According to information released by the Royal Institution of Chartered Surveyors (RICS) it looks increasingly likely that further price increases in the domestic property market may be put on hold, as more properties continue to come on to the market. RICS announced that in February more instructions to sell came on the market than enquiries to buy, making for the second month in a row that this has happened. Analysts have always speculated that

The rise in house prices during 2009 has been because there was a shortage of both new and second hand properties for sale. In spite of the rise in volumes, however, the average price paid for private homes during the year fell 9 per cent to £166,000.

That well known bearer of bad news and inaccurate predictions the Confederation for British Industry (CBI) have come up with another winner. This time they suggest that the cash-strapped U.K. government should aim to balance its budget two years earlier than currently planned. The CBI say that such a move would go a long way to calming investor fears that Britain could lose its top-notch credit rating. They have yet to come up with suggestions of how Chancellor of the Exchequer Alistair Darling or whoever is lucky enough to replace him should go about this mammoth task, although the traditional spending cuts and reforms to public services were mentioned rather than tax increases.

In the last few weeks, newspaper polls continue to point in the direction of a coalition government for Britain in the coming elections. This will mean the first minority government since 1974, and those who remember that far back, don’t recall it as a particularly pleasant experience.

It appears that the British Chambers of Commerce (BCC) has their feet more firmly on the ground than some of the other public bodies. They have proved it once again by suggesting that the UK government reduce their economic growth target for 2011 from 2.3 percent down to 2.1 percent. At same time, the BCC issued a strongly worded suggestion to the government to abandon proposals to raise national insurance. To complete a cheery picture, the UK trade organisation also suggested that the UK government should rapidly address public sector pensions as well as taking a close look at public sector levels to make any progress on tackling the UK’s ever increasing budget deficit.

One of the biggest clouds hanging over the future of the Royal Mail service has finally been lifted after an agreement was reached with postal workers which means that they could be eligible to salary increase of around seven percent over the next three years, as well as a more stable job security. In return for these favours, the Communication Workers Union (CWU) need to promise to cooperate in structural changes to the organisation that will eventually transform it .

The deal, which is still to be accepted in a ballot vote by CWU members, is designed to avert the threat of further union disruption and give the green light for the Royal Mail to proceed with their proposed £2 billion modernisation programme. With their union troubles hopefully behind them, the stage will be set for Royal Mail to face some of their other challenges, including revaluating their pension fund deficit, which currently stand as £3.4 billion to at least three times that sum.

The company that manages the Channel Tunnel, the aptly named Eurotunnel, announce that they had succeed in making a £1.3 million last year, despite the effects of the "poor economic environment" as well as one or two setbacks that they experienced in 2009, which they must hope will be one-offs. These included the tunnel being closed after the fire in late 2008, not returning to normal levels until February of last year, as well as the heavy snow that made it impassible in December of 2009.

There is a buzz in the city that states that Northern Rock are about to announce multi-million pound losses in 2009, and for the third year running, Pre-tax losses are expected to be around 400 million pounds, meaning that . The bank has made losses totaling of £2 billion since being bailed out by the UK government in 2007.

Sir Richard Branson’s Virgin Money, who at one time were said to be interest in acquiring Northern Rock, and are to launch themselves as a retail bank later this year, have come with a fairly innovative new proposal for potential customers. The proposal we that Virgin Bank will charge a fixed monthly fee for current account customers, payable in advance. A spokesman for the company did hasten to point out that the fees will be low and will replace high overdraft charges.

Virgin Money’s launch comes at a time when consumers have lost confidence in existing High Street banks and Virgin’s high profile as a high street trader who gets things done.

Another major UK retailer, supermarket giant Tesco are also set to expand into the banking industry, already offering credit cards, savings accounts and insurance via its Tesco Personal Finance (TPF) brand through their in-store banks.

In the meantime, supermarket chain WM Morrison are expected to report a 16 percent increase of their in full-year pre-tax profit for 2009 to £757 million when its results are announced on Thursday. Sales are expected to have risen to £15.5 billion. The supermarket’s increased penetration in the south of England has led to industry-beating sales growth and large gains in market share.

Money markets continued to be unfavourable for Sterling with the pound closing yesterday on $1.499 while also falling against the Euro on €1.1028.

The benchmark FTSE 100 Index slowed down after a few days of heavy rises, up just five points, to close on 5,602.3.

Stateside, ailing insurance giant AIG have announced that they are to sell of yet another of their overseas insurance business, American Life Insurance Company (Alico) to rival MetLife for $15.5 billion (£10.3 billion), in a drive to raise funds to pay off their $182.3 billion federal bail-out.

MetLife will pay out $6.8 billion in cash and a further $8.7 billion in shares for Alico, which operates in more than 50 countries.

The announcement comes a week after AIG agreed to sell its Asian business AIA to UK group Prudential for $35.5 billion.

