financial news

With the Bank of England (BOE)’s decision to put its quantative easing programme on hold, the Debt Management Office, held with the task for issuing of bonds to pay off the public deficit, are expecting difficulties in finding buyers. A spokesman for the DMO has said that the agency will continue to use new methods of issuing debt bonds in what will be a record number, including syndications.

According to official data released on Friday, by the UK Insolvency Service, the number of companies going into liquidation fell in the final quarter of 2009 for the first time in more than a year on an annual basis. However the report showed that the number of individuals who succumbed to insolvency was on the increase.

The quarterly figures may be a sign the economy is slowly getting back on its feet, with companies finding it easier to get credit. A Bank of England survey which showed the flow of lending to businesses picked up in November for the first time since the beginning of 2009. However UK business analysts hastened to point out that the number of liquidations were liable to be high unless access to finance continued to improve.

Private demand in the UK will remain weak for the most part of 2010 and the British government will maintain its stimulus measures, UK Business Minister Lord Mandelson said after a meeting with German Economics Minister Rainer Bruederle here. "As private demand remains weak, as I suspect it will for a lot of this year, it is the job of the government to balance that weakness and to maintain our stimulus while it is needed," Mandelson said. "We also have to plan the exit from that stimulus and we will do that step by step and in coordination with each other." he continued.

Lord Mandelson also announced on Friday that European governments could consider some support for U.S. carmaker General Motors’ European operations if the carmaker presented them with a business plan.

General Motors’ European arm Opel plans to slash thousands of jobs as part of a restructuring plan and also wants around £2 billion in state aid either as loans or loan guarantees to help finance the 3.3 billion euro revamp.

UK Business Secretary Mandelson in Berlin for a meeting with German Economy Minister Rainer Bruederle said "The primary responsibility for bringing about the future investment, the use of new technologies and models, the reduction of emissions, rests with the private companies concerned, not with the governments,".

"If in the case of General Motors, they present a business plan that involves some financial role or underpinning by our governments, then of course we will consider that. But first we have to see the business plan," continued Mandelson

U.K. defense company BAE Systems announced on Friday that it had reached settlements with the U.S. Department of Justice and with the U.K.’s Serious Fraud Office regarding investigations into the company’s activities in Saudi Arabia as well as the sale of radar systems in Tanzania. Under the U.S. deal BAE will plead guilty and will pay a fine of $400. Under the deal with the U.K. authorities, the company will plead guilty to one charge of breach of duty and pay a fine of £30 million pounds. BAE issued a statement both regretting and accepting full responsibility for both offences.

The Digital TV Group (DTG), made up from a consortium of broadcasters, technology providers and set top box manufacturers, has expressed widespread industry concern regarding a proposed new venture, aimed to market a £200 pound set-top box, which will provide internet services to the television, to be launched later this year. Project Canvas, a joint venture between the UK’s public sector broadcasters and two of the country’s broadband providers, has won initial approval from the BBC Trust. However in a submission to the BBC Trust’s consultation, the DTG, whose members include Virgin Media, BSkyB and Sony expressed their fears that Canvas’ members had not engaged fully with the industry. DTG will need to wait a few months to discover the BBC Trust’s final ruling on the matter.

The pound weakened 0.7 percent to $1.564, its lowest level since October 2009. The decline came after the Bank of England kept the door open to more asset purchases to safeguard the economic recovery.

Sterling closed up at 1.1447 against the Euro.

The benchmark FTSE 100 Index was taking a beating before the weekend put an end to the shares sell-off. It closed down 223 points at 5060.92

U.S. stocks on Friday pared earlier losses as the equities tracked the dollar and the commodities market. Stocks came off their lows as the price of crude oil pulled back above $70 a barrel. The Dow Jones Industrial Average finished down 27.2 points at 9,974.98. The NASDAQ gained 9.73 points to close for the weekend on 2,135.16.

Following the devastating earthquake that struck Haiti last month, the world’s leading industrialised nations have pledged to write off the debts owed to them by the country. Canada’s finance minister made the announcement at a Group of Seven countries summit in Canada. A spokesman for the group announced that they would encourage international lenders to do the same.

Bi- and multilateral lenders including international bodies have already canceled some £800 million ($1.2 billion) of Haiti’s debt in 2009.

Toyota’s reputation was in danger of plunging into freefall tonight when it admitted investigating reports of brake faults in Prius hybrid cars in the US and Japan in a move that could trigger another recall.

The possibility that an estimated 270,000 of the latest model of the Japanese company’s flagship vehicles could be withdrawn because of safety fears follows 77 reported cases of braking problems among cars sold in Japan and 100 similar complaints in the US.

Prius owners have reported momentary loss of braking ability at low speeds on bumpy roads. Two of the incidents reportedly ended in crashes that resulted in injuries.

US safety regulators opened a formal investigation today.

The company is already reeling from a recall of more than eight million vehicles worldwide because of problems with accelerator pedals. A number of cases were reported where pedals jammed in causing vehicles to speed out of control.

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Tags: BAE Systems, Bank of England, Banking, British Economy, BskyB, Currency, Debt Management Office, Digital TV Group, Dow Jones, Economics, Economy, Financial News, FTSE, General Motors, Haiti, Lord Mandelson, Money, NASDAQ, Opel, Prius, Project Canvas, Rainer Bruederle, Recession, Stock Markets, Stocks and shares, Toyota, UK Banks, UK business, UK Economy, UK government, UK Insolvency Service, UK Recession

As was generally expected, the Bank of England (BOE) monetary policy committee has announced that they will not be extending their quantitative easing programme, under which it has purchased just over £200 billion, mostly in government gilts. The decision came after that the UK economy posted slight growth for the fourth quarter of last year However the BOE did retain their right to resume purchases should circumstances warrant it. At the same meeting, BOE officials voted to continue holding interest rates at their current record lows.

The Institute for Fiscal Studies (IFS) has issued a statement expressing their conviction that government’s plans to cut Britain’s yawning budget deficit after that do not go far enough. Instead the IFS called for "more ambitious plans", suggesting that no less than £13 billion of extra cuts or tax hikes will need to be implemented by 2015 to stabilise the country’s finances. The IFS also called for an independent body to oversee official forecasts for the public finances

In addition, the IFS’s statement pointed out that the UK Government needed to aim for a tightening of around 5 per cent of national income, amounting to a ballpark figure of £70 billion over the five years to 2015, in order to stem up the hole in the country’s public finances. Chancellor of the Exchequer Alistair Darling, in his pre-Budget report, pointed to a fiscal tightening of £57 billion in for the same term, which according to the institute would be slightly more than four percent national income for the entire period.

The IFS report is only one of a few that Darling has had to contend with, all of them criticising his plans to address the public finances saying his plans do not go far enough and that his aim of halving the budget deficit as a proportion of national income by the 2013-14 financial year was unlikely to succeed.

According to a report from, the Nationwide Building Society, U.K. consumer confidence rose in January, on news that the economy has eventually emerged from its worst recession on record. The index of sentiment increased 3 points from the previous month to 73, almost double the level of 39 measured in the same month last year.

