News

In June, VW agreed a €1bn settlement in Germany over the emissions scandal, which came to light in 2015.

Audi, whose ex-boss Rupert Stadler is being investigated over “dieselgate”, said affected cars spanned 2004-18.

Audi said in a statement that some V6 and V8 diesel engines were “placed on the market with an impermissible software function”.

In 2015, US investigators discovered that some VW diesel cars were fitted with what became known as “defeat devices” to flatter emissions readings during engine tests so that the true output of nitrogen oxides was reduced.

The scandal spread throughout the motor industry, engulfing not just VW and its other car brands, but to other motor manufacturers.

VW admitted in 2015 to putting defeat device software into 11 million cars worldwide. The company’s total costs in fines, buybacks and refits has now reached €27bn.

While the probe against Audi is now closed, other cases against executives from the VW group – including former chief executive Martin Winterkorn – remain open, with charges including fraud, false advertising and failure to keep investors informed.

Earlier this month, VW ousted Audi chief executive Rupert Stadler. In June, he was put under investigation by German prosecutors over alleged fraud and false advertising involving the sale of cars with defeat devices, and remains in police custody.

Audi’s fine of €800m consists of €5m for regulatory rule-breaking, with the rest being payment for the economic benefits resulting from the sale of cars with defeat devices.

Audi, VW group’s most profitable brand, said the fine would hit its financial performance this year.

VW share price initially fell on the news, but later rose more than 2% in Frankfurt.

The chief executives of three big banks have become the latest bosses to pull out of a conference in Saudi Arabia.

HSBC’s John Flint, Tidjane Thiam of Credit Suisse and Bill Winters of Standard Chartered will not be attending the event in Riyadh.

Diane Greene, who runs Google’s cloud division has also pulled out, as has JP Morgan’s Jamie Dimon.

It follows tensions between the US and Saudi Arabia over the Saudi journalist Jamal Khashoggi’s disappearance.

A critic of the government, Mr Khashoggi vanished on 2 October after visiting the Saudi consulate in Istanbul. Authorities there believe he was killed in the building by Saudi agents, an accusation that the Saudi authorities have dismissed as “lies”.

BlackRock chief executive Larry Fink, Ford chairman Bill Ford and Uber boss Dara Khosrowshahi are among others who will now not be attending the Future Investment Initiative event in Riyadh.

A page with a list of confirmed speakers has been deleted from the website for the conference, which runs from 23 to 25 October.

Siemens and Ernst Young are among those still planning to attend the conference.

Britain and the US are also considering boycotting the event, while others distancing themselves include Sir Richard Branson, who has halted talks over a $1bn Saudi investment in Virgin space firms.

Wages excluding bonuses have risen at their fastest pace in nearly 10 years, official figures show.

Pay rose by 3.1% in the three months to August, compared with a year ago, while inflation for the same period was 2.5%.

Last week, Bank of England chief economist Andy Haldane said he saw signs of a “new dawn” for wage growth.

The latest official data also showed unemployment fell by 47,000 to 1.36 million in the three months to August. The jobless rate remained at 4%.

David Freeman, the Office for National Statistic’s (ONS) head of labour market, said: “People’s regular monthly wage packets grew at their strongest rate in almost a decade, but, allowing for inflation, the growth was much more subdued.

“The number of people in work remained at a near-record high, while the unemployment rate was at its lowest since the mid-1970s.”

The ONS figures showed the number of people in work was little changed at 32.39 million, down by just 5,000.

The average pace of wage growth was 4% before the global financial crisis.

Economists have been puzzled why wages have grown so slowly even as unemployment has fallen sharply.

Wages including bonuses rose at a pace of 2.7% in the three months to August.

In August, the Bank of England said that it expected total pay to be growing at a rate of 2.5% a year by the end of 2018, climbing to 3.5% by the end of 2020.

Public sector boost

However, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the latest wage growth rates were unlikely to be maintained.

“The recent pick-up in wage growth has been driven partly by the loosening of the public-sector pay cap for some workers,” he said. “For instance, most NHS workers received a pay rise of at least 3% in July.

“But the government still is keeping a tight lid on pay rises in other departments, while this year’s increase in NHS pay is the best in a three-year deal. Public sector pay growth, therefore, likely has reached a ceiling.

