The national minimum wage is to rise by 12p an hour to £6.31 for adults and by 5p to £5.03 for 18-to-20-year-olds from October, the government has announced.

Business secretary Vince Cable said the government accepted the recommendation of the Low Pay Commission.

However, although the Commission said rate for apprentices should be frozen, Mr Cable said it would rise by 3p to £2.68 an hour.

The increases are below current inflation levels.

Retail Prices Index (RPI) inflation currently stands at 3.2% and the Consumer Prices Index (CPI) at 2.8%.

Business Secretary Vince Cable said: "The independent Low Pay Commission plays a crucial role in advising the government when setting the national minimum wage every year. It balances wages of low paid workers against employment prospects if the rate was set too high.

"We are accepting its recommendations for the adult and youth rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.

"Apprenticeships are at the heart of our goal to support a stronger economy, and so it is important to continue to make them attractive to young people. Therefore, I am not taking forward the LPC's recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates.

"We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board."

'Modest' increase
The EEF manufacturers' organisation said the rises struck a delicate balance between the need for pay increases and the limitations employers faced in awarding rises.

"The modest increase in the apprenticeship rate is unlikely to negatively affect apprenticeship recruitment and of much greater importance is the raising of apprenticeships standards, better information and advice to students and ensuring that apprenticeships are truly employer-led and employer-driven," the EEF said.

However, the British Chambers of Commerce said the increase in the adult rate would add to the cost pressures on business, although it called the rises for youth workers and apprentices "restrained".

Dr Adam Marshall, the BCC's director of policy, said: "We are disappointed that the government has chosen to raise the adult national minimum wage rate by 1.9%, an increase that is over 50% higher than current average pay growth.

"While the pressures of inflation are affecting many people, including the lowest-paid, the scale of this rise adds significantly to business costs, most of all by contributing to broader pay inflation. It will also make some employers less inclined to hire additional members of staff."

TUC general secretary Frances O'Grady said: "Boosting the incomes of the low-paid goes straight into the economy and wage-led growth must be part of the recovery, so we would have liked to have seen minimum wage rates go up further today, even if the government has rightly rejected calls for a freeze.

"But we are pleased that ministers have increased the apprenticeship rate. This sends a positive signal about the importance of apprentices." (As reported by the BBC) 

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It continues the pattern of recent years, and every time there are two quarters of contraction in a row, we get excited about a recession, and then when there is growth again we get excited about the recovery.

Yet the UK economy is still considerably smaller than it was when the crisis started in 2008.

The influential National Institute for Economic and Social Research says we have been in a depression since then, and will not emerge until the economy reaches its 2008 level.

'Sideways slide'
And yet the word depression has rarely been mentioned and some economists have gone to great lengths to avoid using it.

"I've been trying to use a different word," says Randall Kroszener, professor of economics at University of Chicago, who used to sit on the committee that sets US interest rates.

"I came up with the term 'sideways slide', which characterises where lots of economies are - not boom and bust, just sliding along, surviving."

Randall Kroszener prefers to use the phrase "sideways slide" rather than depression
Prof Kroszener says the key difference between a long recession and a depression is whether there are falling prices, or deflation.

The trouble is, while the definition of a recession as two consecutive quarters of negative growth is widely accepted, there is no popular definition of a depression, which means there is nowhere to go once recessions stop being relevant.

"The economy is either in high growth or in low growth, and we're on low growth," says Andrew Scott, professor of economics at London Business School.

"We're on a low trend so who cares about whether we're in recession or not?"

'Less pessimism'
David Sproul, chief executive of Deloitte UK, says he is seeing the mood improving among his client businesses.

"We're seeing much less pessimism around, but not yet optimism," he says.

"We're in an environment of uncertainty, which is very sentiment driven."

But he adds that many businesses are still concentrating on cost control to grow profits, which suggests a lack of confidence.

So although some may be talking about the possibility of the economy going into a triple-dip recession, that will ignore the fact that the economy has been basically flat for about two-and-a-half years.

The answer may not be to call it a depression, but something is needed to get the narrative beyond the obsession with tiny bits of growth or contraction every three months.

The experts quoted in this article were all attending the World Economic Forum in Davos, Switzerland.

