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Summary

  1. All of the morning's business headlines and breaking news.
  2. Tesco shares plunge after profit warning
  3. Greek shares slump after election bought forward
  4. MP says Post Office "sabotaging" mediation scheme

Live Reporting

By Ben Morris and Howard Mustoe

All times stated are UK

Howard Mustoe

Business reporter

That's all from us after what turned out to be quite the busy day. Join us tomorrow for more, including that FCA report, from 06:00.

Dilbert

Some brutal analysis of work-life balance in today's

Dilbert. For anyone who's had to explain the term coping strategy.

Via Twitter

Income inequality

World Service

tweets: Does increasing inequality hit economic growth? New research from @OECD suggests so.
LISTEN to BBC World Biz Update

Via Blog

Douglas Fraser

Business and economy editor, Scotland

Scots economy: a good story to tell in 2014, but oil, skills and politics flashing red on the dashboard.

Tesco warning

Strong stuff from independent financial analyst Louise Cooper in her

CooperCity blog. "Management appear to be losing control of this business and don't know what to do," she says. Of Tesco's chief executive she says: "Dave Lewis is a brand man and not a cost cutting CEO. He is the wrong man for the job."

Airbag recall

Mazda will soon expand

a recall of vehicles in the US which have potentially defective air bags made by Takata, a spokeswoman told Reuters. The carmaker will make existing regional recalls within the US nationwide but hasn't set a date yet. In total about 19 million vehicles are being recalled across the globe. Rival Honda expanded its recall earlier.

Russian economy

oil refinery
Reuters

The World Bank estimates that Russia's economy would shrink by 0.7% in 2015, but warned that the contraction would be worse if oil prices were to keep falling. The World Bank said its forecast is based on a scenario of crude prices averaging at $78 in 2015. But if oil prices fell to $70, Russia's output would shrink by 1.5%, it said. Brent crude is at $66 a barrel today.

Via Twitter

Tesco warning

Mark Broad

Economics reporter, BBC News

tesco
Bloomberg

tweets: Tesco share price not been so low since Feb 2000. All Saints were at No.1 with '
Pure Shores'

Vodafone deal

Bloomberg reports that Vodafone's $11bn takeover of Kabel Deutschland undervalued the German company, according to a review sponsored by an activist shareholder. New York-based Elliott Management is suing Kabel Deutschland in a German court. The report says it was worth 104 euros per share when Kabel Deutschland shareholders received 87 euros. Elliot's claims "can't be taken seriously," a Vodafone spokesman said.

Qantas

qantas
AFP

Qantas chief executive Alan Joyce defended his airline after it was forced to divert or turn around three planes in one day, saying its record was better than most. Three Qantas flights made unscheduled landings on Monday, including an A380 that was put into a controlled descent and requested a priority landing in Perth after its air-conditioning system malfunctioned. "Thousands upon thousands" of flights are turned around a year, he said, adding that Qantas's record is half the industry average.

Beer dispute

Heineken beer
Getty Images

Wetherspoon has decided not to sell any Heineken beer at its 926 pubs after a row with the Dutch brewer. The pub chain says that the brewer has refused to supply Heineken lager and Murphy's stout to its second pub in Dublin, without guarantees that Wetherspoon was not willing to give.

Via Twitter

Andy Verity

Business reporter

"

Buytoletters are taking more of the new mortgage lending (14.3%)and first-time buyers less (21.6%) say BoE stats"

Income inequality

BBC World News

Mark Pearson, the Deputy-Director for Employment, Labour and Social Affairs at the OECD
BBC

Inequality is at the highest level for 30 years in developed countries, according to the OECD. Mark Pearson from that organisation tells World Business Report that people at the bottom end of the income distribution invest less in education, which hurts productivity. Governments should be making sure that everyone gets access to good quality education, he says.

Via Twitter

Tesco warning

Nick Bubb

Independent retail analyst

"

Lucky for Marc Bolland that the M&S Q3 on Jan 8th will be overshadowed by Dave Lewis coming clean on the Tesco P&L detail the same day"

'Nut rage'

More on the 'nut rage' fiasco at Korean Airlines. Yesterday it emerged that Heather Cho, a vice-president in charge of in-flight service, forced a plane to return to the gate before take off, reportedly because she was served macadamia nuts in a bag, rather than on a plate. Now, the airline says an unspecified executive has resigned over the incident. Ms Cho is daughter of the airline's chairman.

Via Email

UK manufacturing

Paul Hollingsworth

UK Economist, Capital Economics

Brompton bicycle factory
Getty Images

"October's industrial production data provide further evidence that UK manufacturers are still struggling against a crippling combination of weak overseas demand and a strong pound. Looking ahead, there are some grounds for optimism. Business surveys ... still point to annual growth in manufacturing output of around 2%. The fall in oil prices ... should provide a timely fillip to growth."

Greek stocks

ASE Index
Bloomberg

Greek stocks lost more than 6% after the government brought forward its presidential election, sparking fears of a political stalemate. The Athens general index fell to 968 points.

Via Twitter

Mangled English

Nick Bubb

Independent retail analyst

"Crimes against the English Language (1): "We have retrained our entire team and begun the cascade with our suppliers" (Dave Lewis, Tesco) ... (2): "Branded products were not priced in a zonally relevant manner" (Nick Beighton, ASOS)"

Tesco warning

If a business is in trouble, you don't want to be chief creative officer it seems.

Tesco had one, but not for long. Matt Atkinson was appointed in June 2014 but the post was axed earlier this month. Chief executive Dave Lewis says it was a "tough call" but he said Tesco could not support that role in the current environment. In case you were wondering, the role involved being a "custodian of the brand to bring it to life" and developing the "approach to innovation".

