Business Blog

21 April 2013 Last updated at 09:05 ET

German airline Lufthansa has cancelled the majority of its flights scheduled for Monday due to a strike.

The airline said about only about 30 of its flights would run as planned on Monday, out of more than 1,700 originally scheduled.

Ground staff have called a one-day strike in a pay dispute.

Last week Lufthansa rejected union demands for a 5.2% wage increase over the next 12 months.

Strikers are also looking for guarantees over job cuts.

Like many airlines, Lufthansa is looking to cut costs in the face of stiff competition from low-cost carriers and big Gulf airlines, as well as rising fuel prices.

Unions staged a similar one-day strike last month. Short "warning strikes" are a common tactic among German unions, designed to put pressure on wage negotiations.

In a statement on its website, Lufthansa said passengers should expect "massive" flight cancellations and delays that will start to affect long-haul flights from Sunday.

21 April 2013 Last updated at 12:29 ET

George Osborne is set to boost lending to small businesses as he faces growing pressure over his austerity policies.

The chancellor is expected to announce an extension to the Bank of England-run Funding for Lending Scheme (FLS) in the coming weeks.

The scheme was launched in August and was due to expire in January 2014.

The move comes amid pressure from the International Monetary Fund (IMF) for Mr Osborne to reconsider the pace of his austerity programme.

It also follows the decision by Fitch Ratings to strip the UK of its triple-A status on Friday, becoming the second of the big three rating agencies to do so.

The extension to the FLS may be announced before the IMF arrives in the UK to begin regular annual consultations with the government next month.

Sluggish growth

The scheme's launch last year was designed to boost lending to small businesses and households by providing banks with cheap loans on the proviso that they pass them on to customers.

The scheme has so far been criticised because Bank of England figures suggest participating banks were lending less money overall in the second half of 2012 than they were in the previous six months.

But it has also been credited with helping lower the cost of mortgages.

Mr Osborne first suggested extending the scheme in his Budget in March, and the Bank of England's Monetary Policy Committee said there may be "merit" in an extension when it met earlier this month.

The government hopes such schemes will help boost growth, which has remained sluggish since the UK first fell into recession during the 2008 financial crisis.

On Thursday, the Office for National Statistics will release its first estimates for how much the economy grew in the first three months of this year.

Many economists expect the economy to have grown, but only by about 0.1%.

'Time to consider'

Although it has yet to start formal discussions with the UK government, there are increasing signs the IMF believes the slow pace of growth means the UK should consider slowing the pace of its spending cuts.

Last week the IMF downgraded its growth forecasts for the UK, and chief economist Olivier Blanchard warned the UK was "playing with fire" and should consider alternatives to its current austerity drive.

IMF chief Christine Lagarde later told the BBC that "now might be the time to consider" adjusting the pace of the austerity programme.

But she stressed the importance of dialogue with the UK government.

IMF officials are due to arrive in the UK next month for annual consultations that allow it to monitor member countries and issue recommendations about economic policy.

Mr Osborne said he would defend his policies, saying: "Britain's got the right plan in terms of dealing with its deficit."

20 April 2013 Last updated at 20:16 ET By Alex Campbell BBC News

Have you ever seen something you wanted in a shop, tried it, checked the price online on your smartphone, found it was cheaper, and walked out? Welcome to the world of "showrooming".

"The staff at Jessops would like to thank you for shopping with Amazon" read the sign in a shop window shortly after the British camera chain went into administration.

It was a dry reaction to a growing problem for "bricks and mortar"-focused retailers. Showrooming is said to have exacerbated the decline of high-profile brands like Comet.

Gadget stores, bookshops and the cosmetics industry are all losing sales to showroomers, but solutions have proved hard to find.

Kelly Buckle, 23, of Birmingham, sometimes spends more than £200 in a single shopping trip - but never actually gets as far as the checkout.

"I can go in and smell a perfume and then find it online for £30 less," she says.

Research by design agency Foolproof found that 24% of people showroomed while Christmas shopping - and 40% of them took their business elsewhere.

Showroomers are not doing anything immoral. But the process can still be embarrassing.

"I feel bad about it, especially when the staff have been helpful, but it's my money," says Buckle.

Bricks and mortar shops have to pay rent, bills and staff salaries. Online retailers can offer cheaper prices because they don't.

But the online giants get a benefit from the very existence of bricks and mortar shops. It leaves physical retailers in a quandary.

An Australian speciality food shop recently raised eyebrows by charging $5 (£3.37) just for browsing. And some shoe and clothes stores in America and Australia have also tried a "fitting fee". In all instances the fee is taken off the bill when someone buys something.

Victoria Barnsley, chief executive of HarperCollins, recently suggested the idea of charging a fee for browsing bookshops is "not that insane".

Steve Pritchard, 61, who runs an independent book store in Crosby, Merseyside, and has worked in the trade for more than 36 years, is not convinced.

"We see them in the corner with their mobile phones, scanning the barcode on a book and finding it cheaper. I can't blame them," he says.

"I can't see a way to stop it. Charging people to browse has been suggested but it's a daft idea because you still want people to come in.

