After the traumas it has gone through over the last year or so, it appears that the Lloyds Banking Group Plc, still the U.K.’s biggest mortgage lender is making strides to relive itself of some of the stigmas attached to it as the UK banking industry almost imploded in autumn of last year. The bank has reached an agreement with the U.K. government to guarantee half the risk on a portfolio of its existing short-term loans to companies, The billion pound deal will be dependent on Lloyds agreeing to increase their business lending.

As far as the high street us concerned, Lloyd’s Halifax building society unit is currently review the licensing agreements they currently hold, entailing running some 300 outlets situated in real-estate agents, lawyers and financial consultants. They have already implemented a decision to shut down 26 of the situated in independent banks. Lloyds are also reported to be interested in selling off their branches of Lloyds, TSB and the Cheltenham & Gloucester Plc in Scotland. Lloyds Banking Group is considering more job losses as the bank plans to close more than 300 “agency” counters run by its Halifax subsidiary in the offices of estate agents, solicitors or financial advisers.

The 43% state controlled banking giant has already paid off 7,500 people in 2009 so far. On the up side, Lloyds recently announced it was reviewing its decision to close down its 160 Cheltenham & Gloucester (C&G) branches,

Less than cheery forecasts from insolvency specialists are beginning to emerge that a second wave of corporate restructurings are due to break this month as bankers and investment houses begin to face problematic customers. .

September has always been regarded as the second important crunch date in the year for companies and lenders, as companies involved in retailing and distribution draw heavily on working capital to stock up in anticipation of what might not be the greatest of Christmas seasons.

On a difficult day for the FTSE, Lloyds bank’ stock rose 6.3 percent, to 111.34 pence on news of their reorganisation plans.

Shares in the U.K.’s largest self- storage operator Safestore Holdings Plc also rose by 8.3 percent, to 131 pence, in anticipation of improved third-quarter earnings.

RSA Insurance fell 4.8 per cent to 124 pence following reports that the company was considering a £1 billion rights issue to reduce their debt burden

The FTSE 100 closed at a low, having been under pressure all day after market strategists recommended clients to cut their allocation of UK equities.

The FTSE returned from it August Bank holiday break to find itself not in the best of shape. The FTSE 100 dropped to 89.20 points close on 4819.70 while the FTSE 250 fared even worse, dropping 2.24 % or 197.83 points to close on 8,619.68

Sterling also continued to struggle against the major currencies

• Pound/US dollar 1.6126
• Pound/Euro 1.1349
• Pound/Japanese Yen 149.5807
• Pound/Swiss Franc 1.7207

It would appear that scrapping incentives has not had too much of an effect with new cars sales generally on the increase around the world in August according to some preliminary data. Car sales in Japan rose for the first time in more than a year, while several auto manufacturing groups in Asia and Europe reported higher sales volumes than for the comparable month last year.

On Wall Street, markets continue to struggle due to continued uncertainty in the Chinese economy. The Dow Jones Industrial Average plummeted by 185.68 points to close on 9310.6 while the NASDAQ Composite index dropped below the 2,000 mark yet again, down 40.17 points to close on 1968.89.

For the first time since February 2008, US manufacturing output grew according to the Institute of Supply Management’s purchasing managers. Their index rose to 52.9 points last month, up from 48.9 in July.

Any number above 50 indicates an expansion in manufacturing output, making for another significant sign of recovery in the US economy.

In a long anticipated move, the internet phone company Skype has been sold off by online auction site owners in a transaction worth about £1.2 billion

Skype will now be owned by a group of private investors, including Netscape co-founder Marc Andreessen and private equity firms, in partnership with EBay who will retain a 35% stake in the firm, which it has been trying to sell for some time. The deal values Skype at $2.75bn. EBay bought Skype for $2.6bn in 2005.

Unemployment levels Euro 16 countries was reported to have hit a 10-year high in July, as despite declarations to the opposite, the impact of the recession continues to be felt.

The number of unemployed across the eurozone region in July was reported to have reached more than 15.1 million, making for a seasonally-adjusted rate of 9.5%. The unemployment figures were the worst in terms of monthly percentage since May 1999 and compares unfavourably with the numbers of unemployed with all the 27 member states of the European Union which was a total of 21.8 million, or 9%.

Crude oil prices have fallen this week as news out of China continued to raise doubts about its petroleum demand, with prices falling below the $70 a barrel mark again.

Economic concerns have hit China where the benchmark Shanghai Composite index fell 6.7 per cent in its worst one-day decline since June 2008, halting the ongoing increase in crude oil prices, which have risen steadily in 2009, after falling as low as $33 a barrel.

