The weaker Pound and an insurge of wealthy foreign shoppers wishing to take advantage of the satiation have contributed to a major revival in retail sales in the shopping centres of London during September. The British Retail Consortium who are involved in producing the London Retail Sales Monitor, have announced that retail sales in central London were up by 7.5 percent on September 2008. The largest month-for-month increase in 12 trading months. Even more encouraging, were sales figures released by the New West End Company, who monitor sales from retailers based around the highly exclusive Bond Street, Oxford Street and Regent Street region in the West End of London. There retailer were reporting an increase of 25 percent jump in sales in September when compared to August, as well as a 4.6 per cent increase on September 2008.

Britain’s banks could be in line to pay windfall taxes that could reach punitive levels. if they are unable or unwilling to provide acceptable guarantees that they will discard their long running practices of tax avoidance. In a recent statement, officials of the UK Treasury described speculation that tax raids on the banks under their spotlight was imminent is being unfounded, as well as reports that higher levels of corporation tax would be imposed as “not being currently under consideration”. The major UK banks have been negotiating with the Inland Revenue and the Treasury for some time to ensure that their tax payments adhere “to the spirit of the law rather than the letter”. The “powers that be” are looking for a new approach from the banks, and on that will be in contrast to their approach before the bail out of the financial system late last year, that was largely funded by the British taxpayer..

The Treasury is working on a new tax code with the banks, with a final verdict expected ahead of the chancellor Alistair Darling’s forthcoming pre-Budget report. One Treasury official said: “If the banks were not participating we would need to look at other channels, but at this stage they are playing ball

Willie Walsh, chief executive of British Airways has announced that he has held "open and frank" talks with union leaders, in order to prevent cabin crew balloting for strike action. Both sides have been involved in a long running conflict regarding BA’s plans to cut 1,700 jobs as well as making further changes to pay and conditions for other members of the BA staff. The union representing the airline’s employees, Unite, has stated that they will have little option but to ballot for industrial action if BA’s changes are imposed on their members. A representative of BA announced that Mr Walsh had written to unite joint leader Derek Simpson after the meeting, while the union declined to comment.

The pound continued its steady rise, despite faltering slightly against the Euro and the Swiss Franc.

• Pound/US dollar 1.6425
• Pound/Euro 1.10969
• Pound/Japanese Yen 147.9728
• Pound/Swiss Franc 1.6587

The FTSE 100 had a good day, up 91.34 points to 5281.54 The FTSE 250 rose strongly on the day’s trading, up 138.44 points to close on. 9564.64.

Chairman of the US Fed Ben Bernanke announced on Monday that the US and Asia adopt policies that prevent a revival of global economic imbalances as the financial crisis ebbs, and such a move was “extraordinarily urgent”. Bernanke went on to warned that global imbalances, meaning the large gaps between national saving, consumption and investment rates that were reflected in large trade deficits and surpluses needed to be bridged. The US must establish “a sustainable fiscal trajectory anchored by a clear commitment to substantially reduce federal deficits over time”. he continued

The Dow Jones index recovered strongly on Monday’s trading; climbing again above the 10,000 points mark, as encouraging US bank results fuelled optimism for the global economy. The Dow Jones was up .96.28 points to close on 10092.19 The NASDAQ Composite index also recovered all of Friday’s losses, up 19.52 points to close for the day on 2,176.32.

Annual car production in China has topped the 10 million mark for the first time in the industry’s history, with car makers boosting output to meet the ever growing demand. Despite the global downturn in demand for new cars for most of the major car makers, demand for cars is bucking the trend with state incentives, such as tax cuts on small cars, going a long way to boosting sales

The price of oil has continued to rise, mostly on the back of the weak US dollar reaching a new high for 2009. US crude settled up $1.08 at $79.61 in New York trading, while London Brent rose 78 cents to at $77.77

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Tags: Alistair Darling, BA, Bank, Banking, Bond Street, British airways, British Economy, British Pound, British Retail Consortium, British taxpayer, corporation tax, Credit Crunch, Currency, Derek Simpson, Dow Jones, Economy, Financial News, FTSE, Inland Revenue, London Retail Sales Monitor, Money, Money Markets, NASDAQ, New West End Company, Oxford Street, pre-Budget report, Recession, Regent Street, Retail, Stock Markets, Stocks and shares, tax avoidance, UK Banks, UK Economy, UK government, UK Recession, UK treasury, Unite, Weak Pound, West End, Willie Walsh