On Wall Street, the Dow Jones Industrial Average was holding its own, closing up 21 points on 10,585.62. The NASDAQ Composite was still climbing, rising 21 points to close on 2,347.13

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Tags: Alico, American Life Insurance, Bank, Banking, British Chambers of Commerce, British Economy, Channel Tunnel, Communication Workers Union, Confederation for British Industry, Credit Crunch, Dow Jones, Economics, Economy, Employment, Eurotunnel, Financial News, FTSE, House Prices, MetLife, Money, NASDAQ, Northern Rock, Recession, Retail, Richard Branson, RICS, Royal Institution of Chartered Surveyors, Royal Mail, Savings, Tesco, Tesco Personal Finance, UK Banks, UK Economy, UK government, UK Recession, Virgin Money, Wall Street, WM Morrison

Heathrow baggage handlers and Eurostar train drivers have said they are ready to join British Airways cabin crew and strike in the lead-up to Christmas. Following a breakdown in talks with managers over pay, British Eurostar drivers announced they will go on strike on Friday and Saturday. Unite, the union representing BA cabin crew, said the 500 baggage handlers and check-in staff it covered at Heathrow and Aberdeen airports also planned to strike over pay from Tuesday 24th December, the same day that BA cabin crew are set to commence their 12-day strike action.

Meanwhile an operation is under way to recover the UK thousands of people left stranded after Flyglobespan, Scotland’s biggest airline, collapsed. After their parent company, Globespan, entered administration on Wednesday. Around 4,500 passengers were stranded by the airline’s collapse, mostly in Spain, Portugal, Cyprus and Egypt, with the Civil Aviation Authority expected to be repatriating about 1,100 of those stuck overseas.

A recent poll has shown that UK business leaders have become more gloomy about the recovery of the British economy over the last month, with only 36 percent of business leaders sensing that a financial recovery is in the offing, down from 49 percent in November.

The survey, taken in the five days after Finance Minister Alistair Darling’s pre-budget report last week, found the number of business leaders who had confidence in Darling had fallen five percentage points to 20 percent following the statement. Almost three-quarters of businessmen reckoned that Darling was "out of his depth" while less than a quarter believed he "understands business".

Public sector net borrowing in the UKs hit a record high of £20.3 billion in November, according to figures issued by the Office for National Statistics.

The public sector net debt as a percentage of overall UK economic output now stands at 60.2%, a considerably rise since the start of the financial crisis.

UK insurance companies also have little positive to report about, with worldwide premium income plunging 18% in 2008 to £215.3 billion, with 2009 also looking to be a fairly tough year. The financial crisis has had a definite effect on insurance rates, with premium income it falling almost 25% to £168.1 billion in 2008. The first nine months of this year, however, do show some promise. Long-term premium income was off 35% relative to the same period in 2008, but general insurance premiums gained 8% to £47.2 billion, mostly due to overseas business.

Virgin Group controlled by billionaire entrepreneur Richard Branson have announced the launch of a new company, designed to come to the rescue of consumers experiencing technical problems with their such as PCs as well as wireless networks not connecting. The opening of this new company, to be known as Virgin Digital Help, is Virgin’s up’s first new UK company in three years offers free online self-help guides such as "speed up" to make computers go faster, or "get connected" to fix links to printers or wireless networks .

Shareholders in Punch Taverns revolted on Wednesday over the pay for executives at Britain’s largest pub owner, voting against its remuneration policies, in one of the biggest shareholder protests over pay this year. 55 per cent of votes on the remuneration policies of the heavily indebted company were cast against them as shareholders objected to the scale of the awards given to executives in a year in which the group suspended dividend payments after its annual pre-tax loss quintupled to £406 million. While the vote on pay was advisory only, a spokesman for Punch announced that they are to conduct “a full review of the remuneration policy and its future implementation” in the wake of the result. The ABI, which represents shareholders that account for about 20 per cent of investments in the UK stock market, signalled its objection to the pay policies by issuing a “red top” alert to its members. Under a long-term incentive plan, Giles Thorley, chief executive, and three other executives were awarded shares worth 200 per cent of their base salary that would vest if total shareholder returns were in the top quartile of the company’s peers over three years. Mr Thorley earned a base salary of £525,000 during the 2008 financial year to August 23. The vote at the annual meeting came after the company warned slowing food sales and patchy trading at its leased estate were depressing profits. Punch shares fell 4.7 per cent to 77.3 pence.

Carphone Warehouse, broadband group TalkTalk and Channel 4 have opted into a joint venture between the BBC, ITV RTL’s AUDK.LU Five and BT to install internet video on television sets. The backing from all public service broadcasters and the UK’s two biggest broadband providers for the project to be known as Project Canvas will help it "secure the future of free-to-air broadcasting" in the Internet age. The venture partners will share an estimated £115 million in yearly costs over the next four years.

Rentokil Initial was among the talking points in the London market on Wednesday, with the stock registering its biggest gain since July.

The pest control-to-package delivery group bounced 4.8 per cent to 105 pence ahead of its relegation from the FTSE 100 next week, with Rentokil management already hinting of a further £150 million of cost savings expected for next year.

