financial news

The car industry in the UK has not had its problems to seek, not only during the current recession but also well before it. So when something positive happens in the industry it should really be shouted from the rooftops.

And when it comes from one of the most innovative forms of environmentally friendly developments seen for many years, then no form of praise is sufficient. Coventry based electric van manufacturer Modec has won themselves a place in the history book on the announcement that they have been awarded a contract to supply 100 vehicles to a Paris, France distributor of distinctive urban delivery vans, ElecTruckCity. Mode’s van, the first of its kind to be designed specifically as a battery-powered vehicle, has become the first in its category to gain EC Whole Vehicle Type Approval.

Being a holder of a EC Whole Vehicle Type Approval certificate means the van can be sold anywhere within the European Union without the need to go through separate homologation procedures in every member country.

In the light of their success in Europe, Modec are actively seeking to be awarded US federal approval for their yet to be named truck.

The truck will be sold to the trade for around £30,000, meaning that Modec’s maiden order will be worth £3 million to them.
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CEO of Modec Bill Gillespie announced: “International demand for Modec is extremely strong. ElecTruckCity has taken the lead by setting up a distribution network in France and we are very excited about the future of the French market. “At a time when the automotive industry is full of doom and gloom we are pleased to announce our international expansion. This proves the future of the UK auto industry is green.”Mr. Gillespie continued.

A spokesman for ElecTruckCity announced that the Modec electric truck first captured their attention as well as their imagination at the 2007 Commercial Vehicle Show at the NEC. “As soon as I saw the iconic vehicle I knew the demand for Modec would be strong in France,” said the spokesman, going on to add that the interest in electric vehicles is significant and with Modec we can meet the needs of urban vehicle operators. More than 150 vehicles are now on the road and production is set to increase in the near future to 400 vans in 2009 and triple their production to hit 1,200 in 2010.

Tags: Car Industry, EC, ElecTruckCity, Modec, New Car

The government says it intends to take the East Coast rail service, run by National Express, into state ownership. The troubled rail franchise, which is expected to have lost £20m in the first half of the year, is suffering from falling passenger numbers.

Ministers have refused National Express’s requests for its contract with the government to be renegotiated. The Department for Transport said that all East Coast services would continue and that tickets would be honoured Tesco may launch a bid for Northern Rock as the Government attempts to sell off the nationalised lender before the General Election, according to reports. The supermarket chain has shown “provisional” interest in buying the bank which was nationalised as the credit crisis brought the financial system within hours of collapse, the Times reported.
The paper reports Gordon Brown wants Northern Rock returned to the private sector at a substantial profit before an election. Virgin, which tried to buy Northern Rock at the time, has expressed interest but it is understood that the Treasury is not in talks with any potential bidder.

A Tesco spokesman said the report was “pure speculation”.

A Treasury spokesman: “Any decision will be taken in the best interests of financial stability and of the taxpayer. “Our only focus is our discussions with the European Commission around the restructuring of Northern Rock and the implementation of Northern Rock’s new mortgage lending.”

The Government favours a sale rather than a flotation because it would be quicker, the paper reports. Last week MPs said an under-prepared Treasury was “caught flat-footed” by the run on mortgage lender Northern Rock in September 2007. The Public Accounts Committee (PAC) attacked the department’s lack of readiness to deal with a failing bank despite warning signs emerging as early as 2004.

Northern Rock – the first UK bank victim of the credit crunch – was propped up by almost £27 billion in emergency loans from the Bank of England and eventually nationalised in February 2008.

MUSIC and books retailer HMV Group has seen profits soar over the past year despite the recession, it announced today. The retailer reported an 11.5 per cent rise in annual profit, a result which has been helped in part by the demise of the firm’s smaller rivals. The 88-year-old firm, which runs the famous UK high street music, DVD and video games shops, as well as Waterstone’s bookstores, this morning posted profit before tax and one-off items of GBP 63 million for the year ended April 25.
Sales from continuing operations rose 4.4 percent to GBP 1.96bn.

HMV has benefited from the collapse of rivals Woolworths and Zavvi which, after years of struggling with competition from the internet and supermarkets, succumbed at the start of the recession. “We are working hard to maximise both the market share opportunity that has arisen from the withdrawal of competitors, and the investments that have been made over the last two years to improve performance,” an HMV spokesman said. The results were driven by increased sales of games, music and films at the HMV store, with Waterstone’s seeing a drop in sales of 3.6 per cent to GBP 548.3m.