For the third consecutive month of increase, UK housing prices have increased. They are reported to have risen by as much as 1.6% in September. Housing prices in the UK continue to remain considerably lower than in September 2008, as much as 7.4 percent. However since the end of 2008, prices have grown by 1.7 percent as increased demand and reduced inventory have combined to push housing prices up, especially in the recent months. House prices increased by 2.8% in the third quarter of 2009, making for the first rise since the third quarter of 2007, and the largest percentage growth since the first quarter of the same year. The increased demand for property is believed to stems from improved affordability, and the reduction in both interest rates.

It may come to pass that the U.K.’s largest government-controlled bank, the Royal Bank of Scotland Group Plc (RBS) may have to surrender more than ten percent of their one million small business customers, The reason being that the European Commission has imposed a penalty on the RBS for receiving billions of pounds of state aid. Currently it is reported that the RBS, in a move designed to reduce their credit card risk portfolio are only issuing new cards to existing clients.

The Office for National Statistics has announced that U.K. manufacturing output has slumped 1.9% from the month in August whilst dropping 11.3% on a yearly basis. The wider industrial production measure fell 2.5% from July and slid 11.2% from August 2008.

The FTSE 100 rose by 2.26 percent on yesterday’s trading, or 113.65 points to close on 5137.98. The FTSE 250 was still on the rise, but at a reduced pace, closing up a further 25.12 points to close for the day on 9,226.35.

The pound made a minor recovery against the leading currencies, while continuing to hover around $1.60. The Sterling’s latest bout of weakness surrounding Sterling began after UK industrial production was shown to have slumped in August. Additional statistics released on Wednesday show that corporate profitability in the UK had deteriorated for a fifth successive quarter and is standing at its lowest level since 2001.

• Pound/US dollar 1.5958
• Pound/Euro 1.10863
• Pound/Japanese Yen 141.422
• Pound/Swiss Franc 1.64861

Europe’s largest discount airline, Ryanair Holdings Plc set aside as being of “no substance” recent reports claiming that the company is preparing to take control of Aer Lingus Group Plc through a rights issue. In another sign of the advantage that short-haul, low-cost carriers such as EasyJet hold over long-haul flag carriers during the current downturn, the company announced that it had handled more than 4.4 million passengers in September, an increase of 5.3 per cent over the corresponding month in 2008. The increase, the largest since April, was well above the 4.7 per cent rise the airline recorded in August, traditionally one of its busiest months. In any event, stock in EasyJet fell 0.3 percent, to 3.38 Euros.

According to Sir Terry Leahy, chief executive of Tesco, the worst is over for the UK economy as well as for the U.K.’s premier food retailer. Sir Terry’s revelation came after Tesco’s announced pre-tax profit for the first half of its financial year rose that had risen by 1 per cent to £1.42 billion. Sir Terry prediction is that that the UK would see a “slow and steady recovery” as the money pumped into the economy to stimulate it had to be paid back. He added that uncertainties over the financial outlook for 2010, such as public sector cuts, the proposed increase in value added tax and the threat of rising unemployment, would not be sufficient to prevent “a gradual recovery. Sir Terry also defended Tesco’s performance in the US, where its Fresh & Easy chain has reported losses of £85 million in the six months to the end of August. Shares in Tesco rose 0.4 percent, to 391.4 pence.

The management team at Matalan have reportedly held several meetings over the past few weeks to examine strategic options for the discount clothing and home-ware retailer. Subjects on the agenda included the possible sale of the company during 2010 with an asking price of around £1.5 billion pounds. If a sale was to go through, and discussions are at a very early stage, company founder John Hargreaves would be liable to realise hundreds of millions of pounds in profits from the sale. Matalan have invested significant sums of money in revamping their 200 UK stores have reported solid profits for June.