Shares in the U.K.’s second-largest drug-maker AstraZeneca Plc climbed 0.5 percent to 2,843 pence after they won a U.S. panel’s backing to expand use of the cholesterol pill Crestor in the prevention of heart disease, a move that, if allowed, could add up to £300 million in annual sales.

Imperial Tobacco Group Plc Europe’s second- largest publicly traded cigarette company, lost 1 percent to 1,894 pence on threat that Japan, the fifth-largest tobacco market, are about to announce further tax increases on cigarettes . U.K. furnishings and clothes chain known for floral pattern Laura Ashley Holdings Plc added 3.8 percent to 13.75 pence, after analysts predicted a better 2010 for the company.

Barclays, Britain’s second-largest bank, slid 6.2 percent to 273.85 pence. HSBC Holdings Plc, Europe biggest, fell 3.5 percent to 684.1 pence.

Lloyds, the 43 percent government-owned bank, lost 8.1 percent to 51.1 pence, the steepest slump since May. Royal Bank of Scotland Group Plc fell 3.5 percent to 30.74 pence.

Sterling lost ground against the dollar and improved against the Euro in sluggish mid week trading.

• Pound/US dollar 1.6167
• Pound/Euro 1.1273

The benchmark FTSE 100 Index slid 102.65, or 1.9 percent, to 5,217.61. The index has rebounded 49 percent since March and is heading for its biggest annual gain since 1997 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy

As had been widely expected, the Federal Reserve have announced that US interest rates will be kept on hold at between 0% and 0.25%, despite continuing signs that the US economy is recovering. The central bank reiterated that rates would stay at the low level for an "extended period".

The Fed’s hand was strengthened by official data showing earlier on Wednesday that US inflation remains under control, rising by just 0.4% in November, as had been predicted.

With inflation continuing to be low, the Fed is not under pressure to increase interest rates as a means to tackle any inflationary pressure.

On close of trading, the Dow Jones Industrial Average had dropped more than 130 points to 10, 33.61 while the NASDAQ also dropped to 2,183.55.

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Tags: Alistair Darling, AstraZeneca Plc, Bank, Bank of England, Banking, Barclays, British airways, British Economy, British Pound, cabin crew, Carphone Warehouse, Christmas, Civil Aviation Authority, Credit Crunch, Crestor, Currency, Dow Jones, Economics, Economy, Eurostar, Financial News, Flyglobespan, FTSE, Globespan, Heathrow, HSBC Holdings Plc, Imperial Tobacco Group Plc, Interest Rates, Laura Ashley Holdings Plc, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, Office for National Statistics, Punch Taverns, Recession, Rentokil Initial, Richard Branson, Royal Bank of Scotland, Royal Bank of Scotland Group Plc, Stock Markets, Stocks and shares, TalkTalk, UK Banks, UK Economy, UK government, UK insurance companies, UK Recession, Virgin Digital Help, Virgin Group

Mervyn King, governor of the Bank of England (BOE) has taken an about turn on his previous forecasts for economic growth in the UK in the coming two years, He tampers his newly found optimism with forecasts that any recovery in the UK economy will be both slow and unstable, largely because of the slow rate of industrial output which has been endemic since early 2008. King was quoted as saying that "Britain was facing a prolonged period of balance sheet adjustment” as households, businesses and government understandably rein in spending to levels they can afford. The BOE in its most recent quarterly inflation report has forecast growth rates of 2.1 per cent for 2010 and 4 per cent for 2011, making for a major upward revision from their own forecasts in August, of 1.9 per cent and 3 per cent for 2010 and 2011 respectively. The bank’s forecasts are also much higher than the outlook of private sector economists and even the UK Treasury’s predictions. Mervyn King.

Presenting the Bank’s latest quarterly inflation report, King predicted that the UK economy has "only just started" along its road to economic recovery, and lending by commercial banks would "probably remain weak over the next three years". The governor also predicted during his speech that inflation may "rise sharply over the next few months", triggered by VAT returning to 17.5% on 1 January 2010 as well as the effects of ever increasing fuel costs.

According to data from the Office for National Statistics, unemployment in the UK rose at its slowest rate for 18 months. Yet another signal that the UK economy may finally be on the verge of returning to growth in the fourth quarter of 2009. The level of employment in the UK is recorded through a complicated series of measures. Figures from the ILO (International Labour Organisation) showed that the number of people without a job, rose by 30,000 in the three months to September, bringing the total unemployed to 2.461 million, which was the smallest rise recorded since the second quarter of 2008. Unemployment levels in the UK now stand at 7.8%, which is 0.2% lower than most economic forecasts.

Lloyds Banking Group has announced that they plan increase the amount of fresh capital that they intend to raise by £1.5 billion, from £21 billion to £22.5 billion. The increase came in response to demands by the bank’s bondholders for a larger allocation of the contingent convertible instruments (CoCos). The news of the interested in CoCos was especially encouraging for the US Federal Reserve who is reportedly in talks with Wall Street executives over whether US financial groups should also use this method to raise capital. In the case of the Lloyds CoCos, they would be convertible if their equity strength falls from its current level of 8.6 per cent to below 5 per cent.