Meanwhile it appears that the Government faces a battle to pass its flagship digital economy bill before the forthcoming election, largely due to the surprise resignation of one of the ministers charged with pushing it through parliament. Aims to address the UK’s future infrastructure needs, with regards to the digital industry, the bill is scheduled to deal with some controversial measures, including anti-piracy policies and the introduction of a 50 pence-a-month broadband tax on every phone line

Toyota world’s biggest car maker, with around 1.6 million of its cars on UK roads, is to recall millions of cars around the world following an accelerator pedal problem affecting seven of its models. The company’s UK division will be making contact with more than 180,000 UK drivers warning them to arrange repairs after a potential problem with sticking or jamming accelerator pedals was identified, but it will be nearly a week before it can start repairs on cars with defective accelerator pedals

In the meantime, the company’s financial results for the three months to December 2009 show a huge swing back into profit. Toyota announced a net profit of 153 billion yen (£1.06 billion) making for an almost 100% reversal on the same period last year.

Toyota also confirmed that they expect to £1.23 billion in recall costs and lost sales, but said it still expected sales to increase to 7.18 million units in the current financial year.

Broadband provider Virgin Media have announced that their TV subscribers will now be able to access to a high definition (HD) channel from Eurosport, which will be the first of several new services that will be launched on its TV platform over the next few months.

Eurosport typically covers such events as the Tour de France, French Open tennis and the World Touring Car Championships. A spokesperson for Virgin Media was quoted as saying: "With HD ready TVs now common in UK homes, the combination of HD channels as well as our pioneering TV on-demand service gives Virgin TV customers a huge range of HD programming with the unique flexibility to enjoy HD content whenever they want, at the touch of a button."

On the FTSE, U.K. pub chain owner, and brewers of London Pride ale saw their shares rise 1.8 percent, to 537 pence in anticipation of the release of their latest trading statement. Also due to publish their recent earnings are the Vodafone Group Plc. the world’s largest mobile phone company. The news failed to spark too much excitement, and their stock fell 0.6 percent to 134.5 pence. In the same boat were the Yell Group Plc who publish of the U.K.’s yellow pages directory, who are about to publish a trading statement. Their shares dropped 0.5 percent to 36.8 pence.

The pound closed down at 1.5777 against the dollar, while the Euro the dollar was up a little at 1.1458

The FTSE 100 Index dropped 30.16 points to reach 5,253.15 at the close of trading on Thursday. The index has dropped 3.6 percent so far this year while still 49 percent higher than in March of 2009.

Troubled Asset Relief Program (Tarp) paymaster Kenneth Feinburg has called insurance giant AIG’s expected latest round of bonus payments "outrageous".

Feinburg’s comments came as reports say the insurance giant are to announce bonus payouts of around $100 million (£63 million) to its financial products division.

AIG was bailed out from bankruptcy thanks to $182.3 billion of US aid in 2008. Their staff has already been compelled to return $39 million of bonuses paid out last year, with Feinberg "insisting" that AIG workers repay a further $7 million of bonus payments.

Time Warner has announced a major leap in their fourth quarter profits, largely thanks to their two recent hit films Sherlock Holmes and The Hangover. This is the first profit that the company has reported since they

split from AOL in 2008. Net income for the leaner and meaner Time Warner was $627 million (£387 million), compared with a $16 billion loss for the last quarter of 2008, largely due to value write-downs for AOL as well as the company’s cable assets.

Even leaner and meaner AOL also reported fourth quarter results showing a reversal in fortunes from the year before.

Despite encouraging news from the retail sector, an unexpected rise in unemployment benefits claims for sent US stocks sharply lower in early trading on Thursday. On the news, the Dow Jones fell sharply by 192 points, to close on 10092.49, while the NASDAQ dropped 38 points, to finish on 2144.32

Oil prices CL-FT dropped by 5 per cent on Thursday’s trading , the steepest one-day drop since July, due to the fear that demand in debt-laden European economies is liable to fall as well as the rise in U.S. unemployment . U.S. crude for March delivery settled down $3.84 (U.S.) a barrel to $73.14, while London Brent fell $3.79 to $72.13 a barrel.

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Tags: Alastair Darling, AOL, Bank of England, Banking, British Economy, British Pound, Dow Jones, Economy, Eurosport, Financial News, FTSE, Institute for Fiscal Studies, London Pride, Money, Money Markets, NASDAQ, Nationwide Building Society, quantitative easing, Recession, Stock Markets, Stocks and shares, Toyota, UK Banks, UK Economy, UK government, UK Recession, Virgin Media, Vodafone

According to a recent report by the Centre for Economics and Business Research (CEBR) UK house prices are liable to rise by about a fifth in the next four years. The forces that will push property prices up are increased lending levels by the banks and interest rates remaining at a low level.

Home values will rise 6.5 percent in 2010 and will have gained around 20 percent by the end of 2013, according to CEBR radically altering their forecast of October 2009, which house prices would increase by only 2.6 percent this year.

CEBR’s announcement strengthens reports from the Nationwide Building Society that showed house prices have begun rising again after the economy returned to growth. However their optimism was dashed by news that potential UK house buyers could soon face a chronic shortage of credit that will see mortgages ‘rationed’.

According to the Council of Mortgage Lenders (COML) as government schemes to keep mortgage lending afloat are due to dry up in 2014, their fears that a funding gap to the tune of £300 billion will open up. COML predicted in their recent report that the UK is at risk of a chronic under-supply of credit, bringing with it the rationing of mortgages for customers that will continue for many years. Before the financial crisis, the funding gap, meaning the difference between what banks took in savers’ deposits and what they lent out, was always covered by the wholesale market in mortgage debt.

As a result of lower oil and gas prices, oil giant BP have reported a 45% drop in annual profit Its replacement cost profit for 2009 was £8.75 billion, compared with £15.39 billion in 2008. The company said that its oil and gas production increased more than 4% in 2009 and its reserves had grown for the 17th year in a row. Profits during the final three months of 2009 were up 33% from the same period a year ago.

However, the fourth quarter results fell short of analysts’ expectations, causing BP shares to fall more than 4% in early trading.

Shares in Northumbrian Water surged 12 percent after press reports that the Ontario Teachers’ Pension Plan may bid £1.7 billion ($2.7 billion) for the company. The water utilities market in the UK is liable to benefit if the speculation on Northumbrian Water is confirmed as it will establish a higher trading range for the other water stocks. On the news, Northumbrian Water rose by 12 percent to close on 289 pence. The Ontario pension fund already owns 27 percent of the U.K. water company and wants to buy the remaining stake.

Severn Trent caught the wave and added 4 percent to 1,170 pence while United Utilities gained 2.8 percent to 551.5 pence.

South Korea’s National Pension Service, the world’s fifth biggest pension fund, will next week take a 12 per cent stake in Gatwick airport, stressing that investment in Britain will play a significant role in quadrupling its international exposure. The NPS, which is aiming to expand its overall portfolio, came to the attention of Britain’s financial community last year when it bought the headquarters of HSBC in Canary Wharf for £773 million. Gatwick airport was sold late last year to Global Infrastructure Partners, an infrastructure fund backed by Credit Suisse and General Electric, for £1.51 billion.

The longest running saga in recent UK takeover history drew to a happy close as US firm Kraft Foods sealed their takeover of Cadbury after shareholders in the UK chocolate maker voted in favour of the deal.

Cadbury said it had received valid acceptances of the offer from investors representing 71.7% of the firm. Kraft chief executive Irene Rosenfeld celebrated the takeover by announcing: "I warmly welcome Cadbury employees into the Kraft Foods family." Despite the warm welcome, Cadbury employees staged protests in London calling for government support to guarantee jobs

Budget airline Ryanair has raised its full-year profit forecast as passenger numbers continue to rise. The company announced that it said it expects full-year net profits of about 275 million Euros, whilst reporting a 10.9 million Euro; (£9.5 million) loss in fourth quarter of 2009, a considerable improvement on the 101.5 million Euro losses for the same period in 2008.