Shares in Vodafone, the World’s largest mobile phone service providers were under pressure for a second day, dropping 2 per cent to 137 pence. The share price fall could be attributed to a culmination of factors, among them, fears of a price war in India, and analyst’s predictions that AT&T was considering opening their mobile network to third-party voice applications such as Skype. A move that would put pressure on Vodafone’s Verizon Wireless division to emulate.

In the year to 30 September, the US budget deficit more than tripled to a record £877 billion ($1.4 trillion) according to US Congress estimate figures recently released. Analysts had previously predicted a slightly higher deficit but later revised their estimate, which has been attributed to increased government spending coupled with a huge drop in tax revenues. The actual deficit will be released by the Treasury Department later this month.

The Dow Jones index dropped a little on yesterday’s trading, closing on 9725.58, down 5.67 points. The NASDAQ index continued to rise, but at a slower pace, up just 6.76 points to close on 2,110.33.

The White House have announced that it was weighing policy options designed to create new jobs to ease the burden on America’s unemployed, currently numbering more than 15 million. A spokesman for the President hasted to rule out speculation that a second stimulus to provide a further boost to the US economy was on the cards. The majority of US economists believe that the country was on track to move out of recession. However the black cloud of increasing unemployment is hanging over the picture, with unemployment figures hitting 9.8 per cent, the highest rate since 1982.

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Tags: Aer Lingus Group Plc, AT&T, Banking, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, EasyJet, Economy, Employment, European Commission, Financial News, Fresh & Easy, FTSE, Global Credit Crisis, House Prices, Matalan, Money, NASDAQ, Office for National Statistics, property, RBS, Recession, Royal Bank of Scotland Group Plc, Ryanair Holdings Plc, Sir Terry Leahy, Skype, Stock Markets, Stocks and shares, Tesco, The White House, Treasury Department, UK Banks, UK Economy, UK government, UK industrial production, UK Recession, Unemployment, US budget, US Congress, US economy, Verizon Wireless, Vodafone

Government ministers will use this week’s Labour party conference to claim government action helped pull the country back from the economic abyss, while their Tory counterparts will as surely use their own conference next week to blame the government for the downturn’s depth.

According to the Confederation of British Industry (CBI) employers’ organisation, after the general election, public spending should be cut harder and faster than the government intends. The next government should aim to balance their books by 2015-16, which is two years earlier than the plan set out in this year’s Labour Party Budget. The feeling at the CBI is that while it was essential an incoming government laid out a “clear and credible” plan to get the budget back into balance, the organisation remains undecided whether the process of cutting spending should start next year, according to the opposition Conservative party’s proposals.

According to internal company data, Opel’s U.K. and Spanish car plants are more efficient than two of its three German factories. Figures for December show the Russelheim plant in Germany took almost 10 hours more to assemble a car than the Ellesmere Port factory in Britain and 14 hours more than in Zaragoza, Spain. These figures are likely be used by those demanding the European Commission “take a tough stand” on the sale of General Motors’s Opel unit to Magna International Inc. Job losses are expected to be heavier outside Germany under that proposal, which is being brokered by the German government.

The proposed UK government six pound telephone line tax due to be implemented by the end of 2010 has apparently raised some eyebrows in the business community. The proposal, aimed to partly fund the investment required for a new UK national broadband network. Has met with a surprising response from British business who claim that six pound per telephone line would prove insufficient and could hold back the UK broadband sector for some time to come. Government thinking is apparently that many consumers are already upset about the need to pay six pound every year, although they have no current access to broadband, and the government is trying to keep the cost per family down, but to what effect.

UK-based domestic insurance group HomeServe has sold its loss-making emergency repair services unit for £11 million. HomeServe Emergency Services (HES) was acquired by Midlands-based LDC, the private equity arm of Lloyds Banking Group. The division posted a loss for the first half of this year, and HomeServe was reportedly keen to sell it off, reducing its valuation by £97 million to make the sale. HES, who employ 2,400 people at offices in Norwich, Nottingham, and Beverley, is made up of three trading businesses, including HomeServe Glass and Locks, who provide and emergency glazing and locksmith service; HomeServe, Chem-Dry, who provide emergency restoration of water damage and accidental damage; and HomeServe Content Services, who have developed a software designed to assist insurance firms validate contents insurance claims.