BEFORE the credit crisis of 2007/08, Lloyds TSB was rated the sixth safest banking group in the world. That all changed when it was forced to save HBOS from the knacker’s yard, taking on all of the former building society’s toxic waste. Now renamed Lloyds Banking Group, and 43pc owned by the UK government, Lloyds will report the lowest credit losses of all Europe’s largest capitalised banks by 2011 and will be able to act commercially despite being part-owned by the government.

Favourable broker comment also got Barclays going. It jumped 11.55p to 279.65p after long-term bear SocGen suddenly turned positive in the wake of the [pounds sterling]8bn sale of its Barclays Global Investors arm to Blackrock. It upgraded to hold from sell and raised its 2010 target price to 260p from 36p.

Although SocGen continues to adopt a cautious stance on the bank sector, its top pick is Barclays. It says that while not all of its problems have been addressed, evidence suggests a solid foundation for future independent growth has emerged.

It was frisky financials that helped the Footsie close 53.02 points higher at 4294.03 on hopes that the worst of the crisis is over.

Car insurer Admiral accelerated 271/2p to 8831/2p after Credit Suisse upgraded to outperform from neutral A reassuring trading statement lifted media group Informa 191/4p to 231p. It continues to trade in line with ‘management expectations despite very challenging trading conditions’. Broker Singer Capital Markets says that while the group is lacking a catalyst and remains in debt-pay-down mode, the valuation has become much more appealing.

News that Hargreaves Lansdown is trading ahead of expectations left the close 9p higher at 210p. The investment group said revenues for the 11 months to end-May 2009 are 10pc ahead of revenues for the same period last year. It now expects the full-year outcome to be slightly ahead of top end expectations, currently at [pounds sterling]69.1m.
Insurer Gable Holdings firmed 1/2p to 81/2p on pleasing annual results. Pretax profits rose to [pounds sterling]910,000 from [pounds sterling]510,000 and net insurance margins jumped to 22.5pc from 16.5pc. It recently announced a new contract with a French insurance broker.

Better-than-expected annual results attracted buyers to marketing software company Portrait Software, 33/4p up at 111/2p. It reported a strong second-half of the year and a good start to the current year including a big contract win from Dell Computers.

SDI, the automated warehousing systems specialist, added 5/8p to 51/2p on news of a confirmed order book of [pounds sterling]29m and a pipeline of potential orders of [pounds sterling]21m for the current year.

London equities held reasonably firm on Tuesday, helped by more optimistic data from the UK housing market and support from the resource stocks in line with firmer commodities markets As trading closed, the FTSE 100 had reversed its gain from Monday losing 44.82 points to finish the say’s trading on 4,249.21
The FTSE 250 dropped for the first time in three days, by 62.65 points to close on Sterling’s day was weak against the leading currencies.

Pound/US dollar 1.6436
Pound/Euro 1.711
Pound/Japanese Yen 159.1014
Pound/Swiss Franc 1.7841

US equities rallied on Monday as upgrades in the consumer sector and improving energy stocks helped lift stocks later in the day after an early collapse.
On Wall Street, the Dow Jones finished the day dropping most id its previous day’s gains, down 82.38 points to 8447, while the NASDAQ lost 9.02 points to close on 1835.04.

Tags: British Economy, Credit Crunch, East Coast rail service, Employment, Financial News, National Express, Northern Rock, Retail, Tesco, UK Recession

There are a very large number of UK employees who have been contributing to a private pension scheme partially funded by their employers, which they are assuming will provide them with either a very tasty lump sum, or a monthly stipend that will considerably boost their state pension. However people who are due to retire within the next five years are in for a not too pleasant surprise when they discover that the value of their pension has been eroded due to the economic ravages that the equities market has experienced in the last 24 months.

Some worrying information has emerged that the UK’s largest private sector retirement fund ,the BT Group Pension Scheme was reported to have only sufficient funds on hand to pay about 57 per cent of their pension obligations in the event, albeit unlikely, that the telecommunications company were to become insolvent. A spokesman for the company did hasten to announce that they are now taking every step possible to return this figure to a healthier level, as well as considerably cutting back on its future investments in equities for the future.

Huge companies, such as BT, who are faced with the awesome responsibility of handling huge pension funds consistently, took refuge in the FTSE as a hedge against inflation. The shift in investment strategy that they will now be making is significant and they will now have to find ways to make safer short term investments to keep their pensions funds at a higher level.

A spokesman for the British Telecom Pension Scheme (BTPS) announced their target is cut to 33 per cent of the fund’s equities portfolio and instead acquire assets which are low yielding and safer such as bonds that will move in line with liabilities.

