BBC News - Iran nuclear talks: 'Good chance' of deal as deadline looms

The representatives of world powers have been meeting for many months to secure a deal

Russia's foreign minister has said prospects of a preliminary agreement on Iran's nuclear programme are "very good" on the final day of negotiations.

Sergei Lavrov said he was rejoining the talks in Switzerland on Tuesday, suggesting they were close to a deal.

Marathon negotiations between Iran and foreign ministers from six world powers are nearing a self-imposed deadline.

Ministers want to restrict Iran's nuclear programme in exchange for relief from crippling sanctions.

Correspondents say difficulties remain, despite statements from officials saying definite progress had been made.

Mr Lavrov announcement that he was rejoining negotiations followed a statement, as he left the talks on Monday, that he would only return if there was a realistic chance of securing an agreement.

"I believe that the prospects are very good and promising," he told a news conference on Tuesday.

Mr Lavrov said on Monday that he would only return to the talks if a deal was likely

US Secretary of State John Kerry said talks on Monday had produced "a little more light".

But he said: "There are still some tricky issues. Everyone knows the meaning of tomorrow."

Iran insists its nuclear programme is for peaceful purposes, but world powers are worried about the country developing nuclear weapons.

They want to keep Iran at least one year away from being able to produce enough fuel for a single weapon.

The final hours of negotiation in Lausanne are taking place between foreign ministers from the so-called P5+1 - comprising the US, UK, France, China, Russia and Germany - and Iranian Foreign Minister Mohammad Javad Zarif. EU foreign policy chief Federica Mogherini is also present.

China's Foreign Minister Wang Yi said he was "cautiously optimistic" about reaching a deal

China's Foreign Minister Wang Yi said on Monday that the "marathon-like" negotiations had entered the final stage and that he was "cautiously optimistic".

The differences between the parties were narrowing, he said.

At the scene: Barbara Plett, BBC News, Lausanne

Negotiators worked late into the night and are continuing talks this morning in an all-out effort to meet the deadline.

The six global powers are closer than they have ever been to resolving the longstanding tensions over Iran's nuclear programme. Progress has been made on steps to curb and monitor Iran's production of enriched uranium, which can be used to make the core of a nuclear warhead.

But substantive differences remain. These include the pace of sanctions relief and the nature of restrictions on Iran's nuclear research and development.

If a broad framework agreement is reached by the end of the day, it would be used as the basis of a final accord. No-one here has given a clear answer as to what would happen if it is not.

Sense of history at Iran talks

Six key points in the nuclear crisis

How do Iranians see the nuclear talks?

Ministers are aiming to agree on a political framework agreement by Tuesday night that would lead to a final and comprehensive accord by 30 June.

Senior Iranian negotiator Abbas Araqchi told Iranian TV that he was "hopeful" about a deal, but that ministers were not in a position to say whether they were close to resolving all the issues.

Iranian and Western officials have said that a deal is possible, but after almost 18 months of negotiations several sticking points remain.

Three of the major outstanding issues are:

• Length of restrictions - Iran's nuclear activities would be strictly limited for at least 10 years. After that, Iran wants all limits to be lifted. The P5+1 says they should be removed progressively over the following five years
• Sanctions relief - Iran wants the UN sanctions suspended soon after an agreement. The P5+1 says they should be eased in a phased manner, with restrictions on imports of nuclear-related technology remaining for years
• Non-compliance - The US and its European allies want a mechanism that would allow suspended UN sanctions to be put back into effect rapidly if Iran reneges on a deal. Russia reportedly accepts this, but wants to ensure its Security Council veto rights are protected

Another point of contention is Iran's desire to be able to develop advanced centrifuges, which could enrich uranium faster and in greater quantities. While enriched uranium is used as fuel for nuclear reactors, it can also be used to make nuclear bombs.

Adding to the list of issues to be resolved, Iran's lead negotiator has ruled out sending its existing stockpile of nuclear fuel abroad, one of the steps demanded by the P5+1.

Meanwhile, Israel's Prime Minister Benjamin Netanyahu reiterated his opposition to a deal, saying it would send the message "that Iran stands to gain by its aggression".

Bloomberg News - Economy in U.S. Grew 2.2% in Fourth Quarter on Consumer Spending

Tugboats assist a ship carrying Shanghai Zhenhua Heavy Industry Co. (ZMPC) STS gantry cranes dock at the Long Beach Container Terminal in Long Beach, California.

