In one of the classic understatements of the year so far, new finance minister George Osborne has just announced his findings that the British economy is in a dire state and there will be difficult times ahead. Osborne’s revelation came as the government sat down to take action on tackling the record budget deficit. Osborne took up the role of Chancellor after the center-right Conservatives joined with the center-left Liberal Democrats to form the country’s first coalition government for more than half a century, as the Labour Government wound up 13 years rule.

Britain has barely limped out of the worst recession since World War Two, and the new government is under pressure to show their pre-election promises to reduce spending and raise taxes to cut a budget deficit running at more than 11 percent of GDP were not hollow. The coalition already pledged to significantly accelerate the reduction of the deficit in the next five years, cutting £6 billion pounds ($8.75 billion) from non-frontline public services during the current financial year. George Osborne is expected to unveil his emergency Budget on June 22 as the new coalition Government attempts to overcome the appalling state of the economy inherited from Labour.

Meanwhile on the home front, news from the Council of Mortgage Lenders (CML) is that mortgage borrowing by house buyers is on the increase, with the number of loans made to home buyers rising by 25% between February and March, to reach 45,000. First-time buyer borrowing rebounded faster than that by existing home owners, according to CML who also went on to warn that mortgage rationing might continue indefinitely unless the new government helped lenders raise finance.

The latest news on the small business front has shown decrease in UK business insolvencies last month. On a year to year basis, it was shown that

the total number of insolvencies fell by 15.1% in April compared with the same month last year, 2,274 in April 2009 down to 1,818 in April 2010.

Businesses that fell into the medium sized category were found to have suffered the most in April. Companies employing between fifty to hundred workers being the most vulnerable.

In a move that may indicate a thawing of hostilities between internet giant Google and the printed media – particularly Rupert Murdoch’s News Corp, Eric Schmidt, chief executive of Google, announced that Google were holding talks with Murdoch and other newspaper proprietors regarding running subscription services for their online sites. Murdoch has repeatedly criticized Google for undermining newspapers by allowing internet users too much access to their valuable news content. Late last year Murdoch went far as threatening to sue Google for including headlines from News International in its search results. Staring from June, the Times and Sunday Times are set to erect a pay wall limiting access to their online news sites to paying customers. The papers will also withdraw their articles from Google’s search engine

With annual results due to be issued before the weekend, mobile phone company Vodafone are expected to announce a 150 percent increase in profits, with analysts expecting pre-tax profits of around £10.4 billion for the year to the end of March. Vodafone’s profits for 2009 were just £4.1 billion, largely due to one of impairment of £5.9 billion pounds of impairment charges.

Reports are that the Spanish bank Santander are believed to have emerged as likely winners of the tender to take over the 318 Williams & Glyn-branded Royal Bank of Scotland (RBS) branches across England and Wales. Santander has apparently outbid Virgin, Spanish rival BBVA and Blackstone, with only National Australian Bank’s Clydesdale Bank arm still in the running. RBS is expected to make around £2 billion pounds from the successful completion of the sale.

Meanwhile credit card firm American Express has reportedly become the latest contender to enter into bidding for the payment processing arm of Royal Bank of Scotland. The partially state owned bank has been forced to sell of this division under European Commission rules governing state aid. The move by American Express, which has joined forces with private equity house Permira to table a bid in the £2.5 billion pound auction for RBS’s Global Merchant Services division, has been welcomed by RBS. Previously the bank had stated concerns over stand alone private equity buyers having sufficient experience to manage the business. With experience of processing payments of millions of customers in 130 countries, American Express could fit the bill and help RBS in their drive to expand in emerging markets,

Property development and investment giant, British Land, appears likely to take over the mantle as being the largest company in the field in the UK, leaving their bigger rival, Land Securities in their wake, when both companies announce full year results this week. British Land is expected to reveal that its net value of assets has increased by more than 20 percent over the past year to 490 pence a share, while Land Securities will announce that their shares have risen 16 percent increase in its net asset value over 690 pence a share.

Coming back down to earth with a thump will be British Airways who are widely expected to report losses of more than £600 million pounds when they reports their results on Friday. It is expected that results for the 12 months to the end of March will mark the airline’s worst ever financial performance, over a period in which it suffered from the effects of recession, strikes and bad weather. There are suggestions from senior staff that the company will not be able to survive any further blows. Analysts attending the shareholder’s conference will be keen to hear how chief executive Willie Walsh intends to explain the losses as well as the company’s ongoing dispute with cabin crews.

Pharmaceutical retailer and wholesaler Alliance Boots are expected to join the one billion pounds club on Monday. Alliance Boots, who returned to private ownership in 2007, are expected to announce a trading profit over the one billion pound by exceeding the 11.6 percent growth in 2009, when their profit was £953 million. By passing the one billion pound profit barrier Alliance Boots will become only the third retailer to do so in the history of UK retailing.

The euro has plummeted against the US dollar, falling below $1.22 for the first time since April 2006. The eurozone’s single currency fell more than 1.7% in afternoon trading in New York, to $1.216, before rallying.

The decline came after Germany announced plans to ban naked short-selling of shares from midnight local time on Tuesday. The single currency dropped by more than 2% against the yen on the news. Forex traders fear that the austerity measures being put in place in many eurozone countries will hit growth.

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Tags: Alliance Boots, American Express, Bank, Banking, BBVA, Blackstone, British airways, British Economy, British Land, Clydesdale, Council of Mortgage Lenders, Currency, Economics, Economy, Eric Schmidt, Financial News, George Osborne, Google, Government, Land Securities, Money, Money Management, Mortgages, News Corp, Recession, Retail, Royal Bank of Scotland, Santander, UK Banks, UK Economy, UK government, UK Recession, Vodafone, Willie Walsh

Economists have warned that a rise in interest rates is likely before the end of the year in the event that the current spike in factory output prices continues. High petrol prices have caused manufacturers to absorb rising energy and raw materials prices, with the main being transferred to consumers, stoking fears of a rise in inflation. A five percent rise in year-on-year retail prices in March out-paced analyst expectations, causing them to refigure the probability that the Bank of England will raise rates earlier.

The Halifax Building Society, Group has released its house price index, showing that house prices rose by 1.1 percent in March, partially reversing the 1.6 percent decline in February. The average price for the first quarter of 2010 finished 0.6 percent higher than the same period in 2009. A spokesman for Halifax pointed out that the return of stamp duty on lower-priced homes as well at the severe weather had combined to create a negative effect on house prices in the first two months of the year.

The Society of Motor Manufacturers and Traders (SMMT) have revealed as increase in new car sales by 26.6 percent during March. March is typically a strong month for new car sales, regularly accounting for a fifth of annual sales in the UK due to the new registration plate. The SMMT predicts that the end of the government scrappage scheme will result in a nine per cent fall in total sales for the year. A spokesman for the SMMT, also pointed out that the UK motor industry has enjoyed a better than anticipated first quarter of 2010 while the coming months likely to remain challenging with registrations of new cars expected to dip. In a related statement, the SMMT recently revealed that the number of vehicles in the UK are at an all time low.