British Airways (BA) has announced that they are in advanced talks with and Spanish airline Iberia over some form of merger. Both companies are expected to hold separate board meetings at the earliest opportunity to discuss final details of the merger

In an official statement, representatives of BA hastened to point out that the meetings would consider the potential transaction, and that firm decisions had yet to been taken, and there were no guarantees that a deal would take place. Iberia has leaked that the deal under discussion would give it 45% and BA 55% of a new merged company. The firms have considered a tie-up for a number of years, and held talks on the issue in July 2008. BA chief executive Willie Walsh has previously said that a merger would help both firms in the current economic climate. Reports of the imminent merger sent British Airways shares higher, climbing 7.5 percent to 215 pence.

Share in telecoms operator BT Group, rose 3.7 per cent to 147 pence after they announced that they will be raising their full-year revenue outlook and dividend forecast for 2009. Thanks to a series of cost cutting measures including cutting back on 15,000 jobs, BT increased their second-quarter earnings to more than £900 million. The positive outlook for BT came as they announced along with their second quarter results that they are to raise their total cost-savings target for 2009/2010 from £1 billion to £1.5 billion.

The world’s largest owner of shopping malls Westfield Group have announced that retail sales in October at their UK centres in the U.K. have risen at the fastest pace in seven years, amounting to 3.7 percent in the three months. The company also reported that the number of stores closing in their centers has also fallen since steadily since the second quarter.

According to a recent statement, Westfield’s London shopping complex, which opened at the height of the global financial crisis last year, has attracted some 20 million visitors and has signed more than 15 new tenants.

Sterling continued to lose ground on Thursday trading falling against all the major currencies, with the notable exception of the Japanese yen.

• Pound/US dollar 1.6553
• Pound/Euro 1.1136
• Pound/Japanese Yen 150.0166
• Pound/Swiss Franc 1.6842

The FTSE 100 continues to gain strength, up 46 points to 5,276.55. The FTSE 250 also rose, up 175 points to 9,295.92.

In the US, fears continued to be voiced that, "the ‘real’ economy, as opposed to the financial one is still struggling to recover" and that if the government withdrew its stimulus spending measures, the economy could take some major steps backwards. The Dow Jones indexes erratic behaviour over the last few weeks as well as an already depressed job market seems to indicate the fact.

Meanwhile US Treasury secretary Tim Geithner, continue to voice his belief in the importance of a strong dollar, His statement came as the dollar dropped to its 15-month low. The continuing weakness of the World’s staple currency has led to some concern over the future of the dollar in its traditional role in the global economy. According to Geithner, the United States bears a special responsibility for trying to make sure that their global policies will sustain investors in the currency.

His words of comfort helped Wall Street very little, as the Dow Jones lost some of its earlier gains of this week, down 19 points to 10227.92. The NASDAQ made a minor increase, up six points 2157.17.

Warnings continue to come from the International Energy Agency (IEA) that the recent rises in oil prices "risks derailing the recovery" if they continue, whilst. Pointing out that demand for the "black gold" itself would slow down if price rises continue in 2010. The price of oil is now around $79 dollars a barrel, representing a rise of 77% so far this year. The IEA "in their monthly report, pointed their finger at China who they say are driving up demand, causing them to revised upwardly revise their forecasts. Overall the organisation predicts a 1.6% increase in demand for oil, up to 86.2 million barrels a day.

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Tags: BA, Bank, Bank of England, Banking, BOE, British airways, British Economy, BT Group, CoCos, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, FTSE, Iberia, IEA, International Energy Agency, International Labour Organisation, Lloyds, Lloyds Banking Group, Lloyds CoCos, Mervyn King, Money, Money Markets, NASDAQ, Office for National Statistics, Recession, Retail, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US Federal Reserve, US Treasury, Wall Street, Westfield Group, Willie Walsh

At a meeting scheduled to be held next week, the European Commission is expected to grant their approval to a radical restructuring plan for the Northern Rock. The EU green light will mean that the proposed break-up and sale of the nationalised bank can go ahead. Under the plan, the troubled building society will ostensibly split itself in two, with one half trading as retail banks granting loans and holding deposits. The other half of the bank will remain state controlled, and will hold and hopefully eventually realise the toxic mortgage holdings held in the government‘s Granite securitisation programme.
Founder of the Virgin Group, Sir Richard Branson, has launched an attack on Rupert Murdoch’s British Sky Broadcasting dominance of the UK’s pay-to-view television market. Sir Richard likens BSkyB to British Airway’s dominance of the highly lucrative London’s Heathrow airport and the US routes during the1990’s., when the airline held exclusive rights to flying between. Sir Richard announced his hope that, as came to pass in the 1990s, regulatory changes will encourage lower prices and greater choice for consumers.
The pound climbed to a one-month high against the dollar and the euro after the minutes of the Bank of England’s October monetary policy meeting were released, showing the Bank taking a more positive direction than analysts predicted.
· Pound/US dollar 1.6645
· Pound/Euro 1.1073
· Pound/Japanese Yen 152.6189
· Pound/Swiss Franc 1.6743