Ryanair said the result had been helped by a 37% fall in fuel costs and passenger numbers increased by 14%, which had offset a 12% drop in fares.

Europe’s second- largest tobacco company Imperial Tobacco Group Plc have announced a “good start” to the year with business “in line” with company expectations, despite the weak economic climate. Despite the news, their shares declined 1.2 percent, to 2,002 pence. The Royal Bank of Scotland Group Plc are to allow its top performing employees to convert a large portion of bonuses given in shares into cash within 12 weeks of receiving them, according to a letter sent to investors yesterday. On the day RBS shares rose 7.9 percent, to 34.86 pence.

The pound closed down at 1.5977 against the dollar, while the Euro traded at 1.1438

The FTSE 100 dropped 4.1 percent in January as the U.S. government called for limits on risk-taking by banks and China moved to restrict lending and cool economic growth. The gauge is still 49 percent higher than in March after governments and central banks around the world sought to encourage growth by maintaining low interest rates and committing more than $12 trillion to stimulate the economy.

The benchmark FTSE 100 Index added 35.9 points to reach 5,283.31 at the close of trading in London.

US President Barack Obama has announced a $3.8 trillion (£2.4 trillion) budget plan for 2011, which includes increased spending for job creation, but cuts in other areas.

He also forecast the US deficit would rise to a record $1.56 trillion this year.

He scrapped plans to send astronauts back to the Moon and will seek to save $250 billion by capping a range of domestic spending programmes for three years.

Congress must approve the budget for the financial year starting on 1 October for it to take effect.

Mr Obama blamed the huge deficit on the decisions of President George W Bush, previous Congresses and his administration’s moves to prevent an economic collapse.

Stocks continued to extend gains after reports showing the U.S. manufacturing sector expanded more than forecast. The Institute for Supply Management’s factory index showed U.S. manufacturing expanded in January at the fastest pace since August 2004, spearheading the recovery from the worst recession since the nineteen-thirties.

On the news, the Dow Jones rose sharply, to close on 10284.91, while the NASDAQ rose 38 points, to finish on 2185.32

Gold lost some of the previous day’s sharp gains, dropping 0.1 per cent to $1,105. Oil rose 0.5 per cent to $74.81 a barrel.

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While the UK economy snapped back into growth in the fourth quarter of 2009, it did so at a rate considerably less than economists’ forecast. It was thanks to the service industries and manufacturing sector, which expanded just enough to pull Britain out of its longest recession on record. According to figures released by the Office for National Statistics, gross domestic product (GDP) rose by a mere 0.1% from the third quarter. The weakness of the recovery will pose a challenge to Bank of England officials who are due to sit next week to consider week whether the economy is strong enough to begin winding down the Government’s emergency stimulus measures. Prime Minister Gordon Brown’ is regarded as being especially anxious to see and end his government’s propping up of the economy, as delaying it may hamper his efforts to win an election due by June of this year. Much of Brown’s campaigns have been based on promises to curb the budget deficit.

Brown is putting up his case that he is better placed that Conservative leader David Cameron to cut the ballooning budget deficit without hurting the economic recovery. Splits in the Labour Party are beginning to show as election day draws closer with Chancellor of the Exchequer Alistair Darling announcing that it would be “absolutely mad” to withdraw stimulus measures now.

The Bank of England’s £200-billion pound asset-purchase facility, designed to keep borrowing costs low and help pull the economy out of the recession also expired this week.

Meanwhile it was announced that the UK economy shrank 4.8% in 2009, making for the biggest annual drop since records began in 1949. It was also reviled that the in the fourth quarter the economy contracted 3.2% compared to records from 2008.

The fourth quarter data, the first to be released by a Group of Seven nation, means Britain is the last member country to exit the recession that was sparked by the worst financial crisis since the Great Depression. The US Government was expected to release GDP data for the fourth quarter on late January 29.

The news that the Lloyds Banking Group has succeeded in placing of £2.5 billion pounds of mortgages with investors, has raised new hopes that securitisation markets are beginning to open for banks. A £4 billion issue last September by Lloyds recorded a first attempt by a bank to tap the securitisation markets since the onset of the credit crisis. However Friday’s issue was the first to cause any form of reaction interest among U.S. investors to purchase prime residential mortgage securities

There are strong signs of recovery popping up London’s financial services industry, which took a severe pounding during the credit crunch. Recruitment is already on the up, and a recent survey showed that more than 80 percent of hiring managers are expecting recruitment volumes to rise in 2010. Only five percent of those responding to the survey named handling redundancies as a key personnel challenge for the year ahead, will close to half of those interviewed pointed to the threat of competitors poaching staff as a problem. The main problem for 2010, according to close to two thirds taking part, would, be salaries and particularly of discretionary bonuses. Remuneration has become a major hot potato in the financial industry, as the sector has emerged from the crisis under increased public and regulatory scrutiny.

Irene Rosenfeld, chief executive of Kraft has predicted that Cadbury has a positive future under the ownership of the US conglomerate, whilst adding fears of job losses at the UK company are "greatly overstated" and.

In her first interview since the takeover was agreed by the Cadbury board earlier this month, Rosenfeld announced that Kraft would not be looking for any mergers and acquisitions activity in the "near term" following the purchase of the UK confectionary company. "We acquired Cadbury because we believe it is a fabulous business and it is our intention to protect those assets," Ms. Rosenfeld pointed out. "It is our intention to invest in the business; in fact, if anything, the opportunities for the business will be greater as a result of the combination than perhaps they might have been on a standalone basis, given some of the competitive pressures." She continued.

Speculation is growing that the planned sale of the discount fashion chain Matalan is unlikely to raise the sum in excess of £1.5 billion pounds targeted by the company’s owner John Hargreaves. American private equity firms TPG, Advent International among others are expected to make offers in time for next Friday’s deadline. Analysts fear that the parties involved are wary of paying too high a price for Matalan. A clause in the deal specifying a "break price" of between £1.2 to £1.25 billion pounds, has been inserted by Hargreaves, entitling him to refuse any bids below this figure

Expectations are that the release of British Airways’ results for the three months to the end of December 2009 will expose further heavy losses at the airline. BA is expected to reveal a loss of £151 million for the third quarter of the financial year, making for total losses up to the end of March to £602 million, up almost fifty percent from 2008, which was BA’s previous record loss. The threat of pre Christmas strikes and severe weather conditions are two factors among many that have contributed to the company’s already poor situation.

Carphone Warehouse subsidiary TalkTalk have announced the launch of a new television and mobile phone service. The launch is yet another sign of the telecoms group desire to step up its challenge to their sector rivals. Charles Dunstone, chief executive of Carphone Warehouse, outlined the plans for the new division on Friday as the company also released details of the demerger of its telecoms and retail interests. TalkTalk, due to gain a stock market listing in March, have identified TV and mobile services as potentially strong sources of growth. Carphone Warehouse’s broadband rivals already offer TV services, and the market is rapidly expanding.

UK Coal’s already stagnating share price was sent even lower as the mining and property group announced that were liable to increase by £100 million pounds in 2009. UK Coal has announced that they expect production in 2010 to be roughly seven million tonnes, compared with 7.9 million tonnes last year. The company faced severe technical and geological problems in its underground mines in the second half of 2008. The troubled company’s shares fell 4.5 pence to 61.5 pence.

