Chancellor Alistair Darling, possibly with an eye to future job prospects, is expected to blow his own horn in the coming days, by claiming that the Labour government’s investment in jobs programmes are responsible for saving no less than £12 billion during the recession. Darling backed up his claims by stating that in the 2009 budget, the government’s prediction for unemployment was as high as 2.09 million by the end of 2009 and reaching close to 2.5 million in 2010. By the end of December of last year they had already revised, their estimates down to one and three quarters of a million by end 2009 and less than two million for 2010. The reduced number of benefit claimants, if maintained, will save £10 billion over the next five years according to the stressed Chancellor’s figures.

There is much speculation afoot that the UK government are about to introduce important legislation regarding the use of credit cards. The new legislation will prohibit credit card companies from using a method of calculating interest known as the "adverse order of payments method. The adverse order of payments is where credit card companies force customers to pay off the debts on their account holding the lowest rates of interest before higher interest rate debt is reduced. Figures show that currently there are close to ten million people in the UK holding credit card debts with multiple interest rates. The practice is said to cost credit card holders an average of around £250 pounds in the first year they hold the card.

Business Secretary Lord Mandelson has announced that the UK government will be offering a £270 million loan to GM designed to safeguard five thousand Vauxhall jobs in the UK. The money, which will go to Vauxhall’s parent company GM Europe, will guarantee production at the car maker’s plants in Luton and Ellesmere Port. According to a statement from Lord Mandelson, the outline deal followed "highly complex" talks between the Government and bosses in the US.

Lord Mandelson stressed in his statement: "I always said the Government would stand foursquare behind Vauxhall. With this announcement, we have kept our word." Unite boss Tony Woodley who represent the Vauxhall workers chipped in by saying that the loan is great news for British industry.

Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc improved on the increase in value of their U.S. bank shares. RBS soared 5 percent to 42.57 pence. U.S. banks yesterday closed at the highest since November 2008, led by Citigroup Inc. Lloyds climbed 3.4 percent to 58.47 pence. The bank is close to agreeing a joint venture to sell a number of the less than worthwhile assets assembled by HBOS.

BSkyB, the U.K.’s biggest pay-television provider, surged the most in almost eight months on a report that Rupert Murdoch’s News Corp. may bid for the shares that the y currently do not hold in the company. On the news BSkyB rose 5 percent to 598 pence, the biggest gain since July 30. News Corp, which already owns 39 percent of the pay-TV company, may be planning to pay 735 pence a share for the stake it doesn’t already own.

The Pound was still seen to be struggling again the main currencies, although the currency did rise slightly before the weekend. The pound was on $1.5183 while remaining almost on par with the Euro on €1.1033

As the markets closed for the weekend U.K. stocks gained, extending a second weekly increase for the benchmark FTSE 100 Index, largely on the back of increases in financial share values.

The FTSE 100 increased 0.2 percent to 5,625.65, bringing its weekly gain to 0.5 percent. The FTSE 100 has climbed to near the highest level since June 2008, lifted by optimism that the global economic recovery and higher earnings will support the 12-month rally in equities.

Former executives of the now defunct Lehman Brothers firm as well as the senior executives of their erstwhile auditor, Ernst & Young headed home for a weekend of self contemplation as they were severely censured in a recent report for some serious professional lapses that led to the firm’s collapse.

The report also went on to say that Lehman trading on knowing they were insolvent for a number of weeks before eventually declaring themselves bankrupt. Lehman’s bankruptcy is generally recognized as being the catalyst that sparked of the global financial meltdown. The collapse of the 158-year-old investment bank in September 2008 was the world’s largest bankruptcy at that time.

The report made for some heavy and disturbing reading, accusing the Lehman Brothers’ management of "actionable balance sheet manipulation" and using accounting tricks to hide debts. In their defence, Ernst & Young said that its last audit of Lehman was "fairly presented" according to accounting rules. As Lehman Brothers wobbled on the edge of collapse, a determined effort from Wall Street, the City of London, and the US and UK governments did all that they could to prevent the banks’ fearing the chain reaction that Lehman’s failure would set off around the globe.

Whether the long awaited report had an effect on Wall Street trading remains to be seen, but share trading was certainly restrained on Friday before the markets closed. The Dow Jones was up 12. 85 points to 10624.49 while the NASDAQ dropped less than a point to 2367.66

After weeks of crisis, it looks like the Eurozone region are on the verge of agreeing to support a multibillion-euro bailout for Greece as part of a package to shore up the Euro, the zone’s single currency.