The FTSE 100 registered its sharpest gain in three weeks on Monday, as it jumped 83.50 points to close on 5,165.70 The FTSE 250 reversed most of last week’s fall, up 108.96 points to 9169.40.

The pound continued to enjoy mixed fortunes against the major currencies.

• • Pound/US dollar 1.5879
• • Pound/Euro 1.10867
• • Pound/Japanese Yen 142.4182
• • Pound/Swiss Franc 1.64

Photocopier giant Xerox, already the world’s biggest supplier of digital printer and document management services, has unveiled a takeover deal which takes it into the fields of data management and technology outsourcing. The company is buying fellow US firm Affiliated Computer Services (ACS) in a cash and shares deal worth £4 billion.

Wall Street on Monday recorded its biggest daily gain for over a month after merger deals lifted investor confidence. The Dow Jones Industrial Average was up 124.17 points to 9,789.36. The NASDAQ jumped 39.82 to close on 2130.74. Last week, Wall Street suffered its biggest weekly loss since July after disappointing data on durable goods and housing sales.

Germany equities led European bourses higher on Monday aided by a particularly strong performance from the German utility sector, after Chancellor Angela Merkel’s Christian Democratic Union and her Free Democratic allies gained a majority in parliament on Sunday.

In a move designed to ease the impact of the global economic crisis on central and Eastern Europe, the European Bank for Reconstruction and Development has appealed for an increase of 50 per cent in working capital.

The multilateral bank, controlled by some 60 governments, including European Union members, the US and Japan, is asking for an extra £9 billion (€10 billion,) necessary to expand their lending capabilities as well as compensating for a sharp decline in private capital flow, especially into the cash strapped former communist countries.

The bank’s move highlights the bank’s concerns that the region’s difficulties may be forgotten as world leaders grapple with the effects of the global crisis.

The yen rose to a seven-month high versus the dollar as Japan’s new government reiterated its opposition to intervening to stem a currency’s gain and the Federal Reserve pledged to keep interest rates low. Japan’s yen advanced 1.8 percent this week to 89.64 per dollar, from 91.29 on September the 18th at one point touching 89.51 yen, the strongest level for almost nine months.

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Tags: Affiliated Computer Services, Banking, Brighton conference, British Economy, British Pound, Confederation of British Industry, Currency, Dow Jones, Economy, European Bank for Reconstruction and Development, Financial News, FTSE, General Motors, Gordon Brown, Government, HomeServe, HomeServe Emergency Services, Labour Party Budget, Magna International Inc, Money Markets, NASDAQ, Opel, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Wall Street, Xerox

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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

Recent reports have it that the injection of public money that is supposed to pump new life into the construction industry is just not making it. Construction projects across the UK lay abandoned and uncompleted sector, glaring evidence that the sharpest contraction that the building sector has ever known looks a long way from ending.

According to a recent survey carried out on behalf of the industry, the UK government pledge to re-programme more than £3 billion of publicly owned construction projects , that were due to begin in 2010 and 2011 to this year, have failed to materialise as yet. The idea of bringing these projects forward was to offset that painful lack of new building starts in the private sector.

However a recent report from the Construction Products Association revealed that a nationwide cross section of their members reported that instead of the promised increase in new projects, even existing construction projects have been mothballed by the UK government as funding dries up. These projects include important and much needed public works including schools, hospitals road works and general infrastructure, had found public work had declined over the past year. Of the civil engineering and building companies contributing to the survey, 47 per cent of them reported lower work rates in the first quarter of 2009. Construction companies involved in building social housing reported a fall of project completions 27 percent compared to last year.

According to a spokesman for the UK Contractor’s Group, the government stimuli that was promised in Darling’s budget and pre-budget reports have so far failed to appear and their absence is having a very distinct impact on the UK construction industry, which has been hardest hit by the recession. The sector accounts for about 8 per cent of UK output and a similar percentage of jobs.