The statement of investment principles applying to company managed pension funds explained the investment shift, noting: “The trustee acknowledges that, in particular, the level of investment in risky assets might, over the short to medium-term, influence the volatility of the funding level of the scheme, and hence may influence the volatility of the employer balancing contribution rate.”

Tags: Company Pension, Minister for Pensions, Pension Scheme, Pensions, Private Pension

According to a report issued yesterday by the Office for National Statistics (ONS) the UK economy contracted 2.4% in the first quarter of 2009,
more harsh than the earlier estimate of a 1.9% fall, and worse than even the gloomiest analyst expectations.

ONS attached blame for the sharp revision primarily on weaker output in the construction and manufacturing sectors as well as more complete services sector figures showing a sharper decline.
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In a start contrast to the news of contractions in the UK economy, consumer confidence was reported to have increased to the highest level in 14 months in June.
Unemployment claims also rose less than economists forecast for May, while a host of independent business surveys continue to indicate that the economy is starting to climb back. So who do you believe?

As if to compensate, the U.K. government announced their plans to be the cornerstone investor in a new U.K. Innovation Fund to invest in high-tech start-ups. First Secretary of State, Lord Mandelson announced that the government will put up an initial £150 million investment in the new venture capital fund of funds, with the hope that the fund will attract sufficient investment from pension funds and the private sector to allow the creation of a £1 billion fund within 10 years.

UK Minister for Science and Innovation, Lord Drayson, announced that two thirds of the Governments £150 million stake in the fund will come from the Department of Business, Innovation and Skills, with the balance being put up by the Department of Health and the Department of Energy and Climate Change.

A manager is soon to be appointed to run the fund that will focus initially on early stage companies in life sciences, green technology, digital technology and other similar high-tech sectors. The fund, yet to be named, expects to make its first investment by the end of the year

Carrying on their crusade to convince their staff to share in their losses, British Airways announced that they would really like their staff to accept a two-year pay freeze, as well as 3,000 redundancies among crew and administrative staff. Talks on the matter between unions and management to agree on cost savings were adjourned earlier are expected to resume today.

Reportedly being lined up as the next chairman of Lloyds Banking Group is experienced British banker Sir Win Bischoff. Sir Win , (67) chairman of Citigroup, till he stepped down from the role in February, has been apparently been approached by UK Financial Investments to take up the challenge at Lloyds and steer them through the process of integrating HBOS, which the Lloyds took under their wing late last year at the peak of the bank’s crisis.

London equities held reasonably firm on Tuesday, helped by more optimistic data from the UK housing market and support from the resource stocks in line with firmer commodities markets

As trading closed, the FTSE 100 had reversed its gain from Monday losing 44.82 points to finish the say’s trading on 4,249.21
The FTSE 250 dropped for the first time in three days, by 62.65 points to close on

Sterling’s day was weak against the leading currencies.

Pound/US dollar 1.6436
Pound/Euro 1.711
Pound/Japanese Yen 159.1014
Pound/Swiss Franc 1.7841

US equities rallied on Monday as upgrades in the consumer sector and improving energy stocks helped lift stocks later in the day after an early collapse.

On Wall Street, the Dow Jones finished the day dropping most id its previous day’s gains, down 82.38 points to 8447, while the NASDAQ lost 9.02 points to close on 1835.04.

US super bank, Morgan Stanley announced that they will be joining forces with Japan’s Mitsubishi UFJ Financial Group. The joint lending venture will give the bank extra firepower to compete with such Wall Street rivals as Citigroup and JPMorgan Chase.

In the eurozone, annual rates of inflation turned negative in June for the first time since the single currency was introduced in 1999. Prices in the 16-nation zone fell 0.1% in the past year, against 0% in May.

Inflation in the eurozone, dragged down by lower energy and food prices, has also been affected by falling demand for goods from companies and households.

Japan announce that they believe that they are on course for growth in the next fiscal year, but the recovery of the world’s second largest economy could yet prove vulnerable,
The comments came just before a quarterly Bank of Japan survey showed that business confidence had risen for the first time in two and a half years. industries such as auto making, steel and electrical machinery as leading the rebound after an”unthinkably bad” first quarter of 2009.

Tags: Banking, British Economy, Credit Crunch, Economics, Economy, Financial News, FTSE, Money, Recession, UK Banks, UK Recession

A recent report has claimed that the UK public is being overcharged for energy and by more than one and half billion pounds every year.

With the cost of crude oil now less than half of what it was in January of this year, the savings that the energy suppliers must be making in their raw material costs are far away from being reflected in the financially choked British consumer’s gas and electricity bills.