Despite huge resistance, Germany, who were against the bailout, have bowed to pressure from fellow members of the 16 strong Eurozone members who expect to draw up the rescue package in the early days of this week. At the same time, the Eurozone members, at Germany’s behest, will introduce new legislation to enforce greater fiscal discipline among its members.

According to a senior European commission official, the Euro member states have agreed to provide a series of loans or loan guarantees to Greece in the likely event that Athens finds itself unable to refinance its soaring debt and requests help from the EU. Speculation has it that the initial aid to Greece could reach as high as €25 billion (£22.6 billion), with estimates that the total extent of Greece’s financial problems could see them needing up to €55 billion in loans by the end of 2010. Despite the fact that Germany were the most reluctant to come to the rescue of a fiscal delinquent in the current crisis, they have played the pivotal role in organising the rescue package, in their role as the EU’s traditional paymaster,

According to a report by the International Energy Agency (IEA),

China’s demand for oil jumped by an "astonishing" 28% in January compared with the January 2009. The IEA went on to point out that added that the estimated global demand for oil in 2010 would be driven by rising demand from emerging markets, with half of all growth coming from Asia while demand in developed countries is likely to fall by 0.3%.

The IEA has increased its global oil demand forecast for 2010 by 1.8% to 86.6 million barrels a day.

Oil prices were above $83 a barrel on Friday, the highest in two months.

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Tags: Alistair Darling, Bank of England, Banking, British Economy, British Pound, BskyB, Citigroup Inc, Dow Jones, Economics, Economy, Ernst & Young, Financial News, FTSE, GM Europe, HBos, International Energy Agency, Labour government, Lehman Brothers, Lloyds Banking Group Plc, Lord Mandelson, Money, Money Management, NASDAQ, News Corp, Oil prices, Recession, Royal Bank of Scotland Group Plc, Rupert Murdoch, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Vauxhall, Wall Street

UK Prime Minister Gordon Brown received a polite warning yesterday from international leaders who attended a conference in central London that Britain’s tax regime and infrastructure must be improved if the country is to continue attracting investment. Brown and business secretary, Lord Mandelson stressed that the UK still remained a competitive place to do business despite the turmoil caused by the recession.

Following in the footsteps of his opposite numbers at Barclays and Royal Bank of Scotland is Eric Daniels, chief executive of the taxpayer-supported Lloyds Banking Group. Daniels has joined them in waiving his right to a bonus for 2009 of around £2.25 million. Lloyds Banking Group have announced that they would pay 2009 bonuses to those who were entitled to them, whilst emphasising that these awards would be paid in shares and subject to clawback.

Criticism has been rained on the government’s planned 50 pence monthly tax on telephone lines designed to subsidise the cost of superfast broadband has come from all places, by a Labour-dominated group of MPs.

The Commons Business Committee said the new tax, which is expected to raise £175 million per year, would hit poorer families who were less likely to pay for faster broadband. The committee went on to add that the “regressive” tax would “place a disproportionate cost on a majority who will not, or are unable to, reap the benefits of that charge”.

The UK’s largest airports operator of airports BAA, announced on Monday that their pre-tax losses for 2009 had widened, partly because of losses of £277.3 million from the sale of Gatwick Airport, London’s second-largest. The £1.5 billion sale of the airport to Global Infrastructure Partners (GIP) took place just before the end of the financial year. GIP is an infrastructure fund backed by Credit Suisse and General Electric. Competition authorities had ordered a sale to meet concerns about BAA’s market dominance.

The loss on the sale helped inflate losses at BAA owned by a consortium led by Spanish group by Spanish group Ferrovial, from £324.2 million to £821.9 million. Total revenue for the year to December at the group’s London airports, including Gatwick, rose from £2.3 billion to £2.4 billion. Figures for the group excluded BAA’s other airports around the country at Glasgow, Edinburgh, Aberdeen and Southampton

The prospect of a strike is again raising its head for British Airway’s cabin crew. Their proposed strike action looks likely to cause travel chaos for hundreds of thousands of air passengers across the UK. The vote in favour of industrial action by the 12,000 member BA cabin crew comes as a reaction to ongoing disputes over pay and working conditions.

The cabin crew’s union Unite had already decided on a walkout in December, but that BA strike threat was defused by an eleventh-hour High Court ruling.

Meanwhile a strike by around four thousand German airline Lufthansa pilots has been suspended, with union officials agreeing to resume negotiations on disputes covering job security and pay issues.

The action, scheduled to run for four days, was suspended after less than 24 hours, and caused delays and cancellations for passengers. According to the pilot’s union, there will be no further action until at least March 9, the union said.

