collides with democratic politics.

It all comes back down to the key issue Syriza campaigned on in the Greek elections last month: ending the current €240bn bailout programme and replacing it with something more humane.

Most of Greece's euro counterparts have insisted that to do so is simply impossible - that if Greece wants to borrow more cash and continue to enjoy financial support from the European Central Bank, it must sign up to an extension of the existing programme, due to expire at the end of the month.

Video: There Is 'Substantial Disagreement'

However, doing so represents what Yanis Varoufakis, the Greek finance minister, has described as a red line.

Instead, he would rather agree to a separate "bridging loan" without the full conditions attached to the existing bailout (but with, he insists, "some conditionality, to build trust").

He claims that he was privately given such a promise by the European Commissioner in charge of the economy, Pierre Moscovici, last week.

But, in Mr Varoufakis' rendering, at the Eurogroup meeting on Monday afternoon, Mr Moscovici's draft proposal was replaced by Eurogroup head, Jeroen Djisselbloem, with something else entirely - an alternative communique that pledged that Greece should continue with the existing programme.

A copy of this document, with Mr Varoufakis' disapproving penmarks scrawled all over it, was leaked to the press.

In chaotic scenes, the meeting broke down within minutes.

Given it was billed as the make-or-break moment for the euro, the collapse of talks looks, on the surface of it, to be deeply worrying.

However, the reality is that Monday's deadline was always a self-imposed one.

The talks will continue in the coming days, and there is likely to be another Eurogroup meeting to confirm things as soon as something can be hatched behind the scenes.

But with every setback, worries grow that Greece could be edging slowly towards a possible default - or indeed a chaotic exit from the single currency.

There are still many more levers to be pulled by both sides between now and then. But the fact that a key meeting could break down so easily is a reminder that things will hardly be plain sailing in the coming weeks.

In other words, things are likely to get even worse before they get any better.

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US Government Seeks End To Ports Dispute

By Sky News US Team

Secretary of Labor Thomas Perez has flown to San Francisco to solve a stalemate between dockworkers and their employers that shut West Coast seaports.

Mr Perez plans to meet negotiators from both sides of the contract dispute, which has disrupted billions of dollars in US international trade.

Loading and unloading of cargo vessels at 29 ports from Southern California to Seattle resumed on Tuesday morning after being halted since Friday night.

The seaports are a critical trade link with Asia and the gateway not just for imports such as electronics, household goods and clothing but also US exports including produce and meat.

The ports handle more than 70% of imports from Asia. A domino effect has been felt across much of the US economy, extending to agriculture, manufacturing, retail and transportation.

During the shutdown, companies locked out workers who would load or unload ships, saying they would not pay weekend or holiday wage premiums to crews they accuse of intentionally slowing work to gain bargaining leverage.

The union denies slowing down and says its members want to work. It blames troubles moving cargo on larger problems with the supply chain, including a shortage of truck beds to carry containers to distribution warehouses.

On Monday, massive ships continued lining up outside the ports, laden with imports now delayed by weeks.

The last contract expired in July. The two sides have reached tentative agreements on many of the key issues, but are stuck on whether to change the process of arbitrating workplace disputes.

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Inflation At Record Low Of 0.3% In January

The annual rate of inflation has eased to a record low of 0.3% and is on course to fall further, boosting consumer spending power after years of weak wage growth.

The Office for National Statistics estimated the CPI measure of inflation was at its lowest since 1960 as plunging oil prices and a supermarket price war dominated overall price growth last month.

Its figures meant a basket of goods and services that cost £100 in January 2014 would have been just 30p more last month, though the ONS said the fall in inflation would have been sharper but for a softer slowdown in the fall of clothing prices.

The supermarket price war saw food and non-alcoholic beverage prices fall by 2.5% year on year, the steepest rate on records going back to 1997.

It was driven by a 3.5% fall in the cost of milk as two-pint carton costs plunged.