The remaining British motorists pulling will be helping to take part in another record breaking attempt from this week onwards, how much it costs too fill their tank. A spokesman for the AA has speculated that petrol prices are about to hit (and pass) the 120 pence a liter mark, with the previous high being 119.7 pence high seen in July 2008, when crude oil was coasting more than $147.00 a barrel..

Industry sources have rushed to point out that the increase is partly a result of soaring wholesale costs, with the price of oil hitting an 18-month high of $85 a barrel, a third less than it cost during the previous high, although the pound was much stronger them and the effects of Chancellor Alistair Darling’s latest duty rise in last month’s Budget of 1 pence a liter.

In April, 2009, petrol cost 92.44 pence a liter.

Postal operator UK Mail has announced that revenues of £388 million for the financial year up to March 31 despite a drop in demand for their services caused by the financial crisis. After the announcement UK Mail’s share price rose 21.5 pence to 333.5 pence, up 28 percent over the past year.

The number of passengers that flew with budget airline EasyJet has increased by 13.5% on a year-on-year basis. EasyJet flew 3.96 million passengers in March 2010, 13.5 percent more than the 3.49 million carried in March 2009 with rival budget airline Ryanair also reporting a 13 percent rise to 5.3 million for the same period. A spokesman for EasyJet projected that the company had benefited from the British Airways strike, as well recently increased its number of flights across Europe.

Marks & Spencer have reported a 5.1 percent fourth-quarter sales increase at the retailer, ahead of becoming non-executive chairman in May. The figures, reported by outgoing executive chairman Sir Stuart Rose, have surpassed analysts’ expectations with sales driven by strong performance in the group’s formalwear and knitwear divisions. Rose in a somewhat controversial final report called for "greater clarity on economic policy and how this will impact our customers individually" after the election.

Hamley’s, the UK historic toy retailer, took their first step in an ambitious drive into India, with the opening of their first store in Mumbai. The company’s £22 million expansion into Asia’s third-biggest economy will see 20 outlets open across the country in seven years. A spokesman for Hamley’s announced that India was a key part of Hamley’s effort to expand into emerging markets, as they were attracted to the growing population and the potential of a previously restricted retail sector.

Kraft Foods has thrown its support behind a national chain of Cadbury-branded cafés that will offer afternoon teas and a wide range if chocolate products service in a move to compete with the high street coffee shop chains.

Cadbury had been in discussions about the outlets long before Kraft made its hostile bid last September and signed off the deal at the end of January – just before the US company took control of the confectioner.

The US food-maker, who took over Cadburys this year, has now endorsed a 20-year licence to a group of retail entrepreneurs to set up and manage the high street chain, to be called Cadbury Cocoa House.

The group could open as many as 60 cafés in locations around the UK in the next three to five years, and has already begun to negotiate with landlords for the first sites in London, which could be running before the end of 2010.

Following a £13 million ($20 million) management buyout the British arm of Reader’s Digest was pulled out of bankruptcy on Friday, The news means that Reader’s Digest Association Ltd. will now continue to be published under its well-known name.

The U.K. subsidiary of Reader’s Digest took shelter in administration, a form of bankruptcy protection, on Feb. 17 because it had been unable to gain agreement on a plan to close a pension deficit. That decision paved the way for the U.S. parent company to emerge from Chapter 11 reorganization.

Analysts have confirmed that since the start of 2007, the pound has dropped about 25 percent on a trade-weighted basis, making exporters’ goods less expensive overseas. Bank of England policy makers are counting on sterling’s weakness to aid the recovery and reduce domestic spending at a time when the nation faces a record budget deficit.

The pound continues to retain its level above $1.50, closing at $1.5372, while falling back in value ever so slightly against the Euro at 1,1403.

U.K. stocks rose again before the close on Friday, making for the benchmark FTSE 100 Index’s sixth straight weekly gain, the longest stretch of such gains since 2005. The gains were on increased confidence, as the European Union agreed to a contingency rescue package to help Greece cut its budget deficit.

The FTSE 100 advanced 58.28, to 5,770.98, extending this week’s gain to 0.5 percent.

US stock prices dramatically reversed Thursday’s negative start

At the closing bell, the Dow Jones Industrial Average was up 70 points at 10,927.07 while the NASDAQ Composite was 18 points higher at 2,454.05.

Greek bonds have plunged this week on renewed concern that the country won’t succeed in cutting its budget deficit, the European Union’s largest. Leaders of the nations who share the euro last month endorsed a Franco-German proposal to help Greece with a mix of International Monetary Fund and bilateral loans at market interest rates that would be triggered only if Greece runs out of fund-raising options.

China on Saturday announced a rare deficit in its politically sensitive trade balance for March, the first in six years, bolstering Beijing’s argument that the value of its currency only has a limited impact on international trade flows.

News of the $7.2 billion deficit comes at a fortuitous time for Beijing, which is under pressure particularly from the US to allow the renminbi or the Chinese yuan to appreciate.

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Tags: Alistair Darling, Bank, Bank of England, Banking, British Economy, Cadbury, Credit Crunch, Currency, Dow Jones, EasyJet, Economics, Economy, Financial News, FTSE, Halifax building society, Hamley's, Interest Rates, International Monetary Fund, Kraft Foods, Marks & Spencer, Money, NASDAQ, petrol prices, Reader's Digest, Recession, Ryanair, Sir Stuart Rose, Society of Motor Manufacturers and Traders, Stock Markets, UK Banks, UK Economy, UK government, UK Mail, UK Recession

Records from the Registry Trust show that the value of County Court Judgments (CCJs) against businesses in England and Wales increased five percent to nearly £ 900 million pounds last year. The number of judgments against businesses increased by nine percent on 2008 to a record 207,100, the fifth year-on-year increase in a row. A spokesman for the Registry Trust said the figures reflected the worsening economy.

U.S. food group Kraft Foods the new owner of confectioner Cadbury, has told 3,600 Cadbury staff that they face a three-year pay freeze unless they leave the company’s final salary pension scheme. Kraft has discovered a clause in Cadbury’s pension trust deed preventing it from changing members’ benefits in any way deemed "unfair or materially detrimental". Kraft is not forbidden from closing the scheme, but if they decided to do so would have to pay the full costs involved. Cadbury’s pension deficit was reported to be around £258 million.

U.K. owner of train tracks and stations Network Rail Ltd have won a court order preventing four days of strikes that would have disrupted journeys for millions of travelers returning from their Easter break. A High Court judge ruled against the National Union of Rail, Maritime and Transport Workers (RMT). Network Rail’s lawyer argued that the RMT hadn’t polled its members accurately, with some workplaces returning more votes than the number of registered members. The union announced their intentions to hold another ballot. Network Rail, the state-owned operator of the U.K.’s rail infrastructure, carries about three and a half million passengers every day. Britain was facing its first national shutdown since 1994 after the RMT voted last month to strike in a dispute over job cuts and working terms after negotiations broke down. The strike was planned due to begin on the 6th of April.