According to a company spokesman, electronics giant Samsung will introduce its 3D-enabled TVs to the UK within the coming month. No less than twenty different 3D-capable products, with Blu-ray players and the required 3D glasses are expected to be included in the range. To keep pace with demand, TV shows with 3D content will be making their debut in or around the same time, to a partnership with DreamWorks. The rapidly approaching 2010 soccer World Cup will also be broadcast in 3D.

Sterling fell on Tuesday after Mervyn King, governor of the Bank of England, said he could not rule out the possibility of further quantitative easing. Speaking before the Treasury select committee King confessed his concern over scant evidence of a pick-up in UK trade in spite of the weakness of the pound. The pound, which had risen to a high of $1.5575 ahead of the Bank’s statement, fell more than a cent to $1.5441, whilst rising to 1.1415 against the Euro.

The FTSE 100 turned negative on Tuesday following King’s gloomy assessment of the UK economy. The index closing 0.7 per cent lower at 5,315.09.

The US Senate on Monday voted to move forward on a $15 billion jobs bill.

The 62-30 vote in favour of ended months of gridlock in Congress, and is expected to pave the way for a jobs bill to clear the Senate, just as other critical employment benefits are set to expire.

The scaled-back measure is expected to create 250,000 jobs through an array of tax credits and payroll tax exemptions to stimulate hiring. The bill frees businesses from payroll taxes on workers who are hired after more than 60 days of unemployment and gives them a tax credit of $1,000 for new hires that they keep for more than a year.

A number of retail giants reporting positive earnings surprises were not enough to offset Tuesday’s poor macro data, as investors grow concerned that last week’s rally overshot.

Consumer confidence index dropped dramatically to 46.0 in February versus 56.5 in January, the lowest level since last April.

The Dow Jones Industrial Average dropped 126.41 points to 10,276.97 while the NASDAQ Composite also crept back by a significant 34 points to close on 2,209.6.

Chinese premier Wen Jiabao has announced his concern regarding the stability of his country’s investments in US bonds.

China disposed of $34 billion (£21.5 billion) of US government bonds in December 2009, raising fears that Beijing is losing confidence in American economic policy.

US treasury figures show that China is once again no longer the largest overseas holder of US treasury bonds. Beijing ended the year sitting on $755. Billion worth of US government debt, compared to Japan’s $768 billion.

Oil prices retreated below $80 a barrel Tuesday as r sluggish US crude demand justified a 14 percent rally over the last three weeks.

Benchmark crude for April delivery was down 34 cents to $79.97 a barrel, later rising 25 cents to settle at $80.31 on Monday.

Oil had jumped from $69.59 a barrel in early February due to optimism that the global economy will rebound strongly from recession last year. Yet growing inventories of crude, gasoline and diesel fuel suggest demand in the US remains weak.

Some analysts expect crude demand in the US and Japan will gradually follow overall economic growth and lift prices, with crude expected to trade at between $85 and $95 a barrel for most of 2010.

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Tags: 3D TV, 3D-enabled TV, BAA, Bank, Bank of England, Banking, Barclays, British airways, British Economy, Commons Business Committee, Credit Suisse, Currency, Dow Jones, DreamWorks, Ferrovial, foreign investment, FTSE, Gatwick Airport, General Electric, Global Infrastructure Partners, Gordon Brown, Lloyds Banking Group, Lord Mandelson, Lufthansa, Mervyn King, Money, NASDAQ, Recession, Royal Bank of Scotland, Samsung, UK Banks, UK government, UK Recession, Wen Jiabao

According to a leading economist the UK should be classed with Greece and Spain, as countries carrying severe debt problems Not in agreement and understandably so are the UK Treasury sources who rebuked the suggestions that the UK was gradually becoming one of the poor relations of Europe by confirming that all of the three major credit-rating agencies had reaffirmed the UK’s triple A credit status.

Meanwhile Chancellor of the Exchequer Alistair Darling is the man faced with balancing the demands of investors and rating companies who fear that Britain’s top-level credit rating could be at risk, with the hopes of the UK public as well as some of his colleagues for an easing of taxation in the coming budget. Darling has already put the dampers on a lot of people’s hopes that this year’s budget will not be too populist, in a move to win votes for the general election that is due to follow a few months later

“People in the U.K. will want the budget to be realistic,” Darling was quoted as saying. “No one is looking for giveaways; that’s not the mood.” He summed up. Darling said voters realize the need to reduce Britain’s record budget deficit having already vowed to more than halve the £176 billion-pound deficit by 2014 starting next year.

