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Centrica, the owner of British Gas, says profits stayed flat due to the effect of a slump in in demand in the UK.

State-controlled Royal Bank of Scotland reports a loss of £2bn in 2011, its fourth year of losses since the bank's bailout in 2008.

Sir Philip Hampton says bank needs to be run on commercial grounds if taxpayers are to get their £45bn investment back

Royal Bank of Scotland pleaded on Thursday to be run on a commercial basis as the taxpayer-owned bank announced losses widened to £2bn in 2011, and confirmed it paid out £390m in bonuses to investment bankers.

Sir Philip Hampton, appointed chairman after the October 2008 bailout, said that the bank needed to be run on "commercial grounds" if taxpayers were to get their £45bn investment back.

However, the bank risked igniting the row over City pay as it prepared to pay out bonuses to its 17,000 investment banking staff and even as it attempted to show pay restraint by freezing the salaries of its 10,000 most senior staff and its investment banks.

"It is the board's view that running the business on commercial grounds is the best way to make the bank safer and more valuable for everyone who depends upon it. I do not believe there is a workable alternative if our aim is to provide the opportunity for the UK government to sell its shares in the public markets in a reasonable timescale," Hampton said.

"A sign that we have succeeded will be the desire of private investors to acquire the UK government's stake. While these investors hold only 18% of our shares today, their view of our performance, leadership and strategy is crucial. All being well, they will own the majority of the equity capital of the company in future years," he said.

He had expected that the shares would already up for sale by now but regulatory change, the downturn in the economy and the eurozone crisis have meant this is not happened.

A year ago RBS paid out £950m in bonuses after reporting a £1.1bn loss. For the first time, the bank, 82% owned by the taxpayer, published a figure for the bonus pool for its entire staff of £795m.

Hester, who waived his £1m bonus after public outcry, is on course to receive £600,000 next month and is among other top RBS bankers who could be handed £11m in the coming months when bonuses awarded up to three years ago pay out.

He set out the progress made to reduce losses since the record-breaking £24bn losses he inherited from 2008.

The investment bank is among those being slimmed down by Hester as he gives up on global ambitions for the operation built up under his predecessor, cutting 3,500 roles.

The bank's impairment charge for bad loans was down 20% at £7.4bn while other items also ate into profits such as the £906m to participate in the government's asset protection scheme, the previously announced £850m provision for payment protection insurance, a £1bn impairment on Greek debt and a £300m bank levy.

The results were announced as David Cameron said that anti-business "rhetoric" should be stopped. "We have got to fight this mood with all we've got," he said.

Max Temp: 11°C (52°F), Min Temp: 3°C (37°F), Wind Direction: NNW, Wind Speed: 5mph, Visibility: very good, Pressure: 1029mb, Humidity: 70%, UV risk: low, Pollution: low, Sunrise: 06:55GMT, Sunset: 17:34GMT

Max Temp: 15°C (59°F), Min Temp: 5°C (41°F), Wind Direction: W, Wind Speed: 13mph, Visibility: good, Pressure: 1027mb, Humidity: 80%, UV risk: low, Pollution: low, Sunrise: 06:57GMT, Sunset: 17:32GMT

Max Temp: 15°C (59°F), Min Temp: 10°C (50°F), Wind Direction: WSW, Wind Speed: 12mph, Visibility: good, Pressure: 1025mb, Humidity: 81%, UV risk: low, Pollution: low, Sunrise: 06:59GMT, Sunset: 17:30GMT

European markets to open slightly lower as focus shifts from Greece to economic data

Live blogging now: Julia Kollewe

7.44am: So what's happening with Greece now? Michael Hewson, senior market analyst at CMC Markets UK, says:

The problems in Greece have taken a back seat for now but they are still there in the background with negotiations ongoing with respect to the PSI, as well as discussions with respect to increases to the bailout fund.

Greece is expected to conduct the bond swap on March 12th. The swap will see bondholders take up to a 75% write down with any holdouts dealt with by the implementation of collective action clauses as long as two thirds are in favour. It is this debt swap figure that prompted ratings agency Fitch to put Greece onto a rating of selective default, an action which the markets shrugged off.

Another problem is Germany's refusal to increase the ESM or run it alongside the EFSF, which could prompt IMF countries to resist from putting up additional funds to help in the bailouts of other EU nations.

As it is the IMF is only putting in 10% of the funds to the new Greek bailout, which suggests there is a concern however unlikely, that it may well not get its money back.