Photographer: Tim Rue/Bloomberg

(Bloomberg) -- The U.S. economy expanded at 2.2 percent annualized pace in the fourth quarter, led by the biggest gain in consumer spending in eight years.

The revised increase in gross domestic product, the value of all goods and services produced, matched the Commerce Department’s previous estimate, according to figures issued Friday in Washington. The report also showed corporate profits dropped in the last three months of the year, capping the worst annual performance since the recession.

The rate of economic growth will prove hard to replicate this quarter as harsh winter weather, a stronger dollar, a port slowdown and a global oil glut translate into disappointing spending on the part of consumers and businesses. Job growth -- one of the few economic indicators that charged ahead unabated in the first quarter -- will probably help support demand in the world’s biggest economy for much of the year.

There’s “a little bit of a nice gloss on the fourth quarter,” thanks to “very strong” consumer spending, Michael Feroli, chief U.S. economist at JPMorgan Securities LLC in New York, said before the report. As for the outlook this quarter, “I don’t think it’s as dire as some of the February data might indicate.”

The median forecast of 83 economists surveyed by Bloomberg called for growth of 2.4 percent. Projections ranged from 1.8 percent to 2.7 percent. This is the final of three estimates for the quarter.

Offsetting Revisions

An upward revision to consumer spending and exports was mostly offset by smaller gains in inventories, the report showed.

For all of 2014, the U.S. economy grew 2.4 percent from the year before, the most since 2010 and following a 2.2 percent advance in 2013.

Household consumption, which accounts for almost 70 percent of the economy, was revised up to show a 4.4 percent gain at an annualized rate in the fourth quarter, the most since the first three months of 2006. It was previously estimated at 4.2 percent. The update reflected bigger outlays on health care.

For all of 2014, consumer spending rose 2.5 percent, the most since 2006.

The pickup in purchases failed to boost companies’ bottom lines. The Commerce Department’s report also included data on fourth-quarter corporate profits. Before-tax earnings fell 1.4 percent after rising 3.1 percent in the previous three months. They decreased 0.2 percent from the same time in 2013.

A 4 percent gain at an annualized rate in personal income made up for the drop in corporate earnings and helped propel gross domestic income up by 3.1 percent.

Corporate Profits

For all of 2014, corporate profits were down 0.8 percent, the first decrease since 2008. The outlook for 2015 has dimmed with the jump in the dollar.

A stronger currency is more likely to “impact profits this quarter and through this year rather than happening almost in real time,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said before the report.

Bad weather and the stronger dollar are having an impact this quarter. Francesca’s Holdings Corp., which operates a women’s boutique, is among companies saying the harsh winter has depressed revenue.

While the Houston-based company posted sales and adjusted earnings that surpassed analysts’ estimates in the quarter ended in January, demand since was hit by “a weather impact during really February or late February and early March,” Chief Executive Officer Michael Barnes said on a March 25 conference call. “It was very bad last year in 2014, but this year actually proved slightly worse.”

Retail Sales

Retail sales unexpectedly dropped 0.6 percent in February, a third consecutive decline, according to figures issued by the Commerce Department this month. Auto dealers, building-material outlets and department stores were among the merchants that suffered through record cold and snow in parts of the Northeast and Midwest.

Construction also has been hurt by the weather, while manufacturing has struggled as the rising dollar restrains exports and the plunge in oil prices limits investment in energy-related industries.

Builders began work in February on the fewest houses in a year, and orders for durable goods such as machinery and electronics sank.

Economists at JPMorgan Chase and Macroeconomic Advisers were among those who lowered their tracking estimates for first quarter GDP after Wednesday’s durable goods report. Feroli lowered JPMorgan Chase’s growth forecast to a 1.5 percent pace from 2 percent, while Macroeconomics downgraded its projection to 1.4 percent from 1.5 percent.

Atlanta Fed

The Federal Reserve Bank of Atlanta’s GDP forecasting model is so far projecting a 0.2 percent growth rate, which would be the weakest since cold winter weather sent the economy to contract a year ago. The median of 76 economists projected first-quarter growth of 2.2 percent as of a survey by Bloomberg News published March 12.

Fed policy makers are keeping an eye on employment and inflation as they consider raising interest rates this year. Officials cut their economic growth estimates for this year and the next two, according to the FOMC’s quarterly Summary of Economic Projections.