As Reported By BBC NEWS

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If either parent earns £50,000 then payments are to be reduced on a sliding scale, with those on a salary of £60,000 or more losing it altogether.

Treasury minister David Gauke said it was a decision that had to be made to save the taxpayer as much as £1.5bn a year.

"Everybody has got to make a contribution, we're reducing benefits and we've made some cuts in benefits," he said.

"But it's right that those who are earning more than average, those who are in fact in the top 10-15% of earners, make that contribution."

As many as 300,000 of the 1.1 million who will see changes to their child benefit are yet to have received a letter from the Government informing them of the cuts.

HM Revenue and Customs (HMRC) has said it had been unable to contact everyone as it held incomplete data on some customers following changes to their income, relationship status, or address.

Child benefit is currently £20.30 a week for the first child and an additional £13.40 for each child after that.For a family with two children and one parent earning more than £60,000 it means losing £1,752 per year.

But if both parents earn £49,000, the benefit will be unaffected.Those expecting to lose payment have until the end of today to opt out of receiving the money by filling in a form on the HMRC website.

Otherwise they will continue to receive the handout and have to complete self-assessment forms to repay it in tax.

Mel Smith has two young children and does not work, but her husband's salary level means they will lose all of their child benefit.

"It doesn't seem fair when we only have one income," she said.

But while taking with one hand the Government is considering ways to give with the other.

It is thought new proposals may include allowing families to offset some of their childcare costs against their tax, making it easier for mothers like Mel to return to work.

"I would seriously consider going back to work full time if that were introduced," she said.

"It would be better for me to do full time really than part time but again you have to weigh up whether it works out as a family."

It is estimated that around one million women are missing from the workforce because of the price of childcare, which amounts to almost 27% of the average family income.

(AS REPORED BY SKY NEWS)

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Personal pressures at work and at home are driving more people to commit fraud, a survey by KPMG has suggested.

Identity fraud more than doubled in value to £26.3m in 2012 and counterfeit goods' fraud is at a five-year high.

Companies blamed insider fraud perpetrated by either management or employees for 80% of fraud-related financial losses last year.

However, the number of cases and value of fraud committed by professionals fraudsters fell in 2012, KPMG said.

In a survey of fraud cases in the UK's Crown courts, accountancy firm KPMG found that insider fraud was pushing some companies to the brink of collapse.

"What we are seeing is individuals looking to feather their nests through ripping off employers, banks or the government," said Hitesh Patel, UK Forensic Partner at KPMG.

"Times may be tough, but the data shows that some people are unwilling to give up the lifestyles they've become accustomed to."

In one case-study reported, a finance department employee stole hundreds of thousands of pounds to fund an extravagant lifestyle. The discovery led to the company being placed into administration and the loss of 20 of her colleagues' jobs.

Focus shift
Benefit fraud is a real and increasing threat for the government... we expect to see an increase in this kind of fraud this year
Hitesh Patel, KPMG
Mr Patel believes that the much-publicised cases of insider dealing and the Libor banking scandal have skewed the picture of fraud in the UK.

"In the last few years, we have become used to sophisticated frauds at eye-watering values," he said.

"While the total value of fraud has dropped substantially in the absence of so-called super cases, the old fashioned conman hasn't given up his tricks."

The survey looked at fraud cases where the charges were in excess of £100,000.

According to Mr Patel, these cases include back-office fraud, procurement fraud and what he calls plain old-fashioned con tricks.

Counterfeit fraud in 2012 was three times higher than the five-year average, at £22.9m; Ponzi schemes worth £72m came to court last year - three times higher than the level in 2011; and the value of fraud committed by employees almost doubled to £25.1m over the last 12 months, according to the report.

The threat of job losses, pay freezes and job restructuring can lead to a more competitive environment that can lead individuals to act illegally, Mr Patel suggested.

Benefit fraud
There was also a marked increase in cases involving individuals over-claiming benefits or evading tax.

There were 15 cases reported in 2012, compared to 3 in 2011.

"Benefit fraud is a real and increasing threat for the government...we expect to see an increase in this kind of fraud this year as personal pressures mount," Mr Patel said.

In another case study cited, a family used false identities to claim for HIV drugs worth £2.2m, which were then sold on for profit.

But the research suggested that the number of cases carried out by professional criminals has fallen, from 98 at the end of 2011 to 79 in 2012.