The pound posted a weekly advance against the euro after the U.K. economy exited recession in the fourth quarter and Bank of England policymaker. Expectations are that the U.K. currency will continue to gain value as the government’s propping up of the economy may not be extended, with the decision to be announced when the Bank of England meets to decide on interest rates on Feb. 4. Sterling also posted a monthly gain against the Euro, when closing for the weekend at 1.532.

The pound strengthened 1.3 percent in the week, its strongest level in five months. It advanced 2.3 percent in the January. The U.K. currency dropped 0.7 percent to $1.5993 for a monthly decline of 0.8 percent.

The pound rose 8.5 percent against the euro in the first month of 2010, the biggest monthly gain since the single European currency was launched in 1999.

The US economy grew by an annual rate of 5.7% between October and December, official figures have shown.

The number, which is a first estimate, is a big rise from the previous quarter’s growth rate of 2.2%.

It suggests the country’s economy is growing at its fastest pace for six years and confirms the US economy has left its year-long recession behind.

But even with the rebound, gross domestic product (GDP) shrank by 2.4% across 2009 as a whole, making for the worst annual performance since 1946.

On the news, the Dow Jones fell again this time by 53.13 points, 135 points, to close on Friday at 10067.33, while the NASDAQ lost another 31 points, to finish for the weekend on 2147.35

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Tags: Advent International, Bank of England, Banking, British airways, British Economy, Cadbury, Carphone Warehouse, Charles Dunstone, David Cameron, Dow Jones, Economics, Economy, Financial News, GDP, Gordon Brown, Irene Rosenfeld, John Hargreaves, Labour party, Lloyds Banking Group, Matalan, Money, NASDAQ, Office for National Statistics, Recession, Retail, Stock Markets, Stocks and shares, TalkTalk, TPG, UK Banks, UK Coal, UK Economy, UK government, UK Recession

Darling blames the financial sector for the UK’s delayed return to growth.

Chancellor of the Exchequer Alistair Darling has said in a recent interview that the U.K.’s economic recovery is being retarded by the country’s large financial services sector. “I am not surprised that it has taken time for the economy to return to growth,” Darling was quoted as saying. “What is holding us back is the fact that we have a large financial-services sector, which has affected what we produce.”

British Sky Broadcasting Group Plc,(BSB) the U.K.’s biggest pay-television provider, has announced a 3.4 percent increase in first-half operating profit as increased pay-TV and broadband subscribers boosted sales. Earnings for BSB in the six months to Dec. 31 2009 were £401 million ($651 million) up from £388 million in 2008. Turnover rose 10 percent to £2.87 billion for 2009.

Soft drinks and squashes producer Britvic have reported strong first-quarter sales growth, whilst striking a more cautious note about second-quarter trading, partly because of the extremely cold weather conditions experienced across Europe in December and January. Britvic, whose brands include Tango and Robinsons, reported sales of £242.7 million for the 12 weeks to December 20, an increase of 11 per cent on the same period in 2008.

Richard Branson’s financial-services un Virgin Money Holdings U.K. Ltd., it, named former Lloyds TSB Chief Executive Officer Brian Pitman as chairman as it seeks to build a new retail banking group. Financial analysts have credited Pitman with transforming Lloyds TSB into Britain’s most profitable lender before his departure in 2001.

No sooner had the press conference to announce the launch of the new Apple iPad than mobile phone operators in the UK were preparing to open talks with the company regarding the provision of third generation (3G) internet services to the new device when it hits the UK shores. Industry sources said that O2, 3, Vodafone, Orange and T-Mobile are preparing to meet Apple "in the next week" Apple is expected to ship the Wi-Fi only versions of the iPod to the UK in March, while the 3G versions will go on sale in the US "and selected countries" in April. Apple chief executive Steve Jobs announced during the launch on Wednesday that the priority was to secure agreements with international operators for 3G, with deals expected by the end of July.

On the money markets, the euro dropped to a five-month low against the pound on Thursday as concerns mounted over the finances of Greece and other Eurozone countries. The pound closed at 1.6129 against the dollar, with the Euro being traded at 1.1541

UK banks fell sharply at the end of trading, retreating from earlier gains. Lloyds Banking Group fell 0.2 per cent at 51.83 pence, HSBC dropped 0.5 at 660 pence, Royal Bank of Scotland lost 1.3 per cent to 33.29 pence and Standard Chartered was down 2.6 per cent at 1432 pence.

The FTSE 100 fell 71.7 points, or 1.4 per cent, to 5,145.74, with Wall Street’s weak start also being a factor.

The year 2009 gas witnessed the biggest decline in air passenger traffic in the post-war era, according to figures released by the International Air Transport Association (IATA).

"In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen," according to a spokesman for the organisation. Passenger traffic dropped by 3.5% from a year earlier, while freight traffic fell 10.1% as the downturn hit demand. However, figures for December showed a rise in traffic of 1.6% on a year ago.

Chairman of the US Congress financial services committee, Barney Frank, has argued that the dramatic proposals unveiled by the administration last week to clamp down on banks could be incorporated into legislation could be enacted into law within months.

On Frank’s prediction, the Dow Jones fell by 135 points, to close on Thursday at 10120.46, while the NASDAQ lost 31 points, to finish on 2179.0.

The US Commerce Department have confirmed that December sales of new homes have fallen, and for the second month in a row.

Sales fell by 7.6% to 342,000 homes, down from a revised rate of 370,000 in November. Analysts had expected new home sales to increase in December.

The number of new homes sold in 2009 was 374,000, 23% fewer than in 2008 and the lowest number sold in a year on record.

The Federal Reserve left interest rates unchanged at their range of between zero and 0.25%, as the US central bank repeated its vow to keep rates exceptionally low for an extended period. Interest rates have remained at their current low range since December 2008.

Ford has posted an annual profit for the first time in four years.

The carmaker made a $2.7 billion (£1.7 billion) profit in 2009, a dramatic improvement on their loss of almost $15 billion in 2008. A spokesman said that Ford expects to remain in profit for 2010.

The company made an $868 million profit for the third quarter of 2009, a dramatic improvement on the $6 billion loss it made for the same period the previous year. Ford attributed their return to profitability to cutting costs and reducing debt levels.

Thanks largely to "exceptional demand" for Windows 7, computer software giant Microsoft has reported a 60% jump in profit for the three months to 31 December 2009. Net profit for the quarter was $6.66 billion (£4.13 billion), up from the $4.18 billion for the same period a year earlier. Microsoft also reported turnover for the quarter of $19.2 billion, comfortably beating analysts’ forecasts.

French President Nicolas Sarkozy has called for a fundamental rethink of capitalism in the aftermath of the financial crisis.

His comments came as bankers and regulators clashed over proposals to break up banks that threaten the whole financial system.

Mr Sarkozy said he wished to restore a "moral dimension" to free trade.

France has supported forcing banks to hold more capital and curbing bonus payments in global negotiations over the past year on how to reform the system to prevent future crises.

Samsung Electronics have overtaken Hewlett-Packard (HP) to become the world’s largest technology company in terms of company turnover. Samsung have reported full-year sales of $117.8 billion which overtook HP’s sales of $114.6 billion in 2009. With a sales forecast at $127 billion, Samsung are expected to surpass its US rival again this year, with HP expected to achieve "only" $120 billion in sales.