“The recent upturn in wage growth also has been flattered by the recent rebound in average hours.”

The British Chambers of Commerce (BCC) also said it did not expect this trend to continue.

Suren Thiru, head of economics at the BCC, said: “While wage growth increased again, the pace at which pay growth is exceeding price growth remains well below the historic average, meaning the current squeeze on spending power is unlikely to ease.

“Achieving a meaningful improvement in wage growth will be an uphill struggle unless the underlying issues that continue to limit pay settlements are tackled – notably sluggish productivity, considerable underemployment and high upfront costs for businesses.”

Accessories chain Claire’s is reported to be considering closing some of its UK stores.

The Press Association said the High Street chain was talking to restructuring firms about “a number of options”.

The chain has more than 370 stores in the UK, according to its most recent accounts.

A spokeswoman for Claire’s said closing underperforming stores was “part of normal business practice”.

According to the Press Association, one rescue plan being considered is a company voluntary arrangement (CVA) where some stores are closed and rents are reduced on remaining stores.

The chain – which offers ear piercing as well as cheap jewellery – is aimed at teenagers and tweens – 8 to 12-year-olds.

Claire’s is the latest retailer to be hit by the tough High Street conditions, which have also sparked the collapse of Maplin and Toys R Us. House of Fraser fell into administration before being bought by Sports Direct, while stores such as Debenhams, New Look and Homebase have had to close dozens of outlets in an attempt to remain profitable.

The news comes days after Claire’s US parent company emerged from bankruptcy protection.

The bankruptcy protection procedure in the US – known as Chapter 11 – is aimed at giving companies time to restructure their finances.

Group chief executive Ron Marshall said the firm was now “a healthier, more profitable company”.

JP Morgan chief executive Jamie Dimon will not attend an investment conference in Riyadh amid growing tensions between the US and Saudi Arabia.

He is the latest high-profile figure to pull out of the event dubbed “Davos in the Desert” following the disappearance of Saudi journalist Jamal Khashoggi.

The Saudis deny killing Mr Khashoggi.

Oil prices rose on Monday on supply concerns, but the Saudi stock market rose after sharp falls on Sunday.

Softbank’s share price tumbled about 7% in Tokyo as the fallout from Mr Khashoggi’s disappearance spread. The Japanese conglomerate’s $100bn (£76.1bn) Vision Fund is almost half-financed by Saudi Arabia.

A critic of the government, Mr Khashoggi vanished on 2 October after visiting the Saudi consulate in Istanbul. Authorities there believe he was killed in the building by Saudi agents, which Riyadh has dismissed as “lies”.

Mr Dimon has become the latest in a number of business leaders and firms to cancel plans to attend the Riyadh investment conference following the journalist’s disappearance.

“We can confirm … that Jamie will not be attending the Saudi event,” a JP Morgan spokesperson told the BBC. “We won’t be commenting further.”

Other executives including Ford chairman Bill Ford and Uber chief executive Dara Khosrowshahi are among those who will not be attending the conference, to be held between 23 and 25 October.

A page with a list of confirmed speakers has been deleted from the event’s website.

Britain and the US are also considering boycotting the conference, the BBC has learned.

Others distancing themselves include Sir Richard Branson, who has halted talks over a $1bn Saudi investment in Virgin space firms.

Mr Khashoggi was once an adviser to the Saudi royal family, but fell sharply out of favour with the Saudi government and went into self-imposed exile.

US President Donald Trump has said the US will inflict “severe punishment”on Saudi Arabia if it is found responsible for his death.

But on Sunday Saudi Arabia said it rejected political and economic “threats” over the missing journalist and would respond to any punitive action “with a bigger one”.

The UK, Germany and France have demanded a credible investigation into the disappearance.

Hundreds of Royal Mail staff have complained that they have been short-changed as a result of a dramatic fall in the company’s share price.

They claim the privatised company deliberately issued a profit warning weeks before many were planning to sell their shares.

Since the announcement on 1 October the shares have fallen by 28%.

However Royal Mail said it had no choice but to tell the City as soon as it realised profits would be lower.

Monday is the first day they can sell their holdings without having to pay tax or National Insurance.

