Business news and markets: as it happened

• Fourth-quarter growth at 0.7pc as business investment picks up
• Bank of England's Dale: Rates not rising soon
• Foreign banks could be banned from City

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Good night

16.58 We're going to dip out of the Credit Suisse hearing now, but we'll soon have a story from US business editor Katherine Rushton. Thanks for reading and commenting and we will be back early in the morning to bring you the breaking news of the day. In the meantime you can read today's top stories on our finance page.

European markets close

16.54

Bourses in EUrope have ended the day in the red. The FTSE 100 has fallen 0.46pc to 6,799.15, while the Dax and Cac dipped 0.39pc and 0.4pc respectively.

On Wall Street, it's a different story. The Dow Jones is up 0.24pc and the S&P 500 has climbed 0.33pc.

Credit Suisse boss grilled by Senate subcommittee

Watch live

16.51 Levin asks about a US client dubbed "client one" who was told by a banker in 2005 that a W9 form that identifies US bank accounts was not required by Credit Suisse.

Dougan says that's "a process we would not undertake today or a process we in any way approve of".

16.43 Levin pulls up a chart from a 2008 Credit Suisse presentation showing that 1,800 Credit Suisse employees across the business dealt with US clients. He suggests that misbehaviour must have been wider than Credit Suisse's Switzerland-based North America International desk, known internally as "SALN". But Dougan says the bank has not found any of the misbehaviour that they found in SALN in the broader population of employees.

16.23 Levin wants to know whether anyone was fired for referring clients to intermediaries to funnel money back into accounts of shell companies. "Was anyone fired for this egregious behaviour?" Cerutti says he is not aware of anyone having been fired specifically for that.

16.18 Senator Levin vents his frustration again:

We're going to take on the Swiss government.

You're not cooperating with us hiding behind a law which applies in Switzerland but does not apply here and yet you want to do business here. That is not the way the international law is applied. You want to do business here, you have got to comply with our laws.

^{Brady Dougan, chief executive of Credit Suisse, from left, Hans-Ulrich Meister, co-head of private banking and wealth management with Credit Suisse Group AG, Robert "Rob" Shafir, co-head of private banking and wealth management, and Romeo Cerutti, general counsel. Photo: Bloomberg}

16.13 Senator Johnson feigns ignorance. "Why do people put their money in Switzerland?" Mr Dougan eventually gives in:

There is an ability to shelter assets and income from paying taxes. That is decreasingly the case and our view is that is not the future of the industry. It's not our business model and it shouldn't be any bank's business model. With FATCA and the OECD treaty, that's not an advantage the Swiss banking industry will have.

16.10 Senator Johnson wonders why the 238 accounts that were disclosed to the subcommittee were allowed to be shared under Swiss tax law. Cerutti says that several court decisions that have set the standards for fraud which include: accounts where a person is hiding behind an offshore entity, where the corporate governance of the entity of violated or where the client held US securities.

16.00 Awkward. Senator Coburn has asked Mr Cerutti "where he would like to do time" - in reference to Credit Suisse's double jeopardy in the US and Switzerland. If Credit Suisse sticks to Swiss tax laws it could be in violation of a US subpoena, but if it complies with US authorities, it would be breaking Swiss law. "It's a tough decision," says Cerutti.

15.52 McCain asks about the bank's office in Zurich airport. Mr Dougan says it was an office of convenience for clients, most of whom held small amounts of money.

There was no active management. In our investigation we didn't find any systematic issues in that area.

15.49 Senator McCain wants to know how much profit Credit Suisse made from the accounts which investigation deals with. Mr Dougan does not have a figure but stresses that these accounted for a small proportion of the bank's overall activities. He also says that of the $12bn in question, $5bn had subsequently been "determined to be fully tax compliant" and a further $2.2bn were determined "not to have a US taxpayer connected with it".

McCain asks how many bankers have been fired as a result of the activity. Mr Dougan says that most have left as a result of the bank shutting down that arm.

15.46 Mr Cerutti explains that in Swiss banking law, disclosing names of clients can lead to imprisonment and fines. Senator McCain says this proves that the Swiss government has no interest in cooperating with other administrations.

15.42 Mr Cerutti says he believes that the subcommittee only obtained a couple of hundred names from Credit Suisse because it was operating under the old 1996 treaty. He says he believes that under the new treaty, which has yet to be ratified, thousands more names would be made available.