Recent data released by one of the UK’s leading credit card payment acceptance processors shows payments made on credit and debit cards were up 7.1% in February compared to the same month last year. The increase follows on recent figures that show credit and debit card spending was up 3.6% in January 2010 in comparison the same month last year, while February 2010 showed an increase over the previous year, on a month-by-month basis, spending on debit and credit cards declined slightly by 2.5% from January, in line with expectations. The index is based on spending on all credit and debit cards across a wide range of retail sectors.

Marks & Spencer have posted another quarter of sales growth since the turn of the year. M&S’s statement showed a like-for-like sales increase that far outshone the previous quarter’s 0.8% rise with a 1.8% increase. Institutional and private investors have remained cautious on M&S due to economic uncertainty over the last few years, and while the previous quarter saw the first growth in two years, fear were that the Januarys snow may have hampered trading, although Marks and Spencer had managed to keep most of its stores open. M&S’s annual trading results due to be released in May are expected to show annual profits of £625 million, up from £604.4 million the previous year.

The children’s clothing and equipment retailer Mothercare grew total sales by 3.3 per cent in its fourth quarter, but did suffer a decline in UK like-for-like sales because of extreme weather conditions during January. Mothercare, which operates in 1,115 stores, announced in a recent trading update that the adverse weather in the 11 weeks to March 27 forced it to extend its winter sale, while managing to reverse some of the loss of turnover, through implement tight cost controls. Total UK sales in the quarter fell 0.9 per cent and like-for-like sales – sales in stores trading for at least a year, as well as sales in its online divisions – were down 1.6 per cent, weaker than analyst had anticipated.

The UK’s largest mobile phone companies may be forced to cut the price of their calls following new proposals unveiled by Ofcom, the UK telecoms regulator. The watchdog is proposing deep cuts in termination rates on the 02, Orange/T-Mobile, Vodafone and 3UK networks as it works to set the rules on mobile termination rates. By doing so, Ofcom stepped back from an initial proposal last year that could have seen consumers face higher monthly bills if telecoms companies had to cut or scrap charges for connecting calls to their networks. Mobile termination rates are the fees are paid by fixed-line and mobile operators when their customers make calls to people on other networks. The reform is a highly contentious issue among the bigger mobile operators, mainly because they earn more than £2 billion a year from the fees. Ofcom have set a price ceiling on the wholesale fees that mobile operators can levy on each other, as well as fixed-line phone companies led by BT Group

Recent data shows a rise to 57.2 in the UK’s Manufacturing Purchasing Managers Index in March. This positive figure confirms that the sector is continuing to expand and is an improvement on previous forecasts, which had called for a more modest increase February’s reading of 56.6, with expectations that it would be around the 56.8 mark. This improvement in the UK manufacturing sector follows both Germany and the Eurozone’s stronger reading in their March readings. All three economies posted their best numbers since the beginning of the recession. Expansion in the sector comes after a rebound in both consumer demand and export sales.

On the money markets, before the Easter break set in, the pound was beginning to show signs of benefitting from this positive data, despite hitting resistance levels against both the Euro and the US dollar, while the continuing uncertainty over European support for its weakest link pushed the euro as low as $1.3502 on Friday, its weakest level in over two weeks.

The pound fell back slightly, while remaining above the $1.50 mark at $1.5187, whilst and gaining against the Euro to close on 1.1269.

The FTSE was closed for the holiday weekend.

The US government did announce on Friday that the recovering economy had created 162,000 jobs in March last month, whilst the unemployment rate remained unchanged at 9.7 per cent. Temporary hiring by the US government for the public sector only accounted for some 48,000 new jobs in March, meaning the private sector has begun to create new job openings.

China has offered to accelerate free trade agreement talks with India in a bid to balance a burgeoning trade relationship between two of Asia’s largest economies that is heavily skewed in Beijing’s favour. Chinese officials expect trade between the two to rise to $60 billion, (£39.5 billion) in 2010, as the world’s two fast-growing large economies surge forward in their recovery from the global financial crisis. Indian officials described the trade deficit that last year was about $16 billion in Beijing’s favour as “politically unsustainable”, and continue to identify it as a point of friction in a relationship key to Asia’s peace and stability.

Commodities prices ended the week at the highest level since late 2008, with oil hitting $85 a barrel, bolstered by signs of strong manufacturing growth particularly in China and India

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Tags: 02, 3UK, Bank, Banking, British Economy, British Pound, Cadbury, County Court Judgments, Credit Crunch, Currency, Debt, Economics, Economy, Employment, Financial News, FTSE, Kraft Foods, Maritime and Transport Workers, Marks & Spencer, Money, Mothercare, National Union of Rail, Network Rail Ltd, Ofcom, Orange, Recession, Registry Trust, Retail, T-Mobile, UK Banks, UK business, UK Economy, UK government, UK Recession, Vodafone

The National Association of Pension Funds (NAPF) have called for a radical overhaul of the state pension system.

The NAPF, a leading pension’s body wants the next government to introduce a new ‘Foundation Pension’ that would combine the Basic State Pension and the Second State Pension and would entitle all Britons to a state retirement pot of £8,000 a year. If accepted the NAPF proposals would boost pensioners’ incomes initially by £25 a week and would later rise in line with average UK earnings. In addition, around two million UK pensioners would no longer be required to request means-tested benefits.

Consumer Focus, a UK consumer watchdog is set to complain to government regulators about the fact that individual savings accounts holders are missing out on £3 billion a year in interest because of inefficient practices by providers.

The organization are to complain to the Office of Fair Trading stating that savers were being unfairly treated by banks and building societies by the practice of “bait pricing”, meaning offering attractive headline rates on cash Individual Savings Accounts (Isas) only to see the interest rates dropping dramatically drop a short time later.

Consumer Focus have also pointed out that account holders often face unnecessary and costly delays when transferring accounts, as well as a lack of clarity on interest rates. In certain cases arbitrary rules were imposed by cash Isa providers forbidding transfers into more attractive accounts.

According to the Office of National Statistics (ONS), growth in UK household incomes has decreased rapidly during three terms of the Labour government. The ONS report shows that while growth to disposable income increased by 13 percent per person between 1997 and 2001, after these figures were adjusted to meet inflation, true incomes rose by just 1.2 percent between 2005 and 2008. And when the credit bubble was at its peak, between 2006 and 2007, incomes barely increased. During Labour’s second term in government from 2001-05, Growth in pay, benefits, pensions and dividends after tax fell to seven percent

The UK government’s car scrappage scheme, has officially come to an end, with at least 330,000 cars have been sold.

After the scheme was introduced a year ago to help the recession-hit motor industry cope with falling sales, a fifth of cars sold in the UK were part of the scheme which may have created around 4,000 new jobs with manufacturers and suppliers were supported by the scheme.