As reported by BBC News/Business

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The retailer reported 2.7% like-for-like growth, during its peak autumn period, with consumer electronics, notably tablet computers, selling well.

The firm's "check and reserve" ordering service grew its share of sales from 28% to 31% over the last four months.

Orders placed online via mobiles and tablets more than doubled, and 42% of Argos' business is now done online.

'Achilles' heel'
"Argos has tapped into a rich seam of growth," said Neil Saunders of retail analysts Conlumino, who explained that its old catalogue ordering business and related stock management system meant it was perfectly placed to offer a click-and-collect service, in which customers order online and then collect from stores.

The service is particularly attractive to professional workers with limited time to go shopping, according to Mr Saunders, as well as full-time parents who do not want to drag their children up and down the High Street or hang around at home for a delivery.

"The Achilles' heel for online shopping has been that people are not going to be in when the delivery comes," he explains.

As well as electricals, click-and-collect has been making inroads in the groceries, clothing and small household goods sectors.

Customers love the fact that they are in control and can decide where and when to collect
Karen Dracou, John Lewis' head of omni-channel development
Other companies to have launched click-and-collect services include clothes retailer Next and the John Lewis Partnership.

"John Lewis has done a brilliant job," said Mr Saunders. "It has a very good website and range of products, and has integrated its stores - including branches of Waitrose - into its delivery network."

Two-thirds of the partnership's 300 Waitrose branches offer the service, meaning that many potential John Lewis customers who do not have a branch of the department store in their town can instead pick up their purchases on a food shopping trip.

"Customers love the fact that they are in control and can decide where and when to collect," said Karen Dracou, in charge of managing John Lewis' cross-channel strategy.

Starting from scratch two years ago, despite some teething problems, click-and-collect sales doubled in the last year, and now represents one-third of John Lewis' online sales and over 8% of total sales.

Changing High Street
Like Argos, fashion chain Next enjoyed a natural starting point in the form of its old directory business on which to build an online business.

"Next has been very pioneering with the speed and flexibility of its delivery," said Mr Saunders, pointing to the fact that it will take orders up until 9pm for next day collection - something that rivals such as Marks and Spencer have struggled to match.

News from the High Street

High Street casualties

Dixons: Strong Christmas sales

Primark: Sales jump by a quarter

Mothercare: UK sales fall again

Blockbuster: Enters administration

HMV: Music labels reeling

French Connection and Thorntons

Jessops: Staff appeal for new jobs

The past few weeks have been described as one of the most difficult times for retailers following the collapse of Jessops and Comet, while HMV and Blockbuster face an uncertain future after they went into administration, having both notably failed to cope with competition from online competitors.

In this context, click-and-collect has been hailed as a rare positive development for the High Street.

Some analysts have suggested that, in future, many retailers should turn their shops into showrooms and distribution points for their online operations.

"The High Street is going to look a very different place in a year's time," said Adrian Quine, director of the British Online Retailing Association.

"Retailers must realise that now the High Street is here to compliment their online operation and not the other way around."

Amazon has also built out its capacity to offer customers the option to collect items at their convenience. As well as old-school doorstep couriers, Amazon also offers collection at local shops such as Spa, as well as from security code-controlled lockers.

Technology, however, is not the only way forward. Primark - who has just reported a 25% jump in sales - does very little of its trade online, and has instead focused on price competitiveness and keeping up with fashion trends.

Margins
Besides its online strategy, Argos' sales were also boosted by the strong demand for gadgets, particularly tablets, over Christmas.

The retailer can also now expect to benefit from the demise of competitor Comet just before Christmas.

Terry Duddy, chief executive of Argos' parent, Home Retail Group, said the strong sales meant the group's pre-tax profits were on course to beat forecasts.

He said profits could be £10m higher than the £73m previously expected on average by market analysts.

Shares in its parent, Home Retail Group, which also owns DIY chain Homebase, jumped 15% on the news.

Home Retail Group also said the decline at its DIY chain Homebase slowed to a 3.9% drop in sales versus a year ago.

"Whilst we anticipate consumer confidence will remain subdued in the coming year, we are focused on delivering the transformation plan to reinvent Argos as a digital retail leader and the ongoing development of the Homebase proposition," he said.