In energy markets, crude oil prices consolidated ahead of the latest US weekly inventories data, with prices averaging around $74 a barrel. US crude stocks were expected to have risen 1.4 million barrels last week, according to a recent poll of analysts, with demand from US refineries remaining weak.

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Tags: 3, Alastair Darling, Apple iPad, Bank, Banking, Barney Frank, Brian Pitman, British Economy, British Sky Broadcasting Group Plc, Britvic, Economics, Economy, Federal Reserve, Financial News, Ford, Hewlett-Packard, HSBC, Interest Rates, International Air Transport Association, iPod, Lloyds TSB, Microsoft, Money, NASDAQ, Nicolas Sarkozy, O2, Orange, Recession, Richard Branson, Royal Bank of Scotland, Samsung Electronics, T-Mobile, UK Banks, UK Economy, UK Recession, US Commerce Department, US Congress, Virgin Money Holdings U.K. Ltd, Vodafone, Windows 7

Figures released yesterday confirmed that the UK economy grew by 0.1% in the last quarter of 2009, meaning that the recession is finally over, but later and which much less impact than the US or the Eurozone economies. Britain’s economy had been in recession for eighteen months, the longest period since quarterly figures were first recorded in 1955.

The news was widely anticipated with signs such as last week’s UK unemployment figures that fell for the first time in 18 months.

Analysts now predict that no matter which party wins this year’s election when it happens, the loser will be the pound/ Reasons given are that neither David Cameron or Gordon Brown will be able to muster sufficient support in parliament to control the UK’s budget deficit, which is the largest in the in the Group of 20.

Strategists have pruned back their forecasts on the sterling versus dollar pair by as much as 2 percent this month, to the lowest level since June 2009, with Sterling liable to be weighed down by possibility of the first parliamentary stalemate in more than a generation and growth levels that lag far behind Britain’s rival industrialized economies. Add that to a fiscal shortfall that has ballooned to almost 13 percent of gross domestic product and the picture for the pound looks less than rosy.

Previous precedents do not bode well for the pound, as when the last time a U.K. election failed to produce a clear winner in 1974, Sterling fell in value by 28 percent in the next two years, with the government’s failure to fund its deficit leading to the International Monetary Fund stepping in to bail-out the economy.

The UK’s so-called ‘Big Six’ group of energy suppliers is on course for a profits windfall due to the extremely cold weather conditions experienced in the UK during December and early January. Consumers were forced to turn up their thermostats when the country experienced the coldest weather conditions for decades with the daily demand for gas hitting an all-time high on Jan. 7th of 454 million cubic meters. Analysts predict that accumulative profits for the big six (Centrica, EDF, E.ON, Scottish and Southern Energy, ScottishPower and RWE npower) could easily reach an additional £100 million for the period.

The Chelsea and Yorkshire building societies are expected to finalise details of a merger this week. Doing so will mean the creation of the second biggest society in Britain, after the Nationwide. Yorkshire Building Society members are liable to give their thumbs up for the merger, following the lead of the Chelsea Building Society who gave their support to the deal on Friday. A successful deal would mean the consolidated company would have combined assets of £35 billion pounds, around three million members and 180 branch offices around the UK.

On the news that Barclays plans to defer bonuses for top executives including Chief Executive Officer John Varley for up to three years, stock in the company 4.1 percent, to 271.35 pence.

Pilots at British Airways pilots have been warned by the labor unions representing the cabin crews not to become strike breakers if an employment dispute leads to a work stoppage. News that caused BA’s stock to decline 0.8 percent, to 207.9 pence.

Prudential Plc, the U.K.’s largest insurer have announced plans to cut back expansion in developed markets to focus on growth in developing Asian countries, such as Malaysia, Vietnam and Indonesia. Shares in Prudential shares dropped 0.4 percent to 605.5 pence.

Sterling rose slightly against the dollar and the Europe in early week trading. The pound closed at 1.6144 against the dollar, with the Euro being traded at 1.146

Shares in the FTSE 100 took a minor downturn, despite the news that the recession was over in the UK. It closed on Tuesday down 26 points to 5,276.85.

A calmer mood prevailed in markets on Monday and Tuesday after a three day downturn that knocked 5 per cent of its values. Reports coming out of Washington over the weekend suggesting that Ben Bernanke looks like being reappointed chairman of the Federal Reserve for another four-year term settled the markets which had closed at fresh a 15-month high as recently as last Tuesday.

The Dow Jones rose by 84 points, to close at 10255.28, while the NASDAQ recovered 14 points, to finish at 2210.53.

According to the National Association of Realtors (NAR) sales of previously-owned US homes fell 16.7% in December, after having risen in the three months from September to November as first-time buyers took advantage of tax credits. However the decline in December came as no surprise as most buyers had rushed to complete deals before the original 30 November deadline. The first-time buyer tax credit has since been extended until 30 April, causing the NAR to predict that there was likely to be another surge in sales in the spring. December sales fell to a seasonally-adjusted annual rate of 5.45 million from 6.54 million in November, 15% higher than in the comparable period in December 2008.

Computer giant Apple have announced a 50% increase in profits after seeing a bumper Christmas period, with sales of iPhones doubled from a year ago.

Net income rose to $3.38 billion (£2.08 billion) in the three months to 26 December, from the $2.26 billion in the same period in 2008. A spokesman for Apple announced that they had succeeded in selling 8.7 million iPhones in the quarter. Sales of Macs also rose 33%, although iPod sales fell by 8%.

General Motors (GM) has confirmed that Saab is to be eventually acquired by Dutch luxury carmaker Spyker.

GM has been trying to sell Sweden’s Saab since January 2009 although recently they announced that they would begin the procedure of winding down the company while still continuing their search to find a buyer.

Wind-down activities have now been suspended, "pending the close of the transaction".

Saab lost £255 million in 2008, and has not made a profit since 2001.

In the commodities market, gold took advantage of the relative stability in the dollar, to rise to $1,097 an ounce. Oil also rose by 0.5 percent to $74.92 a barrel.

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Tags: Apple, Banking, Barclays, British airways, British Economy, British Pound, Centrica, Chelsea Building Society, Credit Crunch, David Cameron, Dow Jones, E.ON, Economics, Economy, EdF, Federal Reserve, Financial News, FTSE, General Motors, Gordon Brown, International Monetary Fund, iPhone, John Varley, Money, NASDAQ, National Association of Realtors, Nationwide, Prudential Plc, Recession, RWE npower, Saab, Scottish and Southern Energy, ScottishPower, Spyker, UK Banks, UK Economy, UK government, UK Recession, Yorkshire Building Society

City minister Lord Myners, in a recent speech played down suggestions that Britain might follow in US President Barack Obama’s footsteps in introducing radical reforms to the UK banking system.

Myners stated that the UK had already taken sufficient measures to address the problems in its banking industry.

"President Obama came out with a solution to the idiosyncratic problems that he sees in the American banking system, based particularly around the investment banking" pointed out Milner "It’s worth remembering that proprietary trading, hedge funds, private equity, these were not at the heart of the difficulties that Northern Rock, or Royal Bank of Scotland or HBOS experienced." He summed up.

Alistair Darling, UK chancellor, was also reported to be against duplicating Obama’s moves to split commercial and investment banks.

Meanwhile U.K. Prime Minister Gordon Brown is expected to announce details of the release of £125 million pounds of venture capital aimed towards "low-carbon" businesses. The move is aimed to support his argument that the government should continue spending to bolster the UK economy.