7.30am: Good morning. For a brief period of time yesterday, the focus of the market shifted from the probability of the second Greek bailout working to good old fashioned economic data, as Gary Jenkins of Swordfish Research notes.

Unfortunately the data suggested the outlook for the European economy as a whole was about as clear as the outlook for Greece. Both the PMI manufacturing and services numbers came in below expectations and below 50.

There will be more data today: the German Ifo confidence numbers should give a good indication as to whether yesterday's disappointing German PMI data was a blip or something more serious.

The Ifo business climate index is expected to continue its recent recovery, rising to 108.8 from 108.3. The German economy has been one of the few bright spots in Europe in recent weeks and the hope is that will continue.

In the US, the latest weekly jobless claims numbers will be scrutinised for further signs of improvement in the labour market after last week's surprise 348,000 showed that claims continued to fall at a faster than expected rate. This is set to continue, with economists expecting a drop of around 355,000.

European markets are expected to open slightly lower.

The funding is part of the Regional Growth Fund and takes the total fund to £2.4 billion. It will be available to businesses and public / private partnerships with ambitions to create new jobs and make a significant impact on their local economy.

He is also set to confirm that 48 of the successful firms from the first two rounds of the fund have completed their legal checks and have access to the Government fund which leverages private sector investment, with at least £5 put in for every £1 of public money.

Nick Clegg said: “The Regional Growth Fund is already having a huge impact across the UK. So far there have been over 170 successful bids to the fund, leveraging around £7.5 billion of private sector investment and set to create and protect 330,000 jobs. I want to see more businesses that are confident they can create jobs and get Britain building and making things again, coming forward – making sure their hats are in the ring.

“Funding from rounds one and two has gone to some extraordinarily promising manufacturing projects. From Pirelli Tyres in Carlisle who’ll use the money to develop a new range of carbon-cutting tyres; to a Portsmouth based company which hopes to use theirs to create a cutting edge boat building college.

“These are the kinds of projects that will lead their communities into brighter times, helping put industry at the heart of the UK’s economy. Businesses have until June to apply for a share of this extra £1 billion.”

Business Secretary Vince Cable said: “The Regional Growth Fund is starting to make excellent progress. Already 48 firms have started to access their funding, and around a third have started their projects as they go through legal checks. This means jobs are being created, money is being invested and the fund is making a difference.

“But we cannot be complacent. The additional £1 billion in the fund will help us maintain momentum around supporting even more businesses and encouraging the creation of new jobs.

“Many of the successful projects from rounds one and two were manufacturers and the sector remains one of our national success stories. Manufacturing lies right at the heart of the Government’s strategy for economic recovery and growth.”

Many of the 176 successful bidders from rounds one and two, which are currently going through their legal checks, have already started their projects, with around a third of the companies reporting that activity is underway.

The decision whether Europe will officially label oil produced from tar sands as highly polluting will be made on Thursday

A fierce battle over whether the European Union will officially label oil produced from tar sands as highly polluting comes to a head on Thursday with a crucial vote.

The issue is seen as a key test of the EU's ability to implement its climate change policies amid pressure from the Canadian government and oil companies' ability to prevent billions of barrels of tar sands oil being designated as especially harmful to the environment. The lobbying has been intense, with Canada secretly threatening a trade war with Europe if the proposal is passed. The Nasa climate scientist James Hansen has said full development of the tar sands would mean it was "game over" for the climate.

The issue has also drawn fire on to the UK's transport minister, Norman Baker, whose Liberal Democrat colleagues have likened tar sands to "land mines, blood diamonds and cluster bombs", but whose coalition government was revealed as giving secret help to Canada.

Colin Baines, campaigns manager at the Co-operative, said: "Today is crunch time for the UK and other European governments. After years of aggressive lobbying by the Canadian government and oil industry it must now decide whether it supports their interests or Europe's ambition to reduce transport emissions. A vote against would threaten this globally important climate change legislation, giving the oil industry a free pass to increase the carbon intensity of its products and sending all the wrong signals to Canada about its unsustainable expansion plans."

The UK's shadow transport secretary, Maria Eagle, said: "The UK government should be showing leadership, not ducking the opportunity to take an important stand over tougher labelling of highly polluting fuels. Considering the stance taken by his party before the election, it is disappointing to see Baker fail to stand up to vested interests on this issue." The UK and Canadian governments declined to comment before the vote.