15.40 Levin is getting frustrated with the Credit Suiss bankers' references to the treaty being negotiated between the Swiss and US governments. He says the treaty is very limited with loopholes "I'm sure will be used by banks to hold up the names". He wants to know whether Credit Suisse has specifically asked the government whether it can change to law to make it legal to give up client names. Dougan says it has.

15.36 Levin rejoins that since Credit Suisse is operating in the US that it must abide by US law.

We're going to put a lot of presusre on our justice dept to enforce the laws here, and enforce them against you if you are unwilling to do what our laws require you to do. turn over the names of people you aided and abetted in tax evasion.

15.32 Question time. Mr Levin accuses Credit Suisse of hiding behind Swiss secrecy laws to avoid supplying information. Mr Dougan replies:

We can't necessarily influence these discussions between governments. We are ready to provide any information that we can provide legally. We do believe the new treaty approval would provide a lot of fac for IRS and DOJ to actually get a lot of the info they need.

15.30 Hans-Ulrich Meister, co-head of Credit Suisse's private banking and wealth management division, has chimed in with similarly contrite comments. He says that Swiss banks must face up to their role in global tax evasion.

Not everyone in Switzerland wants to deal with this fact but in my view Swiss banks have to recognise this issue and accept their share of responsibility. It's clear to me personally and to the entire management team of the bank that the only way forward for the private banking system is to serve only US clients who can establish compliance with US laws. In 2008 while other banks accepted US clients who left UBS we prohibited acceptance of those clients.

We have conducted intensive checks over last five years that only US clients that can demonstrate that they have complied with US tax laws can be clients of Credit Suisse.

The private banking in worldwide has been going through change for years in the direction of transpareny, international exchange of information and working with regulators to enhance and improve business.

15.25 Mr Cerutti concludes:

When we make mistakes we take responsibility and we hold ourselves to high standards. The last five years have been an important wake up call for the Swiss private banking industry.

At Credit Suisse we have learned real lessons and tried to use thie experience as an opportunity to meaningully improve our bank's compliance framework.

15.20 Romeo Cerutti, general counsel, says that the culture of Credit Suisse as recently as 2008 saw tax as a "matter between a client and his government", but says that the bank now sees that this left it open to abuse. He says there has been "real and meaningful change" at Credit Suisse.

He echoes Mr Dougan's assertion that the bank has taken major steps to remedy past wrongs.

15.17 He's going through Credit Suisse's actions to clean up its act.

We pushed forward with a significant and complex remediation exercise. We hired numerous outside experts to help check whether clients who might have a possible US connection were identified. If they did they were required to demonstrate their compliance with US tax law if they wanted to remain clients of our bank.

[But] despite our efforts, Credit Suisse has not been free of its own problems.

[Credit Suisse] regrets very deeply that we had some Swiss based private bankers who appear to violate US law. While I am extremely dismayed, I believe the leadership is facing up to the past and taking responsibility for what we did.

15.09 Brady Dougan, chief executive is up. He's started by outlining the bank's commitment to the US, saying that it has a deep operation in America which are regulated by US authorities. He is the first American CEO of a major Swiss bank.

15.04 Mr McCain is also having a pop at the justice department. He says that between 2009 and 2011 it issued no subpoenas to Swiss banks for information on US clients. "Facts can be a stubborn thing," he said.

15.01 John McCain, the committee's vice-chairman, has said the practices of Credit Suisse "belong in a spy novel", not one of Switzerland's top banks.

14.57 Katherine Rushton, our US business editor, is listening to the hearing. She notes that Mr Levin is taking full opportunity to blast efforts to catch out tax evasion.

Credit Suisse is not the only organisation set for a rough ride today. Chairman Levin is using his time in the spotlight to lambast the US Department of Justice for its "almost total failure" to catch individual tax evaders. The DoJ "abdicated the home court advantage of using US courts", and allowed Swiss banks to operate in the US without handing over the names of its US clients.

14.46 Mr Levin says the case against Credit Suisse has stalled. He displays a chart showing that Credit Suisse has only shared account details of 238 of its US customers, when the subcommittee has evidence that it has 22,000 US clients.

Less than a handful of US taxpayers with Credit Suisse accounts have been indicited. Taxes owed on billions of dollar remain uncollected. To collect those unpaid taxes, the critical first step is to get their names.

14.42 He's detailing the allegations against Credit Suisse, which Katherine Rushton reported last night. And here's the full report.