Debenhams announced on Wednesday that they have reduced their debt package by £100 million, whilst retaining a further £100 million from the £323 million that the company raised in June to financer acquisitions. The company’s current debt package stands at £590.3 million, down £403.7million from the same period in 2008. The department store chain reported pre-tax profits of £120.8m for the year ending August 2009, up 14 percent from 2008, on turnover up £800 million to £1.92 billion. In a celebratory mood, the company announced that it had acquired t the Principles brand, from the administrators of Mosaic who previously owned the brand. A spokesman for Debenhams stated that the company were on the look out for further opportunities as they arise.

According to a recent study, corporate dividends may be on the way back. Dismal performances by UK corporate dividends in 2008 and 2009 are gradually being reversed, and average dividend pay-outs of around 8 percent appear to be on the cards for 2010.Analysis having suggested that stocks in the FTSE All-Share index were on target to reverse much of 11 per cent decline, driven by an improving economy, margin improvements.
Despite the optimism, this week the FTSE 100 continued to drop, down a further 50.49 points to close on 5207.36. Meanwhile the FTSE 250 25 also lost headway, dropping a further 102 points to close the day on 9,318.91
The number of first time claimers in the US job market rose for the first time last week, as the labour market signals that its recovery continues to lag behind the overall economy. According to the US Department of Labour, new jobless claims rose by 11,000 to 531,000, a level worse than economists had anticipated, continuing unemployment claims declined by 98,000 to 5.92m in the week ending October 2. Currently many members of the American job pool have remained unemployed long enough to see their jobless benefits expire and anxiously wait for the release of fresh government legislation that could extend payments.
Reacting to positive reports from the major US banks, the Dow Jones recovered some of its previous reverses, up 92.12 points to 10081.31. The NASDAQ Composite index also was on the rise, up a moderate 14.56 points to close on 2,165.29. Analysts expect further gains as earnings season continues to broadly exceed expectations.
On Thursday, the world’s biggest mobile-phone maker, Nokia, launched their expected legal challenge on Apple, quoting alleged intellectual property abuse by on of their principal competitors. . The move opens a new front in the continuing battle between these two bitter rivals in what is becoming an increasingly cutthroat industry. A lawsuit filed in a US federal court in Delaware by Nokia accused Apple of infringing 10 patents in all the 30 million iPhones that the company has sold since entering the mobile market in 2007. Nokia’s action looks like setting the stage for a long running and bitter court battle between the industry leader and its fastest-growing challenger with the prize being exclusive rights to possibly the hottest product in current consumer technology

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Tags: British Economy, British Pound, Credit Crunch, Financial News, Money, Money Markets, Recession, UK Banks

Signs are growing stronger daily that the Bank of England is about to cut the umbilical cord on the UK economy, with the first stage being to cease the purchase of bonds when its current £175 billion pound plan draws to a close. News from the Confederation of British Industry (CBI) states that gross domestic product will rise 0.3 percent in the third quarter, reversing their June prediction for a drop of the same size. The CBI have forecast a 0.4 percent growth for the last quarter, and also predict that the central bank will begin to raise their benchmark interest rate during the first half of 2010.

Peer Steinbrueck, the Finance Minister of Germany has accused the UK of blocking tougher financial rules ahead of the G20 summit. According to Steinbrueck "There clearly is a lobby in London that wants to defend its competitive advantage tooth and claw. Both Germany and France have led calls for more restrictions on banks, which have been resisted by the US and UK.

JD Sports, who made their first foray into Europe with the for £7.2 million purchase of French footwear chain, Chausport in May are said to be considering further deals in Europe after increased interim profits increased its cash holdings.

The company’s focus on young shoppers, apparently less affected by the recession than the older home-owning generation , has allowed it to outperform most of its rivals, who have been beset with trading woes.

On the news that the Royal Bank of Scotland (RBS) are looking to launch a rights issue, their shares dropped 5.2 percent to 53.4 pence. Experts predict that RBS hope to rise between three to five billion pounds. Lloyds Banking Group Plc lost 2.8 percent to 107.6 pence on widespread reports that the lender is likely to participate in the U.K. government’s asset protection plan.

The U.K.’s largest shopping-center owner Liberty International Plc have announced plans to issue more than 56 million new shares in order to kick start their investment programme in shopping centers. Their shares rose 5 pence to 564 pence on the news.

National Express Group Plc, the U.K. rail company have apparently received a written undertaking from the Cosmen family to subscribe to a rights offer of at least 300 million pounds. This in the event its bidding group fail to make 500 pence a share offer for the company. National Express’s east coast franchise is to be seized by the UK government. On the news, shares in the company fell 0.2 percent, to 475 pence.