Canada's vast tar sands are the second largest reserve of oil after Saudi Arabia and many of Europe's largest oil companies have major interests in the fields, including BP, Shell, Total and Statoil. The EU proposal is to label tar sands oil as causing 22% more greenhouse gas emissions than conventional oil on average, because of the extra energy needed to blast the bitumen from the bedrock and refine it. This would make it unattractive to Europe's fuel suppliers who have to cut the impact of their products on global warming and would also set a very unwelcome international precedent for Canada.

The Canadian government argues it is unfair to single out tar sands when some other crude oils are also highly polluting but its opponents, including Europe's climate action commissioner, Connie Hedegaard, argue those can be dealt with in due course and that the scientific case against tars sands is clear. Canada convened a high-level private summit in 2011 to discuss winning the tar sands argument in the EU, to protect the "huge investments from the likes of Shell, BP, Total and Statoil".

The UK proposed an alternative "banded" approach to ascribing carbon emissions to different fuel types, which does not single out tar sands. But opponents dismiss it as a delaying tactic and the Guardian understands that the UK has failed to present its proposal formally or provide supporting evidence. In January, the Guardian revealed another compromise plan that would weaken the impact on tar sands oil, this time from the Netherlands.

The proposal to label oil from tar sands as highly polluting will be voted on in Brussels by officials from member states, part of the delayed implementation of an EU fuel quality directive adopted in 2009. If passed by the required majority of about three-quarters, it would then go to the European parliament, where it would be expected to pass quickly into law. If there is no majority, either for or against, as appears most likely, the decision is referred up from the officials to their ministers, who then have two months to send a proposal to the parliament. If the proposal is rejected by a three-quarters majority, it goes back to the European commission for possible amendment but would face an uncertain future.

Darek Urbaniak, at Friends of the Earth Europe, said: "European governments must defy pressure from Canada, and say no to tar sands, which will undermine Europe's ability to reach its climate ambitions."

The senior Greenpeace campaigner Joss Garman said: "For a Liberal Democrat party looking to burnish its environmental credentials this vote is a key moment. In a stroke Nick Clegg and Norman Baker could make an impact on the global stage by changing the economics of investment in the dirtiest oil on Earth."

Group of nearly 30 countries resolves that each would take its own measures against the emissions trading scheme

Countries opposed to the inclusion of airlines in Europe's emissions trading scheme (ETS) have vowed to take retaliatory measures against the EU, which may include halting negotiations over new routes for member states' airlines.

A group of nearly 30 countries, including the US, China and India, met in Moscow on Wednesday to discuss what actions they would take. They resolved that each country would take its own measures against the scheme. These could include sanctions against European airlines or the opening up of a trade war.

But Europe's climate chief, Connie Hedegaard, criticised the meeting for failing to agree to any alternative way of reducing greenhouse gas emissions from aviation.

Valery Okulov, Russia's deputy transport minister, told Reuters news agency: "Every state [represented at the meeting] will choose the most effective and reliable measures which will help to cancel or postpone the implementation of the EU emissions trading scheme."

Ongoing discussions over new routes and landing rights in the countries represented could be one casualty of the talks.

Some governments, including China, have told their airlines not to participate in the scheme. However, the EU said that airlines from the countries represented had complied with the rules so far, by submitting the data needed for their inclusion in the scheme.

The governments opposing the ETS argue that the trading scheme constitutes a tax, which would be forbidden under longstanding international agreement, but the EU says a trading scheme is different, in part because companies can avoid paying for carbon permits by reducing their emissions.

Europe's top court ruled last December that the extension of the emissions trading scheme to airlines based outside the EU was legal.

Hedegaard has repeatedly called for the countries opposing the inclusion of aviation in the emissions trading scheme to bring forward a proposal for an alternative, which she said the EU would be willing to consider. Talks under the International Civil Aviation Organisation have for years failed to produce agreement on a worldwide method of pricing carbon for airlines, or for reducing their emissions by other means.

Without such an agreement, Hedegaard argues that the EU is justified in demanding that airlines with flights taking off or landing within its borders should participate in the scheme, under which they must submit carbon permits for every tonne of CO2 they produce on those flights. A proportion of the permits are granted to the airlines for free but the rest must be bought at auction or from other companies with spares.

She told the Guardian: "The EU will not be threatened into changing our law."

Estimates show that the cost to airlines is likely to be between €5 and €10 for each passenger, which represents only a small addition to ticket prices for international flights.