• Net Worth Update - April 2007 Since it's the middle of the month, it's time to...
• Ceramic Piggy Banks Antiques -> Decorative Arts -> Ceramics, Porcelain Ceramic piggy banks...
• 4 Benefits of Online Banking for Families Whether you’re a first time parent just getting into the...

Tags: Banking, British Economy, British Pound, C&G, Cheltenham & Gloucester, Currency, Current Account, Dow Jones, Ebay, Economy, Employment, Financial News, FTSE, Halifax building society, Lloyds, Lloyds Banking Group Plc, Marc Andreessen, Money Management, Mortgage, NASDAQ, Netscape, Recession, Retail, RSA, Safestore Holdings, Skype, U.K. government, UK Banks, UK Economy, UK Recession, Unemployment, US economy, Wall Street

The Office of Fair Trading (OFT) get their way , in the very near future company directors who turn a blind eye to price fixing at their companies are liable to be banned for up to 15 years. According to a statement published by the OFT, Britain’s antitrust regulator are preparing considerably tougher penalties not only for directors who were directly involved in price fixing but also those who were guilty by default. The current rules ban only directors who themselves breach competition law through offences such as price-fixing.

In common with other U.K. regulatory bodies the OFT, intend to raise the penalties for those individuals who are found guilty of price fixing, including jail sentences. To show that these are not empty threats, the OFT has recently charged four former and current executives of British Airways Plc with fixing the price of fuel surcharges on transatlantic flights with one of their competitors. If found guilty, the four could go to prison for as long as five years.

Anyone saying that the UK economy is dying obviously hasn’t been talking to their funeral undertakers recently. As is often the case, the funeral industry is experiencing record upturn in trade that has been going on for the last year at least. Not that more people are dying, just that many are concerned that when the time comes when they will be called to leave this Earth, their loved ones wall be unable to meet the bill. For this reason, more and more UK subjects are joining a plan organized by Britain’s largest provider of funeral plans to pay for their funeral in advance through easy payments.

The company, Co-operative Funeral care, who operate 1,100 funeral homes across the O.K., announced this week that they experienced a 28% increase in the number of funeral plan sales during the last six months alone.

A spokesman for Co-operative Funeral care pointed out that subscribing to a funeral plan represented a sound investment for people as they are guaranteed against future increases in costs.

Funeral plans, however do not cover all the costs with the "future clients" having to pay for their burial plot.

Northern Rock, the UK building society come bank, who recently reported first-half losses of £725 million, has announced that they will be deferring payments on some of its subordinated debt to help conserve capital. The UK bank, largely public owned, where permissible. Granite, the bank’s securitisation vehicle, will be unaffected.

Thomas Cook, the UK travel group announced that a large part of insolvent German retailer, Arcandor’s 53 per cent stake in the company could be sold to institutional investors as early as next month as their creditor banks attempt to reduce their loan burden.

Arcandor’s banks, led by Royal Bank of Scotland, Commerzbank and Bayern LB were reported to be still in the market for find a strategic buyer for the company so that they could sell off their combined 44 per cent stake. –.

Demands for rented accommodation will grow to eventually reach than a third of UK households within a decade, doubling the number since 2005.

With public sector construction spending expected to weaken over the next 18 months, consumers who are unable or unwilling to purchase their own property will create a strong demand for rented homes. These predictions come from Gravis Snook, chief executive of Rok, the construction and maintenance group. "He continued "The model where the individual borrows large sums to buy a house that they never quite pay off is somewhat suspect."

The group had been in talks with a number of social housing groups regarding the establishment of joint ventures with institutional investors to profit from this demand.

The FTSE 100 was in consolidation mode yesterday rising just 3.89 points to close on 4689.67. The FTSE 250 also recovered slightly, rising 15.77 points to close on 8,370.25

The pound improved against the dollar, whilst taking a tumble against the rest of the major currencies.

• Pound/US dollar 1.6509
• Pound/Euro 1.1624
• Pound/Japanese Yen 155.3987
• Pound/Swiss Franc 1.7614

Research in Motion (RIM) designers and producers of the BlackBerry smartphone have won the coveted honor as the company to watch, by the highly ranked Fortune Magazine.

RIM, based in Canada were ranked first in a list of the fastest growing firms around the world, due to their tremendous success with the BlackBerry Curve in the US, where they hold a 74 per cent share of the business smartphone market.

The Dow Jones Industrial Average continued to recover from its collapse earlier in the week, rising a further 61.22 points to close on 9279.16. The NASDAQ also showed improvement up 13.32 points to close on 1969.24

Another interesting phenomenon was unveiled this week mirroring the unhealthy condition of the World’s leading economies. It has been reported that as the US economy has contracted and employment opportunities have considerably contracted, the number of Mexicans crossing into the US by legal and illegal means appears to have fallen considerably. Statistics show that the number of people legally entering the US from Mexico, mostly looking for work, has fallen by nearly 40 per cent since 2006 to an annual average of about 350,000. Even more compelling news is that according to official statistics, the number of people apprehended trying to enter the US illegally fell to 724,000 in 2008, the lowest since 1973.