14.40 Mr Levin says Credit Suisse in 2011 had told the subcommittee that it had cleaned up its act, but he says that when the subcommittee checked back in, it found the bank had not yet closed thousands of undisclosed accounts of thousands of US customers, holding SFr12bn ($10-12bn)

14.39 Mr Levin says the era of bank secrecy is not yet over.

We have great concern that the battle to collect those unpaid taxes hidden in offshore taxes seems stalled.

14.35 And we're off. Mr Levin, chairman of the committee, is making some opening remarks, saying that today's hearing is part of an investigation that started five years ago. He says that so far the investigation has seen 43,000 tax evaders pay back $6bn to the state.

14.20 Brady Dougan, the chief executive of Credit Suisse, is up in front of US Senators on the Permanent Subcommittee on investigations at 14.30. Here's what the subcommittee's website has to say about the hearing

The hearing will continue the Subcommittee’s examination of tax haven bank facilitation of U.S. tax evasion, focusing on the status of efforts to hold Swiss banks and their US clients accountable for unpaid taxes on billions of dollars in hidden assets. Witnesses will include representatives from a Swiss bank and the U.S. Department of Justice.

We'll bring you updates as they come. Here's our story on the accusations from last night.

BREAKING: Ukraine's central bank to take measures to stop capital flight

13.50 The Ukrainian currency, the hryvnia, is at an all-time low against the dollar today, with its stuttering economy aggravated by the political crisis gripping it.

The country's central bank has just put out a statement saying it will "take measures to stop capital flight" from the country, and has invited the IMF to prepare financial aid.

With Ukraine struggling with its national debt, it can't afford the hryvnia to be undervalued any more. It is believed to be looking for as much as $35bn in IMF aid.

Credit Suisse boss hits back

13.00 Credit Suisse has been under fire from the US government over suggestions it helped Americans to hide $10bn in funds to avoid tax, as Katherine Rushton has reported here.

Now, its chief executive Brady Dougan has hit back at the allegations, saying that he was not aware a small group of Swiss traders were acting wrongly.

He says in prepared remarks ahead of a Senate hearing later today:

We deeply regret that - despite the industry-leading compliance measures we have put in place - before 2009, some Credit Suisse private bankers appear to have violated US law.

The evidence showed that some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management.

^{Image: Bloomberg}

MtGox chief executive speaks

12.20 He's broken his silence. Mark Karpeles, the chief executive of the bitcoin exchange MtGox that went offline yesterday, has posted a statement on the website.

Mr Karpeles has tried to reassure users that it is working to fix the site:

Dear MtGox Customers,

As there is a lot of speculation regarding MtGox and its future, I would like to use this opportunity to reassure everyone that I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues.

Furthermore I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information. Please visit this page for further announcements and updates.

Sincerely,
Mark Karpeles

China: Currency fall was normal

12.10 The Chinese yuan had a bit of a weird day yesterday: falling its most in two years amid speculation the central bank will widen its trading band, or is devaluing its currency.

Today, the country's government says the movement is normal and should not be over-interpreted:

The exchange rate fluctuations this time are normal fluctuations compared to currency fluctuations in developed and emerging markets, so there's no need to over-interpret it.

With the deepening of reform of the RMB exchange rate formation mechanism and putting into use the decisive role of markets, two-way fluctuations in the RMB exchange rate will become the norm.

GDP figures: reaction

11.45 Here's what top economists are saying about those GDP figures.

PwC chief economist John Hawksworth: Investment is critical

It was particularly encouraging to see stronger growth in business investment in the latest official data, bringing this more into line with the message from recent business surveys. Stronger investment is critical to boosting productivity, which in turn is critical to supporting positive real income growth and putting the consumer spending recovery on a sounder footing.

Economist Intelligence Unit UK analyst Aengus Collins: Still a yawning gap to pre-crisis peak

The pick-up in investment spending, in particular, is welcome. There is a long way to go before the yawning gap between investment levels now and at their pre-crisis peak is closed--and the headline investment growth figure of 2.4pc quarter on quarter suggests a greater degree of momentum than exists yet--but any recovery in investment has to start somewhere.

British Chamber of Commerce chief economist David Kern: More needed to help young into work

The UK labour market is flexible and is creating jobs, with unemployment falling faster than expected. But youth unemployment is still too high despite recent improvements, and efforts are needed in next month’s Budget to ensure that a generation of young people are able to find work. To secure a lasting recovery, further measures are also needed to help our exporters break into emerging markets and to improve access to finance for growing businesses.