They also slashed their median estimate for the federal funds rate at the end of 2015 to 0.625 percent, compared with 1.125 percent in December forecasts. Atlanta Fed President Dennis Lockhart and Chicago Fed chief Charles Evans, both of whom vote on policy this year, acknowledged last week that a stronger dollar was a headwind for growth.

Fewer Exports

The biggest impact from the swing in the currency will probably be on trade as an appreciating dollar makes it difficult for some American producers to sell their goods to foreign buyers, who may consider buying cheaper products elsewhere. At the same time, it also makes it less expensive for U.S. consumers to buy imported goods, giving U.S. companies even more competition.

A smaller gain in inventories last quarter mostly offset the revision to consumer spending, leaving GDP the same as in the prior estimate. Stockpiles rose at an $80 billion annual rate, compared with a prior estimate of $88.4 billion.

To contact the reporter on this story: Victoria Stilwell in Washington atvstilwell1@bloomberg.net

BBC News - Oil prices rise 6% as Saudi Arabia bombs Yemen rebels

The airstrikes came after Iran-backed rebel groups marched on the port city of Aden

Oil prices rose by almost 6% after Saudi Arabia, the world's biggest crude exporter, and its allieslaunched airstrikes on rebel targets in Yemen.

The move has raised concerns that the conflict could spread in the oil-rich Middle East and possibly disrupt supplies from the region.

West Texas Intermediate crude futures, the US benchmark, rallied to about $51 (£34) a barrel before falling back.

Brent crude climbed to $59.71 a barrel, but has since dipped to $56.50.

Pressure on the oil price eased slightly as it became clear there was no immediate threat to Middle East oil shipments. However, fears remain that Iran could be drawn into the conflict.

Yemen is located along an important international shipping route for global energy producers. But the country is sliding towards civil war.

Houthi rebels receiving support from Iran have marched on the southern Yemeni port city of Aden, where Yemen's President Abdrabbuh Mansour Hadi took refuge after he was forced him to flee the capital, Sanaa.

Saudi Arabia, supported by regional allies the United Arab Emirates, Bahrain, Qatar and Kuwait, launched airstrikes on Thursday aimed at halting the rebel advance.

Iran and Saudi Arabia are both members of the Organisation of Petroleum Exporting Countries, the group that produces about 40% of the world's oil. Oil exports to Europe pass through the narrow Red Sea strait between the port of Aden and Djibouti.

However, the current glut in global oil stocks, built up in part thanks to US shale production and plentiful output from Russia and other producers, means there is unlikely to be an acute crisis in supply.

"Just because Saudi and others conducted air strikes doesn't mean the oil market becomes suddenly tight," said Masaki Suematsu, manager of the energy team at brokerage Newedge Japan in Tokyo.

Reuters News - Greece risks running out of cash by April 20, scrambles on reforms

(Reuters) - Greece risks running out of cash by April 20 unless it secures fresh aid, a source familiar with the matter told Reuters on Tuesday, leaving it little time to convince skeptical creditors it is committed to economic reform.

After talks with EU leaders including German Chancellor Angela Merkel in the past week, Athens said it will present a package of reforms to its euro zone partners by Monday in the hope of unlocking aid and avoiding a messy default.

"It will be done at the latest by Monday," government spokesman Gabriel Sakellaridis told Mega TV.

Merkel did not reveal details from her meetings with Greek Prime Minister Alexis Tsipras, but she did tell members of her conservative party at a closed-door meeting in parliament on Tuesday that Greece needs to work with the European Central Bank, the International Monetary Fund and the European Commission to unlock the cash injection it needs.

"Time is short," she said, according to party allies.

Comments from the German foreign minister and the chairman of euro zone finance ministers suggested slightly more optimism among Greece's partners that it may be moving closer to meeting the conditions needed to receive more cash.

"That process is moving once again, I say with some cautious satisfaction. Now there's hard work happening on complementary additions to the (reform) list," said Eurogroup chairman Jeroen Dijsselbloem, who is also Dutch finance minister.

"That they’re all but broke, we knew already," he told RTL Nieuws television. "But my message to the Greeks is then every time again: So then, work with us as quickly as possible on an adjustment to the program."

Athens is hoping the finance ministers will approve its list and allow the return of about 1.9 billion euros ($2.1 billion) in profits made by the European Central Bank on Greek bonds, the source familiar with the matter said.