While the Department of Homeland Security claim that the decline is related to tougher border protection efforts, however many claim that the slump in US economy is the real reason.

Oil prices dipped ahead of the latest US inventories data while base metals retreated after a sharp fall in the Chinese stock market

Demand for gold sank in the second quarter after jewellery consumption dropped by more than a fifth and investment interest slowed as the threat of meltdown in the global financial system receded

• First Premier Bank's 79.9% APR Credit Card a Bad Idea - For the Bank! I blogged about First Premier Bank exploiting a credit card...
• Will Democracy Prevail? Due to massive losses, uncertainty, and loss of confidence, credit...
• Weight Lost: 47 pounds in 7 weeks... Under 1 Pound Weight Loss This Week After 7 weeks on the medically assisted weightless program JumpStart...

Tags: Arcandor, Banking, BlackBerry, British airways, British Economy, British Pound, Co-operative, Co-operative Funeral care, Credit Crunch, Currency, Department of Homeland Security, Dow Jones, Economics, Financial News, FTSE, Gold, Gravis Snook, Money, NASDAQ, Northern Rock, Office of Fair Trading, OFT, price fixing, prison, Recession, Research in Motion, RIM, Royal Bank of Scotland, smartphone, Stock Markets, Thomas Cook, UK Banks, UK Economy, UK Recession, US economy

Although your bank manager will tell you that he or she is your friend, and that they have your best interest at heart when they cut your overdraft or credit card levels, don’t believe them. The truth is that banks thrive on people who are in financial trouble and know exactly how to play on your weakened situations to continue to feed their insatiable drive for profit.

More so, that when you go to them on your knees asking for just a little more leeway, they will already have made sure that you will find it difficult if not impossible to find alternative finance elsewhere, and will take full advantage by providing you with additional finance at horrendously high interest rates.

The UK public must surely have learned one expensive and painful lesson from the current financial crisis and that is to keep the credit under control, and to try to do so by achieving and maintaining a credit rating that is as pure and white as the first snows of winter.

And believe it or not, despite prodigious efforts by the FSA to prevent this from happening, lenders, be they banks, building societies or credit card companies, are pooling their efforts to make sure that people who have fallen into debt in the past will find it very difficult to improve their credit rating.

There is, and always has been, a great anomaly about how finance providers look upon a potential client. If someone has money, why should they need to borrow it? Yet in many cases it is sensible to borrow money, particularly for a mortgage, or to buy a new car or even some major household appliance. Banks carry out tens of thousands of transactions every month, although secured loans are much less attractive to them than unsecured loans, where they can make more than twice the interest.

The sad truth of the matter is that if people are in severe financial trouble the last place they should set foot in is a bank, building society or credit card company, except to ask for an extended agreement on the same terms. Under no circumstances should they agree to accept a new refinancing agreement which will certainly be on prohibitive terms.

Only time will cure most people’s problems, and eventually better times will come. In the meantime it is everyone’s interest to keep the head down, draw in the belt even tighter, and repair each credit status. Learning to be less credit dependent will be a challenge for all of us, but it will be justified by never having to bend your knees to your bank manager again.

• Finding the Right Bank A big portion of how you handle your finances will...
• Personal Finance Equations You Should Know: the Amortization Equation Amortization is probably one of the most ubiquitous financial concepts...
• Small Banks Mean Big Yields From the depths of the recent credit crisis, a trend...

Tags: bank manager, Banking, Building Society, Credit, Credit Card, Credit Crunch, credit rating, Current Account, Debt, extended agreement, Finance, finance providers, financial trouble, FSA, Interest Rates, Loans, Money, Money Management, Mortgage, Mortgages, negative equity, Savings, UK Banks, UK Credit Cards, unsecured loans

It now seems likely that the Financial Services Authority, the Government appointed body appointed to control the UK banking system seem to have become a little weak at the knees, with the announcement that their remuneration code, due to be released today, does not fully focus on requiring bank boards and management to link remuneration and especially bonuses more closely to risk

Their reaction appears to come after the CEO of the largely state owned RBOS Stephen Hester announced that if leading bank executives are not offered bonuses and salaries in keeping with their market value, they will leave the industry.

According to FSA chief executive Hector Sants, the FSA’s new guidelines are designed to ensure that boards prevent management from introducing compensation policies that, in effect, subordinate the interests of capital providers to those of employees.

