Customers don’t trust price comparison websites despite using them to search for deals.

A survey carried out by Which? Money magazine in August revealed that 77% of people had used a price comparison site in the past six months, with seven out of 10 using the site for comparing car insurance quotes.

Out of the 1,703 people questioned, the survey revealed that half of the people who used the sites for comparisons went back and bought the product from the provider directly, instead of through the comparison website with only 21% of people trusting the sites to find the best deal.

The survey showed overall customer satisfaction was very low with ratings ranging from 47% to as low as 38% - a disappointing number.

Chief executive of Which?, Peter Vicary-Smith said comparison websites needed to do more. He added: “Comparison websites are part and parcel of renewing insurance or finding new financial products so they really need to do a better job at keeping their customers happy.”

http://www.plimsoll.co.uk/industry-report.aspx?Industry=insurance-brokers

National Express awarded c2c extension.

Following threats from former transport secretary Lord Adonis to terminate National Express from operating, the group has now won a two-year extension to its c2c franchise.

The c2c commuter line, which runs between Essex and Fenchurch Street in the City of London, has been granted an extension to May 2013. The contract was previously due to expire in May 2011.

The line which sees approximately 30 million passengers every year will prove very important during the 2012 Olympic Games as it will provide the London, Tilbury and Southend services until 2013.

National Express won the two-year extension after achieving record-breaking punctuality across the c2c franchise. Chief executive, Dean Finch said: “It is testament to our highly professional team who have made the c2c one of the best performing train operators in Britain.

“We are resolute in our commitment to customer service and are determined to continue delivering the highest standards of train service performance.”

http://www.plimsoll.co.uk/industry-report.aspx?Industry=transport-consultants

Paddy Power to buy remaining Sportsbet shares.

Paddy Power invested in 51per cent of Sportsbet in 2009, and boosted their stake to 61% last February. The Irish bookmaker will now pay £86.2m for the remaining 39.2per cent shares in Sportsbet.

Chief executive, Patrick Kennedy said the acquisition would mean an easy platform for further expansion in Australia. He said: “It gives us the ability to develop further in Australia. For as long as we owned 61 per cent of the business it wasn’t easy to make further acquisitions because you had minority shareholders so I think it positions us to do other things.”

It is expected that the deal will be completed by the end of February 2011. Patrick Kennedy added: “This is a good deal to acquire the remaining shares early, which will allow us to drive development and investment and secure full participation in the upside of the business.”

http://www.plimsoll.co.uk/industry-report.aspx?Industry=sports-management-promotion

REC says the UK is facing a skills shortage

A survey carried out by the Recruitment and Employment Confederation (REC) revealed the jobs market grew at its fastest rate for three months in November. Recent months saw the UK job market remain at a loss, however the latest report from the REC revealed a rise in both temporary and permanent job placements.

But the REC warned this boost in jobs also showed a skills shortage across many areas. REC chief executive, Kevin Green said: “As the jobs market grows, skills and talent shortages are starting to emerge. Our members have identified specific job categories that are already in short supply, including HGV drivers, engineers, IT specialists and chefs.”

Mr Green added that the changes to the immigration policy would only make things worse. He said: “We need to build pipelines into growth sectors through better support and guidance to job-seekers and a targeted skills agenda.”

With unemployment remaining low as a whole following the economic crisis, Mr Green said the report at least revealed hope among the private sector: “The jobs market remains fragile – especially in the light of the public sector squeeze – but confidence does seem to be returning among private sector employers.”

Stagecoach report high profits despite recent heavy snowfall.

The bus and rail operator reported pre-tax profits in the six months to the end of October had risen to £108.7m, an increase of £33.2m from last year.

The company saw an increase in their UK bus division with profits rising by 16.5 per cent thanks to increased passenger numbers

As the company’s revenue increased by 5 per cent to £1.1bn, chief executive Brian Souter said: “These are a strong set of results and we are encouraged by the increased demand for our services in the UK and North America.”

The company’s US business, megabus.com also had a boost with profits up 9.7%. Ahead of the increase in fuel prices, Mr Souter said the group would “monitor closely the rate and sustainability of economic recovery.”