The first slice of money from the Innovation Investment Fund will be released on Jan. 26th, according to an announcement on the prime minister’s official Web site.

“On Tuesday our new innovation investment fund will show our commitment to the industries and the technologies that will create the skilled jobs of the future,” Brown promised. “What is increasingly clear is that determined and active government can and does make a difference.” He continued

Public sector borrowing for December in the UK was lower than forecast,, However the government’s hopes of meeting its deficit target for the fiscal year still remain dependent on January’s tax receipts. However tax income for January, which is a key month for self-assessment, capital gains and corporation tax income, is expected to be down. This is due to reduced income and capital gains for 2008-09, when the UK economy was in the midst of recession. On a positive note UK financial analysts have pointed to the fact that recent receipts were stronger than predicted, with December’s income only 0.4 percent down on the previous year, favourable when compared with the average of 8.1 percent decline for 2009.

The Royal Bank of Scotland (RBS) plans to sell its U.S. trading business for $2 billion to JPMorgan could be in doubt following President Obama’s recent ban on banks trading on their own account. RBS has been urgently trying to complete the sale of their a 50 per cent stake in RBS Sempra Commodities, by the end of next week which would have been bound to create a much more positive view of their annual results due to be released by Feb. 25th. On the news of the positive standoff, RBS, saw their shares fall 0.64 pence to 34.68 pence

Northern Rock and the Post Office have announced cuts to their mortgage rates believed to be in response to Skipton Building Society’s shock increase to its standard variable rate, which rose from 3.5 per cent to 4.95 per cent. A spokesman for the Skipton quoted "exceptional circumstances" had forced them to renege on promises that their lending rate would not rise more than three per cent above the Bank of England base rate.

The first two British banks to come under state control are looking increasingly likely to be merged, in a controversial change of direction by the EU in Brussels. The EU is apparently on the verge of approving the state aid package that Bradford & Bingley received from British taxpayers, opening the door for their buy-to-let mortgage book to be merged with Northern Rock’s so-called ‘toxic bank’. The merger, which UK government officials have been working on for several months, comes in the wake of public pressure to remove some of Northern Rock’s taxpayer-funded benefits, including the customer savings guarantees held in the "good of non toxic "part of the bank.

British Airways has issued some fairly heavy threats to their cabin crew who are threatening strike action. If they do so they stand to lose some of the traditional perks of the job, and on a permanent basis. These include the ability to book standby flights for themselves and nominated friends or family at a 90% discount , as well as the standard of hotels that crew are put up in overnight while they are away would be substantially reduced.

The airline says a strike would have serious financial implications leaving them with no option but to cut staff benefits.

British Telecom, in a move to woo broadband customers from rival operators, has unveiled an aggressive pricing strategy. The fixed-line telephone company is to offer consumers high-speed broadband based on optical fibre for £20 pounds, eight pounds cheaper than a comparable service offered by Virgin Media. An executive at BT’s retail unit, announced that the company goal is to attract "customers to come back to BT for all their services." BT’s optical fibre broadband will be predominantly based in towns and cities, and is expected to be capable of servicing more than 40 percent of UK homes by mid-2012.

According to BSkyB their High Definition marketing campaign was a Christmas marketing hit will full details due to be revealed in their forthcoming half year results due to be released this week. The results are expected to show that capitalising on the stay at home ethos typical of a recession was a shrewd move, with Sky offering a free HD box for customers who signed up for their film channels. City analysts are expecting the company to produce strong results, with turnover up by an estimated £2.8 billion, and a customer base up by around 300,000 new HD subscribers.

The fast food chain McDonalds are looking to create 5,000 new jobs in the UK in 2010 after seeing an 11 percent rise in sales over 2009. McDonalds currently operate close to 1200 outlets in the UK. The new jobs would come from the opening of up to 15 new branches in 2010 and the extension of opening hours in existing outlets. The UK jobs being created would take McDonald’s workforce to 85,000 in this country. A spokesman for the company announced that McDonald’s had increased UK like-for-like sales by 30 percent over the last four years.

Triumph, the UK motorcycle maker have announced an amazing upsurge in interest in their product with new bike sales for Triumph were up 26 per cent in 2009, at 7,450. This means that the company outperformed industry leader, the Japanese Kawasaki company for the first time since the early 1980s. Triumph has now captured 13 per cent of the British market and in the past year witnessed their global market share rise from 3.3 per cent to 4.4 per cent. Turnover in 2009 increased seven per cent to £304 million.

Sterling fell slightly against the dollar and the Europe before the weekend. The pound closed at 1.6118 against the dollar, with the Euro being traded at 1.1404

Shares in the FTSE 100 recovered some of their earlier falls closing on

Friday down by 0.6% at 5,302.99, Fears that the US President’s sweeping reforms would affect UK banks were seeing to recede.

In the US stock markets tumbled for a second consecutive day, over continued concern over President Obama’s plan to revamp the US banking industry.

The Dow Jones plunged by 216 points, to close at 10172.98, while the NASDAQ fell by 60 points, to finish at 2205.29.

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Tags: Alistair Darling, Bank of England, Barack Obama, Bradford & Bingley, British airways, British Telecom, BskyB, Dow Jones, FTSE, Gordon Brown, HBos, Innovation Investment Fund, JPMorgan, Kawasaki, Lord Myners, McDonalds, NASDAQ, Northern Rock, Post Office, RBS Sempra Commodities, Royal Bank of Scotland, Skipton Building Society, UK Economy, UK government, Virgin Media

With an earlier than expected rise in inflation, which soared to 2.9% in December, interest rates could be rising sooner than expected in 2010.

The reading for the consumer prices index (CPI) came in well above the expected 2.4% figure making for the largest ever rise in inflation over a single month, according to figures issued by the Office for National Statistics (ONS) Reasons given were reduced s discounting from retailers in the run-up to Christmas and fuel prices remaining unchanged compared with sharp falls a year earlier.

The Bank of England had already expressed fears that inflation would rise this year, but this high figure will curtail the bank’s efforts to store up inflationary pressures while kick-starting the economy out of recession.

The Bank’s target for CPI inflation for 2010 is 2% and the jump to 2.9% puts its policymakers in a delicate position. While higher than expected inflation would force them to raise rates before the economy has properly recovered.

The head of the International Monetary Fund head has again warned that the global economy could yet experience another downturn, known in financial circles as a double dip recession.

Managing Director Dominique Strauss-Kahn said countries should rush to exit from stimulus packages that have bolstered growth through huge amounts of government spending and that it is too early for policy makers to withdraw stimulus that’s driving the global recovery.

“The global economy is recovering, even if its recovery is fragile,” Strauss-Kahn said in a recent speech. "While a plan to withdraw emergency measures “should be designed today” it should not yet be “implemented” because world economies are still dependent on government support and private demand remains weak" Strauss-Kahn has previously voiced his opinion that the world’s economic recovery is occurring “sooner and stronger” than anticipated. More than $2 trillion in government spending around the world has spurred growth, pulling economies out of a recession spurred by a meltdown in the U.S. housing market. Separately, Germany and France raised their growth forecasts for the year. Strauss-Kahn went on to add that China and Asian economies are leading the recovery.

British Airways cabin crew is to vote again on possible strike action, according to a recent announcement from the Unite union.

A spokesman for Unite predicted that a fresh ballot of its members would be held in the near future. The move came after recent talks with BA failed to find a resolution to a long-running dispute. BA announced in reply that they were "saddened but not surprised" by the decision, whilst promising to make every effort to allow talks to continue. If talks fail, a strike could begin as early as March if cabin crew vote in favour of industrial action.