The source said Athens also expected the return of about 1.2 billion euros in cash left in the Greek bank bailout fund that was taken back by the euro zone last month - something euro zone officials said the euro zone bailout fund would discuss on Wednesday.

Greece argues that its own bank rescue fund should have returned only 9.7 billion euros to the euro zone rather than 10.9 billion euros, since it had used its own cash reserve rather than EFSF bonds to make that recapitalization.

Greek officials have not gone into detail about the latest reform list. Sakillarides said only that it would not contain recessionary measures but structural changes.

The reforms are deeply sensitive for Tsipras, who came to power in January pledging to end austerity policies but was forced to accept an extension to a hated bailout program under the threat of a banking collapse.

Greece has received two bailouts totaling 240 billion euros since 2010 but its economy has shrunk by 25 percent partly due to austerity measures imposed by the lenders. One in four Greeks is out of work, and more than half of all young people.

AIR CLEARED

Tsipras discussed the reforms with Merkel in Berlin on Monday. Sakellaridis said that in a four-hour working dinner they discussed only the outline without going into depth.

Both leaders voiced mutual goodwill during a visit that appeared to have cleared the air after weeks of public acrimony between Athens and Berlin.

German Foreign Minister Frank-Walter Steinmeier said after meeting Tsipras on Tuesday that an improved climate between the two countries would help start serious negotiations for a solution to Greece's debt problems.

The politician told reporters this alone would not solve Greece's financial problems, but it was "no doubt a precondition to begin serious talks in the coming days".

Greek financial markets rallied. The two-year bond yield fell nearly 2 percentage points on the day to below 20 percent.

A spokesman for the European Financial Stability Facility bailout fund said Dijsselbloem had asked the agency to review the Greek case for the cash refund, and had also asked the Eurogroup Working Group to work on the issue.

The move appeared to be a gesture of encouragement to Tsipras after euro zone ministers previously said Athens would get no more money until its reforms were approved by the Eurogroup and implemented to the satisfaction of the creditors.

The source familiar with the government's cash position said Athens had lately relied on repo transactions - where it borrows money from state entities - to cover its cash crunch, but could continue to rely on that only for a few more weeks.

"Although it will be hard, the country can make it without help until about April 20, using the short-term borrowing from public entities," the source said.

(Additional reporting by Jan Strupczewski in Brussels and Toby Sterling in Amsterdam, Andreas Rinke in Berlin; Writing by Deepa Babington and Paul Taylor; editing by John Stonestreet/Hugh Lawson)

BBC News - UK risks economic blow outside EU - Open Europe study

David Cameron faces a tough diplomatic fight to get major reforms enshrined in the EU

Leaving the EU could cost the UK economy 2.2% of total output (GDP) by 2030, a study by the think-tank Open Europe says.

That would be the worst-case "Brexit" scenario, the study concludes. But GDP could rise by 1.6% if the UK negotiated a free trade deal with Europe and pursued "very ambitious deregulation".

Open Europe backs the UK Conservatives' call for far-reaching reform of the EU.

A UK in/out referendum on EU membership might take place by the end of 2017.

UK Prime Minister David Cameron has promised such a referendum if the Conservatives win the 7 May general election. He plans to argue the case for staying in, provided he can get key reforms adopted in the EU, including stricter rules on EU migrants' rights.

There is great reluctance in the EU however to embark on more treaty change - and that could be an obstacle for Mr Cameron's reform ambitions.

'Global trade rules'

The UK Independence Party (UKIP), campaigning for a "Brexit", dismissed Open Europe's calculations, saying the report "ignores facts and distorts significant issues".

UKIP trade spokesman William Dartmouth said fears of greater EU protectionism hurting the UK in the event of a Brexit were unfounded.

"Trade relations between the UK and the EU would be governed by World Trade Organization rules and rules set by global standards-setting forums," he argued.

A 2.2% loss of GDP would be equivalent to the UK economy losing about £56bn ($83bn) annually. That could happen if the UK withdrew, failed to strike a trade deal with the rest of the EU and did not pursue a free trade agenda, Open Europe argued.

The study offers what it calls two "more realistic" scenarios for a Brexit, in which GDP could either fall by 0.8% or rise by 0.6%.

