City Minister Lord Myners said he recognized the need for state-backed banks to compete in the global market, as he signaled the government would not block them from paying large bonuses to staff. Lord Myners told the Scottish affairs committee on Wednesday it was important the Royal Bank of Scotland was able to recruit and motivate employees. His comments came a day after the bank’s chief executive Stephen Hester revealed recruitment posted its biggest problem as RBS was being forced to compete on bonuses.

The number of businesses that went bust in 2009 increased by 18 per cent, but the economic outlook is slightly brighter for 2010. Recent information shows hat from the middle of 2009 onwards, the rate of business failures started to slow down compared to 2008 and early 2009, with a 7.7 per cent year-on-year decrease. This has to be good news for the economy as a whole. Business failures last year were not as extreme as 2008. The number of firms going bust in the fourth quarter of 2009 increased by almost a quarter compared to 2007, still an improvement on 2008, where the year-on-year increase was almost a third.

U.K. manufacturing unexpectedly stalled for a second month in November, a sign the economy is struggling to shake off the longest recession on record.

Factory output stayed unchanged from October, the Office for National Statistics said today in London. Economists predicted an increase of 0.2 percent, according to the median of 25 forecasts in a recent survey.

Bank of England policy makers last week pledged to spend the rest of their £200-billion bond-purchase program as they tried to cement an economic recovery.

Home Retail Group Plc sank 6.2 percent to 265.8 pence, the biggest decline since September, after a company spokesman announced that growth in the industry will be “hard to come by.”

Meanwhile HMV Group Plc slid 8 percent to 84.4 pence, the sharpest drop since December 2008, after saying holiday sales at stores open at least a year were hurt by the performance of its Waterstone’s bookstore chain.

The pound has been little changed against the dollar on recent days, and traded at 1.6245, up 0.5 percent on the day. The Euro was up to 1.262

The FTSE 100 Index added 24.72, or 0.5 percent, to 5,498.20. The FTSE 100 has extended its surge since March last year to 57 percent after central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy

Stateside President Barack Obama has ordered Wall Street banks to repay $117 billion (£72 billion) to taxpayers after criticizing banks for their "massive profits and obscene bonuses" culture. The tax is to recoup money US taxpayers are expected to lose from bailing out the banks during the financial crisis. The move follows populist anger at banks, seen as being responsible for causing the recent economic crisis. President Barack Obama will announce a sweeping new levy on about 50 financial institutions that will raise an estimated $90 billion to reduce the federal debt.

US stocks struggled to push higher on Thursday after an unexpected drop in retail sales gave investors reason for caution.

The Dow Jones Industrial Average had gained 0.1 per cent to 10,690.90 and the NASDAQ Composite was also 0.1 per cent higher at 2,310.58.

The market had opened lower after the latest commerce department figures showed retail sales, excluding cars, had fallen 0.2 per cent in December, with analysts forecasting a 0.3 percent increase

According to figures from the US Commerce Department, sales at US retailers saw an unexpected fall in December, casting uncertainty over the recovery of the US economy. Retail sales fell by 0.3% compared with November. Concerns over job security are expected to continue to restrict spending, with unemployment still at 10%. December’s figures end a tough year for US retailers, with total sales for 2009 down 6.2% on the previous year.

On the other hand, the tech industry’s earnings season got off to a flying start on Thursday with Intel reporting demand for its microprocessors boosted fourth-quarter revenues to $10.6 billion, well ahead of analysts’ forecasts of $10.2 billion. The world’s largest chip maker also reported earnings per share a third higher than Wall Street expected, at 40 cents rather than 30 cents.

Compared with a year ago, when orders collapsed in the teeth of the recession, Intel’s profits were 875 per cent higher at $2.3 billion.

Oil prices traded below $80 a barrel on Thursday, consolidating after recent losses triggered by a sharp increase in US crude and oil products inventories The recession has put a dent in future North Sea oil and gas production, with companies tapping fewer new oil reserves in 2009 than in previous years of operations there. Only eight oil and gas fields – expected to produce a combined total of 140 million barrels over their lifetime – began production in 2009, according to industry consultants.

That compares with an average of 600 million barrels of new reserves brought on stream each year between 2004 and 2008.

Production at the North Sea’s old fields has been declining since the start of the last decade increasing UK dependence on foreign oil.

financial

• CEO Salary Cap Graphic: Salary Cut to Equal Stock Performance? So how much did the $500,000 salary cap affect the...
• South Beach Harbor Marnia South Beach Harbor is located in San Francisco, CA  It...
• Double the Income or Double the Expense Till Death Do Us Part Getting married is stressful and emotional, but when it comes...

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

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

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

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

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

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

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

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

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

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

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

• Dollar 1617
• Euro 1.1285

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

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

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

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

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

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

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

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

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

financial

• Fantastic Steel-Framed Pre-Fabricated Modular Homes Kiss Your Home's Negative Equity Goodbye, And Make Way For...
• It Ain't Sold Till It's Sold! Good news! We got an offer on our co-op. Bad...
• How Hybrid Diesel Electric Technology Makes a Difference While there are some hybrid diesel electric buses and locomotives...

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

Official figures released this week have confirmed that the current recession is the most severe Britain has suffered since World War Two. More businesses have gone bust in this than in any previous recession, with more than fifty companies closing their doors every day.  Estimates are that around 27,000 have closed since the economic crisis began, compared with 24,000 during the early 1990s recession and 9,500 in the downturn of the early 1980s.