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Tags: Alastair Darling, Alistair Darling, British Economy, Budget, Construction Industry, Construction Products Association, Credit Crunch, Economy, Employment, Recession, UK Contractor’s Group, UK Credit Cards, UK government, UK Recession

As the Royal Bank of Scotland’ struggles to push itself out of the quagmire created by Sir Fred and his crew, unpleasant surprises continue to emerge. A recent statement by incumbent CEO Stephen Hester made at the recent British Property Federation conference. The bank’s losses on real estate loans could be higher than it has provisioned for.
Hester went on to add that the bank’s updated assessment is that it could take between three and five years for the excessive level of property lending to level out. Summing up on a more positive note, Mr. Hester said that he foresaw for the future that RBS would need to reduce its exposure to the sector significantly, but that it would “behave responsibly and play a long game”, helped by the fact that most borrowers were continuing to service the interest on their debts.

Meanwhile UK chancellor Alistair Darling issued a warning to the British Bankers’ Association that further regulation and a crackdown on sloppy boardroom practices are on their way, including new regulations on higher liquidity and capital standards at banks. His announcement comes ahead of the release of a Treasury white paper next week on financial regulation, and the forthcoming EU summit in Brussels on plans for regional regulation of the banks.

That perennial bearer of bad news, the Office for National Statistics announced that UK unemployment has passed the two and a quarter million mark, in the three months to April 2009, making for the highest UK unemployment levels since November 1996. However there was a minor crumb of comfort to be taken from the news that the number of people claiming unemployment benefit rose by only 39,000, less than the 60,000 forecast by analysts.

Bus and rail operator National Express have announced the successful renegotiation of terms against their outstanding £1.2 billion, allaying fears that the company were liable to breach payment conditions set on the existing loan.

National Express have been fighting an uphill battle coping with servicing such a massive debt burden, whilst struggling with a major slump in passenger revenues, especially on its East Coast train franchise. At the same time, payments to the Department for Transport to service the franchise have been on constant increase.

And if things are bad on the ground, then they seem to be a lot worse in the air. If you need confirmation ask Willie Walsh, British Airways chief executive, who is facing fresh conflict with the unions on his proposal that BA staff should follow his personal example and work without pay for a month.

Walsh sent a personal note to each of the company’s 40,000 employees, asking them to volunteer for up to four weeks of unpaid work or unpaid holiday leave. Either option means no salary.

Needless to say it looks like Walsh faces a tough task convincing staff to accept his proposal, being that there is already no love lost between the company and the unions. Both Willie Walsh and BA’s chief financial officer Keith Williams set a precedent by announcing that they will be waiving their salaries for July. However a spokesman for Unite, BA’s biggest union, remained unmoved and unimpressed by observing that: “Willie Walsh can afford to work a month for free. Our members can’t

On the stock market, Sainsbury’s shares dropped 5.65 per cent to 313 pence after a surprise announcement that they plan to raise £445 million of fresh capital through a stock issue estimated to be worth £255 million as well as £190 million of convertible bonds offer. The capital is earmarked to fund the company’s growth; a spokesman for Sainsbury’s pointed out.

On the announcement that they had acquired a majority stake in an Indonesian clove cigarette maker shares in British American Tobacco (BAT) rose 0.2 per cent to 1660 pence. The acquisition that will cost BAT around £300 million will elevate the company to be the world’s fifth-biggest tobacco company, increasing their global market share from 2 per cent to 9 per cent.

The recent publication of the Digital Britain white paper has already worked wonders for the BT Group as hopes that government plans to extend broadband internet access would greatly benefit the fixed-line operator. After an advance of 8 per cent on Tuesday, shares in BT in rose a further 3 per cent to 106 pence.

Yesterday was not such a great day for FTSE. The 100 continued on its course of fluctuation this week falling 50.11 points to finish on 4,278.46. The FTSE 250 continued its rapid downward descent this time losing 174.45 points to close on 7,309.05.

Sterling rose for the second day again ever so slightly against the dollar, while losing considerable ground against the other major currencies

Pound/US dollar 1.6427
Pound/Euro 1.1766
Pound/Japanese Yen 157.0514
Pound/Swiss Franc 1.7711

The US government has announced a major reform of banking regulation to prevent future financial crises. The overhaul will require big banks to set more money aside against future losses to curb excessive risk taking. Consumers will enjoy the protection through a new government agency formed to protect their interests as well as regulating credit on mortgages and credit cards.