Open Europe says the 28-nation EU remains the UK's most important single export market, although the share of exports to the rest of the world has grown in the past decade. In 2013, the UK exported 44.5% of its goods and services to the EU, compared to nearly 53% in 2003

Bloomberg News - Asia’s About to Spawn a New Tiger Economy: Good Morning, Vietnam

Vendors sell produce at the Cho Hom market in Hanoi, Vietnam. Photographer: Brent Lewin/Bloomberg

(Bloomberg) -- Perched along one of the world’s most crucial shipping routes, and with a young and growing population, Vietnam is -- once again -- being tipped for economic lift-off, after years of disappointment.

Money pouring into the Southeast Asian economy from the likes of manufacturers Samsung Electronics Co. and Intel Corp. is giving Vietnam a second run at becoming Asia’s next tiger economy. The country’s “Doi Moi” market opening in the 1980s ushered in spurts of growth in excess of 7 percent that waned in recent years after a pile-up of bad debt at state-owned enterprises.

According to PricewaterhouseCoopers LLP, the country has the potential to become one of the world’s fastest-growing economies over the period to 2050. Not only is the Southeast Asian nation gaining ground as a cheaper manufacturing alternative to neighboring China, Vietnam is also a politically palatable destination for Japanese firms boosting investment in the region amid recurring Sino-Japan spats.

“It is quite possible that Vietnam could become the fastest-growing economy in Asia,” said Vikram Nehru, a senior associate in the Asia Program and Bakrie Chair in Southeast Asian Studies at the Carnegie Endowment for International Peace in Washington. “It has all the ingredients for rapid growth if it can address the challenges in the state sector.”

Growing Clout

Signs of Vietnam’s growing clout are gathering: In 2014 the country overtook regional counterparts to become the biggest exporter to the U.S. from the Association of Southeast Asian Nations, or Asean, muscling ahead of its more established manufacturing rivals of Thailand and Malaysia.

Disbursed foreign investment in Vietnam has soared in the past 14 years to reach $12.35 billion in 2014, up 7.4 percent from 2013 and compared with $2.4 billion in 2000, figures from the Foreign Investment Agency show. Samsung’s operations in the country are growing so big that it got government approval to operate its own terminal at Hanoi’s Noi Bai International Airport.

And manufacturers are shifting from China. Japanese printer maker Kyocera Document Solutions Inc., a unit of Kyocera Corp., plans to quadruple its annual printer production in Vietnam to 2 million units by March 2018, the company said this month. Part of its operation in China will be moved to Hai Phong, making Vietnam the company’s biggest manufacturing base for printers, with another plant planned by August, it said.

‘Big Winner’

“Vietnam is really the big winner from China losing its competitiveness because of rising wages” and a strong currency, said Frederic Neumann, co-head of Asian economics research in Hong Kong at HSBC Holdings Plc. “By moving very early into the space vacated by China, Vietnam has first-mover advantage and it is now starting to show.”

Before weakening last year, the yuan in Shanghai had a four-year advance of 13 percent that was the best performance among 24 emerging-market currencies tracked by Bloomberg.

Vietnam's benchmark stock index has climbed 5.5 percent this year, compared with Indonesia's 4.1 percent increase, Malaysia's 2.4 percent and Thailand's 2.2 percent.

Vietnam’s annual real gross domestic product growth could average 5.3 percent in the 2014-50 period, a pace only bettered by Nigeria, according to PwC’s “The World in 2050” report. Growth in China may fall below 4 percent.

Demographics are a big help. Some 13 percent of China’s population in 2012 was already 60 or older, compared with 9 percent in Vietnam, according to the United Nations. More than 40 percent of Vietnam’s population of about 90 million in 2013 was in the labor force aged 15 to 49, government data show.

The average monthly wage in Vietnam was $197 in 2013 compared with $391 for Thailand and $613 for China, according to International Labour Organization calculations. That disparity is widening. The Economist Intelligence Unit predicts that in 2019, manufacturing labor costs per hour in China will be 177 percent of those in Vietnam, up from 147 percent in 2012.

Bad Loans

“I remember when I was in China a couple of years ago and went to buy a pair of shoes and found they were all made in Vietnam,” said John Hawksworth, one of the authors of the PwC report.

There are caveats to the optimism.

Lenders in Vietnam are creaking under bad loans, and the government has struggled to overhaul inefficient state-owned companies. Inadequate infrastructure, skills gaps and corruption remain risks. Vietnam ranked 119 out of 175 countries and territories in the Berlin-based Transparency International’s 2014 Corruption Perceptions Index.

China came in at 100th place. Meanwhile, other Southeast Asian countries such as the Philippines and Malaysia are also competing to win manufacturing jobs.