But the final version will step back from the March draft’s specific recommendations that two-thirds of each bonus should be deferred and that individual rewards take into account the overall performance of a firm rather than just that of the individual or division, people familiar with the code say.

No more free holidays to Lichtenstein and a visit to the safety deposit box seem likely to happen for UK tax dodgers as the HM Revenue & Customs agree a deal geared to recover lost tax income. Up to £3 billion of taxable income is believed to have been secreted away by more than 5,000 British investors to be held in the vaults in this tiny land –locked European principality. With the exchange of information now guaranteed, these naughty investors will be offered the chance to volunteer details of their deposits in return for penalties, which will arrive at no more than the 10% of tax evaded on the money deposited over the past 10 years. As part of the reciprocal agreement the three Lichtenstein investors holding money in UK bank accounts will be presented with a free "kiss me quickly" hat by Chancellor Alistair Darling.

Europe’s largest defence contractor BAE Systems announced that they have been awarded five-year contract from the US army that will be worth around £1.32 billion. The contract is to supply sensors designed to allow all weather and night sight operation. All in all, yesterday was a big day for BAE Systems, with the announcement that their portable laser target locator had also been selected by the US Army for a separate five-year rolling contract that will be worth up to £250 million, while in the UK BAE Systems secured a 10-year partnership deal worth £369.5 million to support navy and air force torpedoes.

Despite the global tightening of defence budgets, BAE has continued to take a growing share of the market, with sales increasing by 28 per cent to £9.9 billion for the year.

An overwhelming increasing demand to generate energy from waste has encouraged the New Earth Group Company to float a rights issue intended to raise £15 million to fund expansion.

The New Earth Group plans to use the funds to develop new power plants to recover energy from waste that will operate alongside its existing waste treatment and composting business.

The company management’s conviction that there will be a demand for energy generation from waste comes as government regulations force businesses to find alternatives to landfill, and as the quest to cut greenhouse gas emissions intensifies.

The first stage looks likely to be a large new waste treatment facility based in Avonmouth, scheduled to begin operation pen in 2011.

Hanson, the heavy building materials company have announced that they will be putting their building products companies up for sale as the malaise haunting the UK construction industry continues. Hanson have been the dominant operators in the UK’s brick and cinderblock market for many years and consequently have been hard hit by the downturn in building starts.

A spokesman for Hanson UK announced that the company hoped to complete most of the sell-offs by the end of 2009.

The FTSE 100 continues to decrease in value, yesterday down 50.86 points to close on 4,671.34.

Meanwhile the FTSE 250 was losing ground after a run of gains. On Tuesday it dropped like a stone, down 118.35 on 8,302.66 at the end of the day.

Sterling fell for a fourth-consecutive session as data continued to point to inflationary trends.

• Pound/US dollar 1.6506
• Pound/Euro 1.1652
• Pound/Japanese Yen 158.0089
• Pound/Swiss Franc 1.7834

In the US, reports from Department of Labour show that in the second quarter of 2009 productivity rose at its fastest annual pace six 2003. The figures show that the average workers’ hourly output rose at an annual rate of 6.4% in the period from April to June. However, the figure for the first quarter of 2009 was revised downwards, to an increase of 0.3% from an initial estimate of 1.6% growth, while labour costs fell 5.8% on an annual basis during the same period.

Financial stocks led the way for the worst day in Wall Street since early July, amid some signs that the financial crisis is still around. Suffering particularly were the US Banks d after the Congressional Oversight Panel hinted that the US Treasury had not done enough to relieve them of toxic assets.

On Tuesday’s trading, the Dow Jones index continued to lose some of its value down a considerable 96.5 points, to 9241.45. The NASDAQ also continued to drop well below the 2,000 mark, down 22.51 points to close on 1969.73.

Crude oil prices have fallen again, on OPEC’s announcement that they anticipate demand to decline further than predicted next year, with renewed forecasts of 27.97 million barrels per day for 2010.

On the news, US light crude dropped $1.15 a barrel to $69.45, while London Brent finished $1.04 lower at $72.46.

• Geriatric Monolith Getting Money, Giving Misery The following is a guest post by Greg McFarlane. He...
• Understanding Investment Returns for Retirement Planning One of the problems that many investors have (and that...
• T-Nation: Bad Fruits, Evil Veggies Credit: T-Nation Every year, about 1.3 million pounds of pesticides...

Tags: Alastair Darling, Alistair Darling, BAE Systems, Banking, British Economy, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, Financial Services Authority, FSA, FTSE, Hanson UK, HM Revenue & Customs, Money Markets, New Earth Group, RBOS, Stephen Hester, UK Bank Accounts, UK Banks, UK government, US Banks, US Treasury, Wall Street

According to their recently released annual report, the Financial Services Authority (FSA) Britain’s financial regulator, whose role in life is to supervise UK banks and help them to reduce debt; themselves have shown a deficit of £23 million pounds for the year.