The U.K.’s largest publicly traded water supplier, United Utilities Group Plc announced that they were “on track” to deliver results in line with previously outlined expectations. Despite that encouraging news, their shares slipped 2.2 percent to close on 455.4 pence.

On the news that the Vodafone Group Plc, who are currently the world’s largest mobile phone company are about announce a whole new range of services today, their stock rose by 1 percent, to 141 pence.

The services are aimed to capitalize on the increasing popularity of Internet surfing through mobile phones.

The FTSE 100 made a minor downward adjustment, down 3.23 points to close on 5,139.37, while the FTSE 250 fell by 31.66 points to close on 9,217.01.

Sterling rallied sharply on Wednesday after the Bank of England’s monetary policy committee quashed rumours of a possible extension of its quantitative easing programme.

• Pound/US dollar 1.6345
• Pound/Euro 1.1107
• Pound/Japanese Yen 148.7512
• Pound/Swiss Franc 1.6817

A spokesman for the US Federal Reserve has suggested that despite the fact that economic activity is "picking up" interest rates will be held close to zero for an "extended time". The comments from the Fed. came as they confirmed that interest rates will remain at their current record low level current level of between 0% and 0.25%, where they have been held since December 2008. Economists continue to predict that the rate will stay at this level throughout the rest of this year, and perhaps well into 2010.

The Dow Jones Industrial Average took a tumble yesterday down 81.32 points to 9,748.55. The NASDAQ lost most of its recent gains, down 14.88 points to 2131.42

Ahead of the forthcoming G20 meeting of world leaders, the US dollar has fallen to a one-year low against the euro the dollar dropped to $1.4840 against the euro as well as against most of the leading currencies. Foreign exchange traders have been switching to rival currencies as signs of economic recovery continues to grow stronger.

Gold rose to $1,012 a troy ounce, as investors awaited the dollar’s reaction to Wednesday’s US Federal Reserve meeting.

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Tags: Bank, Bank of England, Banking, British Economy, British Pound, CBI, Chausport, Confederation of British Industry, Cosmen, Credit Crunch, Currency, Dow Jones, Economy, Financial News, FTSE, G20 summit, JD Sports, Liberty International Plc, Lloyds Banking Group, Money, Money Markets, NASDAQ, National Express Group Plc, Peer Steinbrueck, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, U.K. government, UK Banks, UK Economy, UK government, UK Recession, United Utilities Group Plc, US Federal Reserve, Vodafone Group Plc

It was a day for financial contemplation on Tuesday as the first anniversary of Lehman Brothers filing for Chapter 11 bankruptcy protection in the early hours of 15 September 2008 was marked, not quite by a minute’s silence but by many hours of contemplation of who the World’s financial systems almost went into meltdown.

Following the collapse of Lehman Brothers, once the fourth-largest US investment bank, the knock on effect caused meant that governments around the world had to pump trillions into their financial systems. The previously unimagined bank bail-outs, central bank actions and huge stimulus plans to save their biggest banks followed. Moves that are estimated to have cost every citizen of the developed world around $10,000 each..

On the day, Paul Myners, the minister who job it is to oversee London’s financial district, announced that he remains “very confident” that the UK’s multibillion-pound bailout of its troubled lenders will result in a profit for the country.

Last year the U.K. orchestrated a rescue package for banks including Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc. In the April annual budget the government submitted to Parliament it estimated that the bailout may cost taxpayers £50 billion

When asked to give his impressions when investments in the UK banking system would result in profit for members of the U.K. public, Myners replied by assessing that it will take “much less” time than a decade, and when it came it would add up to a “a nice little nest egg for the British taxpayer.”

Speaking of nest eggs or was it Easter eggs, Cadbury’s chief executive Todd Stitzer is due to be in the hot seat today, when he faces a group of the company’s’ top level investors since Kraft’s £10.2 billion unsolicited takeover proposal was rejected by the company. Stitzer as well as Andrew Bonfield, Cadbury’s chief financial officer are expected to be asked to outline the confectionery group’s long-term growth plans. The address was scheduled before Kraft approached Cadbury late last month.

UK oil and gas explorer, BG Group have announced another oil and gas discovery in a giant field off the coast of Brazil on Monday, making it the second in less than a week.

BG said further work was needed to evaluate the results before any concrete announcement can be made.

Hopes of a swift economic rebound and warned households and businesses of a “slow and protracted” recovery, according to Mervyn King, Bank of England governor.

King’s comments led to a sharp reassessment in financial markets of the likelihood and timing of any rise in interest rates.

The pound has taken a beating in the last few days, falling against all the major currencies for the last three months.

• Pound/US dollar 1.6477
• Pound/Euro 1.122
• Pound/Japanese Yen 148.8052
• Pound/Swiss Franc 1.7034

The FTSE 100 continued its upswing rising 60.31 points to finish on 5.102.44 while the FTSE 250 rose on Tuesday by 87.24 points to 9251.84/

The US recession is probably over but the economy will remain weak for some time due to unemployment, Federal Reserve chairman Ben Bernanke has said.