The shares have fallen by 45% since they peaked at 632p in May this year, with some staff seeing the value of their holdings slipping by more than £2,500. The shares are now just 13p above the original flotation price of 330p.

Some 145,000 postal staff have waited five years to sell the free shares they were given at the time of privatisation.

Anger

Des Arthur, a postman from Coventry, was one of those who complained about the company’s announcement to the City.

“The timing of it could be viewed as extremely cynical,” he told the BBC.

“It’s going to look like it’s not right.”

The Communication Workers Union (CWU) said hundreds more staff had expressed their anger.

“Our members certainly believe it’s just been done to deflate what they would get if they sold their shares,” said Terry Pullinger, deputy general secretary of the CWU.

“You know what people are like; people in some ways have already spent that money in anticipation.”

‘Happy’

Royal Mail said it understood the disappointment felt by its staff, but said it had no choice over when to release the profit warning.

“We had an obligation to tell the market, and that’s what we did,” a spokesperson told the BBC.

“There’s no link between that and the free shares.”

However the company said anyone who pre-elected to sell their shares before 1 October would be able to cancel their transactions.

Other employees said they were happy just to have been given free shares in the first place.

“I’m not annoyed,” said Adam Alarakhia, a postman from Leicester, whose holding is now worth around £2,700.

“The price will shoot up again in our busy period.”

Should staff sell?

Most brokers have Royal Mail shares down as a “sell” – in other words they expect the shares to fall further.

Berenberg has a target price of £3.

But the further they fall, the higher the percentage yield. At the moment the annual dividend is a healthy 7%.

Indeed so far employees who took their full allocation will have earned £850, Royal Mail said, making up for some of their theoretical (on-paper) losses.

“Management have recently reconfirmed their commitment to growing the dividend over time, but with investment demands likely to rise, we find it difficult to see how far that can go,” said Nicholas Hyett of Hargreaves Lansdown.

“Nonetheless, for income seeking investors Royal Mail could well be attractive.”

The original privatisation of Royal Mail was criticised by the National Audit Office, which said that taxpayers had lost £1bn, because the flotation price was set too low.

The world’s longest non-stop commercial flight has landed New York, beginning a journey in Singapore covering more than 15,000km in 17 hours and 52 minutes.

Singapore Airlines has relaunched the service five years after it was cut because it had become too expensive.

Flight SQ22 landed at 0529 US Eastern time with 150 passengers and 17 crew.

Geoffrey Thomas, editor-in-chief of Airlineratings.com, said the time passed swiftly and had not seen like a 17 and a half hour flight.

He told the BBC: “The flight was effortless and very smooth.

“On board the concensus was that the time past very quickly and didn’t seem like 17.5 hours.”

The inaugural flight from Changi Airport to Newark’s international airport, which services New York, took off amid much fanfare.

Qantas launched a 17-hour non-stop service from Perth to London earlier this year, while Qatar runs a 17.5-hour service between Auckland and Doha.

Singapore Airlines (SIA) said there is demand for customers for non-stop services which help cut travelling times compared with flights which have a stopover.

Ahead of the take-off, the airline told the BBC that business class seats for the flight were fully booked, and there were “a very limited number” of premium economy seats left.

A business class ticket entitles passengers to two meals, and the choice of when they are served, plus refreshments in between. They will also have a bed to sleep in.

Premium economy fares get three meals at fixed times, with refreshments in between.

The airline said it is not planning to offer any economy bookings on the route.

The owner of Patisserie Valerie has said its finance director Chris Marsh was arrested last night and then released on bail.

The cafe chain is fighting for survival after revealing on Wednesday it had uncovered “significant, and potentially fraudulent, accounting irregularities”.

Mr Marsh had been suspended when these problems were discovered.

On Thursday, the firm said it needed “an immediate injection of capital” to continue trading in its current form.

The company, in which entrepreneur Luke Johnson has a 37% stake, did not provide any details of its fund-raising effort in its latest statement.

In a brief announcement to the stock market, Patisserie Holdings – the owner of the cafe chain – said: “The company has been made aware that Chris Marsh, who is currently suspended from his role as company finance director, was arrested by the police last night and has been released on bail. Further updates will be released in due course as appropriate”.