Britain’s budget shortfall, which the Treasury estimates at about 12 percent of gross domestic product this year, is the biggest among the Group of 20 nations.

Dividends paid out shareholders by UK companies were honed back by to the tune of £10 billion in 2009, according to recent research.

Total dividends paid out by British listed companies amounted to £56.9 billion last year, down 15 per cent on 2008. The figures would have been considerably worse for investors if it not had been for the contribution of just five leading UK companies, with almost fifty percent of all dividends paid out coming from them. The e British business heroes were by BP, Shell, HSBC, Vodafone and GlaxoSmithKline. A sign of the shifting sands in the UK trading picture is that as recently as 2007, these companies accounted for 35 percent of the total dividend payout.

All the UK banks combined cut their dividends by half, adding up to around £6 billion less in dividends than in 2008. Performing particularly poorly was the high-street sector whose dividend payouts fell by 62 per cent.

At the recent meeting of the Group of Seven finance ministers’ tacit agreement was reached to draw up as set of common rules designed to force banks to pay for possible failures similar to the current one, which led to taxpayers being forced to take on trillions of dollars in liabilities.

The ministers said the world’s most advanced economies should adopt common rules as long as other major countries also agree. Apparently the G-7 is moving closer to an agreement on a bank insurance levy, one of a range of options proposed by the U.K. in November.

Already Sweden has taken the first step forward by creating a fund financed by their banks to help safeguard its financial system. In terms of the agreement, Swedish banks are required to make annual payments to the fund. The Swedish government injected 15 billion kronor (£1.2 billion) into the fund when it was set up, as well adding funds that had previously held in Sweden’s deposit guarantee fund.

According to government estimates, interest from the funds deposited by banks and on the money in the fund means it will swell to 150 billion kronor, or 2.5 percent of Sweden’s gross domestic product, by 2023.

U.K. stocks rose for first time in four days, led by a rebound in mining companies. The FTSE 100 Index increased 50.2 points to 5,111.84 at close of business in London.

The pound dropped to its lowest level in more than eight months against the dollar as growing concerns over the UK’s fiscal situation began to weigh on the currency. Sterling closed at 1.5701 and at 1.1388 against the Euro. The Euro has lost a lot of its attractions recently and was down to an eight-month low of 1.3583 against the dollar.

On Wall Street things were looking up. The Dow Jones Industrial Average finished up 74 points at 10058.64. The NASDAQ gained 15 points to close on 2,150.87.

Honda has added close to half a million cars to its existing global safety recall list. The problem this time is over airbag inflation problems mostly affecting cars sold in North America, with others Japan, Mexico, Taiwan and Australia due for recall. There was also further bad news for e Japanese carmakers Toyota after they were forced to recalled nearly half a million hybrid cars over faulty brakes, and millions of other models will need to be brought back to dealerships worldwide, suffering from accelerator and floor mat problems.

General Motors’ (GM) Opel unit has announced their plans to will invest 11 billion Euros (£9.7 billion) in introducing new product ranges over the next five years. Opel’s investment plan to breaking even within two years, a move that will entail cutting 8,300 jobs across Europe as well as the closure of at least one company plant in Antwerp, Belgium. Opel are trying to persuade

European governments to provide them with billions of Euros in loans to help the company’s plan to return to profitability.

India has announced that its economy is looking at growth levels by 7.2% in the year to the end of March. Government stimulus measures helped to maintain strong growth during the global downturn, but attention is now turning towards cooling rising prices, raising the chance that state support could soon be withdrawn. Many financial analysts also expect the government to raise interest rates earlier than expected. Strong growth in manufacturing in India is helping to compensate for falling agricultural output.

Oil prices rose and base metals moved higher as commodity markets managed a partial recovery after a sharp sell-off in the previous week US crude oil prices traded above the $71 a barrel.

