As the finance industry appears to be pulling out all of the stops to win back the hearts of the UK consumer, the news announced recently that MasterCard, one of the World’s most well-known, widely accepted payment cards brands have agrees to significantly reduce the fees that they have been charging to banks across Europe. The hope is that these savings will be passed on to the consumer in compensation for some of the hefty fees that had been imposed in autumn of last year. MasterCard had been under considerable pressure to reduce their fees and eventually have bowed to the weight of public opinion as we well as no little pressure from the European Union to reduce their fees. Pressure that appears to have borne fruit with the announcement that MasterCard will reduce their fees to the banks by 50% at least temporally. Estimates are that their generosity will be worth around £15m a year on MasterCard transactions in the UK.

In another move that might appear to be an effort to buy time, representatives of the major UK’s banks have petitioned the House of Lords to appeal against a recent judgement on inflated bank charges that was awarded against them after appeal.

The move comes after the High Court had decided to allow the Office of Fair Trading (OFT) to investigate the legitimacy of excessive overdraft charges levied by banks on individuals or business that had exceeded their overdraft levels. This test case has already been going on for 18 months, and with no end in sight due to possible delaying tactics by the banks, many tens of thousands of similar cases have been frozen till a final decision is reached on the subject.

Another sign of increased consumer confidence is that on the FTSE, retailers were leading the way on share value increases. Analysts confirmed that stock prices in the sector were being pushed up amidst increasing speculation that the coming Budget will introduce measures designed to underwrite trade credit insurance.

Star of the day was the Home Retail Group whose shares rose by 7.8 per cent (20 pence to 242) Not far behind were Kingfisher whose shares rose by 4.8 per cent (8 pence to 157) Major high street fashion group, Next Plc also fared well rising 6.5 percent (91 pence to 1410)

The mobile phone and internet company Vodafone had a good day on the news that interest was remaining stable in the UK market. Shares in the company began to surge forward rising by 4.4 percent (6 pence to 128)

The commodity market also was positive with the “diamond of the day” being Randgold Reserves whose shares rose by 5.4 percent (200 pence to 3883). The rise was in anticipation of the release of the company’s annual report due today, which is expected to include details of the company’s successful Massawa gold project in Senegal.

Property owners Hammerson saw their shares rise by a modest 1.6 per cent to (4 pence to 258). The rise came after speculation that the company was considering offers to acquire their Bishops Square development in the City of London.

Transport companies were also in the spotlight as they awaited news on the Government’s decision to allow them to re-negotiate contracts signed during more positive times for the UK. National Express pushed forward by a whopping 23.2 percent (43 pence to 187) with Stagecoach also doing well. Their shares rose by 9.8 percent on the day (13 pence to 131)

The FTSE 100 embarked on the first day of the second quarter of 2009 on a rise, reaching at one point its highest level since mid February, closing up 2.23 percent by 88.34 points at 4,043.95. The FTSE 250 also did well climbing 1.37 percent (89.77 points to 6,630.79)

Sterling rose conservatively against the dollar and the Euro and more strongly against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4553

Pound/Euro 1.0977

Pound/Japanese Yen 144.04

Pound/Swiss Franc 1.6676
Wall Street enjoyed its second consecutive session of gains as stocks rallied after some early uncertainty regarding the state of the economy.

The Dow Jones Average rose 152.68. to close at 7761.6. Nasdaq also rose 23 points to 1551.6

The rises came despite figures announced showing that around three quarter of a million Americans has lost their private sector jobs during March, which is more than fifteen percent above the figure expected. Long term confidence however allowed the stock prices to rise.

Crude oil prices fell on Wednesday large due to a very significant drop in Japanese energy consumption. Demand of oil in February was at its lowest level since 1970, causing US oil inventories to reach a 16-year high. Crude oil is now trading at less than $50 a barrel on average

According to a recent survey, the Chinese manufacturing sector continued to shrink and it has now been eight months since the index has actually risen.

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Tags: Credit, Credit Crunch, Financial News, MasterCard, UK Credit Cards

As the battle against the credit crunch continues unabated, one of the key tools that the Bank of England have called into play in what seems like a vain effort to keep the economy moving may well disappear. According to the one of the Bank’ chief economists, Mr. Spencer Dale is very possible that the UK treasury will request that the banks begin to push up interest rates as a hedge against inflation.

According to Mr. Dale, the Bank will do all in its power to maintain their intention to have inflation down to an annual rate of 2% by April of this year. The bank seemed to be well on track till the figures for February were released last week, showing that inflation had risen to over the 3% mark, instead of falling, largely due to rising costs of food.