Hertfordshire Police said: “A 44-year old man from St Albans has been arrested on suspicion of fraud by false representation. He has been released under investigation.”

Shares in Patisserie Holdings were suspended on Wednesday.

In its most recent results statement in May, the company said it had cash reserves of £28.8m.

But on Thursday, Patisserie Holdings said it had found “a material shortfall between the reported financial status and the current financial status of the business”.

It also said that the board had been become aware this week of a winding-up petition against its principal subsidiary Stonebeach, from HMRC over £1.14m of tax.

Speaking on the BBC’s Today programme. Julie Palmer of restructuring experts Begbies Traynor said that “normally” after a winding-up petition “banks will freeze company bank accounts which makes day-to-day trading very difficult”. The company did not comment on this.

Carmaking giant BMW wants to take control of its joint venture in China and is set to pump billions more into its production capacity in the country.

The German firm will spend €3.6bn ($4.16bn; £3.14bn) to up its stake in Brilliance Automotive from 50% to 75%.

The Mini maker will also invest more than €3bn to expand its existing production capacity in China.

The move comes amid China’s plans to relax rules for foreign car companies operating in its enormous market.

Currently, foreign firms that want to make cars in China must have a joint venture with a local firm, but they are not permitted to own more than a 50% stake in that firm.

This rule has been in place since 1994 and has left many foreign firms frustrated. It has also restricted big global brands from gaining full access to the world’s biggest car market.

BMW said the deal with Brilliance Automotive, which is subject to regulatory and shareholder approval, would not close until 2022. That is when the 50:50 joint venture requirement for car manufacturing in China ends.

“The total yearly production capacity of the BMW Brilliance Automotive (BBA) plants [in China] will be gradually increased to more than 650,000 units in total from the early 2020s,” BMW’s chairman Harald Krüger said in a speech on Wednesday in China.

He said BBA was the cornerstone of BMW’s ongoing success in China – its largest single market – and that with the increased investment the German firm wanted to make, it would be able to produce up to 100% electric vehicles.

The Chinese government has said it wants 20% of cars sold to be electric or rechargeable-hybrid vehicles by 2025.

In February, BMW said it would build electric-powered Mini cars in China with another firm, Great Wall Motor. Cars made under than partnership are aimed at the Chinese market.

Brilliance China Automotive Holdings are the whole owners of BMW Brilliance Automotive.

Companies may be forced to reveal their ethnicity pay gap under plans unveiled by the prime minister to help minorities at work.

Theresa May has launched a consultation on whether mandatory reporting will help address disparities between the pay and career prospects of minorities.

She acknowledged that minorities often “feel like they are hitting a brick wall” at work.

The move follows the decision to make firms reveal their gender pay gaps.

Downing Street said the consultation would allow businesses to share views on what information should be published “to allow for decisive action to be taken” while at the same time avoiding “undue burdens on businesses”. It will run until January.

The government’s Race Disparity Audit last year showed widely varying outcomes in areas including education, employment, health and criminal justice between Britain’s white and ethnic minority populations.

It found that Asian, black and other ethnic groups were disproportionately likely to be on a low income, with just 1% of non-white police officers in senior roles.

Within NHS England, it found that 18% of white job applicants shortlisted got the job, compared with 11% of ethnic minorities.

‘Catalyst for action’

Mrs May is also due to unveil a Race at Work Charter signed by firms including accountancy giant KPMG, advertising firm Saatchi & Saatchi, and public sector bodies including NHS England and the Civil Service.

The charter, designed with Business in the Community, commits signatories to increasing recruitment and career progression of ethnic minority employees.

The prime minister said: “Every employee deserves the opportunity to progress and fulfil their potential in their chosen field, regardless of which background they are from, but too often ethnic minority employees feel they’re hitting a brick wall when it comes to career progression.”

The consultation was welcomed by the CBI employers’ group. Matthew Fell, chief UK policy director, said: “Transparency can be a catalyst for action in tackling the ethnicity pay gap, in the same way that it has been so successful for gender.”

The Equality and Human Rights Commission also supported it, with its chairman David Isaac saying: “Extending mandatory reporting beyond gender will… give employers the insight they need to identify and remove barriers to ethnic minority staff joining and progressing to the highest level in their organisations.”