Unemployment to exceed 2m for first time under New Labour

Unemployment is expected to exceed two million for the first time since Labour came to power in 1997.

Official figures to be released on Wednesday morning will show that tens of thousands of people lost their jobs in the three months to December.

They come amid evidence that Britain's jobless total is rising twice as fast as the European average.

The unemployment total hit 1.92 million in the three months to the end of November. Since then thousands of staff have been sacked by major employers, including 27,000 at Woolworths.

A further 2,300 were made redundant by the Royal Bank of Scotland on Tuesday.

The number of people who claimed Jobseekers' Allowance in January will also be released, offering a more up-to-date insight into the damage being done to the jobs market by the recession. The total reached 1.16 million in December.

An analysis by the TUC showed that while Britain's unemployment rate - 6.1 per cent - is lower than the European average of 7.7 per cent, it is now rising twice as fast as the European average.

Between December 2007 and October 2008, Britain had the third sharpest increase in unemployment, behind Spain and Ireland, said the unions.

Over the same period, unemployment in France went up by just 0.1 per cent and fell 0.8 per cent in Germany.

In advance of the figures' release, James Purnell, the Work and Pensions Secretary, said: "We know times are tough and we will do all we can to help people who lose their jobs find another as quickly as possible to prevent the long-term unemployment which has so scarred communities in the past from taking root."

Gordon Brown is to meet business leaders shortly before the figures are announced, to discuss ways of giving more assistance to people losing their jobs.

Rihanna postpones Indonesia concert after 'attack' by boyfriend Chris Brown

Rihanna, the R&B singer, has postponed a concert in Indonesia for the second time after claims she suffered "horrific" injuries allegedly at the hands of boyfriend Chris Brown.

Local promoter Showmaster said the William Morris Agency in Los Angeles had told them Thursday's concert in Jakarta would be cancelled.

Promoter Troy Reza Warokka said: "We spoke to Tony Goldring of William Morris Agency and he said the concert had to be cancelled because of an assault case involving Rihanna's boyfriend.

"He offered to reschedule but we don't think we'll take it up, not this year at least. This is her second postponement. Her fans are traumatised and we've spent so much money on production and promotional materials."

The 20-year-old Barbados-born singer pulled out of the Grammy Awards on Sunday amid rreports she was the victim of domestic assault allegedly at the hands of singer-songwriter Brown.

She has reportedly cancelled her 21st birthday party and gone into hiding after it was claimed she may need plastic surgery.

Her injuries are said to include a swollen and bruised face, bloody nose, split lip and bite marks on her forearm and fingers.

Brown, 19, was arrested on Sunday and freed on $50,000 (34,500) bail. He also pulled out of the Grammys.

Website TMZ.com claims an onlooker in LA's residential Hancock Park area called police after witnessing a "loud, violent confrontation". Hours earlier, the couple had attended a pre-Grammys gala at the Beverly Hilton hotel.

The young singer, who has a clean-cut image, has previously spoken of the "terror" he felt when witnessing his mother suffering domestic abuse at the hands of his stepfather.

Kanye West, who toured with Rihanna, said that the reports of alleged abuse were "devastating."

"I feel like, just as a person, I don't care how famous she is or even if she just worked at McDonald's, that should never happen," he said. "It should never come to that place." Rihanna had cancelled a concert in the Indonesian capital in November last year on security concerns following the execution of three Islamist militants behind 2002 bombings on Bali island.

Gandhi's sandals and spectacles to be sold at auction in New York

Mahatma Gandhi's sandals and distinctive spectacles are to be sold in a unique auction lot also including his pocket watch.

The sandals were given to a British army officer in 1931 prior to the Round Table talks in London that were held to discuss Indian self rule.

Gandhi gave his metal rimmed, circular lensed glasses to an army colonel with the words: "These gave me the vision to free India."

His Zenith pocket watch was given to his grand niece, Abha Gandhi, his assistant of six years, in whose arms he died after being shot in 1948.

As Mohandas Karamchand Gandhi, commonly known as Mahatma, had few possessions these items are of huge interest and are expected to well exceed the estimate of £30,000.

Gandhi was pictured wearing the pocket watch, made in about 1910, and it is expectted to be the highlight of the lot.

A bowl and plate that were given by the great political and spiritual leader to his grand niece are also for sale.

The items have letters of provenance and were collected by the unnamed vendor who is now selling them.

Michelle Halpern, from Antiquorum Auctioneers in New York, which is staging the auction, said: "This is a truly historic sale of Gandhi's possessions. Of course he didn't have much, so anything of his that comes up for sale is worth that much more.

RBS, Morgan Stanley and UBS to axe 6,500 jobs

Royal Bank of Scotland, Morgan Stanley and UBS are cutting more than 6,500 jobs in the latest blow to the ailing financial services industry.