YouGov: Consumer confidence in February at its highest level since 2007

11.15 Consumer spending numbers may be lower than forecast, but people are feeling better off than they are at any point since September 2007 - the first month of the financial crisis when Northern Rock had to be bailed out.

YouGov's monthly tracker has increased in February, and more than 20pc now believe their household finances will be better in a year's time.

Here's consumer confidence

And here's the proportion of people who believe their finances will be better in a year's time

Read more here

First year that business investment has risen every quarter

10.50 Business investment has been all over the place during the economic crisis, mainly on the downside, but things are finally starting to look up. It has grown in each of the last four quarters. This chart shows the difference between business investment and consumer spending since mid-2009.

William Hill down in early trading

10.25

Over in the FTSE 100, William Hill has slumped 2pc in morning trade, a move that has spurred speculation the bookmaker's shares are being weighed down by a placing.

Elsewhere among the fallers, Teco has declined 3.8pc after analysts came out with their downgrades in the wake of the supermarket group's investor seminar on Tuesday. The company yesterday abandoned its 5.2pc profit margin target.

'Growth breakdown looks more broadly-based'

10.05 Howard Archer of IHS Global Insight says the economy looks more sustainable due to improving business investment.

There were slight downward revisions to growth in the first and second quarters of 2013, but it did not fundamentally change the story of an economy that performed surprisingly well over the year. Year-on-year growth in the fourth quarter was only edged down to 2.7pc from the previously estimated 2.8pc, while overall GDP growth in 2013 was trimmed to 1.8pc from 1.9pc.

Encouragingly, growth in the fourth quarter was much less dependent on consumer spending, with business investment seeing a sharp increase of 2.5pc quarter-on-quarter and 8.5% year-on-year. In fact, business investment was revised up markedly through 2013 to show four quarters of expansion.

Growth on the domestic side of the economy is expected to be more balanced in 2014, with business investment making a markedly improved contribution. Consumer spending should be decent supported by high employment and gradually improving purchasing power.

Treasury: Encouraging that business investment is picking up

09.50 Here's the Treasury's statement on the GDP figures

It's encouraging that business investment grew strongly in the fourth quarter and is now up by 8.7% on a year ago. The government’s long term economic plan is working, but as the Chancellor said last week the recovery is not yet secure.

The Budget next month will do more to support investment and exports, and the biggest risk to the recovery would be abandoning the plan that's providing economic security for hardworking people.

Office for National Statistics maintains fourth-quarter growth numbers

09.30 The economy grew 0.7pc in the fourth quarter of last year, the ONS has confirmed. However, figures for 2013 as a whole are down from 1.9pc to 1.8pc.

The good news:

• Business investment is picking up. It grew 2.4pc in the fourth quarter, against expectations of 1.3pc.
• Exports are up too. They rose 0.4pc in the period, against a 0.2pc forecast

The bad news:

• Consumer spending is lower than people thought. private consumption grew 0.4pc last quarter against a 0.6pc expectation, and imports fell 0.9pc.

More coming

Corporate round-up: Direct Line, Taylor Wimpey and Greggs

09.00 Here's the rest of the news from the City this morning:

• Direct Line has seen a 70pc rise in annual pre-tax profits owing to fewer home insurance claims. It says costs from claims arising from the recent flooding will be "in the range of £70 to £90 million", around the same amount as it would expect from major weather events in an average year.

• Taylor Wimpey is the latest housebuilder to report a bumper set of results, with pre-tax profits up 47.6pc as the housing market roars into life. It will return £250m to shareholders over the next two years.

• Greggs has posted a 0.8pc decline in full-year like-for-like sales with adjusted pre-tax profits down 18.9pc. The fast food chain says trading has recovered in recent weeks however, depite market conditions remaining "challenging".

• And the former Centrica boss Sir Roy Gardner has joined the board of William Hill. Sir Roy was chief executive of the British Gas owner from 1997 to 2006 and was more recently chairman of the catering giant Compass. Here's what William Hill chairman Gareth Davis says:

His vast experience in multi-national operations across different sectors will also be invaluable as we look to develop William Hill further as an innovative, international and multi-channel gambling business.