Business Secretary Lord Mandelson stated his pleasure that the scrappage scheme has delivered the results aimed for. Estimates that the 330,000 figure could still rise as a number of cars purchased through the scheme are yet be registered, meaning that figure could rise to 400,000.

Clothing retailer Matalan have announced the completion of £525 million capital rising which will replace its existing debt package. Matalan was withdrawn from the market in March after private equity groups failed to meet the £1.5 billion valuation set by Matalan. The successful refinancing means a £250 million dividend for Matalan’s founder John Hargreaves.

Music Company EMI continue to make waves, with the news that they may be taken over by its bankers. The move comes after EMI failed to meet the terms of their covenants after failing to clinch a deal with Universal to sell them their distribution rights in the United States. The debt stems from a £4.2 billion pound buyout in 2007, leaving Terra Firma the private equity firm, that owns EMI holding a £3 billion debt to Citigroup. Terra Firma is now faced with the prospect of approaching their investors in an attempt to raise £20 million pounds by June 12 or face the prospect of Citigroup seizing control of EMI.

The news that manufacturing growth in the UK has risen at its fastest pace since 1994, saw Sterling making a long overdue rise. The pound climbed 0.5 per cent to $1.5274 and gained 0.4 per cent versus the euro to close on 1.1257.

The benchmark FTSE 100 was also up as the market closed for the Easter weekend. It rose 65 points to 5,744.89, making for a 5 per cent rise during the first three months of the year, and its best start to the year since 2006

A report from the Institute for Supply Management’s (ISM’s) as shown that the US manufacturing sector expanded in March at its fastest rate for six years.

The highly rated ISM’s purchasing managers index rose by 3.1 points to 59.6 points in March. Any figure of 50 or above represents growth, and last month was the eighth in succession that US manufacturers have increased their output.

The news of USA’s continued growth, which was at its fastest for 15 years in March comes after China and European nations also announced higher factory output.

As Wall Street wrapped up for the long Easter weekend, the Dow Jones Index was still on the rise up 70.44 points to 10927.07. The NASDAQ was less conservative, rising just 4.62 points to close on 2402.58

The number of Americans filing for unemployment insurance fell for the first time fell last week, matching the lowest level since August 2008. According to government data released today by the US Labor Department, there were 439,000 initial jobless claims filed in the week ended March 27, down 6,000 from an upwardly revised 445,000 the previous week.

Toyota’s US sales have reportedly bounced back as substantial discounts helped to win back customers who had been shaken by the firm’s mass safety recalls. Sales in the US for the Japanese carmaker jumped by 40.7 %in March compared with a year earlier, and after a slump of 8.7% in February.

Ford and General Motors also saw their sales rise last month, up 39.8% and 20.6% respectively, while Chrysler saw its sales fall 8.3%.

In Japan a key survey of local manufacturers has indicated that confidence is continuing to return to businesses, with the Bank of Japan’s Tankan index showing that business confidence had improved for the fourth straight quarter. The news came as Toyota saw a 50% increase in domestic car sales last month, belying some of the safety problems that have been reported in the last few weeks.

Oil moved forward from the $83-a-barrel level that has proved its undoing on many occasions over recent weeks, climbing 1.3 per cent to $84.82, the highest point since October 2008.

Gold also joined the rush, rising 1.3 per cent to close on $1,126 an ounce

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Tags: Bank, Banking, Basic State Pension, British Economy, Chrysler, Citigroup, Consumer Focus, Credit Crunch, Dow Jones, EMI, Employment, Financial News, Ford, Foundation Pension, FTSE, General Motors, Gold, Individual Savings Accounts, Institute for Supply Management, Lord Mandelson, Matalan, Money, Money Management, NAPF, NASDAQ, National Association of Pension Funds, Office of Fair Trading, Office of National Statistics, pension system, Recession, Second State Pension, Stocks and shares, Tankan, Terra Firma, Toyota, UK Banks, UK Economy, UK government, UK Recession, Wall Street

A recent report has stated that UK House prices have raised by more than 0.7 % (£3,000), while updates forecasts show that annual property inflation is due to slow down from the current rate of 9%. The increase more or less cancels the 0.8% fall in February.

The average UK property is now valued at £164,519, £16,773 more than the in February 2009, which was the low point in the recent property value slump In from the worst recession since World War II.

In last week’s budget, Chancellor of the Exchequer Alistair Darling scrapped a tax on house purchases for first-time buyers spending £250,000 pounds or less. The tax previously started at 1 percent for properties costing more than £125,000 pounds. The policy will mean nine in 10 first-time buyers will avoid the levy, according to government forecasts. Signs of increased demand is recent mortgage approval figures s released that show that almost 60.000 new mortgages were approved in February, more than double those approved at the at the trough of the financial crisis in November 2008, and less than half the 120,000 reading at the peak of the boom.

The Bank of England said net mortgage lending for February 2010 rose by £1.6 billion pounds, the most since December 2008.

In addition, figures recently released show that UK households added to their unsecured debts in February, with net consumer credit rising by £528 million pounds, a significant increase on economist’s predictions of a £400 million-pound increase. Credit-card lending increased by £374 million, while personal loans and overdrafts increased by £154 million.

Royal Bank of Scotland (RBS) have been fined £28.6 million for breaking competition law in the first big case brought against a financial services company, potentially exposing the part-nationalised bank to lawsuits from clients. RBS admitted staff involved in making loans to big law and accounting firms had illegally given pricing data to counterparts at Barclays. Barclays reportedly escaped being penalised because it voluntarily disclosed its part in the affair to the Office of Fair Trading.

Desire Petroleum, the British company who are drilling for oil off the Falkland islands have seen their shares halve in value , after they revealed the existing supply may not be commercially viable.

In a statement on their Web site, Desire stated that "oil may be present in thin intervals, but the reservoir quality is poor."

Desire will release the final results of its 30-day test drilling operation in the South Atlantic archipelago on Wednesday. According to the company it may have to drill deeper to find greater quantities of oil and gas.

Desire estimated that the North Falkland Basin could contain 3.5 billion barrels of oil as well as having "significant gas potential."

Potential revenues from oil and gas reignited have already re-ignited a long-running dispute between London and Buenos Aires over ownership of the Falklands.

Leasing UK high street banking groups, Banco Santander SA and Royal Bank of Scotland Group Plc are reported to be in advanced talks with the U.K. government over allowing their client’s access to their bank accounts through Britain’s 11,500 Post Offices. According to a recent statement, the negotiations are part of a package of measures intended to breathe life back into the Post Office network. Business Secretary Peter Mandelson is about to announce another series of measures, including allowing consumers to open a Post Office current account, issue mortgages for up to 90 percent of a property’s value. Another revolutionary proposal will be subsidised savings accounts for people on low incomes. If Mandelson’s proposal bears fruit, it means that the government will add 50 pence for every pound saved.

Mandelson was reported to have said that the Post Office is a well-loved community institution. "This move will bring more banking services back to the heart of those communities.” He concluded.