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Tags: Alistair Darling, Bank, Banking, BP, British Economy, Credit Crunch, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, G-7, General Motors, GlaxoSmithKline, Honda, HSBC, Money, Money Markets, NASDAQ, Recession, Retail, Shell, Stock Markets, Toyota, UK Banks, UK Economy, UK government, UK Recession, UK treasury, Vodafone, Wall Street

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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Tags: Banking, Barack Obama, British Economy, Cadbury, Centre for Economics and Business Research, Council of Mortgage Lenders, Credit Suisse, Dow Jones, Economy, Employment, Financial News, FTSE, Gatwick Airport, General Electric, George W. Bush, Global Infrastructure Partners, HSBC, Imperial Tobacco Group Plc, Kraft Foods, Money, NASDAQ, Nationwide Building Society, Northumbrian Water, Oil, Ontario Teachers’ Pension Plan, Property Prices, Recession, Retail, Royal Bank of Scotland, Ryanair, Severn Trent, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession

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

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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Tags: Bank of England, Banking, Barack Obama, British Economy, British Pound, Currency, Dow Jones, economic recovery, Economy, Financial News, FTSE, HMV Group Plc, Home Retail Group Plc, Intel, Lord Myners, Money, NASDAQ, North Sea oil, Office for National Statistics, Oil prices, RBS, Recession, Retail, Royal Bank of Scotland, Scottish affairs committee, Stephen Hester, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, US Commerce Department, Wall Street, Waterstone's

While the UK and with it almost all of Western Europe and the West Coast of the US are caught in the grip of the longest running and most severe cold spell that it has seen for close to thirty years without a break in the foreseeable future, many analyst are now scratching their heads and asking themselves "what will this do to the price of oil?"

Since the weather began to turn incredibly difficult about a week ago the price of oil has risen steadily from the around $78 to $82 within the space of one week, the highest price it has been all of 2009, and to those of you who may have forgotten, sat on a low of $32 a barrel towards the end of December 2008. With the news that the major economies, and especially China, were starting to build up stockpiles of oil, hopes were that prices would begin to fall and settle around the ideal figure of between $68 to $72 a barrel.

Analysts fear that if the span weather persists, and predictions are that at least in the UK it could continue to the end of January, and the increase in demand could push the price up oil even further, as stocks diminish. Meanwhile leading bodies in UK industry bodies have asked head- teachers to minimize snow-linked school closures to reduce levels of absence from the workplace. Although 61 percent of 200 companies surveyed by the British Chambers of Commerce said less than one in 10 employees was absent, the Federation of Small Businesses warned that childcare-related absences following school closures would become a serious problem. The cold snap looks likely to cost the economy close to £700 million pounds a day, meaning total financial damage of £14.5 billion pounds if, as expected. The bad weather lasts a further three weeks.

As expected UK interest rates will remain unchanged at 0.5%, meaning that the cost of borrowing has remained at a record low since March 2009. Economist are not expecting to see a rates increase s in the near term, despite expectations that the UK will finally have exited recession in the last quarter of 2009.

Formula 1 boss, Bernie Ecclestone is looking to buy a Saab, not the car but the company, and intends to do so in partnership with the Luxembourg-based private investment company, Genii Capital, which recently invested in Renault’s Formula 1 team.

Ecclestone’s dramatic announcement came shortly after the deadline for expressions of interest in the company closed without any public bids.

As well as Ecclestone’s offer, a second bid s also emerged, from the Dutch sports car maker, Spyker Cars.

U.S. food giant Kraft has received a ticking off from the principal shareholder Warren Buffett who has also thrown a spanner in the works of their proposed transaction. The Buffett-owned holding company Berkshire Hathaway who Hold 9.4% of Kraft’s stock announced that they will be voting against it is the proposal to issue up to 370 million shares to facilitate the Cadbury deal.

A spokesman for Kraft reacted to Buffet’s statement by saying that "Mr. Buffett is our largest investor and one of the most respected investors in the world. We take his opinion very seriously. We agree Kraft shares are deeply undervalued. We would not do anything to hurt shareholder value and we intend to remain disciplined in this process." Shares fell 7 pence, or 0.9 percent, to 772 pence on trading.

In their annual Christmas trading statement, Majestic Wine announced a rise in sales of 11.7 percent between Nov. 3 and Jan. 4 in the UK, with champagne sales regaining their seasonal appeal over Christmas. While champagne sales grew 11 percent, fine wine sales climbed 30 percent and online trading rose by 20 percent.

Family-owned brewer Fuller Smith & Turner also managed to increase its profits, sales and dividend in the six months to September, largely bucking the trend prevalent in the brewery sector. With members of the controlling families owning more than half of the company equity and 60 percent of the voting rights, executive chairman Michael Turner pronounced the effect that company’s long-term, risk-averse strategy was paying dividends.

The FTSE 100 brought in the New Year and new decade by closing above 5,500 for the first time since the start of September 2008 – before the Lehman Brothers collapse, coming after a 22% rise over the whole of 2009 and a 53% rally from the low last March. The FTSE 100 closed on Tuesday on 5522.5.

Britain’s currency weakened possibly due to U.K. Business Secretary Peter Mandelson hints that the pound’s devaluation aided the economy in the recession.