The US equities market moved into fluctuation mode on Wednesday as the government released details of their proposed regulations.
The Dow Jones rose 42.77 points to close on 8547.44, while the NASDAQ climbed back over the 1800 barrier, up 23.99 points to 1820.17.

US consumer prices rose less than had been expected in May, as the recession continued to keep inflation down.

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Tags: Alistair Darling, Banking, British American Tobacco, British Economy, Economy, EU summit, Financial News, National Express, Royal Bank of Scotland, Sainsbury, Stephen Hester, UK Banks, UK Credit Cards

Economist doesn’t often agree with U.K. Prime Minister Gordon Brown’s every decision, but on Friday there was a consensus that to keep Chancellor of the Exchequer Alistair Darling at the treasury was a wise one.

As part of a sweeping cabinet reshuffle brought about by revelations of expenses system abuse by those who are supposed to be leading the country out of recession, there had been strong speculation that Brown would replace Darling who has held down the post for two years, during which time the recession really took hold.
While changes at the treasury team still look likely, it seems that Darling is unlikely to be shuffled, as there may be no one else willing to take the job!

Another example of the “let them eat cake” theory adapted by big business in the UK is the disclosure that annual salaries of the country’s top executives rose by seven percent in 2008 last year to reach an average of £2.6 million. To the average British citizen, whose salary at best stayed the same, and whose cost of living rose as fast as his savings dissolved, this news will be especially galling.

Iceland agreed to take a $5.44 billion loan from the U.K. and the Netherlands to repay Icesave claims, bringing to a close a seven-month dispute and helping the island draw the next tranche of an international bailout.
The Atlantic island must pay back the loan over 15 years, according to a joint government statement sent by e-mail today. The U.K. will lend 2.35 billion pounds ($3.76 billion), the Treasury said, and the Dutch 1.2 billion euros (1.68 billion). It will be interest-only for the first seven years.

Thousands of U.K. and Dutch depositors risked losing their life savings after Landsbanki Islands hf, which offered the high-interest Icesave online accounts, collapsed with the rest of Iceland’s debt-reliant banking system in October, dragging the island’s currency down with it. The island is now relying on its IMF-led bailout to avert bankruptcy.

The FTSE 100 added 1.18 percent to 4,438.56 while the FTSE 250 gained 1.14 percent to 7,747.33.
Miner Rio Tinto added 10.33 percent to make it the session’s best performer on the 100, while Vedanta Resources (LSE: VED) was up 9.31 percent, Eurasian Natural Resources (LSE: ENRC) gained 7.31 percent and BHP was 6.8 percent higher.

ANOTHER DAY of political uncertainty helped to push sterling to a one-week low against the dollar, a two-week low against the euro and the yield on 10-year gilts 8 basis points up to 3.92 per cent – the highest since February.

The high drama in Westminster again left sterling gyrating as wildly as some ministerial careers. Sterling fell to $1.5959, compared with a seven-month high of $1.67 seen as recently as Wednesday. The pound was also hit later in the day by a sharp surge in the dollar in the wake of better-than-expected US jobs data

New York markets were slightly higher in early afternoon trade as the Dow Jones Industrial Average added 0.47 percent to 8,791.13 while at the same time, the Nasdaq Composite was up 0.09 percent to 1,851.66

Crude oil, grains, and most metals prices were all lower, but only after the price of crude oil went above $70 for the first time this year.

While markets in the Asia-Pacific region were mixed, more saw gains than suffered declines.
In Tokyo, the Nikkei 225 was up 1.02 percent to 9,768.01 while the Topix index added 0.61 percent to 916.56 and the Mothers market was 0.11 percent higher to 398.65.

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Tags: Alastair Darling, British Economy, Gordon Brown, Recession, Stocks and shares

Harrogate in the North of England is almost a nice place to spend a few days. Their stay  might be slightly less than pleasant for  the chief executives of the UK’s building society sector who are due to gather there for their annual industry conference in Harrogate. 2008 was, to say the least, a difficult year for UK building societies, and 2009 liiks already that it will be just as challenging. Cracks are beginning to show at the West Bromwich Building Society amid speculation that the finacilly challenged society are on the lookout for a buyer.  Its an open secret that many building societies have found themselves on shaky ground having diversified into issuing commercial property and subprime mortgages.

