BOE says that good times are still not quite rolling for UK banks.

June 29th, 2009 by admin | Filed under Daily News, Global Credit Crisis, Recession, Retail, UK Bank Accounts, UK Banks, UK employment.

banking 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by about 500 billion pounds within the next four years, or find alternative sources of funding as government aid is withdrawn.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.