Market update

The UK's

FTSE 100 index fell 1.24% to 6,589.25 as shares in Tesco lead down other retailers. The
Dax in Frankfurt is down 0.9% and the
Cac in Paris is down 1.2%

Tesco warning

tesco
Reuters

Tesco chief executive Dave Lewis says

Tesco has added 6,000 staff to the workforce in stores since he took over. He feels that he is "getting to the right place". He wants to see how Christmas goes and will review after that. But away from the stores there is the opportunity for more efficiency he says (read: job cuts).

Tesco warning

Dave Lewis
Reuters

Tesco chief executive Dave Lewis tells journalists: "It's incredibly difficult to predict how long the turn around will take." The company is likely to find a boss for the UK business in next couple of months, he says.

Via Twitter

Andrew Clark

Deputy Business Editor, The Times

"

Tesco CEO deep in jargon. FT's @AndreaFelsted calls him out: "What does that actually mean in plain English? It's all double dutch to me.""

Via Blog

Kamal Ahmed

BBC Business editor

The report into the fiasco of the Financial Conduct Authority and a mishandled announcement that led to billions of pounds of value being wiped from insurance companies' share price will be published tomorrow. And it will not make for comfortable reading for the chief executive of the FCA, Martin Wheatley. Read BBC Business Editor Kamal Ahmed's analysis

here.

Random ram

BBC Breakfast

BBC Breakfast
BBC

If you do an outside broadcast from a costume company, then perhaps you are asking for trouble. However, it takes more than a 6-foot ram to fluster the BBC's Steph McGovern.

Via Email

Uber in India

Simon Atkinson

Editor, India Business Report

"Government recommending states across India ban Uber and other apps doing same thing. Be interesting to see how it'd be enforced. Hearing Uber drivers still available in Delhi where it was "banned" on Monday after rape claims."

Tesco warning

Tesco shares
Bloomberg

Tesco shares have plunged 15% this morning, following that profit warning. They are now trading at the lowest level in more than a decade.

Via Email

Tesco warning

Richard Hunter

Head of Equities at Hargreaves Lansdown Stockbrokers

"The trading update may be brief and patchy on detail, but it has provided more ammunition for the snipers... Even prior to today, and as a result of the uncertainty, the share price had taken a battering, having fallen 44% over the last year, as compared to a 2% hike for the wider FTSE 100, and down 36% in the last six months alone."

Market update

Tokyo stocks sank 0.68% after racking up seven days of consecutive gains. The Nikkei 225, which closed at a fresh seven-year high on Monday, declined 122.26 points to 17,813.38. The Hang Seng fell 2.2% to 23,519.87.

Via Twitter

David Buik

Market Commentator, Panmure Gordon

"

TESCO crossing at 164p - yesterday 187p - down 12%!!"

Post Office 'sabotaging' scheme

BBC Radio 4

MPs have criticised the Post Office for how it has handled claims its IT system caused at least 150 sub-postmasters to be wrongly accused of false accounting and fraud.
Today speaks to one of those MP's, James Arbuthnot, who says the Post Office is "sabotaging" a mediation scheme. Mark Davies from the Post Office rejects that claim.

John Lewis numbers

Sales for the last week were up 10.8% compared to last year. However that was 10.6% decline on the previous week which included the Black Friday offers. What are people buying? Sales of women's own brand cashmere accessories are up 51% as temperatures drop. Less obviously, stainless steel roasting pans were up 39%.

Apprenticeships

BBC Breakfast

Steph McGovern (right)
BBC

Steph McGovern is at a costume hire company in North London. Founded in 1840 it has 8 miles of clothing rails and has supplied Oscar winning movies. Steph speaks to one staff member who started as an apprentice, because she did not want to rack up debt at university. She has "absolutely loved" the experience.

Via Email

Tesco warning

Nick Bubb

Independent retail analyst

"Wow. Just when the market thought Tesco were prepared to tough it out for Xmas they go and announce a huge profit warning, flagging that full-year trading profits will not exceed £1.4bn, some 20% below recent expectations, because of unspecified actions to improve UK competitiveness....More details are promised on Jan 8th, but let's hope they say something on the 8am conf call..."

Via Twitter

Tesco warning

David Buik

Market Commentator, Panmure Gordon

"

TESCO - expect shares to drop 10% this morning - trading profit may not exceed £1.4 billion against expectations of £2 billion"

ASOS

asos
Asos

Asos says sales for the three months to the end of November rose 8%, led by the UK. International sales actually fell 2%. "International trading conditions remain challenging," said chief executive Nick Robertson. After the fire at their Barnsley distribution centre, they received £6.3m in insurance payout during the quarter.

Digital summit

BBC Radio 4

Five nations who say they have the most digitally advanced governments are coming together in summit in London today. The UK, South Korea, New Zealand, Israel and Estonia call themselves the D5. "It's a slightly random selection," says Rory Cellan-Jones on

Today. Estonia has paperless public services; "we are not in that league," agrees Rory.

BreakingBreaking News

Tesco

Tesco has issued a warning over profits. For the fiscal year to February 2015 it says profit will not exceed £1.4bn. Analysts were expecting a £1.8bn to £2.2bn profit for this year. It posted a trading profit of £3.3bn last year.

Airbag recall

airbag
Reuters

Honda will expand its recall of cars fitted with

Takata airbags worldwide, covering a total of 13 million vehicles. It could also help the parts maker if it has financial difficulty, according to the Japanese media outlet Nikkei, citing an interview with Honda president Takanobu Ito.