While a large number of consumer protection groups have picked up on this point and begun to pressure the energy suppliers to reduce their bills, the UK government seems to be “sitting on their hands”. With the general feeling that the man in the street continues to be the whipping boy for profit hungry conglomerates, this apparent lack of regard for their plight really sticks in the throat of those who are concerned for the well being of Britain’s sick and elderly. There is no reason why significant reductions cannot be made in utility bills.

Until the UK government does step in, the only defence that the UK consumer has is to shop around and compare prices. If their current energy supplier seems to be overcharging them, no time should be wasted in stating their displeasure, and not waste time and energy by threatening to move on to a new supplier, but beginning to take the necessary steps to do so. Many consumers, who have tried this move, have been surprised to discover that their existing energy supplier will pull something out of the hat to keep their business.

Although it is often easier said than done, the UK consumer could take certain initiatives to reduce the cost of buying energy. The first is by paying promptly, preferably by direct debit, which could amount to saving of around £7.00 a month.

Paying online, especially if you are capable of reading your own meter can save even more. Watch your electric appliances, and switch them off when not in use, even if it is a pain in the neck. If you are finding it difficult to cope financially, and the circumstances allow it, you may even be eligible to certain government grants that will help you to pay your energy bills or better still reduce them through energy saving methods such as improved insulation among others.

All that will help till the UK government starts wielding the big stick at the energy companies. Don’t hold your breath.

Tags: Energy Company's, Energy Prices, Fuel, Fuel Costs, Fuel Package, UK energy suppliers, UK’s oil and gas

The highly rated “Which?” Award for Best Financial Services Provider, has gone to none other than the Co-operative Bank.

Despite the recession, the bank has continued to perform well with its client base increasing significantly in recent years, largely due to their ethical investment policy.
Since 1992, the bank’s commercial lending has grown from £571 million to £4.4 billion in 2008 – an average 14% per year growth.

According to a company spokesman “The Bank’s Ethical Policy has led to more than £1 billion in unethical business being declined, but it has also contributed to a massive £3.8 billion net growth in our corporate lending” Which obviously agrees.

U.K. Business Secretary Peter Mandelson announced yesterday that the U.K. Financial Services Authority must be allowed to retain control of both prudential and business conduct supervision despite the risk that it may cause an argument with the Bank of England who seek to have a more “direct role” in financial stability issues. Mandelson made the statement during a speech to the British Banking Association on Monday.

A rush for floral dresses and “boyfriend blazers” has helped online fashion retailer Asos to almost double their pre-tax profits in the year ending March 31. Since the onset of the financial crisis, the group has outperformed its high street rivals, luring young shoppers online with more than 800 clothing brands. However the company reports that slowing UK sales growth has prompted Asos to increasingly turn their attention towards international expansion.

Meanwhile that bastion of the UK high street, Marks & Spencer is expected reveal improved trading this week as more benign market conditions feed in to its sales figures. A strong showing at Easter and the recent positive turn in the weather are expected to contribute to a marked improvement in sales, compared to the final quarter of 2008.

In a move best described nobler than astute, food supplier Uniq have announced the sale of their profit making subsidiary based in France in order to focus on their UK operation which is losing money.

Uniq’s French company, which produces chilled and frozen convenience foods, is to be sold poultry and delicatessen group LDC for £62 million. £25 million of that sum will be set aside by Uniq to reduce its UK debts, with the balance going towards pension deficit reduction and some investment. Uniq, a fairly major supplier to Marks & Spencer among others, posted an operating loss of £3.3 million for 2008.

On the stock exchanges, National Express added 9.8 percent to close on 302.75 pence, after the FirstGroup announced that their preliminary acquisition approach to the board of National Express was rejected.

Shares in Lloyds Banking gained 6.1 percent to 70.56 pence after analysts predicted that the lender will be a “key beneficiary” of higher market share concentration in the U.K. Royal Bank of Scotland gained 2.3 per cent to 39 pence while Barclays was up 4.3 per cent to 279.65 pence apparently aided by renewed speculation that the UK are to announce a new “bad bank” scheme to buy up toxic loans.

U.K. financial adviser Hargreaves Lansdown Plc also enjoyed a good day with shares up 4.5 percent, to 210 pence on the announcement that they expect full-year pretax profit to be “slightly ahead” of market estimates, boosted by higher stock broking volumes and the rising markets.