He added: “The group has a strong financial position and we remain focused on robust cost control. We have made a good start to the second half of the financial year and current trading remains in line with management expectations.

“We look forward with confidence and believe the outlook is positive for our bus and rail services.”

Tesco reports strong sales as consumer confidence continues to grow.

With Christmas approaching, Tesco revealed like-for-like UK sales have risen 1.5% in the three months to 27 November.

Chief executive, Terry Leahy said of the increase: “It’s not party time, but people are recovering in confidence.”

Total sales across the group’s 5,000 stores rose by 8.8 per cent. Tesco’s Finest line also saw a boost as sales increased by more than 10 per cent compared with two years ago in the run up to Christmas.

With 30.7% of the market share, Tesco finance director Laurie McIlwee said: “The build up to Christmas is going well. We have given Finest an extra push and we are seeing consumers trading up. Non-food is also going well which is a good sign of consumers’ confidence.”

BP to sell stake in Pan American Energy to pay for oil spill.

 Continuing its plan to rid itself of $30bn by 2011, BP has sold its 60% stake in Pan American Energy (PAE) for $7bn. In selling its shares in the Argentine oil company, BP will have raised more than $20bn since July. The oil spill crisis is estimated to cost the company $40bn in total.

BP chief executive said the sale showed BP was strong enough for the company to continue despite its large liabilities.

He said: “This agreement further demonstrates both the high quality and attractiveness of the assets throughout BP’s global portfolio and also the company’s ability to meet our significant financial commitments arising from the Gulf of Mexico tragedy.

“We now have agreements in place that should secure the majority of our divestment target. We will continue to identify further assets that may be strategically more valuable to others than to BP as we complete the programme.”

UK household spending drops for first time in 10 years.

Figures released from the Office for National Statistics (ONS) revealed the impact the recession had on households across the UK. Data from the ONS annual Family Spending Report showed the average household spent £455 a week in 2009, lower than the £471 seen in 2008.

The report showed just how affected consumer confidence was in 2009 following the recession, as spending hit a 21-month low.

Interestingly, the figures revealed high earners were hit particularly hard during the economic crisis, with families in the top tenth income bracket reducing spending by nearly 12 per cent.

ONS statistician and report editor, Giles Horsfield said: “Higher expenditure on some housing related costs such as rent, electricity and gas [was] offset by lower spending on mortgages.”

Further figures from ONS revealed consumer spending in 2010 is on the rise with data leading to an increase in 7%, despite the looming VAT increase and the announcement of comprehensive public spending cuts.

BA wins 99% shareholder approval for Iberia merger.

The £4.5bn tie-up will introduce Europe’s second largest airline under the name, International Airlines Group (IAG).  Plans for the collaboration began two years ago after both airlines suffered financial difficulties during the global economic crisis.

Antonio Vazquez, Iberia’s chairman said the joining of the companies would form a “historical agreement that will create a global group to lead a future consolidation process in the airline business.”

With more than 99 per cent of the vote from BA shareholders for the merge to go ahead, BA will own 56 per cent of IAG with Iberia taking control of the remaining 44 per cent.

BA said of the merger: “We have taken a big step toward our merger with Iberia. This will create a stronger business for the long-term benefit of our customers, our shareholders and our employees.”

It is expected the merger will be completed on 21 January with shares in the new company listing in both London and Madrid on 24 January. 

The banks are right – many UK Tour Operators just aren’t worth lending to

Many UK Tour Operators are bemoaning the scarcity of bank lending to businesses but market analysts Plimsoll argue that the banks are right – many UK based operators are just not worth the risk.

High profile failures throughout 2010 have shown the danger of operating on micro profit margins and there could be more to follow. 643 of the UK's 1000 largest operators exist on profit margins of less than 1.5% - 322 of them are making a loss. Any bump in the road will be enough to see them fail because they cannot rely on cheap credit to see them through anymore.