“It’s not guaranteed that Vietnam will fulfil its potential,” said Hawksworth. “Part of it is that Vietnam is simply in a good geographic location and part of it is that it does have some catching up to do in terms of GDP per capita.”

Labor Intensive

Much of the work being transferred to Vietnam is in low-end manufacturing as China moves up the value chain: labor-intensive work in textiles, garments, furniture and electronics.

“The productivity of Vietnam’s manufacturing sector is very low,” Karel Eloot, Shanghai-based director at McKinsey & Co.’s Asia Operations Practice, said in November. “That’s the biggest blowback for further expansion in Vietnam.”

The government is working on some of the economy’s biggest millstones.

Vietnam will attempt to sell a record amount of shares in state-owned companies this year, Dang Quyet Tien, deputy general director of the finance ministry’s corporate finance department, said in an interview March 13. The plan to sell stakes in about 280 entities this year is “credit positive” for banks, Moody’s Investors Service said.

There are other positives. Vietnam is in talks on a free trade deal with the European Union and is part of U.S.-led negotiations for a major regional trade deal, the Trans-Pacific Partnership.

Mekong Star

“Vietnam will displace Thailand as the greater Mekong star,” said Tim Condon, head of Asia research at ING Groep NV, referring to the Mekong River basin region that includes the nations of Cambodia, Laos, Myanmar, Thailand and Vietnam, along with China’s Yunnan province.

Exports from Thailand, one of the nations dubbed by analysts and the media as a rapidly developing tiger economy before the 1997-98 Asian financial crisis, have contracted in the last two years. By contrast, Vietnam in 2014 saw its shipments overseas jump almost 14 percent.

Australia & New Zealand Banking Group Ltd. this month upgraded Vietnam’s GDP forecast to 6.5 percent for this year and next, citing strengthening retail sales, accelerating industrial production and improving construction.

“The economy’s structure is shifting, it is moving from agriculture to manufacturing,” said Victoria Kwakwa, the World Bank’s country director for Vietnam. “You can see there is a progression happening.”

To contact the reporter on this story: Enda Curran in Hong Kong atecurran8@bloomberg.net

BBC News - UK government announces corporate tax evasion clampdown

Companies that aid tax evasion will face penalties as part of plans announced by the Chief Secretary to the Treasury, Danny Alexander.

There will be a new criminal offence for firms that aid economic crime.

In addition, tax investigation authorities will no longer have to prove "intent to evade tax" to prosecute offenders.

Mr Alexander called for a corporate tax evasion crackdown in February.

BBC business editor Kamal Ahmed said that "the difficulty of proving intent has been one of the major reasons for tax evasion cases collapsing".

Mr Alexander said: "For too long, our tax system struggled with the fact that a small minority felt it perfectly OK to indulge in tax avoidance and commit the crime of tax evasion.

"The public will not tolerate being stolen from any more."

For offshore evaders there will be a "strict liability" criminal offence, he said.

"Strict liability will bring and end to the defence of 'I knew nothing, it was my accountant, my lord'," he said.

'Accomplices'

The government will also introduce a new offence of corporate failure to prevent tax evasion and of making tax evasion possible.

"No longer should any organisation be able to get away with facilitating or abetting others to evade tax," he said.

Companies which allow their employees to help others evade tax will be treated as accomplices, he added.

Financial penalties for offshore evaders will be increased and linked to underlying assets.

"A billionaire evading £5m of tax won't just be liable for that £5m," he said.

There will also be a new civil offence, so that those who help evaders will have to pay fines that match the amount of tax being dodged.

"If you help someone evade £1m of tax, you risk a penalty of £1m or even more yourself," he said.

Tax authority HMRC will also be given new powers to name and shame offenders, he added.

Labour's shadow chief secretary to the Treasury, Christopher Leslie, said the government had not made it clear how these plans would be put into practice.

"Are these genuinely new powers to tackle tax evasion, or just a series of press releases to give the impression of activity?" he said.

'Prudent to wait'

Professional accountancy body the ICAEW said the public was "rightly concerned about tax evasion", but that the government should wait for relatively recent rules to take effect before bringing in new laws.

"Over the last few years, the government has introduced measures to reduce evasion and aggressive avoidance," said Frank Haskew, head of the ICAEW tax faculty.

"It would be more prudent to see the effect these have first before introducing the raft of new laws that they have proposed," he added.