Defence contractor Cobham was up 1.8 per cent to 175.6 pence after they announced that their joint venture with Northrop Grumman had been awarded a US intercom order estimated to be worth around £ 1.5 billion ($2.4 billion) over the next ten years.

The FTSE 100 began the week positively, rising by 53.02 points to 4,294.03.
The FTSE 250 also climbed for another day, this time by 90.95 points to reach 7,477.21

After a period of falls and rises, Sterling kicked off this the week on the up against all the other major currencies.

Pound/US dollar 1.6645
Pound/Euro 1.793
Pound/Japanese Yen 159.2436
Pound/Swiss Franc 1.7978

The worst recession in decades will curtail oil demand for years to come, according to a prediction from the International Energy Agency (IEA). The Agency has sharply reduced their forecasts for world consumption and declared that the threat of a supply crunch had receded.

In their role as the consuming countries’ oil watchdog the IEA announced their expectations that global demand will grow by an average annual rate of just 0.6 per cent or 540,000 barrels a day till 2014.

On Wall Street, the Dow Jones finished the day up 90.99 points to 8529.4, while the NASDAQ rose just a little, 5.84 points to close on 1844.06. The State of California is preparing to issue IOUs to its creditors this week as it grapples with an unprecedented cash crunch and prepares to begin its new fiscal year deep in the red.
Once the US’s richest state, California now has the dubious distinction of having the worst credit rating in the country.

Now the sunshine states are facing a budget deficit of £14.5 billion yet Arnold Schwarzenegger, its governor, and the state assembly cannot agree on a budget that would address California’s record shortfall. Anyone surprised?

In New York, disgraced financier Bernard Madoff was shown no mercy by the courts, being handed down the maximum prison sentence of 150 years for masterminding his £40 billion fraud, a world record that will never be broken. Madoff’s lawyer, obviously an optimist, had sought a more lenient sentence of 12 years,

Tags: Bank, Best Financial Services Provider, Co-operative Bank, Economy, Financial News, Recession, UK Banks

The Bank of England announced before the weekend their prediction that not only the U.K. but all the major global banking systems will remain in a vulnerable position for some time, if there is a recurrence of economic and financial tensions. Their announcement comes despite a continued improvement in market conditions over recent months.

In its semi-annual Financial Stability Report, the BOE also warned that government aid for banks could eventually stifle their growth. The feeling is among the bank officials are that a point could be reached where aid will become less effective, through driving up national debt. Their estimate is that U.K. banks may need to cut lending by about 500 billion pounds within the next four years, or find alternative sources of funding as government aid is withdrawn.

British lenders’ “large and rising” financing gap, and the eventual reduction in central bank assistance “will add further to the need for alternative sources of funding,” summed up the central bank’s reports.

Meanwhile, an announcement from UK business secretary Lord Mandelson that plans to sell a minority stake in Royal Mail to a private company may be delayed, due to scheduling problems brought about by the government’s legislative programme. Mandelson was unfazed by the delay and went on to promise Labour would outspend and out-reform the Tories. In “maintaining frontline spending”.

In the wake of the sudden passing of pop superstar, Michael Jackson, AEG Live, the company who were to be organising the singers 50 concerts scheduled to be held at the O2 arena, look like they could be facing a loss of millions from their cancellation..

As ticket holders clamoured for information. AEG announced that full ticket refund information would be released early this week, whilst advising fans to hold onto their ticket vouchers and proof of purchase. It remains unclear what insurance cover AEG Live has. Around 800,000 people have bought and paid for tickets for concerts that were due to commence mid July. Seemingly more than fifty million pounds worth of tickets for the scheduled fifty concerts has been sold, with AEG having already invested close to twenty million pounds on mounting the production,

On a cheerier note, Woolworths, the UK’s most loved high street chain and the biggest retail casualty to date during the recession, have made a comeback. Instead of the High Street, Woolworth’s products can now be bought on the information super highway, including their famous pick ‘n’ mix candy. Welcome back Woolworths!

Even more good news, is that the hundreds U.K. workers laid off during the recent strike at Total’s Lindsey oil refinery are to be reinstated after a series of mass protests at energy plants across the country. The striking workers’ demands had become a rallying cry of sympathy strikes across the U.K.’s engineering-construction industry, after almost 10% of the industry’s work force staged a spontaneous walk out.

In an audacious move that if it goes through is liable to have huge repercussions on the UK mobile phone market, it was reported over the weekend, that Vodafone, one of the world’s leading mobile operators is considering an offer to buy T-Mobile UK. Details were still scarce at this point; however developments are expected during the course of this week.