However the news from the business was offset by the news that sharp rises in public savings may leave the economy better set for recovery. Higher incomes have helped to push up the savings ratio to 8.6 per cent, making it the first time for more than a decade that savings have been higher than their long-run average, further suggesting that the UK economy may be closer to finding a proper balance.

With pressure mounting on state-owned banks to dispose of their non essential assets, the Royal Bank of Scotland (RBS) are said to be considering selling of parts of its estimated £15 million art collection, but only when the art market improves. The bank’s collection comprises works by artists LS Lowry, Anne Redpath, Jack Vettriano, Patrick Caulfield and Peter Howson. To try to drum ups some customers, the RBS is said to be considering loaning some of their paintings to public galleries next year.

The Office of Fair Trading (OFT) has finally admitted defeat over their two-year battle against high overdraft fees. Despite the fact, the OFT still intend to invite bank executives into meetings starting early next year to discuss plans to make fees clearer and apply pressure to launch new current accounts with low or no penalty charges. , Although it is unlikely they will phase them out altogether, banks reportedly are working on plans to lower overdraft and especially the controversial penalty fees. Among ideas being raised is to block clients from spending money within a close percentage of their agreed overdraft limit.

Business Secretary Lord Mandelson has reportedly contacted the Tata Group requesting that they review their decision to temporarily suspend operation at their Corus subsidiary’s Teesside Cast Products site at Redcar, which will result in the loss of 1,700 jobs. Tata Steel will need to stay ‘very firmly in touch with’ the government to honour a shared responsibility to look after the workforce and local community, according to Lord Mandelson. The recession has led to a sharp fall in production at Corus and the Tata Group has constantly stated that they cannot continue to operate the plant with insufficient orders or the support of a long-term strategic partner.

Sterling fell below the $1.60 level against the dollar for the first time in more than two months on Tuesday after a disappointing revision of UK third-quarter growth, adding to concerns over the UK economy which continues to grapple with ballooning deficits and rising unemployment

• Dollar 1.5955

• Euro 1.1106

The FTSE 100 closed 0.6 per cent higher at 5,402.41, the highest peak since September 2008. Trading wound up early for the holiday period and is due to resume on Tuesday December 29.  . 

According to figures issues  by the U.S. Commerce Department figures consumer spending increased in November by 0.5 percent, which was lower than the median estimate of economists and followed a 0.6 percent gain in October,. Incomes climbed 0.4 percent, the biggest increase since May

On Wall Street, the Dow Jones Industrial Average climbed 86 points to close on 10,521.1 while the Nasdaq Composite jumped 48 points to 2,285.69, as positive figures and festive spirits combined.

US senators have passed the final Senate version of a historic healthcare reform bill. The bill will provide cover to 31 million Americans who till now were uninsured and is liable to lead to the biggest change in US healthcare in decades.

President Barack Obama welcomed it as offering “real and meaningful” reform, saying it was the most important piece of social legislation since the 1930s.  However, it must still be reconciled with more expansive legislation passed by the House of Representatives. The process of reconciling the two bills is expected to begin in January and will require considerable and tough negotiations to see the bill passed.

Crude oil prices rose more than $2 a barrel on Wednesday following the latest US weekly inventories data, averaging around $76.00 a barrel. US crude stock levels dropped 4.9 million barrels last week, far more than the consensus forecast for a decline of 900,000 barrels.

• I Owe $28,000 in Medical Bills. I Need Some Sponsors. That's right. THIS IS NOT A GIMMICK. My appendix surgery...
• 401k Introduction The original 401(k) plan was created and set into motion...
• We tear through plastic bags and bottles like they’re going out of style by Jerry Hart I like calling IT the “trash superhighway” and after digesting...

Tags: Alastair Darling, Bank of England, Financial News, Peter Mandelson, Recession, Royal Bank of Scotland, UK Economy, UK Recession

U.K. Prime Minister Gordon Brown said Monday that his government has identified billions of pounds in additional efficiency savings in the public sector to help pare the country’s record deficit. Mr. Brown said the government can deliver £12 billion ($19.7 billion) in efficiency savings over the next four years, an increase on the target £9 billion that the Treasury had identified in April. Brown’s announcement comes ahead of Wednesday’s Pre-Budget Report, which will map out some measures to cut the budget deficit. Among the measures that have been considered is a tax on bankers’ bonuses and even on the banks themselves. However the issue of a windfall tax on banks or bonuses presents Brown and Chancellor Darling with a serious dilemma as they leave no stone unturned to raise cash without damaging the economy’s return to growth. Eroding banks’ profits to raise fiscal income might weaken these institutions just as the government is trying to provide increased more capital behind them to cover lending to Britain’s credit-starved companies.

Manufacturing output in the UK between September and October was unchanged against expectations for a 0.4 per cent increase. UK house prices rose 1.4 per cent month on month in November – stronger than forecast. The two pieces of news appeared to cancel each other out and sterling and gilts seemed little affected.

U.K. Chancellor of the Exchequer Alistair Darling is expected on Wednesday to announce a cut in taxes on the use of electric vehicles as company cars as part of efforts to present an environmentally friendly pre-budget report. A U.K. treasury spokesman predicted that from 2012, companies and employees would be exempted from paying taxes on company cars if they were electric vehicles.

Shares in UK government majority owned Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, dropped after Chancellor of the Exchequer Alistair Darling refused to rule out a tax on excessive bonus payments. Royal Bank of Scotland retreated 4.7 percent to 33 pence and Lloyds Banking tumbled 4.1 percent to 53.69 pence.