"You've just got to make your retail environment pleasant, have people here who know what they're talking about and try to embarrass them out of doing it."

If you take a specialist running chain like Run and Become or Runner's Need you can see this process in action. Staff analyse a customer's running gait, often on a treadmill and "diagnose" a pair of shoes that will avoid injury.

Those £100 shoes might be markedly cheaper online, but the would-be showroomer has to have a very high embarrassment threshold to walk out with a straight face.

This approach may seem more realistic than either charging a fee for advice or placing other obstacles in the way of showroomers. There have been suggestions that resistance from retailers has included asking suppliers to subtly change the names of products to thwart internet searches.

Coaxing the customer into being willing to pay more is the way, says retail consultant Martin Philpott.

"Shops like Jessops need to become centres of excellence with a limited number of showroom stores in high profile areas, selling high end products.

"I'm a passionate cyclist and I go to a shop that is much more expensive than the internet. But they will build a cycle for you, watch you ride up and down the street or even ride out with you.

"By the time you've been there for an hour, their enthusiasm is so overwhelming that you really don't want to go elsewhere."

Strangely, online retailers have an interest in the survival of bricks and mortar shops. If web-based retailers lure so many showroomers, what will they do if there are no showrooms left?

Philip Beeching, 53, a web consultant and self-confessed showroomer, thinks online retailers may themselves turn to bricks and mortar - but not necessarily staff and checkouts.

"Online retailers do well out of showrooming and companies like Amazon may well decide that they need to open up showrooms," he says.

Retailer-turned-author Bill Grimsey, former chief executive of Wickes and Iceland, agrees. He believes the future lies in purpose-built showrooms in major shopping centres.

"Things are going to change a lot, the whole thing is about to explode," he says. "People won't pay to browse. It may start but it will die quickly. People will expect the service."

Grimsey believes that even out-of-town retail parks will quickly become redundant, with 20 or 30 huge shopping malls dominating retail by making use of showrooms.

A growing number of retailers allow customers to order online and check or collect their goods in store - avoiding the inevitable missed delivery cards and increasing the chances of them buying something else while they are there.

But for many, the most important factor is still the price.

"My wife asked me to get a new celebrity cookbook which I found in Waterstones for £27. Using my smartphone I was able to search for it and I instantly found it on Amazon for £15," Beeching says.

"If the price had been closer maybe I'd have done the right thing. But especially in times where a lot of people are strapped for cash - what do you expect them to do?"

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20 April 2013 Last updated at 07:35 ET

A minicab firm which started in London in the 1970s with one car has been sold for £300m to a private equity firm.

Addison Lee, which started in 1975 in south London and now has 4,500 cars, has been bought by the Carlyle Group.

Carlyle said it hoped to expand the firm into international markets and continue to transport about 10 million passengers each year in London.

Founder John Griffin will remain chairman of the company and his son Liam will be chief executive.

'Humble beginnings'

Mr Griffin entered the trade after he gave up his accountancy apprenticeship to help his father.

He founded the company with Lenny Foster and both will retain minority stakes in the business.

Liam Griffin said: "From humble beginnings almost 40 years ago, Addison Lee has grown to become a well-known brand."

In a statement, Carlyle said: "The focus for Carlyle's investment in Addison Lee will be to drive business expansion both in the UK and internationally."

20 April 2013 Last updated at 14:10 ET

Russian businessman Alisher Usmanov has topped the Sunday Times ranking of the wealthiest people in Britain and Ireland with a fortune of £13.3bn.

The Surrey-based tycoon, 59, who has a 30% stake in Arsenal football club, owns iron ore producer Metalloinvest.

Warner Music's Len Blavatnik comes next in the 25th annual list with £11bn but steel magnate Lakshmi Mittal's £10bn sees him drop from first to fourth.

The 1,000 richest people in Britain and Ireland share a wealth of £450bn.

The highest British-born person in the list is the Duke of Westminster in eighth place with £7.8bn from property. He is the only person to make the top 10 of the list in each of its 25 years.

Sir Richard Branson, founder of the Virgin brand, is in 19th place with £3.5bn and Chelsea FC's Russian owner Roman Abramovich, who made his fortune in the oil industry, is down two places to fifth with £9.3bn.

In third place are Sri and Gopi Hinduja, of the London-based global conglomerate Hinduja Group, with £10.6bn.

Former Miss UK Kirsty Bertarelli shares her £7.4bn pharmaceuticals fortune with husband Ernesto, the same amount as last year, but they have slipped three places down the list.

There are a record 88 billionaires in the list - compared to 77 last year and just nine when the rich list started in 1989, and the Queen was placed top.

Her then wealth of £5.2bn included the Crown Estates and the royal art collection but since 1993 the Queen has been valued only on personal worth for the purposes of the list.

The combined wealth of the top 200 people in list is £318.2bn which is more than eight times the figure 25 years ago.

Mr Usmanov started his business empire with the manufacture of plastic bags.

His interests now include Russia's biggest iron ore producer Metalloinvest, a stake in internet business mail.ru and a holding in mobile phone operator MegaFon which became listed on both the London and Moscow stock exchanges last year.