In order to ease cash flow problems, the FSA have had to take up £100 million-pound loan from Lloyds Banking Group Plc As the FSA raises its revenue through fees that financial-services companies must pay to be regulated, and this latest bombshell is bound to mean some moments of discomfort for them. The agency announced that they will be raising their fees for the coming financial year to cover unexpected overheads.

Pension scheme burdens at U.K. banks HSBC and Barclays are reported to have increased dramatically during the first half of the year, largely due to an ongoing collapse in corporate bond yields. The deficit in HSBC’s main U.K. pension scheme was reported to have increased almost ten-fold from $392 million at the turn of the year to $3.9 billion at June 30.

It was announced on Tuesday that Australia’s ANZ have agreed to buy part of Royal Bank of Scotland’s Asian banking assets for $550 million. ANZ will be acquiring RBS units in Taiwan, Singapore, and Indonesia as well as in Hong Kong, the Philippines and Vietnam. The sale goes through as RBS continue in their drive to curtail their international activities after posting the biggest loss in UK history last year.

It was announced that nearly 75 percent of British shoppers now choose supermarket own labels, compared to only 25 percent a year ago. According to a recent survey, the rise was attributed supermarkets increasingly expanding their own ranges as well as cost-conscious consumers arriving at the conclusion that the fact that own brand ranges despite being cheaper do not fall for the quality of the “brand” products. In response, certain some private label brands such as Heinz, and Reckitt Benckiser (recently reported resurgence in demand for their branded products

Data centre provider Telecity announced an outstanding increase of pre-tax profits of 80 per cent for the first half of 2009 as their expansion program continues.
In the six months to June 30, revenue increased 33 per cent to £82.2 million, Telecity, are halfway through a three-year new-build programme that will almost double in its capacity, measured in megawatts of power available to customers.

The company announced that internet usage continues to grow, maintaining demand among Telecity’s customers, including technology services companies such as Hewlett-Packard as well as large telecommunications groups such as BT and AT&T.

Aerospace and defence stocks were under pressure on Tuesday as the FTSE 100 slipped from its 2009 high.

Defence contractor Qinetiq dropped 4.7 per cent to 135 pence after their interim trading statement reiterated profit would be weighted towards the second half due to US defence budget delays. Also shares in Rolls-Royce were down 1.8 per cent to 412 pence after brokers announced that the decline in demand for the company’s products would continue for several years.

Standard Chartered was the sharpest faller in the insurance sector, losing 7.5 per cent to 1328 pence after launching a surprise share issue to raise £1 billion in a drive to fund growth. Legal & General saw their shares down 4.8 per cent to 62 pence after their first-half operating profit were lower than market expectations due to investment losses as well as damped speculation that it might sell its asset management arm.

Pharmaceutical giant GlaxoSmithKline closed 0.1 per cent weaker at 1147½ pence after it was once again mooted as a potential bidder for Allergan, the Californian maker of breast implants and Botox.

After the announcement that they had struck oil in Uganda, shares in Tullow Oil outperformed a weak commodity sector, rising 2.6 per cent to 1021 pence.

Dana Petroleum was down 1.3 per cent to 1402 pence after Tethys Oil, its partner in Morocco, said it had plugged an exploration well after gas levels proved non-commercial.

Weakness among the banks and insurers led the FTSE 100 to close down 0.2 per cent, fading 11.09 points to 4,671.37.

Meanwhile the FTSE 250 continued to make considerable gains, climbing a further 84.4 points to close on 8,242.51

The pound has continued to gain against the dollar, rising as high as $1.7005 before falling back to $1.6938.

Pound/US dollar 1.6938
Pound/Euro 1.1763
Pound/Japanese Yen 160.6581
Pound/Swiss Franc 1.7985

US consumer spending climbed for the second consecutive month in June, despite growing unemployment and falling personal income.
Spending rose 0.4%, ahead of analysts’ estimates against 0.1% in May with rising food and fuel costs blamed.
Personal income fell 1.3% from the previous month – which had seen one-off stimulus payments from the government.
Consumer spending makes up about 70% of economic activity in the US.

Yesterday on Wall Street, the Dow Jones continued to climb up 33.63 points to 9320.19. The NASDAQ also crept up a little, 2.7 points to close on 2011.31.

The US House of Representatives has caused no little amount of consternation through inserting an amendment into their $33 billion spending bill that disallow any government money being spent on cars other than those made by the US “Big Three”, car manufacturing concerns. The proposed amendment has created considerable alarm from US trading partners in Europe and Japan, sparking claims of protectionism. A flurry of behind-the-scenes lobbying activity to make sure that the amendment is removed when the House bill is merged with a Senate version after Congress’s summer recess is already expected.