Andrew Bailey, executive director for banking services at the BOE, has stated the bank’s fears that U.K. consumers are hoarding cash due to their lack of confidence in the banking system. Another factor that strengthens the banks theories are the negligible interest that they would earn even if they did invest their money with a financial institution. In a speech made in Washington D.C., Bailey highlighted the ironic connection between the declining need for cash in everyday life and the sharply increasing demand for banknotes during the financial crisis and ensuing recession.

According to a recent report issued by the Engineering Employers Federation, U.K. factory production will begin growing again next year as exports rebound, Production is expected to grow 0.9 percent in 2010 after it had shrunk by 10.4 percent in 2009. The report went on to add that increasing signals point to the fact that the U.K. is emerging from the longest recession on record. The British Chambers of Commerce pointed out that although the recovery has started the Bank of England will probably be required to maintain its bond purchase plan at £200 billion pounds ($331 billion) while it assesses the strength of signs of a rebound.

Shares in travel companies are on the rise, with the Thomas Cook Group and TUI Travel leading the way. Thomas Cook, Europe’s second-biggest tour operator, jumped 1.9 percent to 221.2 pence, while TUI Travel, Europe’s largest tour operator, rose 1.5 percent to 250.5 pence.

Shares in the U.K. waste recycling company Shanks Group Plc surged forward 43 percent to 128.5 pence after the company revealed that they had received a possible bid offer from an unidentified private equity group. Washington-based private equity firm Carlyle Group, have been reported to be in talks to buy the British waste-disposal company Shanks for about £535 million ($875 million) for some time.

Sterling lost ground on Tuesday as disappointing economic data and concerns over the UK government’s pre-Budget report weighed on the currency,

• Pound/US dollar 1.6292
• Pound/Euro 1.1040

London equities continued to weaken on Tuesday, with renewed concern about the financial problems in Dubai. Banks especially were hard while talks continued between Dubai World and the creditors to restructure debt at the holding company. It is expected that a group of banks, including the Royal Bank of Scotland, Standard Chartered, HSBC, Lloyds Banking Group as well as two from the United Arab Emirates (UAE) will form a steering committee to be appointed to represent creditors. At the end of the day’s trading, the FTSE 100 had tumbled 1.5 per cent to close on 5,230.5,

According to Federal Reserve Chairman Ben Bernanke the US economy is improving, although it is still too early to say that the recovery will last.

Unemployment could stay "elevated", although inflation is likely to remain subdued, while interest rates were likely to stay low for "an extended period",

Following Bernanke’s comments, the dollar lost a lot of the recent gains it had made against the euro.

On close of trading, the Dow Jones Industrial Average had dropped 104.82 points to 10,285.292 and the NASDAQ was also down 19,65 points to to 2,169.96

President Obama has said that money not spent under the £425 billion ($700 billion) US bank bail-out package could be used to cut the US deficit and boost jobs. The cost of the "Troubled Asset Relief Program" (Tarp) had turned out to be "much cheaper than expected". Reports say the cost of the Tarp will be £120 billion below the Treasury estimate. Back in August, the Obama administration had estimated that the rescue package would be £200 billion.

Crude oil dropped for a fourth day, trading below $75 a barrel, as the dollar gained amid speculation the U.S. Federal Reserve will start raising interest rates.

The China Association of Automobile Manufacturers announced that Chinese car sales and production both exceeded 12 million between January and November, with expectations that car sales and output will to top 13 million for the full year.

Production of new cars has never topped the 10 million cars in one year mark in the past with state incentives having boosted car sales. The Chinese government has reiterated their plans to continue economic stimulus measures into 2010, Despite the downturn and falling sales at most global car makers, demand for cars in China continues to boom.

financial

• Obama aims to cut deficit in half | Reuters President Barack Obama wants to slash the ballooning deficit in...
• How to Find Ratings and Information for Your 401(k) Plan I came across a new online resource this week for...
• Tax Rebate Money Could Be Better Spent A couple days ago I wrote about the possibility of...

Tags: Alastair Darling, Asset Relief Program, Bank, Banking, Ben Bernanke, British Economy, British Pound, Chancellor of the Exchequer, Credit Crunch, Crude oil, Currency, Dow Jones, Dubai World, Economics, Economy, Employment, Engineering Employers Federation, Financial News, Gordon Brown, HSBC, Lloyds Banking Group Plc, Money, Money Markets, NASDAQ, pre-Budget report, Recession, Royal Bank of Scotland Group Plc, Shanks Group Plc, Standard Chartered, Stock Markets, Stocks and shares, Thomas Cook Group, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US economy

The Treasury was "justified" in using taxpayers’ money to bail out banks to protect the wider financial system, according to an official report.

The National Audit Office (NAO) review said the cost to the UK public so far totalled £850 billion.

"It is difficult to imagine the scale of the consequences for the economy and society if major banks had been allowed to collapse," the NAO said.

It said that the final cost to the taxpayer will not be known for "years".

During the financial crisis, the UK government nationalized Northern Rock and took stakes in the Royal Bank of Scotland (RBS) and Lloyds Banking Group in return for bailing them out.

RBS also put £282 billion of its assets into a government insurance scheme for toxic assets.

Despite the fact that Royal Bank of Scotland has signaled that it will succumb to pressure to pay its high-flying investment bankers substantially less than rival institutions amid an escalating row with the government, it is feared that Alistair Darling may still be heading for a potentially disastrous showdown with the bank over their plans to pay £1.5 billion in bonuses to its staff.