The sales figures for both units exclude the impact of store closures. Including this effect, sales in the 18 weeks to 5 January rose 1.6% at Argos, and fell 4.5% at Homebase.

Three more Homebase stores closed during the reporting period, cutting the total number to 337. The number of Argos stores held steady at 739 during the reporting period, but a further nine stores have been shuttered since the New Year.

Home Retail Group said profit margins at both units were squeezed, but for different reasons.

At Argos, profits were hurt mainly by the shift in customer demand to lower-margin tablets - a problem also reported by Dixons Retail, the owner of Currys and PC World.

Margins at Homebase were cut by more aggressive price discounts as part of the chain's clearance sales.

(As reported by BBC News)

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The CPI rate of inflation has been above the Bank of England's 2% target since November 2009.

Retail prices index (RPI) inflation, which includes housing costs, edged up to 3.1% last month from 3% in November.

The figures were broadly in line with analysts' expectations. It was the third month in a row that the CPI rate has come in at 2.7%.

Phil Gooding from the ONS told the BBC: "By far the largest upward effect comes from domestic gas and electricity. Here we saw the majority of the pre-announced price increases coming into the index for December."

Electricity prices were up 3.9% compared with December 2011, while gas prices were 5.2% higher. Prices of food and non-alcoholic drinks rose 3.8%.

However, motor fuel costs fell 0.2% while air transport dropped by 6.8%.

Sarah Hewin, head of research at Standard Chartered, told the BBC that she was optimistic that the rate of inflation would start to fall.

"The outlook I think is probably for inflation falling, rather than inflation rising," she said.

"Unfortunately the backdrop is that the economy is continuing to struggle. We've had some pretty poor data out recently and that in turn will dampen inflation pressures."

However, John Longworth, director general of the British Chambers of Commerce, said he expected inflation to rise in the near term, as further rises in utility and food prices kicked in.

"Higher inflation is clearly a concern for the UK economy as it increases the squeeze on both businesses and consumers, further exacerbating an already weak economic environment," he said.

TUC general secretary Frances O'Grady called for "healthier pay rises".

"Unless inflation falls are matched by stronger pay growth, 2013 will be the fourth year in a row that people have suffered real wage cuts," she said.

A Treasury spokeswoman pointed out that inflation was nearly half of its 5.2% peak and that the government had taken action to help households with the cost of living, including a further increase in the tax-free personal allowance and cancelling the fuel duty increase that was planned for this month.

(As reported by BBC News)

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A new payday lenders' code of practice designed to give more protection to those in financial difficulty should now be fully in place.
A deadline has been reached for lenders to ensure they keep to the minimum standards included in the code.
This includes a limit on the rollover of payday loans, and breathing space for customers who are struggling to repay.
The code comes in as regulators formally investigate some lenders.
(as reported by BBC)

Nationwide sees a slump in profits despite an increase in new customers as it takes a £45m hit for mis-selling loan insurance.
Nationwide, Britain's biggest customer-owned financial services group, has reported a drop in half-year profits despite seeing a sharp increase in new customers.
The bank said its pre-tax profit fell by almost 50% to £124m for the six months to the end of September, down from £238m a year earlier.
The slump is mainly caused by the cost of the compensation for the rising level of payment protection insurance (PPI) claims.
Nationwide has had to set aside a further £45m to compensate victims of loan insurance mis-selling, which means the total figure for compensating customers will now cost £173m.
(as reported by Sky News)

A whopping £516 million was paid out to victims of payment protection insurance (PPI) mis-selling in September, according to latest industry figures.
It brings the total recorded amount paid out for mis-sold PPI since January 2011 to more
The true figure will be much higher as the data is two months out of date, while the final bill will be significantly larger still as lenders have set aside over £12 billion to repay victims of the scandal.

Legal loan sharks will be stopped from charging sky-high interest rates after a major climbdown by the Coalition.
Ministers accepted a Labour amendment to let a new watchdog cap the rates charged by payday lenders such as Wonga if there is evidence of "consumer detriment".
The Financial Conduct Authority will be able to overturn "payday loan" agreements if lenders flout the cap.
It can also clamp down on rogue traders who force people deeper into debt.
The decision is a major victory for the Daily Mirror's "End Legal Loan Sharking" campaign.
(as reported by the Daily Mirror)