Video: Action Promised On Weak Inflation

Transport costs fell by 2.8% year on year, the steepest rate on record, as fuel costs dived by 16.2%.

Separate figures from the ONS, due to be released tomorrow, are expected to show annual wage rises remaining above 1.5% - easily outpacing inflation - leaving households with more cash as salaries rise and living costs ease.

The Bank of England last week forecast that the UK could even see negative inflation in the coming months, as energy bill reductions start to be fully realised in the figures, with inflation rebounding later this year.

Governor Mark Carney said that should it become clear that a more entrenched period of falling prices - deflation - was looming, then the Bank would take action to prevent the possibility of economic activity dropping off.

Deflation is seen as bad news because consumers and businesses put off purchases in the hope goods and services will be cheaper in future.

Chancellor George Osborne said: "Today we see the lowest CPI inflation ever - a milestone for the British economy.

"It's great news for families, whose budgets will stretch even further. It shows that those who went around predicting a cost of living crisis were plain wrong.

"And it demonstrates the clear choice between a long-term economic plan that's delivering stability and rising living standards, and the chaos of the alternatives.

"Although the low inflation is, as the Bank of England confirmed last week, driven by lower food and energy prices rather than damaging deflation, we will remain vigilant to all risks, particularly when the global economic situation is so uncertain."

Labour sought to distance the Government from taking any credit for falling prices.

Shadow treasury minister Cathy Jamieson MP said: "Inflation is falling around the world because global oil prices have plummeted.

"But in Britain wages continue to be sluggish and working people are £1,600 a year worse off under this government.

"A few months of falling world oil prices won't solve the deep-seated problems in our economy."

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Inside Tiny One-Bed London Home On Sale At £275k

By Jonathan Samuels, Sky News Correspondent

London's population is set to reach a record high of 8.6 million people, with housing expected to be a major General Election issue.

With limited space and prices that have gone through the roof, one survey suggests bricks and mortar could be as significant as the NHS in the ballot this May.

According to research by estate agents Your Move and Reeds Rains, one in six tenants (16%) say housing is the issue most likely to affect their vote.

Sky News visited what has been billed as the smallest house currently on the market in the UK. The tiny one-room home in Islington is just over 150 square feet, with an asking price of £275,000. 

You have to climb on to the kitchen surface to get into bed, the dining room is a pull-out table, and you can touch opposite walls at the same time.

Video: London Homes Become Unaffordable

"Obviously the price is quite absurd but I don't think the project is absurd," says architect Chris Dyvik, who took inspiration from caravans and boats.

"You might see similar types of compact units being built. People need to be creative in London to survive with these housing prices."

It is unlikely anyone would live in such a place for more than a few nights at a time, but the fact that such a small space can command such a big asking price means questions continue to be asked about London's property bubble.

Last year, some 60,000 30-somethings left London, the highest number ever. Soaring house prices have put homes out of reach for most first-time buyers.

According to the Office for National Statistics, 67% of the 25 to 34 age group were homeowners in 1991. By 2012 this had dropped to 43%.

George Cheetham got fed up with prices going up and up during the buying frenzy in London last year.

"Week-by-week, house prices grew," he said.

"You'd go for a viewing in the same street one week and by the next it had gone up by about £10,000."

He moved to Bristol, buying a three-bedroom flat with a garden, something which would have been impossible in the capital.

"It just didn't seem a realistic market to buy in, it was very easy for us to say enough is enough" he said.

Soaring prices have been partly driven by foreign investors.

Estate agent Savills estimates up to 70% of newly-built properties in central London are bought by foreign investors, with many flats in prime locations lying empty.

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1. Gallery: Property: What £1m Can Buy You

   We take a look at what £1m can buy you around the UK. For example this one bedroom flat in Chelsea's Lennox Gardens, London, at exactly £1m. All photos courtesy of rightmove.co.uk

The modestly-sized flat is being sold in one of London's most sought-after areas. Pic: rightmove.co.uk

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