RBS which is 70 per cent owned by taxpayers, is hoping to avoid the high-stakes showdown after it was forced to give the Treasury the final say over the total size of its bonus pool as a condition of signing up to a scheme that will insure £240 billion in toxic assets, with hints coming from the bank that pay-outs in its investment banking division would be “at the low, low end of the scale”. They also hastened to send out a veiled threat, that reduced pensions and bonuses could meant them losing experienced staff to competitors. The bank is confident of forging an agreement with the government after it emerged that RBS directors had sought legal advice about whether they would have to resign if the Treasury vetoed pay deals agreed by the board, Darling, who to be granted the right to veto bonus payments at the bank, is left with a dilemma of waving through potentially huge bonus pay-outs at RBS just months before a general election or plunging the bank, which has already received unprecedented support from taxpayers despite widespread fury over bonus levels, into further crisis.

The value of UK commercial real estate debt in default or in breach of key lending agreements more than doubled to about £30 billion in the first six months of the year, adding pressure on the banking sector, a survey has revealed. Banks have also extended or refinanced an extra £16 billion in the first-half of the year, rolling over maturing debt that could not be paid back by cash-strapped borrowers or restructuring loans when breaches were threatened owing to the steep fall in values. This strategy has been dubbed “extend and pretend”, with some banks even refusing to test loan covenants, given a reluctance to crystallize losses by selling the property asset or the debt attached to it. De Montfort University, which compiles the most comprehensive study of the sector, announced that banks are beginning to deal with the massive £224 billion of outstanding debt to the real estate sector.

Lord Mandelson, business secretary, on Friday issued a blunt warning to Kraft and hedge fund investors that they will face “huge opposition” from the British government if a takeover of Cadbury is used as a means to make “a fast buck” The comments represent a government intervention that is unprecedented in recent years, extending the business minister’s policy of “industrial activism” into a live bidding situation. Meanwhile a strategy appears to be emerging to fend off a hostile takeover from Kraft. The Cadbury strategy emphasizes the value of its brand image and its emerging markets footprint as well as highlighting the progress made on during their restructuring program

Kingfisher, the owner of B&Q DIY stores, has cut net debt by 90 per cent since the start of 2008 and on Thursday confirmed its debt burden at the end of the financial year will be lighter than previously forecast. Net debt fell to £200 million in the third quarter and Kingfisher forecasts net debt of about £300 million at its year end in January, an improvement on previous guidance, which was for £800 million.

The pound continued to lose value strongly against the dollar and the Euro before the weekend.

• Pound/US dollar 1.471
• Pound/Euro 1.1086

U.K. stocks climbed, with the FTSE 100 Index extending this week’s advance, after a government report showed the U.S. rate of unemployment declined in November.

The FTSE 100 climbed 9.36 points to 5,322.36, bringing this week’s gain to 1.5 percent. The measure has rebounded 52 percent from its low on March 3 as governments committed about $12 trillion and central banks cut interest rates to record lows to end the global recession and revive credit markets.

US labor Department figures show that unemployment rate fell in November to 10% from 10.2% in October, meaning that 11,000 jobs went over the month, a figure far lower than expected by most analysts.

On Friday’s trading, the Dow Jones Industrial Average gained 0.2 per cent to 10,388.22 and the NASDAQ was up 1 per cent to 2,194.35.

The price of gold price has taken a surprise slump after surprisingly positive US unemployment data sent the US dollar higher, making gold a less attractive investment.

Gold fell more than $65, or 5%, to $1,161.4 an ounce, down from a record high of $1,226.56 in early trading.

After the release of figures showing that the US jobless rate was on the decrease, the dollar gained 2% on the Japanese yen and 1.3% on the euro.

As the dollar weakened due to low interest rates in the US, gold has hit a number of record highs in recent weeks

financial

• 15 vs 30 Year Mortgages - Longer is better! I read an interesting post that really got me thinking...
• The US Open Series is Well On Its Way The Indianapolis Tennis Championships tipped off the six week long...
• Reliance Power: An Indian IPO I'm currently on a short trip to India. For the...

Tags: Alistair Darling, B&Q DIY, Bank, Banking, British Economy, Cadbury, Currency, De Montfort University, Dow Jones, Economics, Economy, Employment, Financial News, FTSE, Global Credit Crisis, Gold, Kingfisher, Kraft, Lloyds Banking Group, Lord Mandelson, Money, Money Markets, NAO, NASDAQ, National Audit Office, Northern Rock, Recession, Retail, Royal Bank of Scotland, Stock Markets, Stocks and shares, taxpayer, Treasury, UK Banks, UK Economy, UK government, UK Recession, US labor Department

The Treasury is looking at introducing tougher requirements on bankers’ pay disclosure than those proposed last week by Sir David Walker.

Alistair Darling, the chancellor, announced a formal consultation exercise on Monday on whether legislation should go further than the Walker review, which proposed that banks should disclose the numbers of employees earning above £1 million.

Treasury officials said there was a case for greater disclosure, for example starting at £750,000 and having narrower bands.

The news came as the chairman of the Financial Reporting Council; Sir David Hogg signalled that his review of broader corporate governance at UK listed companies, published on Tuesday, would be more far-reaching than Sir David’s recommendations on bank boards.

U.K. house prices rose for a fourth month in November as the shortage of homes for sale sustained the property market, according to industry sources.

The average cost of a home in England and Wales climbed 0.2 percent from October to 156,700 pounds, meaning that prices are down 11 percent from the 2007 peak. While U.K. mortgage data due today may show loan approvals at the highest level in 19 months in October, rising unemployment may curb house price increases next year. According to Bank of England Governor Mervyn King, the economy’s recovery from the longest recession on record isn’t “particularly strong.”