Nowadays, with pensions and benefits being paid directly into bank accounts, and services including car licensing have gone online. Falling revenue has seen the number of U.K. Post Office branches declined from 25,000 in their peak during the 1960s.

U.K. publisher Daily Mail & General Trust PLC have announced their predictions that first-half operating profit will be up sharply for the last six months trading figures. They state that the increase is due primarily to improvements within its consumer businesses, but it remains cautious about the second half of the year given the political uncertainty in the U.K. ahead of the imminent general election. The Daily Mail and the Sunday Mail newspapers reported an 8% rise in underlying advertising revenues at Associated Newspapers for the six months period.

The pound was little changed at $1.5079 while the Euro rose on increased optimism on the Greek situation to €1.1249.

The FTSE 100 index dropped again on trading, finishing down 31 points to 5,672.32

The Dow Jones industrial average ended at a fresh 18-month high and the rest of the market churned Tuesday as investors weighed a rise in consumer confidence, more weakness in the housing market and a stronger dollar.

The Dow Jones industrial average added 11 points, or 0.1%, closing at 10,907.42, the highest finish since 11,143.13 on Sept. 26, 2008. The NASDAQ composite also added 6 points to close on 2410.69.

The Irish government are expected to inject a further €8.3 billion Euros (£7.4 billion, $9.9 billion) into the nationalised Anglo Irish Bank.

A spokesperson for the Irish Finance Ministry revealed that pumping in more money was the" best of a series of bad options". Although both Allied Irish Banks and Bank of Ireland will attempt to raise funding from private investors, it appears more likely that Allied Irish Banks will also require taxpayer support,

This second bailout follows the nationalisation of Anglo Irish Bank last year.

The Irish government also owns 25% and 16% stakes in Allied Irish Banks and Bank of Ireland respectively

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Tags: Alistair Darling, Anglo Irish Bank, Banco Santander SA, Bank, Bank of England, Banking, British Economy, British Pound, Budget, Credit Crunch, Desire Petroleum, Dow Jones, Economics, Economy, Financial News, FTSE, General Trust PLC, House Prices, Inflation, Money, Money Markets, NASDAQ, Peter Mandelson, Post Office, Recession, Royal Bank of Scotland, Savings, Stock Markets, Stocks and shares, The Daily Mail, UK Banks, UK Economy, UK government, UK Recession, Wall Street

It came as no big surprise to anybody when the Bank of England (BOE) announced that they will be holding interest rates at their record low of 0.5%, and for the twelfth consecutive month.

The BOE’s decision gained a consensus of approval by UK economists, who pronounced, individually and collectively that rises in the cost of borrowing could set the UK’s fragile economic recovery back into the red.

The announcement that the bank will be standing firm on the amount of money that will be pumped into quantitative easing program (QE) programme was also met with a similar apathy.

BOE governor Mervyn King has long since made clear his opinion on increasing interest rates raising QE quotas, and all the rest of the UK’s financial programs by simply stating that that it was “far too soon” to make any changes to the status quo.

Sterling has now dropped in value for six consecutive trading days, with the bulk of opinion on the Pound’s increasingly weak position being because of speculation that the forthcoming general election is liable to see a hung parliament which translates to a government that will be too weak to mend the UK’s financial problems. Since the beginning of 2010, the pound has dropped by seven percent against the dollar, reaching a ten month low of $1.4783 on March the 2nd. The pound closed on Thursday on $1.5051 while the Euro was stabilising at 1.1078.

Financial Service Institute (FSA) chairman Lord Turner has voiced his opinion that that the size of banks was also not the main reason behind the economic turmoil, and even some of the UK’s smaller financial institutions could have been pronounced equally guilty of “over-exuberant lending” and taking “risky short-term wholesale deposits, Turner explained “Everyone was seduced by the long boom and were often led astray in the past by complicated mathematical rules. The Bank’s regulators were the ones who failed to notice the inherent weakness in that position.”

The FSA chairman also went on to explain that when the time comes to add up the cost of bailing out the financial services industry at the height of the global financial crisis may in the end turn out to be a lot less than first predicted.

“It is quite possible that the total overt costs of the UK’s big bank rescues may not exceed five-ten per cent of GDP," Turner predicted in a recent interview "and perhaps considerably less as indeed was the case in the Swedish banking crisis of the 1990s.” He summed up.

Recent research is pointing to a situation that increasingly adds weight to the theory that the UK’s property rental sector is heading towards a similar model of the mainland European countries of increasingly longer tenancy agreements.

According to one of the UKs largest letting agencies, during the last year and a half, a fairly dramatic increase in demand for rented accommodation has been observed, with potential tenants being especially interested in properties with long term tenure periods.

Reasons given for this new phenomena in property rental appears to be largely causes by increasing difficulties of young families to raise the new and higher deposit levels required to be granted a mortgage, while around a third confessed that they were unsure that the conditions were ripe to put their toe in the still turbulent waters of the UK property market. With almost 40 percent of potential first-time home buyers opting to remain tenants in the meantime, because of the current tough mortgage-lending criteria and 14% of those questioned said they preferred life as a tenant to that of a homeowner.

Home ownership in the UK has fallen by three percent since 2003 with the trend likely to continue. Several of the UK’s leading property management companies now believe that the UK Government now needs to ensure that renting a home offers the stability levels that are currently only afforded to home owners.

British Airways, once again under strike threat have dug in by saying that more than one thousand of the staff have volunteered to work as cabin crew if indeed the threatened strike goes ahead.

As a further back up, BA announced that they also intended to hire no less than 23 fully crewed planes from a leading European owned charter company. The company’s role will be to help run flights from Heathrow Airport should the strike threats eventually materialise.

The Society of Motor Manufacturers and Traders (SMMT) recently announced that new car sales in the UK increased by 26.4% in February compared with the same month in 2009, with the main push in demand coming because of the Government’s scrappage scheme.

Launched in May of last year in an effort to boost the ailing car industry, the £400 million initiative, which allowed owners of cars at least 10 years old would be offered a £2,000 discount off the price of a new vehicle, with half of the grant being provided by the UK Government and the other £1,000 coming from the lucky carmaker. Figures from the SMMT show that almost 20 percent of new car sales in February came a result of the scheme, which is due to be wound up by the end of March.

On the stock market, Barclays Plc’s Asian partner, the China Development Bank announced that they will be reviewing their “ties” with the bank, U.K.’s second-biggest. The announcement caused shares in Barclays to rise one percent, to 333.1 pence.

The U.K.’s third-largest supermarket owner J Sainsbury Plc has announced plans to expand their activities into non-food products. They will be marketing electronics, entertainment and sports equipment among others through their Web site. Despite the excitement, Sainsbury shares 0.2 percent, to close on 335.4 pence.

Michael Page International Plc, the U.K.’s second- largest recruitment company announced a drop in full-year pretax profit of no less than 85 percent to £21.1 million pounds. Despite the reversal, their shares climbed 6 1.7 percent, to close on 395 pence.