Reeling from the continued slump in demand from the construction industry steel industry giants Corus announced that they reluctantly plan to shed 2,000 more jobs in their plants at Rotherham and Stocksbridge in South Yorkshire and Scunthorpe in Lincolnshire. , Corus has already axed thousands of posts this year.

As the markets began to wind up and thoughts moved towards a weekend in the sun, the FTSE 100 also wilted by 11.56 points to 4,241.01, making for the first back-to back weekly decline since early March.

The FTSE 250 climbed again, this time by 42.95 points to reach 7,386.26

Sterling continued its topsy turvey trail rising slightly against dollar whilst retreating against the other major currencies on a mixed day for trading.

Pound/US dollar 1.6525
Pound/Euro 1.745
Pound/Japanese Yen 157.6885
Pound/Swiss Franc 1.7912

In the US, stocks ended a choppy week of trading with an indifferent finish on Friday after the Department of Commerce reported that personal spending, incomes and savings all rose in May. The down side came with the announcement that the number of Americans filing claims for unemployment benefits unexpectedly rose last week by 15,000 to 627,000, while the U.S. economy had shrunk at a 5.5 percent annual rate in the first quarter.

The Dow Jones finished down 34.01 points to 8438.4, while the NASDAQ rose but only be 8.68 points to close on 1838.22

Who ever heard of paying more than a million and half dollars for a buffet lunch? In America everything is possible and even more so if the guest of honour at the lunch is none other than legendary entrepreneur and Investor Warren Buffett. Despite a less than successful trading year by his high standards, the business community is still prepared to pay strong money to break bread with Buffet, this year paying $1.68 million, which split seven ways works out at around $240,000 a head. Needless to say all the proceeds go to charity

In Asia, it was announced that Japanese industrial output appears to be moving out of the doldrums. Output rose by a commendable 5.9 per cent in May with car and electronics production recovering from a deep slump. Japanese financial analysts did hasten to point out that the outlook was still not one to generate too much optimism, and the downturn is liable to return once the effects of government stimulus wear off.

Tags: Bank, Bank of England, Banking, British Economy, British Pound, Credit Crunch, Economy, Financial News, Money Management, Stocks and shares, UK Banks, UK Recession

Poor Exchange Rate Maths Costs UK Travellers £288 Million
More than a third of adults are unable to convert currency 44 per cent don’t work out how much things cost when shopping abroad Countdown maths expert, Rachel Riley, provides currency conversion tips and calculations

More than a third of UK adults (38 per cent) are unable to convert popular currencies into sterling1 and are losing out on a staggering £288 million2 a year on holiday as a result.

Despite household budgets being squeezed, a new report3 by the Post Office® reveals that 44 per cent of people don’t work out how much things actually cost when they are abroad and one in three people (27 per cent) go over budget when they travel.

Such is our dislike for exchange rate maths, one in five people (17 per cent) prefer holidaying in places where they understand the currency, and nearly 1.5 million people actually avoid places with unfamiliar currency because they find it too confusing and stressful to work out how much they are spending.

Despite Turkey’s growing popularity as a holiday destination, the Turkish lira topped the list of confusing currencies, 49 per cent of people were unable to convert it into sterling. And a surprising number of people struggled to convert the most popular and widely used currencies – 35 per cent did not convert US dollars accurately and 26 per cent struggled with the euro.

Rachel Riley, Countdown’s new resident maths expert said: “Working out how much things cost on holiday doesn’t have to be time consuming or confusing.
To help avoid overspending, make a note of the exchange rate when you buy your currency and use my easy to remember formulae for working out some of the most popular currencies.

“It’s not always practical to carry a calculator around but most mobile phones have calculator functions, so make the most of this, particularly if buying expensive items, and work out how much you are spending before you purchase.”

Rachel Riley’s Currency Conversion Formulae (based on rates XX June 2009)

Currency | Method | Formula
—————-+——————————+———————————-
Euro | The current euro exchange | Take One Tenth Off For Sterling
| rate is around 1.09 so the |
| easiest way to work this |
| out in pounds is to take |
| away 1/10 of the price in |
| euros. |
—————-+——————————+———————————-
US dollar | For current US dollar | Double Dollars Then Take A T
| exchange rate is 1.56 so | hird
| doubling the number of |
| dollars and dividing by 3 |
| gets you to sterling. |
—————-+——————————+———————————-
Turkish lira | For the Turkish Lira it is | Lira Times Two Times Two, Then
| around 2.4 which is | Divide By Ten
| approximately multiplying |
| by 4 (or doubling twice) |
| and then dividing by 10. |
—————-+——————————+———————————-
Thai baht | For Thai baht it’s 51.8 to | Doubling Your Baht Equals Price
| the pound so doubling this | In Pennies!
| is approximately the price |
| in pence. |
—————-+——————————+———————————-
Egyptian | The Egyptian pound is 8.2 | Halve Once, Twice,Thrice,In,E
pound | to the British pound so | gypt!
| halving the number of |
| Egyptian pounds 3 times is |
| the easiest way to work |
| that out. |