Dubai World, the investment company whose $59 billion of liabilities caused stock markets across the World some anxiety will ask all creditors for a “standstill” agreement as it negotiates to extend maturities according to Dubai’s Department of Finance. Reports are that the plan will not be acceptable to most investors and would be considered a default. Dubai, the second-biggest of seven states that make up the United Arab Emirates (UAE)., and its state-owned companies borrowed $80 billion to fund an economic boom and diversify its economy. The global credit crisis and a decline in property prices hurt companies like Dubai World as they struggled to raise loans and forced the emirate to turn for help to Abu Dhabi, UAE capital who hold 8 percent of the world’s oil reserves.

Barclays Bank will book a gain close to £1 billion more than expected on the sale of its asset management arm to BlackRock thanks to a 62 per cent rise in the US fund manager’s shares since the deal was struck. The UK bank on Tuesday completed the £9.1 billion sale of Barclays Global Investors (BGI) to BlackRock, which becomes the world’s biggest asset manager with more than $3,000 billion .Barclays has taken a 19.9 per cent stake in BlackRock as part of the cash-and-shares deal. The sale price was £6.2 billion higher than the value of BGI in the accounts of Barclays, and £900 million more than estimated when the deal was agreed in June.

Thomas Cook will refinance their £1.65 billion loan facilities by next summer but has no plans to use a rights issue, according to a leading company representative. The tour operator’s current facilities are due to expire in May 2011. The company has predicted that 2010 would be a tough trading year, and the refinancing plans were announced as Thomas Cook revealed that net debt had more than doubled from £292 million in 2008 to £675 million. Explanations were that the additional debt had come from completing its share buy-back programme, acquisitions and the need for increased working capital arising from late holiday bookings.

British Airways Plc has announced that they are to conduct a series of feasibility studies and tests to see if their planes can run on bio-fuels. The airline will run the trials in conjunction with Rolls-Royce. On that piece of good news for the environment, shares in BA shares gained 0.6 pence percent, to 193.8, while Rolls-Royce rose 0.9 pence to 476.4.

Cadbury Plc Chief Executive Officer’s Todd Stitzer has signaled his support for a possible bid by U.S. candy maker Hershey Co. in preference to the hostile bid from Kraft. Meanwhile JPMorgan Chase & Co. and Bank of America Corp. are being lined up to provide Hershey a further $7 billion in finance. Cadbury’s shares later advanced 3 pence to 806.

Drinks manufacturer C&C saw its share price jump almost 9 per cent yesterday on the back of an announcement that it is to acquire the British cider assets of Constellation Brands owners of the Gaymer Cider Company, the UK’s second largest cider manufacturer, for £45 million.

The transaction is expected to be completed by mid-January 2010, and will broaden C&C’s existing cider offering beyond Bulmers and Magners to include brands such as Blackthorn, Olde English as well as Gaymers.

Under the terms of the deal C&C will also acquire a cider production facility in Shepton Mallet, Somerset, and a distribution warehouse in Bristol. As well as strengthening its position in the UK cider market, the acquisition is expected to shift C&C’s focus away from on-trade sales towards the faster-growing off-trade distribution channel.

On the Foreign Currency exchanges, the Pound rose against the dollar, yen and Swiss Franc whilst falling slightly against the Euro,

• Pound/US dollar 1.6605
• Pound/Euro 1.1002
• Pound/Japanese Yen 144.5284
• Pound/Swiss Franc 1.6589

Fears of a further fall in share value on the FTSE 100 were dispelled as shares continued to recover, closing in Wednesday on 5312.77, up 67 points from the weekend.

US shares headed higher on Tuesday after a flurry of economic data pointed to a rebound in the economy Better reports on construction and housing suggested there was something to look forward to.

The housing figures, from the National Association of Realtors, provided the best hopes for growth, showing sales agreements 3.7% up on the month and 32% higher than this time last year.

The Dow Jones index closed up 126.66 points, or 1.2%, on Tuesday to reach 10,471.50 points, while the NASDAQ also rose, closing the day on 2175.8.

Australia’s central bank lifted interest rates for a third consecutive month on Tuesday amid signs that inflationary pressures were building in an economy expected to return to “trend” growth of 3.25 per cent next year. The 25 basis point rise to 3.75 per cent matches increases in the last two months and is part of the Reserve Bank of Australia’s strategy of weaning the economy off historically low interest rates. The benchmark rate fell to a 49-year low of 3 per cent earlier this year.

The continuing weakness of the US dollar has pushed up demand for gold to another record level. Gold struck £722.69 an ounce on the London Bullion Market, after striking historic peaks over recent weeks. The dollar index fell 0.8% against a number of currencies as early fears regarding the Dubai debt crisis continued to wane across international markets. Demand for gold has been fueled by moves by central banks to diversify assets.

financial

• Thirsty markets eye water By Sarah O’Connor Published: July 23 2008 16:17 | Last...
• Tennis Preview: The West Virginia Open Final preparations are currently being made for the West Virginia...
• The FDIC May Need A Bailout From The Banks Now Congress has a mandate that the FDIC must hold enough...