Mr Usmanov owns Sutton Place in Surrey, the former home of the late oil baron J Paul Getty, as well as a £48m mansion in north London.

Mr Blavatnik saw the biggest rise in wealth among those listed with an increase of £3.4bn over the past year.

The Russia-born media mogul, who now holds US citizenship, sold his stake in Russian oil and gas giant TNK-BP for £2bn last month.

Mr Mittal, who topped the list for the past eight years, was the biggest faller in wealth terms after his 40% stake with his wife in steelmaker ArcelorMittal plunged from a peak of £28bn to just under £6bn.

Earlier this month former Beatle Sir Paul McCartney was revealed to have topped the Sunday Times Rich List of musicians with the £680m fortune he shares with his wife Nancy Shevell.

Sir Paul, whose American heiress wife is said to be worth £150m, has topped each music list since 1989 when he was worth an estimated £80m.

Andrew Lloyd Webber was second with £620m and Irish rock band U2 were third with £520m.

19 April 2013 Last updated at 18:04 ET By Kevin Peachey Personal finance reporter, BBC News

The UK shivered its way through the second coldest March on record. So there has been little motivation for gardeners to fetch the tools out of the shed and start digging and planting in their beds and borders.

As a result, staff at some garden centres have given gloomy reports of custom so far this year.

Tammy Woodhouse, of the Millbrook Garden Centre in Gravesend, Kent, says that typically half their sales for the year come in March, April and May. This year, takings are 35% down on the norm.

"It has been tough," says Mrs Woodhouse, a spokeswoman for the Garden Centre Association.

Bargains

For many garden centres and growers, the bad weather has led them to throw stock away.

In the short term, that could mean bargains for gardeners, with items heavily discounted before being dumped.

Primroses are being sold for 99p and pansies are being offered at knockdown prices.

"Some plants have had to be thrown away. They've been affected by the cold and by the frost, and they have been damaged too much," says Mrs Woodhouse.

"Some prices are coming down. There are discounts to be had. We'll always discount before we throw away, and some of the suppliers are offering us discounted products just to make space."

But in the long term, Mrs Woodhouse warns that prices could go up and some garden centres and growers could be pushed out of business.

Her parents started in the business 35 years ago, and now have three centres, but the family say this is the worst start to the season that they can remember.

Like many other centres, they have been relying on alternative sales, such as gifts and refreshments, and are hoping for a good summer.

Gardens network

Gardeners may face the threat of rocketing prices in the long term, but they are already used to seeing costs rise steadily.

Official figures show that the cost of gardens, plants and flowers rose by 0.6% in March, compared with a year ago, typical of much of the past year.

The good news for gardeners is that this remains lower than the overall inflation rate - the rising cost of all good and services - which stood at 2.8% in March.

And the Office for National Statistics data shows that the cost of tools and equipment for the home and garden has actually fallen, down 1.9% in March compared with a year earlier.

Community spirit

Many groups of enthusiasts who get green-fingered on a strict budget can be found in the network of community gardens across the UK.

Often funded with the help of local authority grants and run by volunteers, they are designed to improve the wellbeing of residents in low-income areas.

And those involved hope the low costs mean that things look healthy for their finances too.

The Coplow Street Community Garden in Ladywood, Birmingham, has 26 plots where members of the 500-household community can grow fruit and vegetables.

The site was transformed from old garages on the estate in 2009, and began with some soil-filled builders' bags.

For a membership fee of £10 a year, residents now get a small custom-built bed to grow their produce, and access to seeds and plants at cost price.

Co-ordinator Chris Blythe, part of the North Summerfield Residents Association, says it is terrific way to build community spirit as well as encouraging the grow-your-own culture.

It also gives a chance to people living in flats, or with only small yards, to get outside with their families and involved in affordable gardening.

"It is an inner-city area. This is a great way for people to just have a small space to grow vegetables and fruit to benefit their health and their family," he says.

There are also social events and educational days organised by the group.

"It is a great way of getting involved in gardening. It is not just about growing, but getting people together as a community and supporting each other," he says.

Plant tips

For others with access to a little space, but without much money to spend, what are the top tips for gardening on a budget?

Alys Fowler has written a number of books on gardening and has presented Gardeners' World on BBC Television.

She says it is vital not to start too quickly.

"Go to lots of car boot sales. You can get fantastically good old tools. They will be really well made and you can pick them up for about a fiver," she says.

"You just need a spade, a fork, a hand trowel, a hoe and a rake. That will be all that you need. You don't have to get everything out there."

Other gardeners are often generous with cuttings and some vital equipment, ranging from plastic to bricks for the garden, are simply discarded by other people, she says.

But one item that is worth investing some funds in, she says, is good soil.

"If I was going to spend money anywhere, I would spend it on the best-quality compost that I can buy. For everything else, just use the cheapest seed trays, recycle all the labels. I make my own out of lollypop sticks," she says.

So those inspired to get out in the garden, to an allotment, or to their local community plot, may find it is easier than they think to control the budget.

It is just a shame that the same cannot be done with the weather.