Sarah Munro, head of Post Office Travel Services added: “At a time where budgets are being stretched, it’s more important than ever to keep a reign on holiday spending. To make the most of your pound make sure you do your research before you go. Check out the exchange rate and do some research to find out how much things basic staples like drinks and suncream will cost when you get there.

Sarah continued: “Make sure you buy commission-free currency in advance and avoid purchasing it at airports where you won’t get the best rates and can be charged through the nose in commission; recent research shows that we waste £20 million a year by purchasing money at airports4. It is also advisable not to withdraw money abroad at ATMs as you will be charged and it can be difficult to keep tabs on your spending.”

Top Tips from Rachel Riley and the Post Office for budgeting on holiday:

Make a note of the exchange rate – it sounds simple but many of us change our money and then forget the rate we bought it at. Keep a note in your purse or wallet and use this as your reference when working out how much things cost. Write the equivalents for £1, £5, £10 and so on and use as a rough reference guide Use your phone – make the most of the portable calculator that most of us have in our mobile phones, if you are struggling to work something out, you can do it quickly on your phone. For those who want something more advanced, you can buy special currency converters and calculators

Don’t pay in sterling– don’t be tempted to pay in sterling on your card or in cash as shops and restaurants can charge their own exchange rate which is unlikely to be competitive. You can also get stung by added fees of up to 4 per cent. Bartering – in lots of popular destinations like Turkey and Morocco, bartering is part of the culture. Do your research before you go and if you’re going somewhere where bartering is acceptable, don’t be afraid to offer the merchant the price that you are willing to pay Try a pre-paid travel card – pre-paid cards like the Post Office Travel Money Card enable you to load your card with currency when the exchange rate is good. You can then use this as you would your bank card and it helps act as your own budgeting tool to ensure you don’t spend more than you have loaded onto the card. The Travel Money Card is completely separate from your bank account too so it’s a secure way of taking money abroad.

Over 1,600 Post Office bureau de change branches offer the most widely requested European currencies on demand (except the Hungarian forint and Estonian kroon, which can be pre-ordered).

All currencies can be pre-ordered for next day branch collection at all 11,500 Post Office outlets or online at postoffice.co.uk. Home delivery can also be requested online. Travellers to the eurozone can obtain euro currency over the counter at more than 8,000 Post Office branches.

1 Respondents were asked to convert euro, US dollar, Egyptian pound, Thai baht and Turkish lira into pound sterling
2 Figure based on the finding that 25 per cent of the population over-spends on holiday through miscalculating prices by an average of £24 3All research unless stated otherwise is from Opinium Research. Opinium Research carried out an online poll of 2,022 British adults from Friday 12th to Tuesday 16th June 2009. Results have been weighted to nationally representative criteria. www.opinium.co.uk 4With an estimated 2.6 million UK airport transactions made annually, the volume of euro transactions was based on 80 per cent of outbound travel being to Europe, cross-referenced with the Post Office’s own statistics which show that euro sales account for 70 per cent of currency purchases.

That lower figures of 70 per cent was therefore used to calculate euro wastage. The figure of £20, 329,400 was calculated by combining the minimum commission charge of £3 with the difference between the euro exchange rate in UK airports and that at Post Office branches. An individual wastage of £11.17 per transaction was multiplied by 1.82m transactions (70 per cent of total transactions of 2.6m). The exchange rate differential was calculated by taking the mean average from cost comparisons at eight UK airports on three separate days.

Tags: British Pound, Economy, Exchange rate, Financial News, Money, Post Office, The Post Office, Travel, Travel Money Card

We must all remember with some shock and horror when the UK treasury announced that they would be cutting bank interest rates to next to nothing to help the business community and keep the major banks from going “belly up.”

If you were one of these people who were fortunate of unfortunate enough to have money on deposit and even more so if you were dependant on the interest earned on a day to day basis, you had no option but to sit back in horror and disarray and watch the interest rates that you were earning on your deposits fall from three of even four percent to less than one.

Although there is a return to optimism that the financial crisis has at least bottomed out and that the economy is now in cautious recovery mode, there are little signs in general that interest rates on deposits are beginning to climb.