Tags: Alastair Darling, Bank of America Corp, Bank of England, Banking, Barclays Bank, Barclays Global Investors, BlackRock, Blackthorn, British Airways Plc, British Economy, British Pound, Bullion Market, Bulmers, C&C, Cadbury Plc, Dow Jones, Dubai World, Economy, Financial News, Gaymer Cider, JPMorgan Chase & Co., Magners, Mervyn King, Money, NASDAQ, National Association of Realtors, Olde English, Recession, Reserve Bank of Australia, Rolls-Royce, Shepton Mallet, Sir David Hogg, Sir David Walker, Stock Markets, Stocks and shares, Thomas Cook, Todd Stitzer, UAE, UK Banks, UK Economy, UK government, UK Recession, United Arab Emirates

The Office of Fair Trading (OFT) has lost its legal battle over bank charges with banks following the shock announcement by the Supreme Court on Wednesday. While the ruling effectively scuppers any chance of reclaiming fees in the foreseeable future it does clear the way for new rules to be drawn up that would limit charges. The Treasury did however stress that if lower bank charges could not be achieved voluntarily then it would consider passing legislation. The OFT’s four-year campaign and two-year legal case to win refunds for those overcharged by their banks after falling into an unauthorized overdraft fallen at the last hurdle. The Supreme Court, in a move that stunned campaigners, went against earlier findings by the High Court and Court of Appeal and decided the OFT did not have the right to assess the charges for fairness in the case

The good news from the U.K. economy is that it shrank in the third quarter less than previously estimated. It is now estimated that gross domestic product probably fell 0.3 percent from the second quarter, which less than the 0.4 percent drop is reported on Oct. 23, The Office for National Statistics will release its second estimate before the weekend.

More than £60 billion was secretly lent by the Bank of England to prevent Royal Bank of Scotland and Halifax Bank of Scotland from failing at the height of the financial crisis last year. In evidence to the Treasury Select Committee, the Bank revealed yesterday that such a catastrophe was averted when it decided "in exceptional circumstances" to act in its traditional role as lender of last resort and extended Emergency Liquidity Assistance (ELA) to RBS and HBOS. Meanwhile U.K. Chancellor of the Exchequer Alistair Darling Wednesday defended authorities’ secret provision of emergency assistance to Royal Bank of Scotland Group PLC and HBOS during the height of last year’s financial crisis. In a written ministerial statement to parliament, Mr. Darling said any disclosure of the loan at the time would have "seriously" jeopardized financial stability and "the risk to public resources was low" given the quality of the collateral received by the Bank.

Trading on the London Stock Exchange (LSE) was halted for three and a half hours earlier because of technical difficulties.

The LSE said it had been affected by connectivity issues, and at 1033 GMT had placed all orders for shares into an "auction call period".

This allowed traders to put orders to buy or sell shares into the system, ready for when trading restarted.

Normal trading was then able to resume from 1400 GMT.

Big banks will be obliged to disclose how many of their UK employees are paid more than £1 million, if City banker Sir David Walker has his way. Sir David is expected to announce that half of the bonuses paid to bank employees should be deferred for three to five years.

Travelers who book holidays on the internet could receive more financial protection if things go wrong, under plans in a European review.

Consumers who make up their own packages of flights, hotels and car rentals on one website or partner sites could get more protection.

Currently, only those who have booked specific package deals have rights to cancel or refunds if operators go bust. A review will consider help for passengers if airlines collapse.

Spanish investor Jorge Cosmen, the largest stockholder is reported to have boosted his stake in National Express Group Plc, the U.K. bus and rail company three times in as many days. The investor, a company board member, has spent 5.8 million pounds ($9.6 million) snapping up shares since Nov. 20. The third purchase, announced today by National Express, brings his family’s holding to 20 percent. Cosmen, who opposed National Express, wants the London-based company to refinance debt and reevaluate strategy before any rights issue, is apparently yet to decide whether to oppose the stock sale in a Nov. 27 shareholders’ vote.

The pound retreated slightly against the dollar, Swiss franc and the yen, while rising against the Euro.

• Pound/US dollar 1.6506
• Pound/Euro 1.10997
• Pound/Japanese Yen 142.3998
• Pound/Swiss Franc 1.6556

After trading resumed on the FTSE, the 100 went on to finish the day at 5,194, which was 130 points down on Tuesday’s closing price, while the FTSE 250 rose dropped 200 points to close on 8,880.52. Falls on the FTSE were also felt across Europe, as concerns about the wider impact of state-owned investment company Dubai World asking for a six-month delay on repaying its debts grew.

The US dollar has hit a 14-year low against the Japanese yen with low interest rates in the US making the greenback less attractive to investors.

The dollar slipped to 86.5 yen, its lowest level since July 1995.

The US has indicated it is unconcerned about the dollar’s slide, and will not intervene to strengthen it.

Many traders are swapping dollar holdings for gold as a safer investment in the current uncertain economic climate.

The price of gold is currently at a record high of $1,194.5 an ounce

The Dow Jones average was looking stronger rising 53 points to 10464.5 The NASDAQ also rose thirteen points to finish up on 2176.05

financial

• House of Cards By William D. Cohan A firm that was established on May 1, 1923, and...
• Its Official: Hell Freezes Over Last week, hell froze. The Financial Times reports: In a...
• How Many Economists Does It Take To Build A Successful Blog? One, if it's The Weakonomist I've thoroughly enjoyed all the interviews I've been fortunate enough...

Tags: Alastair Darling, Bank, Bank Charges, Bank of England, Banking, British Economy, British Pound, Currency, Dow Jones, Dubai World, Economics, Economy, ELA, Emergency Liquidity Assistance, Employment, Financial News, FTSE, Gold, Halifax Bank, HBos, Interest Rates, Jorge Cosmen, legal battle, London Stock Exchange, Money, Money Markets, NASDAQ, National Express Group Plc, Office of Fair Trading, OFT, Overdraft, Overdraft Charges, RBS, Retail, Royal Bank of Scotland, Sir David Walker, Stock Markets, Stocks and shares, Supreme Court, Treasury Select Committee, UK Banks, UK Economy, UK government, UK Recession

According to a survey for the Confederation of British Industry (CBI), UK companies will be relying much less on banks for credit in the future, instead pinning their hopes funding from bonds and equities.

