Alistair Darling about to throw the UK building societies a little rope

June 11th, 2009 by admin | Filed under Daily News, Employment, Retail.

government Reports have it that Alistair Darling; the UK’s much loved Chancellor of the Exchequer is burning more midnight oil than usual, as he considers an escape clause for the UK building societies. The clause will allow them to raise some much needed capital without endangering their mutual status. Darling’s findings will be published in a Treasury white paper, due to be released this month. It is expected that Darling will announce the development of a new financial instrument, designed to allow the mutuals to raise capital at a one tier level only.

Meanwhile the Shadow Chancellor of the Exchequer George Osborne, in what some might say is an exercise in hypocrisy, has launched a renewed assault against bank bonuses. Osborne’s statements indicate that the Conservative Party has already begun their countdown to the next election. Their “holier than though” stance against City excesses may be difficult for many to swallow. Osborne was quoted as saying “The banks should be using their profits to rebuild their balance sheets, not to hand out huge bonuses while the rest of the economy picks up the pieces.

Encouraging news is that U.K. manufacturing levels rose in April for the second consecutive month driven by increased production of cars, vans and trucks, according to data issued by the Office for National Statistics.

Meanwhile, in sunny Britain there are those who are saying that every cloud does indeed have a silver lining. One of them is Halfords, the bike and camping retail chain. They are rubbing their hands in anticipation of a great summer as Britain stays at home and enjoy their holiday in the UK.

An executive for the company announced that they were both “amazed and encouraged” as to tents sold by the company during the recent UK bank holiday weekend.
Halfords aim to cash in even more by increasing caravan sales and caravan equipment for the rapidly approaching summer holiday season.

Those of us who are thinking past the summer holidays and into the next football season will be encouraged by the news that Setanta, the company who holds franchise to broadcast Premier League games and have been tottering financially of late, look like they might be able to save the company from administration, with all the complications that entails.

According to reports, company founders, Michael O’Rourke and Leonard Ryan may have been successful in rising up to £30 million in the wake of a long term rescue operation, involving Setanta’s international operations being spun out to raise money to support the UK business.

On the FTSE, commodities continued to gain strength. The Rio Tinto Group, who announced their intention to conscript $21 billion from a share sale and an iron-ore venture with BHP Billiton Ltd., had their shares rise climb by 6.6 percent to 3,148 pence.

Oil companies were doing well as prices continue to raise .BP, Europe’s second-largest oil company, added 0.6 percent at 533 pence, and Shell rose 0.8 percent to 1,684 pence.
Shares in the U.K.’s third-biggest supermarket owner J Sainsbury Plc gained 3.25 pence, to 327.5 pence after announcing that planned store openings for the coming three years are expected to l exceed initial targets as property prices plunge in the recession.

Lloyds Banking Group Plc gained 2 pence to 65 pence partially driven by news that the bank is in talks to sell part of its Insight Investment Management unit for as much as 300 million pounds to a team of asset managers currently employed by the bank.

On the day, FTSE 100 rose by 31.96 points to finish the day on 4,436.75 while the FTSE 250 rose 38.33 points to close on 7,729.98
The pound advanced yesterday against the dollar yet fell against the Euro.

Pound/US dollar 1.6357
Pound/Euro 1.1602
Pound/Japanese Yen 160.73
Pound/Swiss Franc 1.7677

US stocks slipped on Wednesday despite some positive economic news from the Federal Reserve.

The Dow Jones dropped 24.04 to 8739.02, while the NASDAQ also dropped but only by 5.3 points to close on 1853.63 Crude oil prices continue to rise reaching a fresh seven- month high of near $72 a barrel. Analysts say that investor’s appetites have been titillated by a larger- than-expected drop in US crude oil inventories.

Worryingly, oil prices have doubled in price since late last year, and have risen 60 per cent since oil prices fell in February to a four-year low of $32.70 a barrel.
In Japan, it was reported that the economy had shrunk less than previously thought for the first quarter of the year, but still at a record pace.
Gross domestic product actually only shrank by 3.8%, equivalent to 14.2% over a year, less than the 4% originally predicted.
Japan has been hit hard by the global downturn because it relied on consumers abroad to buy its cars and electronics.

The slow down seems not to be having too much effect on China. Reports show that Chinese industrial output grew 8.9 percent in May in relation to the same month last year