• Dollar 1,5967
• Euro 1.1126

The U.K.’s largest home builder by market value Persimmon Plc has announced that they completed the sale of 8,976 new homes in 2009 with a total value of around £1.4 billion pounds. On the news their shares gained 1.2 percent, to 469 pence. Wolseley Plc, the world’s largest supplier of heating and plumbing gear seemed to be moving in a positive direction, with their shares added 4.7 percent, to 1,361 pence.

The Vodafone Group PLC expects to be able to offer Google Inc.’s Nexus One smart phone to its U.K. customers in the next few weeks, with their rivals reported to be already in advanced talks with the Internet giant about the device.

Vodafone, the world’s biggest mobile operator, is also in early discussions with Google about supporting the phone in France, Germany and Spain, a Vodafone spokesman told Dow Jones Newswires Wednesday, and hopes to offer it across the rest of Europe through the course of 2010.

JD Sports Fashion Plc, the U.K.’s second- largest sportswear chain said sales at stores rose 6.6 percent in the five weeks up to the Ist of January .2010. On the news their shares jumped 6.2 percent, to 550 pence.

Marks & Spencer Group on Wednesday reported a small increase in third-quarter sales, despite not slashing prices in the run-up to Christmas, as customers snapped up cashmere sweaters and clothing for kids. But the company cautioned that trading will remain challenging this year.

Group sales at the iconic British retailer rose 2.6% in the three months to Dec. 26. In the U.K. same-store sales rose 0.8%, with general merchandise up 1.2% and food up 0.4%. Underlying sales returned to growth for the first time in two years.

Still, the results missed the consensus forecast for a 1.2% increase in same-store sales, partly because this year’s trading period excluded the first day of the company’s post-Christmas sales, when it typically sees a surge in revenue. Online sales increased 32% and international sales climbed 6%

Britain’s Home Delivery Network said it would buy DHL’s UK parcel delivery operations, DHL Domestic, from Deutsche Post DHL (DPWGn.DE), growing its market share in a sector profiting from a boom in online shopping.

With many of the UK s leading retailers, among them John Lewis and Next reporting significant online growth, companies such as Home Delivery Network have felt the impact.

The parcel delivery company, headquartered in Merseyside, northwest England, said the combined businesses would have annual revenues of more than £600 million pounds, delivering over 180 million parcels a year, with a combined market share of 17 percent.

Britain’s currency recovered slightly over the last two days

• Dollar 1,5992
• Euro 1.1198

The FTSE100 finished trading on Thursday in a fairly static position at 5526.72 barely moving on the week’s trading.

On Wall Street, the Dow Jones Industrial Average closed on Thursday up a further 24 points to 10,607 while the NASDAQ also dropped 8 points to 2,300.71.

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Tags: Bank, Banking, Bernie Ecclestone, British Chambers of Commerce, British Economy, British Pound, Cadbury, Currency, DHL, Dow Jones, Economics, Economy, Federation of Small Businesses, Financial News, Freezing Britain, FTSE, Fuller Smith & Turner, Genii Capital, Home Delivery Network, Interest Rates, JD Sports Fashion Plc, John Lewis, Kraft, Lehman Brothers, Majestic Wine, Marks & Spencer, Michael Turner, Money, Money Markets, NASDAQ, Nexus One, Oil, Persimmon Plc, Peter Mandelson, Recession, Saab, Spyker Cars, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Vodafone, Wall Street, Warren Buffett, Wolseley Plc

The last and most positive item of news that hit before the UK financial community went into New Year mode was that data released by the Nationwide Building Society indicated that U.K. house prices had raised again in December by 0.4%, taking the growth for the year to 5.9%. December’s rise was for the eighth consecutive month. To take some edge from the optimism, Nationwide pointed out that there remained high levels of uncertainty over the outlook for property prices in 2010.

Other good news came from the Bank of England, who pointed out that the FTSE market has recorded the third biggest rise since 1693, over the last nine months. Predictions are that of January carries on at roughly the same pace, the market will have enjoyed its largest sustained rise for 317 years. Someone should point out to the BOE that the FTSE had to fall more or less on its knees in order to make such a dramatic recovery. Not that anyone is not grateful!

The UK statisticians seemed to be competing against each other this festive season to see whose figure could look the most positive.

Just before Christmas, the Office for National Statistics reported that unemployment had fallen 6,300 in a single month, hastening to add some icing to the Christmas Cake by pointing out that in no postwar recession has unemployment ever fallen so quickly. To be positive, unemployment in the UK has been less severe than most analysts expected. Expectations are that jobless levels will certainly carry on rising in 2010, but will eventually level out at around 1.25 million.