The benchmark FTSE 100 Index fell 0.1 percent, to close on Thursday at 5,527.16.

On Wall Street, for the Dow Jones Industrial Average the only way was up, this time rising 47.38 points to close on 10,444.14. The NASDAQ Composite also held its own, rising 11 points to close on 2,292.31.

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Tags: Bank of England, Barclays, BOE, British airways, Dow Jones, Financial Service Institute, FTSE, general election, Heathrow Airport, Interest Rates, Lord Turner, Mervyn King, Michael Page International Plc, NASDAQ, quantitative easing, Sainsbury, SMMT, Society of Motor Manufacturers and Traders, UK government, Wall Street

That would make for very good news if only the Royal Bank of Scotland (RBS) hadn’t succeeded in making a loss of £24.3 billion shortfall in 2008. For 2009 RBS has announced losses for 2009 of just £3.6 billion after losing their struggle to recover billions of pounds of bad loans. Considering that city analysts had expected losses of around five billion, this is not a bad result for the bank whose Chief executive Stephen Hester said had "exceeded all the principal milestones" set for the first year of their turnaround plan.

Hester went on to add that t the group’s core business saw profits rise from £4.4 billion in 2008 to £8.3 billion last year, while bad debt increased to £13.9 billion from £7.7 billion in 2008. On an optimistic note, RBS announced positive signs of a peaking in the number of "toxic loans" being held by the bank, with the fourth quarter looking better for corporate clients.

Hester also revealed that in discussions with the Government about altering its lending commitments to "reflect the economic circumstances" over the next year, that they were very open to increasing its lending levels to

customers. However, strained economic environment still remained a factor that had caused many of the bank’s customers to reduce their borrowings.

As part of its bailout terms, the firm agreed to make an extra £25 billion available to customers in loans with £9 billion being allocated for mortgages and the remaining £16 billion for business lending.

Mr Hester summed up by saying that 2009 was "a year of substantial progress" for the bank.

On the controversial subject of bonuses, Hester requested that RBS should not be singled out and that the financial community as well as the UK public should recognise that that important staff would leave if pay was not competitive. Alistair Darling obviously agrees, because he has cleared the payment of £1.32 billion in bonuses to staff at the bank.

The announcement came just a few days after Stephen Hester opted not to take his £1.6 million bonus, with the CEO apparently still waiting to see if any of his colleagues at the bank will follow suit.

Also subject to change will be Northern Rock’s 100% savings deposit guarantee that is now to be lifted on the 24th May.

From that date, the UK government has decided that their deposits guarantee will no longer apply. The day has obviously been timed to specifically allow, savers exactly 12 weeks to decide what to do about any money that they have on deposit with the north east based building society, As was the case before the Rock began to crumble, savers who still have deposits worth up to £50,000 will be covered by the Financial Services Compensation Scheme. However those holding larger amounts will no longer enjoy the government’s protection. .

The decision may have come as result of complaints by other banks and building societies that the 100% guarantee has given an unfair advantage to the bank, with an increasing large number of deposit holders happy to deposit large amounts there, despite lower interest rates due to the 100% protection.

Leaders of the leading British unions have described a “still fragile” the labour market , despite the fact that recently released figures showed that unemployment surprisingly fell by 7,000 in the quarter to November 2009 to just below 2.5 million. Correspondingly e the number of people claiming jobseeker’s allowance was also around 15,000 lower in December at 1.6 million. However, the union leaders claim, thousands of job losses have only been announced in recent weeks, raising fears that unemployment will start to climb in the flat period that typically occurs in the run-up to a general election.

The TUC said it will be looking for a number of key signs in today’s figures, including a fall of more than 30,000 in unemployment and a reduction in the number of “involuntary” temporary workers. According to the TUC, the number of people taking temporary or part-time jobs because they can’t find permanent work has risen considerably. .

Operating profits at British Gas soared by 58% last year to £595 million, compared with £379 million in 2008. Its parent company Centrica said the figures beat the previous high of £573 million in 2007.

British Gas announced earlier this month it was reducing its gas prices by seven percent.

The U.K.’s second- largest department-store retailer Debenhams Plc, who recently acquired the Denmark based Magasin du Nord retail chain, are considering acquiring similar companies in the future. A spokesman for Debenhams stated that the company would like to become less reliant on the difficult home market. According to the British Retail Consortium Retail sales in the UK rose at the slowest pace in 15 years last month with London-based Debenhams, who operate 142 stores in the UK, obviously feeling the pinch. Until January’s acquisition of the six-store chain for £12.3 million pounds Debenhams’s overseas presence had been restricted to 11 stores in neighboring Ireland and about 50 franchised outlets.

On the foreign exchanges, the pound continued to fall, reaching $1.5266, whilst reaching .1245 against the Euro.

U.K. stocks dropped after a report showed confidence among U.S. consumers fell in February to the lowest level since April 2009. In London, the FTSE 100 dropped 64.69 points to close on 5278.83.

Overall, the FTSE 100 has gained around five percent since early February. as U.K. companies continue to confound the experts and expectations grow that the strengthening global economic recovery will signal further economic growth.

Confidence among U.S. consumers fell more than anticipated in February to the lowest level since April 2009 as the outlook for jobs diminished, a report showed today.

Federal Reserve chairman Ben Bernanke said there was a "nascent economic recovery" in a testimony before Congress.

US stocks jumped more than 1%, led by banks, as some had feared that the cost of borrowing would start rising soon.

Although the US economy is growing, some worries remain about its strength because unemployment remains high, meaning that the "Fed "has begun to gradually undo some of the emergency measures that they had implemented during the financial crisis.

The Dow Jones Industrial Average rose 47 points to close on 10,321.03 while the NASDAQ Composite also recovered by 25 points to close on 2,234.22

Ben Bernanke is taking a very close look at the role of Wall Street firms in helping Greece to cover up the extent of their financial troubles, with Goldman Sachs apparently under closer scrutiny than most.

Bernanke hinted that both the Fed and the US financial watchdog were "looking into a number of questions" related to banks’ arrangements with Greece, whilst stopping short on the question of whether an official inquiry was under way

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Tags: Alistair Darling, Bank, Banking, Ben Bernanke, British Economy, British Gas, British Pound, Centrica, Currency, Debenhams Plc, Dow Jones, Economics, Economy, Employment, Financial News, Financial Services Compensation Scheme, FTSE, Goldman Sachs, jobseeker’s allowance, Magasin du Nord, Money, Money Markets, NASDAQ, Northern Rock, RBS, Recession, Retail, Stephen Hester, Stock Markets, Stocks and shares, TUC, UK Banks, UK Economy, UK government, UK Recession, US economy

The announcements that Royal Bank of Scotland (RBS) and Lloyds Banking Group are to sell off hundreds of branches has added a smile to the face of.

Alistair Darling as well as the European Commission, who had insisted that the banks sell off some of their branches. In a recent statement, the chancellor confirmed his opinion that the sales, were in the "best interest" of the wider UK banking sector.