BA had already planned a 12-day strike for Christmas last year which was blocked by a court injunction.

The long protracted takeover of Cadbury by US food company Kraft now appears to be going forward after the Cadbury board approved a new increased bid. Cadburys will now advise their shareholders to accept a new offer of 840 pence a share – valuing the company at £11.5 billion ($18.9 billion). Shareholders will also receive a dividend of 10 pence a share.

The additional cash represents a 90 per cent premium to the Cadbury share price before the deal was announced and a 50 per cent premium to Cadbury’s undisturbed share price of 568 pence before Kraft approached Cadbury in late August

Spokespersons from both Cadbury and Kraft jointly announced that details of the agreement were still being finalising and would make a statement later.

Many city pundits were surprised that the deal eventually went through so smoothly after months of animosity between the two companies.

It is expected that Kraft’s final offer consisting of 500 pence in cash, with the rest made of Kraft shares made the deal much sweeter for Cadbury shareholders. To finance the takeover Kraft will require borrowing around £7 billion ($11.5 billion)

Shares in Cadbury topped the FTSE 100 on Tuesday.

Sterling was among the few currencies to rise against the dollar and the Euro on Tuesday after UK inflation jumped in December, increasing the possibility of monetary tightening and increases in interest rates being brought forward. The pound closed at 1.636 against the dollar, with the Euro being traded at 1.1459

The FTSE 100 index rose 41.6 points to 5,496.9, while the FTSE 250 index added 33.4 points to 9,571.6.

In the US, Citigroup announced losses of $7.6 billion for the last quarter of 2009, large due to their efforts to repay US government bail-out funds, and coming after three consecutive profitable quarters. Citigroup’s ’s loss was in line with Wall Street analysts’ expectations and would amounted to a loss of $1.4 billion, had it not been for its repayment of the $20 billion in funds it received from the troubled asset relief programme. For the same period of a year ago, Citigroup reported a loss of $17.3 billion. In 2009 as a whole, Citigroup made a loss of $1.6 billion on $80.3 billion turnover.

The Dow Jones Industrial Average rose sharply on early trading after being closed on Monday for Martin Luther King Day. The index rose 115 points to close on 10,725.43. The NASDAQ Composite was also on the up, 32 points to 2320.4

Computer giant IBM has announced that after cost-cutting work helped to increase its earnings by 9% in the last three months of 2009.

They have raised their profit target for 2010. IBM made a net profit of $4.8 billion (£2.9 billion) for the fourth quarter, up from $4.4 billion from the same period in 2008, with turnover for the quarter increased by 1% to $27.2 billion

Crude prices fell to a three week low on Tuesday, with prices averaging around $77.00 a barrel. Traders pointed out the implications in the oil market of the bankruptcy of Japan Airlines, as the Tokyo-based carrier made extensive use of oil derivatives to hedge its cost and the bankruptcy is likely to force investment banks to unwind the hedges.

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Tags: Bank, Bank of England, Banking, British airways, British Economy, British Pound, Cadbury, Citigroup, consumer prices index, Crude oil, Currency, Dominique Strauss-Kahn, Dow Jones, Economics, Economy, Financial News, FTSE, IBM, Inflation, Interest Rates, International Monetary Fund, Japan Airlines, Kraft, Money, Money Management, Money Markets, NASDAQ, Office for National Statistics, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Unite, US Government

U.S. President Barack Obama has celebrated his first year in office by showing a more brittle side to his personality, and in recent statements has been particularly vehement in his comments regarding the US banking system. Obama has stated his intention to raise legislation that would force around 50 banks, insurance companies and large broker-dealers to pay a tax of 0.15 percent on all of their U.S. assets, less their capital and deposits. Falling into that category will be the Royal Bank of Scotland (RBS), Barclays Banks and HSBC who, if the legislation is passed, could be forced to pay more than $10 billion to the U.S. government over the next 10 years. Analysts have already calculated that HSBC could be forced to pay around $3.8 billion dollars and Barclays could face a total bill of around $5.6 billion dollars over ten years. While the RBS will only be paying out around one and half billion dollars, they appear to be already in the process of raising capital to meet the bill, when it comes. They have announced that the Grosvenor House hotel, , is to be put up for sale by the part-nationalised RBS and proceeds for the sale is expected to raise between £600 and £700 million as part of RBS’s unwinding of its property portfolio. The Grosvenor House hotel, which has previously hosted events such as the CBI annual dinner, could be on the market as early as this month.

Meanwhile the Bank of England (BOE) are still feeling the effects of their quantitative easing programme, with the news of the loss of £3.6 billion s on its purchases of government bonds, whilst projecting that capital losses from the purchase, so far of £192 billion pounds in gilts would be £8 billion if these were sold today. The reason for the shortfall is the steep drop in government bond prices as a result of the strengthening economic recovery felt the past month. On the upside, losses will be offset by £4.4 billion pounds, which is the interest payment the BOE has received from the securities.

Construction companies made up more than 20 percent of UK business failures in 2009, a recent survey has disclosed. While the number of companies involved in the construction sector that closed their doors in 2009,

decreased slightly from 2008, there were still 683 who fell into administration during 2009, compared with 716 in 2008. The fourth quarter of 2009 saw a 17 percent decline in construction administrations according to Deloitte with 129 compared with 155 in the third quarter.

Shares in Premier Foods have fallen by more than ten percent after the food manufacturer announced that full-year pre-tax profits would be lower than expected, at around £165 million pounds for the financial year to February 16. Total sales increased by 1.5 percent during the fourth-quarter with sales of the company’s branded goods increasing to around £1.7 billion, making up to two thirds of the total turnover for 2009, compared with 61 percent the previous year.

The bus operator FirstGroup has reported a drop in turnover of around 20 percent for the company’s U.S. Greyhound operation during the first half of their financial year. A little ray of sunshine was that revenue for the third quarter was only down by 11.4 percent and passenger revenue for the group’s UK bus business grew by 0.7 percent during the three months to December 31. On the upside, FirstGroup announced that they remain on course to achieve earnings targets for the year and that trading, was in line with management expectations.

The European electrical groups DSGi, who own and operate the Currys and PC World chains in the UK, have announced trading figures that are in excess of most City analyst’s projections. Group sales rose by eight percent during the 12 weeks to January 9, much higher figure than the three percent expected by most analysts, with the reason attributed to an upturn in consumer sales.

Home Retail Group (HRG) have also updated their predictions for its full-year profits, which they now expect to be around £20 million higher than the £265 million initially forecast, following a four percent improvement in sales at HRG’s DIY chain Homebase.

One of Cadbury’s major shareholders has indicated that US food giant Kraft will have to increase their hostile takeover offer if it wishes to win support.

Legal & General Investment Management, which owns 5% of Cadbury shares, said Kraft’s current offer did not meet "the long term value" of the UK firm. Legal & General’s comments come ahead of Tuesday’s eagerly anticipated deadline for Kraft to increase its offer to Cadbury shareholders.

Reports continue to gather strength that Hershey is also planning a rival bid for Cadbury which may be announced as early as this week. The current state of affairs is that Kraft is currently offering £10.5 billion or 761 pence per Cadbury share, which was rejected by the chocolate-maker’s shareholders. .

Kraft’s current bid is worth less than Cadbury’s share price which closed on Friday at 793.5 pence.