But he added that the economy would still feel "very weak" to Americans concerned about job security.

A year after Lehman Brothers collapsed, a think tank has warned the lessons of the crisis have not been learned.

The Institute for Public Policy Research (IPPR) says the rapid return to the City’s bonus culture shows that real reform has been "very limited".

The warnings echoed a speech by US President Barack Obama, who warned of complacency in the banking sector.

Despite President Obama’s and Bernanke’s comments , stocks on Wall Street rose on the day’s trading. The Dow Jones rose by 56.61 points to 9683.41, while the NASDAQ rose by 10.86 points to 2102.64.

Japan Airlines (JAL) plans to cut 6,800 jobs, as an airline trade body upped its projected losses for the global industry this year.

Media reports have said several US and European airlines are in the running to take a stake in the loss-making carrier.

The airline had already launched a programme of job cuts, plans for fuel-efficiency and a focus on business customers.

Reports this week have suggested that Delta Airlines and American Airlines are in talks to invest in JAL to expand into Asia via code-sharing agreements.

financial

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Tags: Andrew Bonfield, Bank of England, Banking, bankruptcy, Barack Obama, Ben Bernanke, BG Group, British Economy, British Pound, Budget, Cadbury, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, FTSE, Gordon Brown, Institute for Public Policy Research, Investment, IPPR, JAL, Japan Airlines, Kraft, Lehman Brothers, Lloyds, Mervyn King, Money, Money Markets, NASDAQ, Paul Myners, Recession, Retail, Royal Bank of Scotland, Stitzer, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, US President

Signs that the UKs hard hit investment banks are springing slowly back to life comes with the news that new job openings in July were at their highest for the year and the impetus is expected to continue if not increase in the autumn.

According to recent data, the number of job listings in June and July across London’s financial sector was almost double of that in December 2008 with an August looking to be even stronger.

The strong half-year results from most of the major UK banks show a dynamic upward trend, especially in investment banks, which at the peak of the financial crisis cut their staff back to the bone.

Another item of positive news from that banking sector is that the Lloyds Banking Group is to place their decision to close its 164-strong Cheltenham & Gloucester branch network on hold for the time being. Less than three months after announcing their decision, partially state owned Lloyds, are to take a second look at their decision, and while the situation is under review, the branches will remain operational after their planned closure date of November. Lloyd’s sudden change of heart is believed to be connected to its recent request for state aid approval from the European Commission.

Shares in John Menzies rose more than 24 per cent on Wednesday after demand for air travel and new contracts for newspaper delivery boosted underlying profits at their aviation services and news distribution division.

Meanwhile Menzies’ news distribution division, responsible for more than two thirds of the company’s total turnover, announced a 2 per cent reduction in sales to £573 million.

In the first half to June 30, Menzies negotiated new contracts with all the leading newspaper and magazine publishers, and is now serving an extra 3,000 retail outlets.

One of the largest and well known UK camera retailers, Jessops, who have been experiencing financial difficulties for some time now, have announced that they are close to closing a rescue deal with their bankers.

In spite of falling sales, Jessops, who operate 211 stores across the UK and Ireland, announced their intention to defer the end of their financial year to November, hopefully to allow the company sufficient time to reach an agreement with HSBC on restructuring its £60 million debt facility.

A spokesman for Jessops announced that sales had been weak for the summer months, down 4.7 per cent in the 12 weeks to August 16, on top of the expectations that the company would make a pre-tax loss before non-recurring charges for the year, following its £49.8 million pre-tax loss in the year to September 2008.

Britain’s largest bus and train operator FirstGroup, who also own and operate the Greyhound coach brand in the US, announced that the famous Greyhound buses will soon be seen on UK street, The company plans to start a bus route, running from London Victoria to Portsmouth and Southampton . .

The buses will be equipped with all the comforts that a passenger could ask for, including free Wi-Fi, power sockets for each passenger, air conditioning, complimentary newspapers and leather seats. To add a bit of character, each Greyhound bus will be named after character featured in US classic pop music, with of the names brought to mind including Peggy Sue, Billy Jean and Barbara Ann.

FirstGroup, who acquired the Laidlaw company, Greyhound’s parent company in a £1.9 billion deal in 2007, intend to provide strong opposition to their competitors through providing greater comfort and improved service at low cost. Each Greyhound coach will have a maximum of 40 seats compared with the usual 50. Customers will be able to reserve their seats over the internet.

The FTSE 100 was in good shape yesterday rising 66.91 points to close on 4,756.58. On the way back is the FTSE 250 jumping by 1.92% or 161.11 points to close on 8,531.36 at the end of the days trading.

It has been revealed that Bank of England governor Mervyn King intended to inject even more billions into the UK economy in August, but his move was vetoed by his colleagues on the monetary policy committee. The news has unnerved markets, sending the pound lower and gilt yields down. King apparently had intended to increase the central bank’s “quantitative easing” programme of injecting cash into the banking system by £75 billion to a total of £200 billion.