Lloyds will dispose of more than 600 branches over the next four years, while RBS will sell 318 of their high street outlets. The Spanish banking group, Santander will be allowed to bid for Royal Bank of Scotland’s branches when they are put up for sale. Under competition rules agreed between London and Brussels, Santander will be eligible to bid for some of the branches as the currently hold less than 8 per cent of the UK small business lending market. Meanwhile, Sir Richard Branson is reported to be interested in moving into the world of high street banking as his Virgin Money group has applied to the Financial Services Authority (FSA) for a banking licence.

There are even some contentious rumors around that no less a company than PayPal might find them on the UK high street. Reports have it that PayPal already have an EU banking license, granted to them in May 2007, so why not a place for the outsiders!

Britain’s fourth-biggest supermarket group, WM Morrison have sent a message to their major suppliers that they will be looking for increased support for their increased and more aggressive promotion campaigns, The campaigns are aimed to increase their market share in what has become an increasingly competitive market. Morrison’s move comes as the prices of basic food stuffs begin to drop.

Europe’s biggest low-cost airline Ryanair announced on Monday that it is considering slowing down its rapid expansion program, and instead break with tradition by distributing cash earmarked to buy new aircraft to their shareholders instead. The company raised the possibility of the strategic shift while announcing a 46 per cent rise in second-quarter profits. The company has kept its full-year profit forecast steady, although they expect that figures for the third and fourth quarters will be less than rosy.

Sterling continued to weaken against the dollar, whilst rising slightly against the Euro and holding its own against the rest of the major currencies.

• Pound/US dollar 1.6398
• Pound/Euro 1.1168
• Pound/Japanese Yen 148.3102
• Pound/Swiss Franc 1.6874

The FTSE spent time under the 5,000-point mark on Tuesday with banking stocks taking the biggest toll. At close of trading, the FTSE 100 was seen to be holding its own on 5,037.2.

The FTSE 250 continues to suffer from a consistent run of heavy losses, falling more than 15% of its peal of 10,000 just a few weeks ago. At close of trading yesterday it was sitting on 8,756.68.

Troubled US commercial lender CIT Group, filed for bankruptcy on Sunday after attempts at a restructuring or bail-out failed. In a statement, CIT, who have been a key figure on the American banking scene for more than a century, announced that they had requested that the court quickly confirm its prepackaged bankruptcy plan. The plan, which has broad support from its debt holders, and in particular from Carl Icahn its billionaire investor. Icahn has agreed to provide a $1 billion line of credit, allowing the company to remain confident that they would be able to emerge from bankruptcy by the end of the year.

The US Dow Jones index made some recoveries from the last two days trading; up 61 points to 9,774.1 The NASDAQ were also fairly stable, reaching 2047.46.

The market was taken by surprise by the announcement of a swing to profitability by the auto manufacturing giant Ford. The company posted its first quarterly profit in more than a year, thanks to the implementation of cost-cutting and the government’s “cash-for-clunkers” rebates helped produce earnings of nearly $billion, or 29 cents a share, during the third quarter. Shares in Ford closed up 8.3 per cent at $7.58.

Australia’s economy continues to be the rising star of the global economies, so much so that it central bank has increased its interest rate for the second consecutive month, up a quarter percent to 3.5%. The Australian economy is the only one in the developed world to expand in the first half of 2009, with the continent largely managing to steer clear of recession, only entering into negative growth for the last quarter of 2008. The bank’s confidence was justifiably increased by the release last week of the lowest inflation figures in Australia for 10 years.

The price of gold price hit a fresh record high on Tuesday as India agreed to buy 200 tonnes of bullion from the International Monetary Fund. The move caused traders to speculate that there would be further purchases by the emerging economies. India’s purchase valued at around $6.7 billion, accounts for half of the IMF’s expected disposal of gold and signals a growing appetite among developing countries’ central banks for bullion in the wake of the global economic and financial crisis, coming after China had revealed earlier in the year that it had quietly almost doubled its gold reserves to become the world’s fifth-biggest holder.

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Tags: Alistair Darling, Bank, Banking, British Economy, British Pound, Bullion, Carl Icahn, cash for clunkers, CIT Group, Credit Crunch, Currency, Dow Jones, Economics, Economy, EU banking license, European Commission, Financial News, Financial Services Authority, Ford, FSA, FTSE, Gold, Government, Interest Rates, International Monetary Fund, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, Paypal, RBS, Recession, Retail, Royal Bank of Scotland, Ryanair, Santander, Savings, Sir Richard Branson, Stock Markets, Stocks and shares, UK banking sector, UK Banks, UK Economy, UK government, UK Recession, Virgin, Virgin Money group, WM Morrison

Chancellor of the Exchequer Alistair Darling now appears likely to give Lloyds the go ahead to test the seriousness of its ambitious £25 billion refinancing plan. Darling’s tacit agreement will be looked upon by city watchers as a definite indication that the chancellor could be prepared to release the bank from its obligations to the government’s toxic asset insurance scheme. It would appear that Darling has concluded that Lloyds’ plan to bring in more private capital is in the public interest. However it would appear that his final decision will only be positive when he is convinced that the market is ready for such a bold initiative. Darling is expected to announce his decision to the Lloyds at the early part of next week. The move will mean that the bank can then begin to appoint underwriters and test the market. Only then will Darling make the final decision and may even withdraw approval for the plan if he concludes the move carries to many risks for the already under siege UK taxpayer.

As expected, the European Union (EU) has approved plans for nationalized bank Northern Rock to be split into two parts, a move that is expected to pave the way for a partial sale of the bank.

One half of the bank, known as the "good" bank, would trade as retail bank holding deposits including some of the Rock’s existing mortgages, as well as lending money to consumers only.

The toxic side of the bank will remain in government hands, whose unenviable task it would be to attempt to salvage as much as the taxpayer’s money tied up there. The chancellor has ruled out the possibility of completing the sale of Northern Rock before the general election, in spite of winning approval from Brussels.

Meanwhile Spanish banking giants Santander continue to clean up on the UK high street. The bank announced that profits during the first nine months of the year for its UK banks have risen by more than a third.

Abbey, Alliance & Leicester and Bradford & Bingley banks, owned by Santander announced a £1.2 billion profit, up 38% from the same period in 2008.

Debt laden bus and rail operator National Express has wound up their discussions with rival Stagecoach regarding a possible merger. Instead they will press ahead with their plans to mount a rights issue to re-finance the company. Yesterday’s announcement follows weeks of speculation over a possible tie-up between the groups that would have created a transport giant with an estimated worth of £1.7 billion.

Oil and gas supply group BG, announced on Wednesday that their post-tax profits for the third quarter had fallen 39 per cent to £474 million from last year’s £777 million. A spokesman for the company said that the fall in gas and oil prices had been partially offset by advance sales of liquefied natural gas at advantageous prices. Although natural gas has rallied since early September, it had not done as well as crude oil during continued signs of economic recovery.