• What Happens When Banks Fail? The Digerati Life is a site that offers general personal...
• Frugal Friday Week 9 As many bloggers do, I read other blogs on the...
• Alzheimer's Disease - Cut Your Risk By Living Healthily Today in the news : This week, the Lancet Neurology...

Tags: AT&T, Bank, British Economy, BT, Economy, Financial News, Financial Services Authority, FSA, GlaxoSmithKline, HSBC, Legal & General, RBS, Retail, Rolls-Royce, Stocks and shares, Telecity, UK Banks

We must all remember with some shock and horror when the UK treasury announced that they would be cutting bank interest rates to next to nothing to help the business community and keep the major banks from going “belly up.”

If you were one of these people who were fortunate of unfortunate enough to have money on deposit and even more so if you were dependant on the interest earned on a day to day basis, you had no option but to sit back in horror and disarray and watch the interest rates that you were earning on your deposits fall from three of even four percent to less than one.

Although there is a return to optimism that the financial crisis has at least bottomed out and that the economy is now in cautious recovery mode, there are little signs in general that interest rates on deposits are beginning to climb.

When the rates paid out on deposits first began to plummet, the best move that anyone could make was to stay put, dig in and be patient. Especially as the likelihood of finding another bank or building society that were paying out more than one percent was very slim.

However there now indications that higher interest rates on deposits are now available, under certain terms circumstances, For example, both the Abbey and Newcastle Building Societies have recently announced increases in lending rates that, while being far from spectacular, do allow the possibility of actually seeing your savings begin to accumulate for the first time since late last year.

The significance of the interest rate not only strengthens the general feeling that the recession is slowly dwindling and for the families and individuals who had refused to panic the time has come to begin to reorganize their finances and have them work for you once again.

Trends in finance are generally consistent, and mean that if one or two building societies or even the banks begin to offer improved deposit rates it is only a matter of time before they all do. So take the time to check out which deals are likely to be worth your while, and for the long term

• Sometimes Saving Hurts! Declining Interest Rates Shouldn't Lead to Rate Chasing This post was inspired by a post titled, “FNBO Direct...
• It Pays To Wait, But Not with Interest Rates For those who like to say it pays to wait,...
• How Is Your Mortgage Interest Rate Determined? There are a number of factors that influence how your...

Tags: Bank, Bank of England, Banking, Intrest Rates, Money, Money Management, Savings, UK Banks

With 50% tax bands hanging over their heads, 1% interest being paid on any money that they may be lucky to have left on deposit in the banks in which they may be reluctant shareholders, is it any wonder that the UK public might feel hard done to. Yet we Brits are an uncomplaining lot, and it doesn’t take much to put a smile on our faces.
And just to prove that someone up there likes us, the weather seems to have taken a turn for the better, and cautious forecasts say that the weather in the UK for the summer months will be much warmer than it has been for the last few years.

Last weekend witnessed very pleasant weather throughout the UK and certainly put smiles back on the faces of those who had passed through a particularly cold and wet winter. If the weather holds up to expectations, it means that considerable and much welcome savings will be made in the cost of heating and electricity. And who can blame anyone who goes out and spends the money saved on having a good time. Outdoors.

For many UK citizens who had considered it prudent to do without their foreign holiday this year, the thought of holidaying in the UK has suddenly become much more bearable. The fact that their money is staying in the UK will also mean a major boost for the UK tourist industry and for the economy in general, with signs of a major increase in job vacancies in the service industries showing that they are gearing up to meet the demand. Retail sales in the last few weeks have also been encouraging.
Let’s hope that the weather forecasts don’t let us down and that Britain will enjoy a warm summer and pleasant autumn. We deserve it.

• Preparing for Winter Running Winter running is a challenge because of many different factors....
• Cycling for Your Body for Your Mind Cycling is commonly used means of a transport, and it...
• Christmas in July This post was written by Marie.  I have always thought...

Tags: British Economy, Credit Crunch, Financial News, Recession, Savings

Some might say deservedly, buts some of Britain’s best known banking brands will be removed from the UK’s high street, on news that Santander, the Spanish bank who first set foot in the UK market with the purchase of Abbey and later acquired both Alliance & Leicester as well as the savings branch of Bradford & Bingley announced that from next year all branches would trade under the Santander label. The British public will need to get used to seeing Santander, especially when they are about to invest around £12million on a major makeover, rebranding branches and product livery with their already well known and ever distinctive logo of a white flame on a red background.