According to the Bank of England, quarterly credit conditions saw British banks reported a rise in the availability of secured credit to households, driven partly by an improved economic outlook. Unsecured credit availability to households continued to decline, but banks expected it to stabilize in the coming quarter.

Meanwhile cold Icelandic hearts have appeared to thaw just a little, with the news that Iceland’s parliament has approved plans to repay £3.4 billion to savers in the UK. The repatriations will go to the British as well as the Dutch governments, both of whom partially compensated savers when the Icesave online bank failed in 2008, with more than 320,000 savers losing their savings when the bank collapsed. Not that there weren’t ulterior motives behind the Icelanders generosity. In fact a special bill on the measure, was only narrowly approved against strong opposition, and was seen as crucial to Iceland’s bid rebuild its economy and gain a key to eventually being accepted as members of the EU.

A recent survey of UK adults has come up with the interesting discovery that that around two-thirds had made it a point of keeping track of their financial situation much more than they did two years ago, and were increasingly concerned about whether their bank was safe. Despite that, the survey did discover that far fewer consumers were less willing to make an effort to protect themselves, with only around half making an effort to reduce their debt levels and even less attempting to save than they were at the start of the recession.

More slightly bitter sweet news announced before the end of the year was that the number of repossessed homes that were sold by auction in the UK has fallen by more than half during the past 12 months. The number of repossessed homes sold at auction during 2009 totaled 3,998, compared with 8,222 sold during 2008, with the number of repossessed homes sold at auction in the last quarter falling even more dramatically to just 941 homes compared to 2,941 during the same period in 2008.

Sterling jumped to a 10-day high against the dollar on Thursday as year-end position adjustments led to a broad sell-off in the U.S. currency, with thin trading sparking exaggerated price movements.

The pound also extended gains against the euro as month- and year-end flows as well as technical factors supported the currency, helping lift rise to a 10-day high.

• Dollar 1617
• Euro 1.1285

The benchmark U.K. FTSE 100 rose 0.3% to 5,412.88 on Thursday, bringing its year-to-date gains to 22.1%, its highest gain since a 24.7% return in 1997. Despite the good news, overall the noughties were not great for the.

FTSE that declined 21.9% for the decade, worse than the Dow Jones Industrial Average that fell just 8% and the 14% retreat for the German DAX.

Wall Street ended the day and the decade in the red after encouraging jobs data on Thursday renewed concerns over interest rate hikes.

The number of Americans filing fresh claims for unemployment benefits last week dropped to the lowest level in about 17 months. Analysts had been expecting initial jobless claims to show a modest increase.

A late sell-off left stocks near their lows of the day, pushing the Dow Jones Industrial Average down 1.1 per cent to 10,428.05 and the NASDAQ to 2,269.15.

Commodity markets ended 2009 on a high with US crude oil touching the $80 a barrel mark in the final trading session, while white sugar extended its record-breaking run and copper, lead and zinc all enjoying price gains of more than 100 per cent over the year.

Oil prices maintained their upward momentum over the Christmas period amid ongoing tensions in Iran between opposition supporters and the government and by cold winter weather in the US, which has boosted demand for heating oil.

Gold ended 2009 just below the $1,100 mark at $1,096.35 a troy ounce, up 24.8 per cent over the year.

Gold hit a record $1,226.10 an ounce in early December and the bull market for bullion has now lasted for nine years.

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Tags: Bank, Bank of England, Banking, British Economy, British Pound, copper, Credit Crunch, Currency, Dow Jones, Economics, Economy, Employment, Financial News, FTSE, German DAX, Gold, Icesave, lead, Money, Money Markets, NASDAQ, Nationwide Building Society, Office for National Statistics, Oil prices, Property Prices, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK financial community, UK government, UK Recession, UK unemployment, US crude oil, Wall Street, zinc

The UK in the first decade of the new century recorded the lowest economic growth of the postwar period and the worst returns for stock market investors since the 1930s. Information provided by the Office of National Statistics points out that gross domestic product, on average, rose by only 1.7 per cent annually in real terms throughout the so-called noughties, making them Britain’s weakest period of economic expansion of any since the war years. The manufacturing sector was particularly hard hit with output actually contracting over the decade by 1.2 per cent annually.