Of course, banks have been guilty of being too harsh in turning away some perfectly healthy companies and it is essential that they play their part in getting business moving again. However, nobody should blame them for refusing credit to operators that might not be able to pay it back. Many are turning up at the bank saying “We spend almost as much as / more than we make”.

The financial sector was correctly vilified for reckless lending that lead to the economic crisis but in the case of many Tour Operators they are right. If banks are to meet government and electorate demands to lend responsibly then companies with consistently low margins just pose too big a risk.

It also seems that debt levels have little to do with the ability to secure funding. Even companies with minimal or no debt are struggling to get credit if they have thin margins. There is simply too much risk attached. We picked 212 companies who have little to no debt but have profit margins that are just too thin.

On the flipside, there is good news for 177 prudent companies that made tough decision early and focused on the bottom line instead of chasing sales over the last few years – they now have the edge in the market. Ironically, these are the companies that the banks are most willing to lend to. One or two of these solid companies should look to capitalise on this advantage and borrow money to invest in their future through a couple of smart acquisitions.

Click here for more information on Plimsoll’s latest assessment of the UK Tour Operators market.

Britons in rural areas must earn 20% more than those in urban surroundings.

A study conducted by the Commission for Rural Communities (CRC) revealed country dwellers must earn around £4,600 more annually than those living in urban areas in order to sustain an acceptable standard of living.

The results have been blamed on those in remote areas needing to spend extra on fuel and transport as well as urban dwellers benefiting from cheaper and more accessible utilities.

Executive director for the CRC, Nicola Lloyd said: “Although it is now widely recognised that one in five rural households experience poverty, this is the first time we’ve also had reliable data to show the minimum cost of living in the countryside is higher than in the city.”

Figures from the study also revealed that in order to afford a minimum standard of living, someone living in a rural village would need to earn at least 50% above the minimum wage, just to make ends meet.

Ms Lloyd added: “The rural minimum income standard clearly shows that many ordinary families living in rural areas will struggle to afford the everyday essentials; for some this will make rural life unsustainable.

“The CRC’s recent work on fuel poverty and promoting greater energy efficiency offers ways for government and others to help reduce these costs.”

Train travellers angry as fares may rise nearly 13%.

 The Association of Train Operating Companies (Atoc) revealed rail fares would go up by an average of 6.2% in the New Year. As regulated fares are expected to rise by between 5.8 and 7.8 per cent, the increase has sparked criticism from travellers.

Leader of the TSSA rail union, Gerry Doherty said: “It is simply outrageous that hard-pressed commuters are being forced to pay fare hikes when they are themselves facing pay freezes and job cuts.

“Passengers will regard that as a sick joke seeing as we have the most expensive and overcrowded railway in Europe.”

As regulated fares are tied to an annual price cap formula, they can increase every January depending on the previous year’s RPI inflation rate plus 1%.

Atoc defended the price increase and said the fee hike was important for investment in British railways, making room for improvements in customer satisfaction and punctuality.

Chief executive of Atoc, Michael Roberts said: “We know times are tough for many people but next year’s fare increase will ensure that Britain can continue investing in its railways.

“Even with these fare increases, the money passengers spend on fares covers only half the cost of running the railways – taxpayers make up the difference.”

Experts warn Irish crisis could have knock-on effect on the rest of the eurozone.

 As the Irish government unveiled their four-year plan to save 15bn euros, financial experts have voiced their fears that the problems will spread across the rest of Europe and will be detrimental to the future of the euro altogether.

While it may not mean the death of the euro as a whole, Lionel Barber, editor of the Financial Times said a “change in the structure and make-up of the eurozone may be necessary to ensure its survival.”

The euro has fallen by 1.9% against the dollar to less than $1.34 leaving investors fearing that other European countries may seek financial help in the near future.

Mr Barber added: “We are not seeing the death of the single currency; there are a lot more cards to play. What we may be seeing if the beginning of a change in the eurozone, so in other words the euro may survive but the eurozone in its present form, with its present membership, may not.”

Klaus Regling of the European Financial Stability Facility has rejected claims of a failure in the eurozone, branding it “inconceivable”.

Mr Regling said any countries giving up the euro would only face “economic suicide.”