Sterling continued to rise in value yesterday against the dollar, while rising slightly against the Euro.

• Pound/US dollar 1.6393
• Pound/Euro 1.1131
• Pound/Japanese Yen 148.0908
• Pound/Swiss Franc 1.6804

London’s FTSE 100 dropped 2.32% or 120.55 points to close on 5080.42. The FTSE 250 plummeted a further 3.19% percent yesterday, down 291.78 points to close on 8849.50

For the first time in half a year, sales of new homes in the US fell as buyers opted for bargains on existing and foreclosed houses. Unexpectedly new home sales fell by 3.6 per cent from August to September, defying economists’ expectations that they would increase. Compared with a year ago, sales of new homes were down by 7.8 per cent, according to commerce department figures

On Wall Street, the Dow Jones Industrial Average closed down 1.21% after news that the annual rate of US new home sales had fallen unexpectedly in September.

At close of trading Wednesday it had fallen 119.48 points to 9762.69. The NASDAQ Composite index also took a tumble down 56.48 points to 2059.61.

It was announced on Wednesday that new orders for durable goods rebounded in September after slumping the prior month, offering another sign that manufacturing activity is stirring in the US

European shares also fell fairly sharply yesterday, largely due to disappointing company results and negative US economic data.

Norway has become the first European country to raise its interest rates since the beginning of the global financial crisis. The country’s central bank raised the cost of borrowing from 1.25% to 1.5% in a move that was widely expected. A spokesman for the bank stated that the increase was necessary due to increases in inflation and recent unemployment figures that were considerably lower than previously projected.

Oil prices dropped by more than $2 a barrel on Wednesday, as the latest US weekly inventories data continued to show supply outstripping demand. All in all the expected recovery in the dollar weighed on investor sentiment towards the commodities market.

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Tags: Abbey, Alastair Darling, Alliance & Leicester, Bank, Banking, BG, Bradford & Bingley, British Economy, British Pound, Chancellor of the Exchequer, Currency, Current Account, Darling, Dow Jones, Economy, Employment, Financial News, FTSE, gas, llo, Lloyds, Lloyds Banking Group, Money, Money Markets, Mortgage, NASDAQ, National Express, Northern Rock, Oil, Recession, Retail, Santander, Savings, Stagecoach, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Unemployment, Wall Street

The U.K.’s second- biggest bank Barclays Plc have announced that they are to acquire Standard Life Plc’s banking assets for a sum of £226 million pounds, In a move designed to expand their UK based savings and mortgage operations, Barclays will receive a major boost in turnover through Standard Life Bank Plc, who currently hold around £ 5.5 billion in deposits as we’ll as £8.8 billion in mortgages. A spokesman for Barclays announced the bank’s intention to continue to explore opportunities in the U.K. retail long term savings and investments industry, working in conjunction with Standard Life, who are the U.K.’s third-biggest insurer.

The bank is seeking to increase revenue at its consumer and corporate-banking division, whilst reducing their reliance on investment banking. The acquisition follows that of the Portuguese credit-card business of Citibank International Plc made last month. Barclays continue to seek more acquisitions in Europe.

Production of new cars in the UK fell by 16.1 percent for the year in September, making for the smallest decline for 12 months, according to figures issued by the Society of Motor Manufacturers and Traders. 119,616 cars were made in Britain last month, making for an annual total of 694,769, down by 41.2 percent on the same period in 2008. Sales have been boosted by the government’s car scrappage scheme, which allows motorists to trade in cars that are more than 10 years old in return for a 2,000 pound subsidy on a new vehicle.

Oil giant BP has reported third-quarter profits of £2 billion ($4.98 billion) well ahead of analyst’s expectations

BP’s results, boosted by higher than expected cost cuts, was still down by

50% from last year. This is largely due to the fact that oil is currently trading at about $80 a barrel, about half of where it was this time last year. The announcement sent BP’s share price up by almost 4%.

The British Standards Institute (BSI) the national standards body are reportedly deep in the process of developing a voluntary standard of ‘kitemarks’ that will be issued to retail and wholesale financial services firms.

The BSI have been consulting with members of the industry in order to set out a common methodology and good practice standard, which can be implemented alongside existing regulations, with the goal of reducing risks of compliance failures whilst offering greater reassurance to management that regulatory requirements are being met. The British Bankers’ Association (BBA) are apparently offering their whole hearted support for the scheme, with their chief executive quoted as saying that the initiative should improve efficiencies between and amongst compliance teams across the financial service industry .

Sterling continued to rise in value yesterday against the dollar, while falling against the Euro.

• Pound/US dollar 1.6351
• Pound/Euro 1.1043
• Pound/Japanese Yen 149.0922
• Pound/Swiss Franc 1.6709

Shares in the Anglo-Dutch publishing group Reed Elsevier, were very much in demand on Tuesday, rising 3.3 per cent to 473 pence after the market deduced that concerns over the trading performance of, it’s content archive service division, Lexis-Nexis, had been exaggerated.

Banks didn’t have such a good day on the FTSE, especially the partially nationalised ones. Royal Bank of Scotland were down 8.1 per cent to 40.8 pence while Lloyds Banking Group, also fell 6.1 per cent to 83.8 pence. The reason for their downfall was investor fears regarding the disposals that both banks will be obliged to make in order to satisfy European Commission rules on state aid.

The FTSE 100 made a minor recovery on trading Tuesday, up just 9.23 points to close on 5200.97. The FTSE 250 continued to lose value, yesterday down 44.82 points to close on 9141.28.

Fears about future job prospects was stated as the principal reason why US consumer confidence fell unexpectedly in October. The Important Consumer Confidence Index from the Conference Board business organisation slipped to 47.7 in October from a revised 53.4 in September. Analysts were caught unawares by the decrease, with expectations that the index would remain unchanged or might even rise slightly.

On Wall Street, the Dow Jones hiccupped a little into forward gear, up a mere 14.21 points to 9882.18. The NASDAQ Composite index was still dropping yesterday, a further 25.76 points to 2116.09.

According to the European Central Bank, lending to companies operating in the eurozone fell in September at an annual rate of 0.3%, compared with a modest annual growth of 0.1% in August. The fall is a source of concern for the Eurozone countries is it comes when European governments continue to bolster their economies by increased lending at very low, subsidised interest rates.

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Tags: Bank, Banking, Barclays, Barclays Plc, BBA, BP, British Economy, British Pound, British Standards Institute, BSI, car scrappage scheme, Citibank International Plc, Conference Board, corporate-banking, Currency, Dow Jones, Economy, European Central Bank, European government, Financial News, FTSE, Important Consumer Confidence Index, Lloyds Banking Group, Money, Money Markets, NASDAQ, Recession, Reed Elsevier, Royal Bank of Scotland, Society of Motor Manufacturers and Traders, Standard Life Bank Plc, Standard Life Plc, Stocks and shares, The British Bankers’ Association, UK Banks, UK Economy, UK government, UK Recession, Wall Street