Meanwhile, the British stock market suffered its weakest performance of any decade since the Great Depression, with prices on the FTSE All Share Index recording negative returns, averaging minus 1.8 per cent per year. The particularly sharp contraction in the real economy as a result of the financial crisis of the past 18 months continues to fuel pessimistic assessments of the UK’s prospects for the new decade.

In his New Year message, that well know optimist Prime Minister Gordon Brown is expected to give an upbeat assessment of Britain’s economic prospects for the forthcoming 12 months. Under pressure amid Labour Party concerns that they are destined to lose the next election, Brown is expected to take a gamble on a positive prediction that UK unemployment will have decreased by the end of 2010, with more smaller businesses starting up during the period, His gamble is calculated by details of latest forecast from the Chartered Institute of Personnel and Development (CIPD) stating that UK unemployment will peak at 2.8 million in 2010, and would continue to rise for the first six months of the new year, despite the recovery in the UK economy. .

Earlier this year, the CIPD had said it expected unemployment to peak at 3.2 million as a result of the recession. The total number of UK unemployed in currently stands at 2.49 million, 7.9% of the population, with around a quarter of these job losses happening in 2009.

UK homeowners pumped almost £5 billion into their home equities during the third quarter of 2009, according to recent figures issued by the Bank of England. Analysts pointed out that the trend of homeowners repaying mortgage debt would continue to restrain consumer spending, as they took advantage of record low interest rates to reduce mortgage debts. This development is in healthy contrast to much of the previous decade when homeowners had continuously drawn on equity from their homes to fund durable purchases.

Pressure is being applied to the UK government to make some changes to the Sunday trading laws in time for Christmas next year. Boxing Day falls on a Sunday in 2010, and shopping centres are lobbying to relax the law that restricts outlets of more than 3,000 square foot to just six hours of trading during this peak trading day. According to surveys, the number of shoppers soared by 17.9 percent last Sunday against a year ago, making it the highest increase in UK consumer traffic on record for a December 27.

Waitrose, the John Lewis-owned supermarket, reported an increase of 13.5 percent for the week before Christmas compared to the same period last year, making it their most successful Christmas on record. Total sales jumped 20.5 percent to reach £134.6 million s in the week to December 26, compared with £111.7 million for the same period in 2008.

Sterling remained below the $1.60 level on early week trading, even falling a little, whilst while remaining static against the Euro

• Dollar 1.5924
• Euro 1.1089

London stocks pushed higher on Tuesday, the first day back from the Christmas break, following the lead set in global equity markets in the previous session.

With US stocks failing to add much momentum, London’s FTSE 100 stayed at the same level for much of the session, adding 35 points or 0.7 per cent by the close to 5,437.61, extending its winning run to five days.

This was the index’s highest level in 15 months and took it above the point at which it stood on September 12, 2008, when Lehman Brothers collapsed.

Shares in US airlines fell on Monday following the alleged bomb attack on a US plane bound for Detroit, fueled by fears that renewed security concerns could further depress demand for air travel. Airport security measures have been tightened following the security incident on Christmas Day.

On Wall Street, the Dow Jones Industrial Average returned from the Christmas break in buoyant mood, climbing 36 points to close on 10,521.1 while the NASDAQ Composite jumped just three points to 2,288.46. Retailers had initially lifted the market after data from the International Council of Shopping Centers and Goldman Sachs showed like-for-like sales across the sector were up 2.3 per cent last week from the same period a year ago

US house prices rose in October for the fifth month in a row, according to a leading index.

Prices were 0.4% higher than they were in September on a seasonally-adjusted basis, according to a recently published index.

Confidence among US consumers has shown a larger-than-expected rise; with improved optimism over the jobs market saw consumer confidence hit a three-month high in December

Oil prices have climbed to more than $79 a barrel, reaching the highest levels for five weeks. During Monday’s trading in London, US crude touched $79.12 a barrel before falling back later to $78.77.

Heating oil futures led the gains, while London Brent crude rose by more than a dollar to $77.32 a barrel.

Prices rose following forecasts of colder weather in the United States, and the expectation of increased consumption and falling reserves.

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Tags: Bank, Bank of England, Banking, British Economy, British Pound, British stock market, Chartered Institute of Personnel and Development, CIPD, Council of Shopping Centers, Credit Crunch, Currency, Dow Jones, Economic Growth, Economics, Economy, Employment, Financial News, FTSE, Goldman Sachs, Gordon Brown, Heating oil, House Prices, John Lewis, London Brent crude, Manufacturing, Money, Money Management, NASDAQ, Noughties, Office of National Statistics, Recession, Savings, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, UK unemployment, Waitrose, Wall Street