Tax professional body the Chartered Institute of Taxation (CIOT) said that while tax evasion is a serious crime, the government's proposal that intent to evade tax will not be necessary for a conviction could net innocent people.

"UK and international taxation is a minefield of complexity and, while some taxpayers do actively seek to hide their income by intentionally failing to declare it, there are others who simply make mistakes in their financial affairs without intending to act wrongly," said CIOT tax policy director Patrick Stevens.

"A taxpayer may fall within the ambit of the offence without any intention or knowledge on their part."

Reuters News - Fed opens door wider for rate hike but downgrades economic outlook

1 OF 3. U.S. Federal Reserve Chair Janet Yellen speaks at a news conference following the two-day Federal Open Market Committee meeting in Washington March 18, 2015.

CREDIT: REUTERS/JOSHUA ROBERTS

(Reuters) - The Federal Reserve on Wednesday moved a step closer to hiking rates for the first time since 2006, but downgraded its economic growth and inflation projections, signaling it is in no rush to push borrowing costs to more normal levels.

The U.S. central bank removed a reference to being "patient" on rates from its policy statement, opening the door wider for a hike in the next couple of months while sounding a cautious note on the health of the economic recovery.

Fed officials also slashed their median estimate for the federal funds rate - the key overnight lending rate - to 0.625 percent for the end of 2015 from the 1.125 percent estimate in December.

The cut to the so-called "dot plot," together with other economic concerns cited by the Fed, sent a more dovish message than investors were expecting, and pushed market bets on the central bank's rate "lift-off" from mid-year to the fall.

"Just because we removed the word 'patient' from the statement doesn't mean we're going to be impatient," Fed Chair Janet Yellen said in a press conference after Wednesday's statement.

Stocks on Wall Street surged and oil prices jumped as much as 5 percent after the Fed statement. The dollar tumbled against other major currencies and the U.S. 10-year Treasury yield dipped below 2 percent for the first time since March 2.

In its quarterly summary of economic projections, the Fed cut its inflation outlook for 2015 and reduced expected U.S. economic growth. The policy statement repeated its concern that inflation measures were running below expectations, weighed down in part by falling energy prices.

"I just don't see any price or wage pressure out there," said Craig Dismuke, chief economist for Vining Sparks. "June is not off the table but it's unlikely. September is the most likely time for the first rate hike. They might get one hike in this year, maybe two."

The Fed noted that a rate increase remained "unlikely" at its April meeting and said its change in rate guidance did not mean it has decided on the timing for a rate hike. Yellen told reporters that a June move could not be ruled out.

The Fed statement, however, allowed enough flexibility for the central bank to move later in the year, stressing that any decision would depend on incoming data.

"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium-term," the Fed said.

It had previously said it would be patient in considering when to bring monetary policy back to normal.

Goldman Sachs economist Jan Hatzius said in a research note that the Fed's statement and projections suggested a hike in September rather than June, citing the "dot plot" shift and changes to the central bank's assessment of the economy.

MUDDY DATA

Yellen has kept rates at near zero since taking over as head of the central bank in February, 2014, though she has also overseen a steady whittling of loose money promises.

And while she lays the ground for "lift-off," the Fed continues to grapple with muddy economic data: strong job creation, continued growth, and healthy consumer demand in the United States, but a global collapse in oil prices and a rapid run-up in the dollar that could mean the Fed remains far from its 2 percent inflation target.

The Fed on Wednesday downgraded its view of economic activity, saying growth has "moderated somewhat," a departure from its view in December, when it cited economic activity expanding at a solid pace.

Economists and investors were watching closely for the Fed to drop "patient" from its rate guidance language, as a sign that the central bank will shift toward making rate decisions on a meeting-by-meeting basis.

"Let me emphasize again, that today's modification of the forward guidance should not be read as indicating that the committee has decided on the timing of the initial increase in the target range for the federal funds rate," Yellen said in the press conference.

"In particular, this change does not mean that an increase will necessarily occur in June. Although we can't rule that out."

The federal funds rate has been at its low point since December of 2008. The last time the Fed raised rates was in June 2006, when a roaring housing market and strong economic growth prompted it to push its target rate to 5.25 percent.

There were no dissents on the Fed statement.

(Reporting by Michael Flaherty and Howard Schneider; Additional reporting by Richard Leong in New York; Editing by David Chance and Paul Simao)