The pound remained fairly stable, apart from falling heavily against the Swiss Franc.

• Pound/US dollar 1.6507
• Pound/Euro 1.1582
• Pound/Japanese Yen 155.3327
• Pound/Swiss Franc 1.755

In the six months to April US banks have begun to reduce consumer access to revolving loans including credit cards and home equity lines of credit for about 20% of borrowers, according to a recent study. The study shows that banks in America are becoming increasingly aggressive in cutting their lines of credit to US consumers, with the average decrease to a consumer’s credit line averaging $5,100, more than double the $2,200 average reduction in the six months to October 2008

Seemingly unaffected was the Dow Jones Industrial Average, which continued its steady recovery, up a further 45.19 points to close on 9324.35. The NASDAQ also continued to show improvement, up 14.39 points to close on 1983.63

The sudden surge in the price of oil following data showing a huge drop in crude supplies last week was what pulled US stocks out of their early week slump

US natural gas prices sank to a seven-year low on Thursday amid concerns about a possible supply glut as winter looms in the offing.

Demand for natural gas has been weak, particularly from the industrial sector. US producers have cut the number of rigs drilling for new gas by more than half since September 2008 although stocks continue to rise due to output from existing facilities.

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Tags: Bank of England, Banking, British Economy, British Pound, Cheltenham & Gloucester, Currency, Dow Jones, Economics, Economy, European Commission, Financial News, FirstGroup, FTSE, Greyhound buses, HSBC, Investment, investment banks, Jessops, John Menzies, Lloyds, Mervyn King, Money, Money Markets, NASDAQ, Recession, Stock Markets, UK Banks, US Banks

As oil prices began to surge towards a record high for the year an important official from the International Energy Agency (IEA) warned that the world economy cannot sustain any further increases in the price of crude oil.

The benchmark price of $70 should not be breached otherwise a damper would be placed in the path of world economic recovery, the official warned.
Prices for crude oil reached a high for the year on Monday of $73.75, with analysts from the IEA explaining that the increase was spurred by results of improved manufacturing statistics coming out of China and as well as a steady rise in construction starts in the US.

There have been increased fears over recent months that as the economic situation begin to improve in the West and the demand for crude oil begins to increase as a result, the oil producing nations will begin to push their prices up. The results could be that higher energy prices will make a serious impact on the fiscal measures taken by western governments to get their economies out of recession.

French President Nicolas Sarcoxie and Gordon Brown the UK prime minister, have already called for increased scrutiny of the energy markets. In addition the US commodities regulator instituted a series of hearings designed result in increased limits on oil futures trade.

Overall fears that the demand for crude oil in China demand would the most important determinant factor in oil prices, which could set an indeterminate edge to the worldwide supply and demand balance could become very tight if other countries began to grow in 2011 or 2012.

World crude oil prices reached up to $147 in July 2008, but crashed to below $40 by the end of the year. In response to the statements issued by the IEA, leading mark analysts have stated that the tolerable range of oil prices appeared to be somewhere between $70 and $80 a barrel. If prices rise to $90-$100 a barrel even China could be affected.

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Tags: Gordon Brown, Money Markets, Nicolas Sarcoxie, Oil, UK’s oil and gas

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.

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

To be fair to UK Chancellor Alistair Darling it was fairly obvious that he was uncomfortable imposing a top tax rate of 50% on the country’s top earners, With a national net debt close to three quarters of a trillion pounds and not getting any smaller, Darling was hopeful that the successful and the famous would play their part in reducing the deficit. With all the fuss that Darling’s tax band increase has caused, it is worth taking into account that if everyone who is still earning lots of cash and pays up willingly, all that will trickle into the Government’s fast depleting coffers will be around two billion pounds annually. Just about enough to pay two weeks interest on the national debt!

And that is on the assumption that everyone pays up, or is around to do so. So far indications that the new tax band will succeed in driving some of the UK’s finest entrepreneurial talents to other shares, where the tax rates may be kinder. The UK treasury might have been labouring under the misconception that loyalty to the flag would entice some of the UK’s wealthy to set their personal welfare and desire to get even richer aside, if just for a while, and remain in the rain soaked, recession haunted British Isles and repay some of the country’s debts that they might even have been part of incurring. But that doesn’t appear to be the nature of the beast, and in today’s world of mobility and split second communication technology , it is possible to run a business in the UK from anywhere in the World.

Is yet to be seen that some of the threats issued will actually take place, but if they do some of the best-known figures in commerce and industry will be taking leave of the British Isles till this unpopular taxation rate becomes history. It is possible to argue the moral applications of their, what can be seen as, desertion in times when the country needs them, or at least their tax income. However as long as Greta Britain remains great, there is nothing that anyone, even Alistair Darling, can do to stop them.

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Tags: Alastair Darling, British Economy, Credit Crunch, Financial News, Tax