When the rates paid out on deposits first began to plummet, the best move that anyone could make was to stay put, dig in and be patient. Especially as the likelihood of finding another bank or building society that were paying out more than one percent was very slim.

However there now indications that higher interest rates on deposits are now available, under certain terms circumstances, For example, both the Abbey and Newcastle Building Societies have recently announced increases in lending rates that, while being far from spectacular, do allow the possibility of actually seeing your savings begin to accumulate for the first time since late last year.

The significance of the interest rate not only strengthens the general feeling that the recession is slowly dwindling and for the families and individuals who had refused to panic the time has come to begin to reorganize their finances and have them work for you once again.

Trends in finance are generally consistent, and mean that if one or two building societies or even the banks begin to offer improved deposit rates it is only a matter of time before they all do. So take the time to check out which deals are likely to be worth your while, and for the long term

Tags: Bank, Bank of England, Banking, Intrest Rates, Money, Money Management, Savings, UK Banks

That time honoured analogy that ” if you ask you sometimes get” has just been proven yet again with the news that around 800 British Airways employees have indeed taken up the challenge laid down their chief executive, Willie Walsh by volunteering to work without pay for up to a month In addition, almost 7,000 BA staff have offered to take pay cuts, through opting for working part-time or without pay, whilst other have agreed to take unpaid A spokesman for the airline announced yesterday that the worker’s compromise would allow temporary savings of around £10 million in 2009 alone..

Walsh hailed the workers offer as “a fantastic response” despite the fact that he came under heavy attack from Unite, the biggest union at the airline.
Groupe Eurotunnel, the company that runs the Channel tunnel is considering making a bid for the UK’s only dedicated high-speed rail line.

The move comes as Groupe Eurotunnel prepares to buy back the last of a series of financial instruments formed during the company’s complex 2007 restructuring. The line known as High Speed 1 carries trains running at up to 300kph (186mph) between the Channel tunnel and St Pancras station in London.

The High Speed 1 line which cost £5.8 billion to build is likely to fetch between a third to half of that figure. The line’s current owners are none other than the UK government who took over the line’s former owner’s London & Continental Railways, on June 8.

In a deal costing around £3.5 million Clinton Cards has bought 196 Birthdays stores out of administration. Birthdays, a subsidiary of Clinton Cards, went into administration last month after Clinton cut off funding to it.

News of the buy -out, as well as forecasts that the acquisition would contribute at least £3 million in profits for the year to July for Clinton Cards, pushed shares in the company up by 24 per cent. Clinton will need to pay only £250,000 in cash for buying stores, with the balance offset by existing loan from Birthdays to Clinton.

A spokesman from Clinton announced that said that they had chosen only the stores that were making profit and that the stores that remain open will continue operate under the Birthdays label.

Signet Jewelers Limited rose to 4.58 percent to 1,187 pence in morning trading session and climbed earlier to 1,195 pence. Over the last year shares in the high street jewelry chain have fluctuated from a low of 42.50 pence to a high of 1,449 pence.

Shares in Britain’s biggest government-controlled bank, Royal Bank of Scotland Group plc, climbed 4.05 percent to 37 pence; after analysts pointed out that they expect the bank’s share price to rise against opposition banks “given its lower risk strategy.”

The benchmark FTSE 100 dropped 27.31 points to reach 4,252.57 ending a run of rises lasting three days. The FTSE 250 climbed by 22.86 points to reach 7,343.31

Sterling continued its topsy turvey trail rising slightly against dollar whilst retreating against the other major currencies on a mixed day for trading.

Pound/US dollar 1.6421
Pound/Euro 1.689
Pound/Japanese Yen 157.6885
Pound/Swiss Franc 1.7912

US stocks staged an impressive broad-based rally on Thursday with retail stocks leading the way with home furnishings retailers faring especially well. The Dow Jones was up a respectable 172.54 points to 8472.4, while the NASDAQ jumped a further 27.2 points to close on 1829.54

Reacting to accusations that he had overstepped his authority during the Bank of America’s acquisition of Merrill Lynch, US Federal Reserve chairman Ben Bernanke was forced to present a public defence of his actions, The House oversight committee asked him whether he had actually forced Bank of America to go through with the deal through applying excess pressure.

Prices for crude oil rose back just over the $70 a barrel mark on Thursday after an attack on a pipeline in Nigeria.

Tags: Bank of America, British Economy, Clinton Cards, Economy, Financial News, Royal Bank of Scotland, Signet Jewelers, UK Recession