British Telecom (BT) announced their intentions to enter a price war with Sky over the price charged for fans to watch premium sports events on TV, including football and cricket.

The telecoms firm is awaiting the outcome of an Ofcom probe, which will be known in March, examining whether Sky must drop the wholesale price it charges rivals for content.

BT Vision has leaked their intentions to charge about £15 a month for Sky Sports 1, about £10 cheaper than Sky currently charges. A spokesman for BT projected that there would be benefits to the viewing public for choosing BT as they would be getting more choice

Vodafone UK has launched a new online business centre, bringing information and insight on its full range of capabilities in mobile, fixed and unified communications together in one place. The site, www.vodafone.co.uk. Has been designed to make it even easier for private and business customers to find the information they need and the solutions that best suit them. Meanwhile Vodafone (has become the third mobile phone operator in Britain to begin to market the Apple iPhone in the UK. Results are encouraging with a total of 50,000 units delivered on the first day of sales. Until recently, Vodafone had been disallowed from marketing the premier smartphone due to exclusivity rights brokered between Apple and O2.

Vodafone is now the fourth company in the U.K. to carry the iPhone, following O2, Orange and Tesco. While O2 once enjoyed a two-year exclusive deal with Apple to offer the iPhone in the U.K., that exclusivity ended last year and Orange and Tesco began offering the Apple smartphone in November and December, respectively.

Orange sold 30,000 iPhones on its first day of its launch in November 2009 while Tesco has not disclosed any sales figures.

Also enjoying some good trading on the back of the iPhone launch is the Carphone Warehouse. Their trading update for the last quarter of 2009 is expected to show a four percent increase in the number of phone connections compared to the same period in 2008. Sales of the most expensive products, such as the Apple iPhone and BlackBerry, are believed to contribute considerably to sales and profits, while the company’s fixed-line division TalkTalk is reported to have added 46,000 new subscribers during the last three months of last year.

The pound improved a little against the dollar before the weekend, closing at 1.6301, while the Euro being traded at 1.321

The FTSE 100 Index dropped 43 points before closing on Friday finishing on 5,455.37.

Wall Street bank JP Morgan Chase has reported profits of $3.3 billion (£2 billion) for the last three months of 2009, compared with profits of $702 million for the same period in 2008, which was the height of the financial crisis. Total profits for the bank for year were $11.7 billion, with investment banking providing the bulk of the profit.

The Dow Jones Industrial Average took a tumble before closing on Friday down 81 points to 10,609.65. The NASDAQ Composite was also down. 23 points to close on 2287.99

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Tags: Apple iPhone, Bank of England, Banking, Barack Obama, Barclays Banks, BlackBerry, British Economy, British Telecom, BT Vision, Cadbury, Carphone Warehouse, Currys, Deloitte, Dow Jones, DSGi, Economy, Employment, Financial News, FirstGroup, Grosvenor House hotel, Home Retail Group, Homebase, HSBC, JP Morgan Chase, Kraft, Legal & General, Money, NASDAQ, O2, Ofcom, Orange, PC World, Premier Foods, Recession, Retail, Royal Bank of Scotland, Sky, Stock Markets, Stocks and shares, Tesco, UK Banks, UK business, UK Economy, UK government, UK Recession, Vodafone UK, Wall Street

City Minister Lord Myners said he recognized the need for state-backed banks to compete in the global market, as he signaled the government would not block them from paying large bonuses to staff. Lord Myners told the Scottish affairs committee on Wednesday it was important the Royal Bank of Scotland was able to recruit and motivate employees. His comments came a day after the bank’s chief executive Stephen Hester revealed recruitment posted its biggest problem as RBS was being forced to compete on bonuses.

The number of businesses that went bust in 2009 increased by 18 per cent, but the economic outlook is slightly brighter for 2010. Recent information shows hat from the middle of 2009 onwards, the rate of business failures started to slow down compared to 2008 and early 2009, with a 7.7 per cent year-on-year decrease. This has to be good news for the economy as a whole. Business failures last year were not as extreme as 2008. The number of firms going bust in the fourth quarter of 2009 increased by almost a quarter compared to 2007, still an improvement on 2008, where the year-on-year increase was almost a third.

U.K. manufacturing unexpectedly stalled for a second month in November, a sign the economy is struggling to shake off the longest recession on record.

Factory output stayed unchanged from October, the Office for National Statistics said today in London. Economists predicted an increase of 0.2 percent, according to the median of 25 forecasts in a recent survey.

Bank of England policy makers last week pledged to spend the rest of their £200-billion bond-purchase program as they tried to cement an economic recovery.

Home Retail Group Plc sank 6.2 percent to 265.8 pence, the biggest decline since September, after a company spokesman announced that growth in the industry will be “hard to come by.”

Meanwhile HMV Group Plc slid 8 percent to 84.4 pence, the sharpest drop since December 2008, after saying holiday sales at stores open at least a year were hurt by the performance of its Waterstone’s bookstore chain.

The pound has been little changed against the dollar on recent days, and traded at 1.6245, up 0.5 percent on the day. The Euro was up to 1.262

The FTSE 100 Index added 24.72, or 0.5 percent, to 5,498.20. The FTSE 100 has extended its surge since March last year to 57 percent after central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy

Stateside President Barack Obama has ordered Wall Street banks to repay $117 billion (£72 billion) to taxpayers after criticizing banks for their "massive profits and obscene bonuses" culture. The tax is to recoup money US taxpayers are expected to lose from bailing out the banks during the financial crisis. The move follows populist anger at banks, seen as being responsible for causing the recent economic crisis. President Barack Obama will announce a sweeping new levy on about 50 financial institutions that will raise an estimated $90 billion to reduce the federal debt.

US stocks struggled to push higher on Thursday after an unexpected drop in retail sales gave investors reason for caution.

The Dow Jones Industrial Average had gained 0.1 per cent to 10,690.90 and the NASDAQ Composite was also 0.1 per cent higher at 2,310.58.

The market had opened lower after the latest commerce department figures showed retail sales, excluding cars, had fallen 0.2 per cent in December, with analysts forecasting a 0.3 percent increase

According to figures from the US Commerce Department, sales at US retailers saw an unexpected fall in December, casting uncertainty over the recovery of the US economy. Retail sales fell by 0.3% compared with November. Concerns over job security are expected to continue to restrict spending, with unemployment still at 10%. December’s figures end a tough year for US retailers, with total sales for 2009 down 6.2% on the previous year.

On the other hand, the tech industry’s earnings season got off to a flying start on Thursday with Intel reporting demand for its microprocessors boosted fourth-quarter revenues to $10.6 billion, well ahead of analysts’ forecasts of $10.2 billion. The world’s largest chip maker also reported earnings per share a third higher than Wall Street expected, at 40 cents rather than 30 cents.

Compared with a year ago, when orders collapsed in the teeth of the recession, Intel’s profits were 875 per cent higher at $2.3 billion.

Oil prices traded below $80 a barrel on Thursday, consolidating after recent losses triggered by a sharp increase in US crude and oil products inventories The recession has put a dent in future North Sea oil and gas production, with companies tapping fewer new oil reserves in 2009 than in previous years of operations there. Only eight oil and gas fields – expected to produce a combined total of 140 million barrels over their lifetime – began production in 2009, according to industry consultants.

That compares with an average of 600 million barrels of new reserves brought on stream each year between 2004 and 2008.

Production at the North Sea’s old fields has been declining since the start of the last decade increasing UK dependence on foreign oil.

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