Mr. Dale also suggested that further action may be required to be taken by UK policymakers to keep inflation in check, and what has been implemented so far may take longer to cause the desired effect than initially projected.

Also on Friday, Chancellor Alistair Darling called for the banks to implement a fundamental shake-up staff in order to restore confidence in the industry. He insisted that one of the key areas requiring attention was how the banks reacted to their customers and not only that, to their staff, especially those at the middle level.

“Banks, and in particular their boards, need to recognise that their duty to shareholders is best fulfilled by acting in the interests of their customers and — not only some — but all of their employees,” Darling was quoted as saying

“But in order to regain the trust of the public, we need change that extends beyond the boardroom.” He continued.

His message was one that said as well as cleaning up their balance sheets the major UK banks had also make change in their trading culture. Digging in for the long haul, Darling also pointed out that it looks increasingly likely that the government will continue to hold a significant stake in the domestic banking system for the foreseeable future.

In the markets, shares in Barclays Bank shot up by 18%, their highest in more than two months, as the bank announced that they had been given a clean bill of health by the Financial Services Authority (FSA)

Barclays confirmed that, following a series of discussions with the FSA, it had been informed that their capital position and resources are expected to meet the capital requirements which the FSA published on 19 January and continue to do so.

One of the major banking groups who have consistently managed to survive without the need for public financial support, seem capable of doing so in the future, especially when they are about to announce the successful sale of their iShares asset management business which will bring them as further £4.5billion for their war chest, in addition to the close to £7billion raised last year.

In February Barclays posted better than expected profits for 2008. The £6.1bn, 14% down on 2007 was a bonanza when compared to the results of their competition, many of whom are now in Government hands.

On FTSE Friday stocks slumped slowly backwards with the FTSE100 closing down 0.67% (26 points to 3,898.85). The FTSE250 did about the same closing down 0.48% (30.62 points at 6351.52

Sterling continued to weaken against the increasingly strong dollar whilst rising slightly against the Euro, and holding its own against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4316

Pound/Euro 1.0772

Pound/Japanese Yen 140.09

Pound/Swiss Franc 1.6375

Wall Street shares took a tumble on Friday spoiling a week of steady increases.

The Dow Jones Average dropped 148.38.to close at 7776.18. NASDAQ also fell 41.8 points to 1545.20

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Tags: Bank of England, Banking, Credit Crunch, Interest Rates, Money, Mr. Spencer Dale, UK Banks, UK Recession

At one time, before the credit crunch implosion was ever thought of, credit cards seemed liked a really good idea. And the truth is, it still is. If placed in the proper hands.

However, in the days of easy credit, things got very out of hand. Credit card companies, on the constant look out for more paper profit, began to offer unreasonable levels of credit to the UK public, too many of whom took up the temptation to live now and pay later, without taking into account the long term implications. And the implications for too many people, especially young families starting out in life, is that they will be facing a future filled with uncertainty and debt.

However this situation appears to be drawing to a close thanks to proposed UK government legislation that will see an end to credit card company’ practices of raising a customer’s spending limits on their credit card without them requesting it. Another recent marketing tool that the credit card companies have adopted recently is to send cheques by post to their customers, These cheques, always unsolicited, present tremendous temptation to people who are struggling to make ends meet to “borrow their way out of trouble” Instead, they are only placing themselves in deeper financial trouble in the long term.

APACS, the UK trade association that provides a forum for financial institutions to discuss issues relating to the payments industry hastened to announce that its members did not raise the credit limits of borrowers with known financial problems. Currently it is estimated that credit card debt in the UK stands at a staggering £53 billion.

Consumer Affairs Minister Gareth Thomas has expressed his concerns, both on the amount of credit card debt in the UK. With the average adult carrying a debt of close to £2,000 in addition to their other financial commitments.

” We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers, or send out unsolicited credit card cheques,” said the Minister “It’s vital we protect consumers at this time and we are exploring these issues carefully,” he continued.

A new code of practice for the credit card industry, instituted back in the 2006, imposed on credit companies to carefully assess a customer’s suitability before sending out cheques or raising limits without solicitation on behalf of the customer. They were also requested to explain clearly the implications and costs of taking up these offers. However, in practice, most people see these offers as a lifeline and find it difficult, if not impossible, to refuse.

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Tags: Banking, British Economy, Credit, Credit Crunch, Debt, Financial News, UK Credit Cards