The survey showed that half of the companies will be looking to decrease financing from bank debt after the recession winds down. More than forty percent of the companies who took part in the survey said that they could see no change in bank funding.

The new Supreme Court is expected to rule on Wednesday on whether overdraft charges can be assessed for fairness under the Unfair Terms in Consumer Contract regulations. If the Supreme Court rules in favour of consumers, banks could be forced to pay out hundreds of millions of pounds if the overdraft charges levied were ruled to be unfair, and the public could seek to recoup losses through charges on current accounts and ATM withdrawals.

The British Bankers’ Association announced that the number of home purchase loans approved by banks in October was almost double that of a year ago, with 42,238 mortgage applications being approved. The figure was slightly higher than the 42,073 loans approved in September, while they almost double what they were from the same period on 2008. Net mortgage lending rose by £3.1 billion pounds in October, the same figure as in September.

Up to their knees in this week were the Association of British Insurers (ABI), who have received between 500 and 1,000 claims relating to recent flooding in Cumbria and southern Scotland where claims totaling up to £100 million have been recorded. At least 1,500 homes were affected by the floods, six bridges are reported to have collapsed and 5,000 households were left without power. The ABI announced that it was difficult to ascertain how many more claims could be expected. Insurers have said they might have to reconsider current arrangements, whereby all homes in the UK are offered flood insurance

Britain’s biggest mortgage lender, Lloyds Banking Group Plc is scheduled to publish results of a debt exchange. Meanwhile it was reported that the banking group is in talks with Execution Ltd. and a deal may result in the creation of a joint venture. Shares in Lloyds dropped 2 percent to 88.15 pence

Following its successful merger with Spain’s Iberia Lineas Aereas de Espana SA, British Airways Plc could revive plans for a tie-up with Australia’s Qantas Airways Ltd. Chief Executive Officer Willie Walsh has suggested that the Iberia model would allow Qantas to retain a separate brand and home base.

British Airways has agreed to combine with Iberia to boost its network amid a slump in international travel that contributed to a record first-half loss. The carrier abandoned merger talks with Qantas last year after the airlines failed to agree on who would control the new company. Shares in BA gained 1.6 pence, or 0.8 percent, to 202.6 pence.

Rumours abound that Nestle SA has thrown their cap into the ring in the who will buy Cadburys circus. The company is said to be weighing options would challenge Kraft Foods Inc.’s offer as well as a potential move by Hershey Co.

Cadburys are seemingly expecting a friendly bid from Hershey Co. if it can arrange the financing, with the company’s controlling trust supposed to be in favour of a $17 billion bid for Cadbury. The only thing that is certain is that Cadbury’s stock keeps on rising, up 1.2 percent to 800.5 pence.

Marks & Spencer Group Plc’s incoming chief executive officer Marc Bolland, has announced that he will focus on growth on foreign markets especially China, when he takes the reins next year. The markets remained indifferent, as shares dropped or 0.1 percent, to 380 pence.

The pound rose against the dollar, while falling against the Euro and the yen on continued concerns regarding the U.K. budget deficit.

• Pound/US dollar 1.6581
• Pound/Euro 1.1077
• Pound/Japanese Yen 146.6185
• Pound/Swiss Franc 1.6718

The FTSE 100 Index jumped by 82.55 points to 5,323.98, while the FTSE 250 rose by 14 points to close on 9,181.

In the US, the National Association of Realtors announced that sales of previously-owned US homes jumped by 10.1% in October as buyers rushed to take advantage of tax credits, which have now been extended.

Sales hit a seasonally adjusted annual rate of 6.1 million, up from a revised 5.54 million in September. First-time buyer tax credits had been due to expire at the end of November, but have been extended until 30 April.

The jump in October home sales was the biggest in almost three years.

The Dow Jones average took a turn for the better after the weekend, up 93 points to 10411.5 The NASDAQ rose seventeen points to finish up on 2163.73

Computer hardware giant Hewlett-Packard (HP) has announced a rise of 18% in profits for the third quarter, despite that the fact that their sales had fallen for the period. A spokesman for HP revealed that the company’s major cost-cutting initiatives had been the driving force in the £1.4 billion profit earned during the period. The firm has cut 6,700 jobs this year to trim costs.

The price of gold has hit a new all-time high, boosted by continued concerns about the weakening dollar.

Gold hit a record of $1,173.50 an ounce, up almost 2% from Friday close.

The expectation that US interest rates will remain low has put pressure on the dollar, making both gold and oil more attractive as an investment.

financial

• November Prosper Marketplace Survey Released Prosper released the November marketplace survey and coresponding comentary from...
• What Does The $1.75 Trillion Deficit Mean for You and Me? President Obama recently presented a new federal budget plan to...
• Random Thoughts and Personal Finance Links I've got lots on my mind this week, so I'm...