A spokesman for Santander pointed out that when the Spanish bank entered the UK market five years ago, only 20 per cent of the public were aware of the company. This figure is believed to have raised four -fold largely due to Santander’s sponsorship of the British Grand Prix and their partnership with current Formula One champion Lewis Hamilton.

The in-your-face presence of Santander in the UK high street might represent a turning of the page for many who would associate the companies that will be replacing as unpleasant memories..

On the FTSE yesterday media stocks provided the only highlight, with ITV topping the bill, jumping by 12.5 percent after renewed speculation of a tie-up with Mediaset, Italian Prime Minister and business magnate Silvio Berlusconi’s media group.

Financial stocks also made gains with Man Group rising 5.4 per cent to 250p ahead of full-year results due on Thursday. There is speculation that the company’s retail fund launches are likely to have exceeded analyst’s expectations.

After abandoning a proposed deal to acquire 49 per cent of a China based asset management business from fortis, shares in Old Mutual rose 4.9 per cent to close on73½p.

Tour operators were buoyant on the news of Sterling’s continued recovery Intercontinental Hotels led the way, climbing by six per cent to 675p. Shares in Thomas Cook also rallied by four per cent to 233¾p.

Spirits were low at Diageo as shares slipped by one per cent to 843½p after French owners Pernod Ricard announced that talks of a recovery in the wine market might be premature.

At the end of a subdued day, the FTSE 100 closed up 4.51 points to 4,416.23, due to very low levels of trading. The FTSE250 closed on 7,588 down 26 points from Tuesday

• Investing For Sustainable Dividend Yield The following is a guest post by Saj Karsan. Saj...
• CPA Marketing - Creating Funds With Surveys And Sign Ups Auto Mass Commissions ReviewDo you understand that you just can...
• Bing overtakes Google in U.S. market share Microsoft Corp's new Bing search engine gained U.S. market share...

Tags: Abbey, Alliance and Leicester, Bank, Economy, Financial News, Santander, Stocks and shares, UK Banks

In the strange times in which we are forced to live in, when it is considered a major achievement to only make losses of £160 million in a quarter seems to be beyond imagination. But when it is the Royal Bank of Scotland’s (RBS) making that announcement then everything falls into place. And where does the “achievement factor” come in? It comes in when compared to the losses that the bank made in the comparable quarter of 2008. Almost £600 million, making for a recovery of £440.

To be fair to the much maligned bank, income for the period rose from £1.7 billion to £3.7, and much of the losses were attributed to writing off some £2.9billion of the toxic loans handed out by the bank when it was under a different and considerably more reckless management team.
On the results, RBS shares rose by 13.9 per cent (6 pence to 47.4) largely due to the positive performance returned by the bank’s global banking and markets division.

As the weekend closed in, Carphone Warehouse Plc finally announced that it reached an agreement with of Italian broadband firm Tiscali to acquire the company’s U.K. operations for £236 million. And to prove that patience is indeed a virtue, the price that Carphone Warehouse paid is less than half of the offer that the Italians rejected a year ago. Shrewd!

On the FTSE, stocks in the property sectors were underperforming on Friday.
British Land dropped by 9.4 percent (40 pence to 437), while Liberty International fared just as badly dropping by 8.1 percent (32 pence to 404)

Commodities are doing well as forecasts of the global economic recovery begin to gain ground. Vedanta Resources’ shares crept up by 8.4 per cent (105 pence to 1301), while Kazakhmys moved upward 7.1 per cent to (6 pence to 767) as the market appeared to be moving only forward

Equity fund raising fears caused some turbulence in the retail sector. Builders’ merchant Travis Perkins dropped by 3.8 per cent to (30 pence to 753) after rumours that the company is about to launch a rights issue of around £300million.

Retailing group Debenhams were also tarred with the same brush, and their shares dropped by 3.4 per cent (3 pence to 93) as a result.

Also on the hunt for a major cash injection from their shareholders are 3i. Their recently appointed chief executive admitted on Friday that the company’s £800million 2007 share buy-back may have been a trifle premature, and in order to renew their cash reserves they will be to organise a £700 million rights issue.

The FTSE 100 advanced a further 63.4 points on Friday to close on 4,462.1, maintaining a consistent 28 points daily increase since the beginning of 2009. Over, the week FTSE 100 gained a commendable total of 220 points.
The FTSE250 closed on 7,806.18 down 36 points.

The dollar had a bad day on international currency markets, put down to reduced interest rates from Europe and the UK, as well as slightly less encouraging results from the stress tests carried out on the leading US banks and the increase in unemployment statistics, with levels reaching 8.9 percent. 539,000 jobs were lost in April, making for the seventh worst month for job losses since the late nineteen fifties.