U.K.’s recession is beginning to make its mark on the online clothing market, where it was reported that sales are down for the first time in nearly a decade.

Web-based clothing sales dropped by two percent compared with the previous month, recent reports have it. Possibly distractions might have been Easter shopping, as well as mother’s day. Overall online retail sales in the UK were still on the rise in April, up 14 per cent from March, with online beer, wine and spirit purchases being the pacemakers, up by ten percent as warmer weather and Darling’s unwelcome two percent tax pushing sales figures upwards.,

The world of banking was shaken but not stirred by the news that the chairman of Lloyds Banking Group (LBG), Sir Victor Blank is to call it a day in June 2010.  Sir Victor announced to the LBG board that he felt it was “the right time for the Group to appoint a new chairman”.
 
Sir Victor had faced considerable shareholder  criticism for their decision last year to buy HBOS, the troubled owner of Halifax. These day. the UK Treasury is the principal shareholder holding a  43% in LBG.

On the news of  chairman Blank ’s intended step down  shares  in LBG  rose 1.6 percent    (1.4 pence to 89.2)

The Competition Commission and the Financial Services Authority have apparently begun a crackdown on a controversial form of insurance , that has been  costing banks and insurance companies  hundreds of millions of pounds. Among those affected are Lloyds Banking Group, Royal Bank of Scotland by concerted efforts to reform payment protection insurance.

High street retail giant, Marks and Spencer  are reported to be on the verge of announcing a dividend cut this week, with some analysts saying that it could be  by as much as half. Expectation are that the full year payout per share will be 11.3 pence down from 22.5 in 2008.  M&S are expected to announce their results on Tuesday.

On the FTSE ON Friday, property companies were again under the sword. The U.K.’s second-largest real estate investment British Land Plc trust declined 1.3 percent (5.25 pence to 391.75)  Eurasian Natural Resources Corp.  also followed suit , down  1.8 percent  (10.5 pence to 592.5) while Carnival Plc  on news that they are likely to cut dividends fell 2.4 percent  (42 pence to 1702) .

The world’s largest mobile- phone company Vodafone Group Plc (are expected to announce any day now their eagerly awaited plan  to speed up their one billion pound cost-cutting program. Shares  fell 2.3 percent  (2.9 pence to 123.2)
 
U.K. yellow pages provider , the Yell Group Plc are expected to announce a  one billion pounds write-down on its Spanish subsidiary, which has been severely affected  by the country’s severe economic  Yell shares dropped by 6.9 percent (3 pence to 40.5)

U.K. stocks fell backwards slightly on close of business on Friday. The FTSE 100 Index fell 14.47 to close on 4,348.11.37, while the FTSE 250 settled down for the weekend on 7427.87.

The pound receded slightly against the dollar and rose strongly against the Euro on currency markets yesterday.
· Pound/US dollar 1.5144
· Pound/Euro 1.259
· Pound/Japanese Yen 143.767
· Pound/Swiss Franc 1.703
On Wall Street, the Dow Jones closed on Friday down 62.68 points to 8268.64, while the Nasdaq held its ground more or less, down 9.07 points to 1680.14.

The US Treasury Department  announced that  they will make federal bailout funds available to a number of companies in the life insurance sector, after impassioned pleas  to receive much needed government help.

The Treasury plan  to inject up to $22 under last Autumn’s  Troubled Asset Relief Program.  On the news, shares of U.S. life insurers rose sharply on Friday.  The  life insurance companies who are eligible to receive aid  have been on hold  for weeks with some applications going back as far as November 2008.

The economies of the 16  Eurozone countries  have declined by 2.5% in the first three months of 2009,  according to a recent report. Forecast were for a drop of only 2%, with the sharp fall in German exports acting as a key factor in the decline.
GDP in the Eurozone has fallen by  fell 4.6% annually up to the end of March 2009/

Commodity prices were huffing and puffing over the weekend, Crude oil was up 5 cents a barrel at an average of $56.15, Gold dropped by 7 cents an ounce to $930.60. Copper continued its recent steady decline finishing at $200. 25 down $2.55

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Tags: Building Society, Financial News, Lloyds TSB, Retail, Sir Victor Blank

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

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

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

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