RBS said it was in consultation with staff over plans to make 2,300 UK employees redundant. The cuts will affect about 2pc of UK staff.

Morgan Stanley kicked off its latest redundancy programme as part of a global restructuring that will see as many as 2,000 staff lose their jobs, hundreds of whom are likely to be UK based.

The majority of the RBS and Morgan Stanley redundancies are expected to come from back-office operations.

UBS said it would axe a further 2,200 jobs in its troubled investment bank. The Swiss institution expects staff numbers in the division to have shrunk to 15,000 by the end of this year, down from 26,000 in October 2007.

RBS, which claimed compulsory redundancies would be kept to a minimum, said the cuts would not affect customer-facing branch staff.

"It is essential that we consistently review our business to ensure that we are able to operate as efficiently as possible, especially in the current economic circumstances," said Alan Dickinson, chief executive of RBS UK.

"Staff have given everything they have over the last year, which makes the decision to cut any job an extremely tough one."

Banks have been forced to reduce headcount sharply as business has dried up and the global recession has intensified.

A Morgan Stanley spokesman said: "We are continually evaluating business conditions in an effort to be right-sized for the current environment."

The US bank has already made 8,680 – or about 6pc – of its global workforce redundant. RBS has cut about 3,950 jobs.

The redundancies come as Deutsche Bank became the latest investment bank to announce a sharp fall in bonuses. Staff were told the size of their bonuses yesterday with the average payout down 60pc year-on-year.

The job cuts are not confined to banks. City law firm Lovells has revealed plans to cut up to 94 staff, while call-centre operator Sitel said it was making 220 employees redundant.

Luxury carmaker Bentley said it is also cutting 220 jobs and revealed all staff will take a 10pc pay cut.

WS Atkins to cut 1,000 jobs

WS Atkins, the design and engineering group, is to cut approximately 1,000 jobs as a result of "uncertainty" in its Middle East and UK markets.

The company, which has been appointed the official engineering design services provider to the London 2012 Olympics, said its building design arm has been "severely impacted" by the economic conditions and the deferral of projects by the Learning and Skills Council.

The Middle East business had performed well until "confidence in the region was significantly impacted by the global economic slowdown," it added.

WS Atkins, whose business revolves around infrastructure projects, had been eyeing expansion in the buoyant Middle East as the cash-rich emirates such as Dubai and Abu Dhabi embarked on spending sprees in new buildings and transport links. However, projects are now being put on hold as the financial crisis grips the area.

WS Atkins will axe 5pc of its workforce, which totalled 18,600 last year, with 260 already cut in the UK and 200 in the Middle East. However, Keith Clarke, the chief executive, insisted its general performance and cash generation remained "good".

"The economic environment is difficult and will remain challenging, but we continue to have confidence in the underlying strength of our business," he added.

Mr Clarke said WS Atkins expects performance in the year to March 31 to be in line with expectations.

However, analysts, who are expecting annual pre-tax profits to increase from £91m to £98m, warned that the job cuts suggest WS Atkins will find 2009/2010 tough.

"In [the full-year to 2010], we are assuming that profits will start to fall," said John Lawson at Investec.

China exports fall by most in 13 years, imports drop by record

China's exports fell by the most in almost 13 years as demand dried up in the U.S. and Europe and imports plunged by a record, signaling a deepening slump in the world's third-biggest economy.

Outbound shipments declined 17.5pc in January from a year earlier and imports fell 43.1pc, the customs bureau said on its website today. Both numbers were worse than economists' forecasts.

The $39.11bn trade surplus, the nation's second biggest on record, may add to tensions as global leaders seek to avoid a trade war amid the worst financial crisis since World War II. China's economic slowdown has already cost the jobs of 20 million migrant workers and growth may slide to 6.1 percent this quarter, the least since 1999, estimates show.

"It's a very eye-catching trade surplus and people will ask how it can be so high at a time that everybody else's economy is suffering," said Dariusz Kowalczyk, chief investment strategist at SJS Markets Ltd in Hong Kong. "What's happening here is really dramatic, underscoring plunging global demand."

Falling commodity prices drove down import costs as China's demand for raw materials also faltered because of the export slowdown and a property slump. The value of crude-oil imports fell 57pc from a year earlier.

Exports to the European Union fell 17.4pc. Those to the U.S. slid 9.8pc. Shipments of electronics dropped 21pc. Steel slid 32.5pc and toys declined 14.7pc.

Government researchers have advocated weakening the yuan against the dollar to support exports. China should "actively guide" the yuan to about 6.93 against the dollar to aid growth and bolster employment, according to a report by the Ministry of Finance's research institute published Feb. 7.

HBOS whistleblower Paul Moore breaks silence to condemn Crosby

Paul Moore, the whistleblower whose claims about risk taking at HBOS led to the resignation of its former boss Sir James Crosby from the UK's financial watchdog, has poured scorn on his defence.