Pound/US dollar 1.523

Pound/Euro 1.1168

Pound/Japanese Yen 149.89

Pound/Swiss Franc 1.6823

Wall Street shares rebounded slightly on Friday’s trading, after dropping on the back of the stress tests results. The Dow Jones Average rose by 164.8 to close at 8574.65. NASDAQ rose 22.76 points to close at 1739.0

For the first time since 2001, the Berkshire Hathaway group, headed by legendary investor, Warren Buffett, posted a quarterly loss. While principal blame was attached to the group’s ill timed investment in oil company ConocoPhillips, Buffett admitted that the bulk of the group’s businesses were hurt by the recession. Berkshire Hathaway losses for the first quarter were of $1.53billion, against a profit of $940m for the same period of 2008. .

Another iconic company reporting a loss for many a long year were car maker Toyota who announced a loss of 766billion yen (£5.2billion) as well as issuing a profit warning for the financial year.

The major commodities were down over the weekend, with crude oil averaging a loss of 48cents a barrel at $57.91. 100Oz Gold was also down 30cents an ounce at $914.60 Copper dropped $0.93 to close at $212.70

• Bank of America’s New Fee is Yet Another Example of Congressional Ineptness Sometimes when I read Congressional Members’ rationale for certain bills...
• Weight Lost: 46 Pounds in 6 Weeks aka Over 7lbs this Week! After 6 weeks on the medically assisted weightless program JumpStart medicine...
• Is The Economy Recovering? Had dinner last night with an old family friend at...

Tags: Bank, Carphone Warehouse, Economy, Financial News, RBS, Royal Bank of Scotland, UK Banks

When the history books are written on what caused the first (and hopefully the last) global financial crisis of the 21st century, what will undoubtedly will be regarded as the “kick off” point in the UK will be the sudden and dramatic collapse of the Northern Rock Building Society. Nobody seemed to really understand the implications of the Bear Stearns Bank and the terminology “sub-prime mortgages” must have meant very little to the average UK citizen, but when the news broke that Northern Rock was in serious financial trouble, and queues began to form around the block to withdraw deposits, then the chilling realization began to form in the minds of many that the golden era of easy finance was over. And that the time had come to pay to the piper.

One of the UK’s biggest mortgage lenders at the height of the property boom, Northern Rock were the first bank to bail out by the Bank of England during the current crisis, as other banks began to refuse them further finance. As the international banking crisis deepened, and no viable private buyer emerged, Northern Rock were eventually nationalised by the government, supposedly on a temporary basis.

A recent report issued by the National Audit Office (NAO) has begun to peel some of the layers of how this long established building society managed to find themselves in such desperate financial straits, and even after they were the Treasury began to inject considerable sums of public money into the bank, Northern Rock, continued to award mortgages that amounted to (at least) 100% of the property’s value in a rapidly declining market. .

According to their findings, the NAO have declared that Northern Rock lent up

£800m to borrowers whose mortgage could be classed as “risky” This meant that the levels of equity in the agreement were less than 30% of the value of the property. The reports goes on to reveal that as late as spring 2008, there were a considerable number of cases recorded where Northern Rock issued mortgages of up to 125% of property values where the prices were continuing to plummet.

This amounted to 30% of its entire mortgage lending at the time although the bank said £1bn of this extra lending had been agreed before September 2007.

Findings of the report also reveal that before the treasury stepped in to rescue Northern Rock in order to protect the public’s savings. The mortgage bank’s lending policy could only be described as “foolhardy.”

Around a third of their clients were holding mortgages that represented more than the property value, with a further almost twenty percent with equities of between 90 -100% and decreasing.

The NAO report, whilst it generally displays its approval of the government’s intervention to protect the bank’s depositors through keeping Northern Rock afloat, does level some criticism on the Treasury for not taking a much closer look at state of the bank’s finances, before it deciding to take the drastic step of totally nationalisation.

The Treasury is to study the report and reply to the public accounts committee at the end of the month.

It might not make for light reading for many with the report stating that the government was not only slow to respond but were totally under-prepared to handle the crisis. Obviously they hadn’t heard of Bear Stearns either!

In the meantime it will not come as a surprise to anyone in recession hardened Britain of 2009, that as a result of mortgage arrears as well as shortfalls on sales of repossessed homes, Northern Rock made a trading loss of £1.4bn in 2008

• How Does A Second Mortgage Work? Second mortgages have unfortunately become very common over the past...
• So This is How Liberty Dies On Tuesday night this nation watched as Obama made a...
• Fishing North and South of the I-80 North of the I 80 There are actually more good...

Tags: Bailout, Bank, Bank of England, Banking, British Economy, British Pound, Credit Crunch, Financial News, Northern Rock, UK Banks