FTSE: 'Where we go from here is anyone's guess

08.45

The FTSE 100 has continued to drift even further away from its record high of 6,930.2, sliding 20 points, or 0.3pc, to 6,810. Jonathan Sudaria, a dealer at Capital Spreads, said:

Flat finishes in the US and mixed markets in Asia highlights the trepidation that traders are feeling at current lofty levels. Where we go from here is anyone’s guess and traders will be looking for cues before embarking on the next leg but with all the bearish flash points in the world at the moment let alone the hidden black swan events that no one is talking about yet, traders are well aware that a downward move is equally likely if not more.

Bank of England's Miles: Inflation on target so no reason for rate rise

08.30 The BoE is out in full force this morning. As well as Spencer Dale speaking earlier this morning, Monetary Policy Committee member David Miles has said there is no pressure to raise rates because inflation is on target.

He told the BBC:

(Our aim) at the moment is not to increase interest rates in the very near term, because we have got inflation at target, it looks like it is going to stay there, and there is plenty of scope to encourage strong demand in the economy.

He adds that real wages are starting to grow and that it is "far too soon" to say the market is overheating.

FTSE falls on open, ITV biggest loser

08.15

The FTSE 100 is down 0.2pc in early trading at 6,816, amid fairly directionless Asian trading - most market movers will be waiting for

those GDP figures at 09.30

.

ITV, the broadcaster, is the biggest faller on the index this morning, down 2.2pc. This is despite the company announcing a special dividend as it reports a 27pc rise in adjusted profit before tax to £581m.

The company is bullish about advertising prospects:

Over the full year in 2014 we expect to outperform the television advertising market. Our robust on-screen performance in 2013, the strong schedule for 2014 including the FIFA World Cup, and the advertising deals we have done to date, puts us in a good position to achieve this.

^{ITV anticipating World Cup success. Image: EPA}

Co-op losses to be worst in its history

08.00 The Co-op will report annual losses of more than £2bn when it reports 2013 results in March, the BBC's Robert Peston is reporting. He says chief executive Euan Sutherland will sell its farming operation and is considering offloading its 750 pharmacies.

Thousands of jobs are also likely to go. Here's what Peston says:

Over four years, Co-op Group is planning to cut running costs by £500m, of which it has already identified £100m of savings.

To achieve these cuts, I am told there will be thousands of job losses, probably between 4,000 and 5,000 by 2017, especially in head office and in support positions.

But Mr Sutherland and his board colleagues have yet to calculate precisely how many jobs will go, and he is not expected to give details for some weeks yet.

GDP figures coming later today

07.50 So how sustainable is the recovery? Britain's economy grew 0.7pc in the fourth quarter of last year, according to figures published last month, but we didn't get the official figures on what was driving that.

We'll know more at 09.30 when the contributions of consumer spending, Government spending, business investment and trade are revealed.

Szu Ping Chan says the data will show that the recovery continues to rest solely on consumer spending.

Economists expect household spending, which accounts for almost two-thirds of UK output, to have grown 0.7pc in the final three months of 2013, representing a ninth consecutive quarter of expansion.

The figures, which will be released alongside the Office for National Statistics' second estimate of GDP, will also highlight that the recovery remains badly out of kilter.

While business investment is expected to have grown by 1.2pc in the fourth quarter, Ross Walker, chief UK economist at RBS, said this would still leave overall investment 23pc below its pre-crisis peak. "This is way shy of Bank of England Governor [Mark] Carney's fabled 'escape velocity'," he said.

Bank of England's Spencer Dale: Rates not rising any time soon

07.40 The Bank of England's chief economist Spencer Dale has attempted to reassure the public that interest rate rises are not likely to come this year, insisting that the BoE is not even thinking about higher rates.

Speaking to the BBC, he says rate rises will be "cautious" when they do come in order to "nurture the recovery". Here's what he had to say.

We’re not planning to raise interest rates any time soon. Interest rates will have to rise at some point but not yet. And when they do they will rise very gradually and cautiously to make sure we continue to nurture the recovery we have seen in output growth and employment.

Today's business stories

07.30 Here's what's leading our business pages this morning

• Harry Wilson reports on Britain's banking supervisor the PRA warning foreign banks that they could be barred from operating in the City amid concerns over their poor regulation.

• Louise Armitstead reveals that the London-based authority responsible for setting accounting standards in 100 countries has been forced to admit that it has found more irregularities in its Companies House filings - despite categorically stating two weeks ago that its record was up to date.

• And Allister Heath argues that we are much better off now despite falling real wages.

Here's the front page of today's Business section: