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The Office of Fair Trading (OFT) has referred providers of local bus services to the Competition Commission after uncovering evidence a distorted market is leading to higher prices and poorer service quality.
The government's consumer watchdog said on Thursday a study had found evidence that limited competition among bus operators, whether commercially operated or run by local authorities, tended to result in poor value for money for taxpayers.
"The study identified a number of features of local bus markets that could prevent, restrict or distort competition," the OFT said in a statement.
All local bus services in the UK, except those in London and Northern Ireland, will now be subjected to a more detailed public investigation by the Competition Commission which has greater powers than the OFT and can impose remedies.
"One of the concerns that we think the Competition Commission should take a look at is the tendency for local areas to become dominated by a single operator," said OFT Senior Director Heather Clayton.
The OFT said its study had found that the majority of local bus services were being operated by a small number of large companies who tended to steer clear of each others' territories.
There are often very few bidders when taxpayer-supported services are put out to tender and in a quarter of cases there is just one contender, the watchdog found. It also pointed to complaints alleging "predatory behaviour" by established operators designed to exclude new entrants.
At least 1.2 billion pounds in public money goes towards supporting local bus services each year.
Arriva, FirstGroup, Go-Ahead National Express and Stagecoach are among the country's biggest private bus and rail operators.
Companies in the FTSE 100 are on track to meet Britain's 2020 carbon emissions targets, despite lax commitments from the heaviest polluters, a report showed on Thursday.
On average, FTSE 100 companies have pledged to reduce their greenhouse gas emissions by 2.5 percent annually, in line with what is needed to reach the first milestone en route to deep cuts by 2050, the Carbon Disclosure Project (CDP) said.
The UK Climate Change Act, passed in 2008, sets an emissions cut target of 80 percent below 1990 levels by 2050, with an interim target of a 34-42 percent cut by 2020.
The CDP said annual cuts of 2-3 percent are needed from companies in order to meet this.
The 24 firms in the FTSE 100's energy, basic materials and utilities sectors, which collectively account for 87 percent of the index's total emissions, have pledged to cut by only 1.2 percent per year.
"The targets set by the most carbon intensive sectors, responsible for the majority of FTSE 100 emissions, are not sufficiently ambitious and will not deliver reductions required by the UK Climate Change Act," the CDP said.
The report showed that the basic materials sector, which accounts for 27 percent of FTSE 100 emissions and includes mining companies like Rio Tinto (RIO.L) and BHP Billiton (BLT.L), forecasted an annual rise of 1.5 percent, making it the only sector that said it will grow emissions.
Utilities including Scottish & Southern (SSE.L) pledged annual cuts of 2.4 percent, while energy (oil and gas) companies said they would cut by 2 percent per year.
Firms that fail to reduce their emissions significantly from 2013 may also be forced to buy additional carbon permits under the EU's emissions trading scheme, a move that could raise European carbon prices.
Irish airline Ryanair Holdings Plc (RYA.I) must observe Italian rules on passenger documentation if it wants to operate in the country, Infrastructure Minister Altero Matteoli said in an interview published on Thursday.
The low-cost carrier said in December it would stop domestic flights at 10 Italian airports from January 23 in a row with civil aviation authority ENAC over security standards for check-in documents.
ENAC and Ryanair officials are meeting on Thursday to discuss safety rules.
"If it (Ryanair) wants to operate in Italy, it must respect rules on documents imposed by ENAC on everybody. On this no mediation is possible," Matteoli was quoted as saying by La Stampa newspaper.
Ryanair objects to a decision by ENAC to lower requirements on documents presented by passengers.
ENAC Chairman Vito Riggio told Reuters on December 30 that security standards at Italian airports were certified by international bodies.
The FTSE 100 .FTSE is seen opening unchanged to down 5 points on Thursday according to financial bookmakers, with investors seen staying on the sidelines ahead of the interest rate decision later in the session and always key U.S. non-farm payrolls numbers on Friday.
The blue chip index is seen opening as much as 0.1 percent lower, after hitting a fresh 16-month high on Wednesday when the index gained 7.54 points to close at 5,530.04.
Investors will be focussed on the Bank of England's announcement at 12 p.m. for any changes to interest rates, which are at a record low of 0.5 percent, and for amendments to the 200 billion pound quantitative easing (QE) programme. Analysts, however, expect no changes to interest rates or the QE amount.
On Friday investors will await the December figures for U.S. non-farm payrolls for a fresh indication of the health of the economy. Economists polled by Reuters expect 8,000 job losses in December after a surprisingly small 11,000 drop in November.
No significant economic data from the UK is scheduled for Thursday. U.S. data set for release later in the session include weekly jobless claims data at 1:30 a.m. British time and comparable chain store sales numbers for December.
J Sainsbury, Britain's No. 3 grocer, beat third-quarter sales growth forecasts on Thursday, as rising customer numbers and strong sales of non-food ranges offset lower food price inflation.
However the 141-year-old firm, which runs over 500 supermarkets and about 300 convenience stores, joined other retailers in injecting a note of caution about prospects for 2010, saying the consumer environment remained "challenging."
Sales at shops open at least a year rose 4.2 percent, excluding petrol and VAT sales tax, in the 13 weeks to January 2.
That was down from 5.4 percent in the second quarter, due to lower food price inflation, but above analysts' average forecast of 3.7 percent in a Reuters poll of 12.
Sainsbury said it served on average 1 million more customers a week over the quarter, with many attracted by its "coupon at till" loyalty scheme, and sales of non-food ranges like toys and clothes grew at over four times the rate of food.
Market researchers Nielsen said earlier on Thursday that non-food sales drove a strong Christmas for all four of Britain's top grocers.
Trading updates from other retailers suggest they also enjoyed a good Christmas, with low interest rates helping to prop up consumer spending despite the recession.
Fashion chain New Look on Thursday reported a 5.9 percent rise in underlying Christmas sales.
Iceland will "honour its obligations" over the more than $5 billion (3.1 billion pounds) owed to Britain and the Netherlands that was lost in failed savings banks, President Olafur Grimsson told British television.
The Icelandic parliament had approved a deeply unpopular bill to cover compensation already paid out by the British and Dutch governments to holders of "Icesave" accounts after Icelandic banks collapsed in 2008.
But Grimsson stunned international financial markets and the government on Tuesday by refusing to sign it and forcing a referendum on the issue.
"The view that we will not honour our obligations is completely wrong," Grimsson told the BBC Newsnight programme late on Wednesday. "The fundamental basis of the law which is already in existence and which I signed is that Iceland declares it honours its obligations."
The dispute over the Icesave payments has severely strained relations between Reykjavik and London, with Britain warning Iceland faces economic isolation if voters reject the bill.
Asked if people could trust Icelanders anymore, Grimsson replied: "We should involve ourselves in a constructive agreement with the British and Dutch governments in order to resolve this issue."
"The only thing that I have decided is to allow the Icelandic people to have the final say in a referendum which is in accordance with our fundamental democratic principles."
Iceland's government proposed on Wednesday a February 20 referendum on the issue that has divided the country. Grimsson did not say what would happen if the country voted against the bill.
The Bank of England is unlikely to tamper with its monetary policy settings on Thursday, but growing signs the country has pulled out of recession mean it is expected to halt its quantitative easing programme next month.
The Bank's Monetary Policy Committee voted unanimously in December to leave interest rates at 0.5 percent and to keep its target for asset purchases -- the bulk of which have been gilts -- at 200 billion pounds.
The Bank is on track to complete the last of these gilt purchases just before its February meeting, by which time it will also have fourth-quarter GDP data and new growth and inflation forecasts to hand.
"The Monetary Policy Committee is likely to wait for February's inflation report before reviewing its asset purchase programme," said Vicky Redwood at Capital Economics.
Since it exhausted its conventional monetary firepower in March by cutting rates to 0.5 percent and began buying gilts, the MPC has only ever tweaked policy in months that coincide with its quarterly projections.
Preliminary Q4 figures due later this month are expected to confirm the economy returned to growth at the end of 2009, but economists are split on the extent to which the economy will maintain traction over the course of the coming year.
Recent activity indicators have been encouraging. Manufacturing and services sectors are growing at their fastest pace in two years, and money supply growth and bank lending both picked up at the end of last year.
But consumer confidence fell in December and analysts warn that headwinds to recovery remain, not least a record government deficit which will require deep cuts to public spending in the coming years.
The Office of Fair Trading (OFT) has referred providers of local bus services to the Competition Commission after uncovering evidence a distorted market is leading to higher prices and poorer service quality.