Mr Moore's claim to the Treasury Select Committee that he was sacked by Sir James for warning that the bank's lending policy had become dangerously overheated has sparked a political row and questions over Gordon Brown's judgment.

Sir James resigned as deputy chairman of the Financial Services Authority following the allegations, saying that he did not wish to become a distraction but insisting that there was "no merit" to Mr Moore's claims.

But Mr Moore, 50, responded: "Why would you resign if you totally deny all allegations?"

He told the Daily Telegraph that he "totally stood by" his claims about his sacking and said he had extensive correspondence to back them up which he was prepared to submit to an inquiry for scrutiny.

And he described an unpublished report by the respected accountants KPMG which exonerated Sir James of wrongdoing as "inaccurate, inadequate and without weight".

He also accused the leaders of Britain's main banks, whom he holds responsible for the current financial crisis, of being out of touch and arrogant.

"I feel genuinely sorry that people who are so senior are so unable to see things as ordinary people see them."

Sir James, 52, is a close adviser to Gordon Brown and had recently carried out a review of the mortgage market for the Government and his departure will be a blow to the Prime Minister.

Bank of England Governor Mervyn King says UK economy is in 'deep' recession

The Bank of England Governor Mervyn King has warned that the UK is in 'deep' recession and delivered its clearest signal that it will move beyond cutting interest rates to help revive the economy.

The risks to the economy remain "heavily weighted to the downside," the Bank of England said today in is its gloomiest assessment so far. The speed of deterioration is accelerating, the Bank said in its latest Quarterly Inflation Report, and the economy may shrink by 4pc by the middle of this year. Inflation will drop to 0.5pc at the end of next year, it added.

Governor King also gave a sharp signal that interest rates are heading below 1pc as the Bank steps up efforts to prevent what's already the deepest recession since the early 1980s turning into something worse. The news drove sterling almost two cents lower against the dollar to $1.44, and put it on the back foot against the euro.

The report provides "strong support for our view that rates are heading to zero or very close," said Jonathan Loynes, an economist at the Capital Economics.

Today's assessment comes as the barrage of bad news from most parts of the economy continues. Unemployment reached nearly two million, its highest level for almost 12 years, in January, figures earlier today showed. That comes on top of confirmation last month that the recession is officially the worse since 1980.

The Bank insisted that the weakness in sterling - its down 28pc against the dollar since the start of 2008 - will eventually help pull the economy out of recession. However, Hetha Metal, an economist at the Ernst & Young ITEM Club, doubts the pound will make a powerful impact because overseas demand for British goods will remain weak.

Governor King and the rest of the Monetary Policy Committee have so far reacted to the downturn by aggressively cutting interest rates, the speed of which increased after the collapse of Lehman Brothers in October deepened the crisis and its fall-out on the wider economy.

The Bank today also signaled it will take measures to inject more money into the economy as earlier moves to make money cheaper become redundant. These measures include buying assets such as corporate and Government bonds.

Oxford students threatened over unpaid rent

Hundreds of Oxford University students could fail to graduate after amassing debts of £200,000. Some students at the university's Pembroke College have fallen behind in rent as the recession starts to bite.

They have been warned that degree certificates will be withheld if students fail to clear their debts.

Students have traditionally charged their rent, food and course fees to their 'battels' - a form of tab - which is paid off at the end of term.

But the collective overdraft at Pembroke - where Samuel Johnson, JRR Tolkien and J William Fulbright studied - has now reached £200,000.

The university is now pledging to "chase students" falling behind on their repayments.

John Church, the bursar, said: "In the greater scheme of things the money owed is not a great deal but we want to reduce the amount so the finance committee has decided to chase students up for the outstanding debt.

"If debts are not paid students will not formally graduate and some have actually decided not to take their final exams - they obviously don't have mothers to make proud.

"Students who refuse to pay will be punished. At the end of the day they owe the college the money and it must be paid."

Virgin Atlantic accused of sexism over anniversary advert

Virgin Atlantic's anniversary TV ad campaign, featuring crowds lusting after female cabin crew, has prompted complaints to the advertising watchdog that it is sexist and insulting to women. The 90-second commercial, set to Frankie Goes to Hollywood classic Relax, features a glamorous red-suited cabin crew and pilot walking through an airport for Virgin Atlantic's first flight in 1984.

As the pilot and entourage walk through the airport crowds of people, mostly men, ogle the array of glamourous air hostesses. One man inadvertently squirts hamburger filling over himself while watching the procession.

At the end of the ad, which runs with the line "Still red hot", two men are seen mesmerised by the pilot and his crew.

"I need to change my job," remarks one of the men. "I need to change my ticket," says the other.

But despite receiving 29 complaints the Advertising Standards Authority said that the £6m ad campaign, which also includes press advertising, is not sexist.

The ASA said: "The general crux of the complaints was that the ad was offensive because it was sexist and presented a stereotypical view of gender roles."