Tags: ABI, Association of British Insurers, ATM withdrawals, Bank, Banking, British Airways Plc, British Bankers Association, British Economy, British Pound, Cadburys, CBI, Confederation of British Industry, Credit, Currency, Dow Jones, Economy, Execution Ltd, Financial News, FTSE, Gold, Hershey Co, Hewlett-Packard, HP, Iberia Lineas Aereas de Espana, Interest Rates, Kraft Foods, Lloyds Banking Group Plc, Marc Bolland, Marks & Spencer Group Plc, Money, Money Markets, NASDAQ, National Association of Realtors, Nestle SA, Oil, Qantas Airways Ltd, Stock Markets, Stocks and shares, Supreme Court, UK Banks, UK companies, UK Economy, UK government, UK Recession

The UK looks like being in the financial doldrums for years to come, largely due to placing too much faith n the financial service sector and not enough on building up the heavy to medium sized industries that once made Britain Great. Financial experts are now convinced that that the reasons why the UK is taking longer than their European rivals to move out of the recession is too much of an emphasis been placed on saving the banks and too little on pushing industry forward as the French and German governments succeeded in doing. The mood on the street is that Britain has got to get a grip on its public finances.

This mood is emphasized by recent statements made by head of the Confederation of British Industry General Richard Lambert who reminded all of us that didn’t know it that how to reduce the 175 billion pound deficit will become a major battleground ahead of the next election, due next year, which the Conservatives are expected to win. General Lambert did point out that in his opinion there is very little to choose between both main parties’ deficit-reduction plans.

Meanwhile public borrowing in 2009 is almost treble what it was the previous t year with some analysts even forecasting that could even surpass the government’s forecast of £175 billion pounds, equivalent to no less than 12 percent of GDP. Chancellor Alistair Darling, who for some reason thinks he will be around to make it happen, has pledged to halve the deficit within the next four years and to even balance the budget by 2018, although he has yet to explain how.

What does appear likely to happen in the near future is that the UK Financial Services Authority (FSA) begins responsibility for financial stability as well as market regulation, consumer protection and investigating financial crime in the UK. Under a new bill that entered Parliament yesterday, to be known as the. Financial Services bill, a formal three-member Council for Financial Stability will be created. The council will consist of the finance minister, the governor of the Bank of England and the head of the FSA, who will be jointly responsible for overseeing UK financial stability. The Treasury will also start be held responsible for publishing annual reports on the stability of the UK financial system. The FSA will also gain long awaited veto power over bankers’ pay arrangements. This new authority will allow them to act if they believe that a bank employee’s contract would damage the bank’s risk management.

A recent survey has predicted that it may take until 2014 for UK property prices to return to the levels they peaked at in 2007 peak, the height of the country’s biggest housing boom.

After a surprise rebound this year, the survey predicts that U.K. house prices will probably fall next year, with predictions of an average drop of about 1.6 percent being bandied about.

The 7 percent gain in average prices in the UK that have been going on since April were driven by a shortage of properties for sale and are unlikely to be sustained, while Britain’s longest recession on record fuels unemployment and makes banks hesitant to lend.

National Grid, the company that operates electricity and gas networks in the UK as well as in the US, has reported a 16 per cent rise in underlying pre-tax profit for the six months to the end of September. The rise comes despite a steep fall in energy use, demonstrating what the company describes the success of their extremely low risk business model. Pre-tax profits, were £649 million in the first half of 2009, up from £91 million from the equivalent period of 2008. The company benefited from the favourable effect of 2008’s high UK retail price inflation, which governs the charges that National Grid is allowed to earn from energy suppliers for using its networks. The company was also helped by the steep fall in interest rates, as about a third of its debt is at floating rates.

The world’s largest maker of household cleaners Reckitt Benckiser is close to a “multibillion pound cross-border transaction,” most likely candidate being industry giant Colgate. The news added 1.1 percent to Reckitt’s shares which closed at 3,140 pence.

Brewers SABMiller Plc who produces the Pilsner Urquell and Miller Genuine Draft beers among others saw their shares rise 3.4 percent to 1,714 pence on trading before the weekend. The rise was a result of their announcement of first-half profits that beat analysts’ estimates, as well their plans to launch a four year cost reduction program to save around £200 million annually by 2014.

U.K. pub owner Fuller Smith & Turner Plc, producers of London Pride ale, has announced first-half profits up 47 percent, as the company benefited from acquisitions and by selling more of its own beer brands. A spokesman for the company said that they expect the second half to be “significantly tougher,” as factors including good weather and the benefits of the purchases are unlikely to be repeated The company has added 11 pubs over the past year, seven in central London acquired from Punch Taverns Plc.

There was a lot of movement on the FTSE 100 before the index closed for the weekend. In the travel sector both Thomas Cook and Tui Travel sank at least 4 percent. Wolseley Plc and Taylor Wimpey Plc led a retreat among home builders after reports that unemployment will continue to force down property prices. Cable & Wireless Plc added 1.8 percent after positive market reports on the company’s performance.

The pound fell against the dollar, the euro and the yen on concern that the U.K.’s worst budget deficit since records began will hamper the nation’s recovery. The pound slid to its lowest level in more than two weeks against the U.S. currency. Britain’s £11.4 billion-pound budget deficit in October was the worst for the month since records began in 1993, according to data released on Friday by the Office for National Statistics.

• Pound/US dollar 1.6504
• Pound/Euro 1.1099
• Pound/Japanese Yen 146.7564
• Pound/Swiss Franc 1.6803

U.K. stocks declined for a fourth day with the benchmark FTSE 100 Index slipped 0.3 percent to 5,251.41, bringing this week’s loss to 0.9 percent. The gauge has rebounded 50 percent from this year’s low on March 3 amid signs government stimulus policies and record-low interest rates are leading the UK economy out of recession, albeit at a slow pace. The FTSE 250 dropped another 70 points to close on 9,167.60

Stateside the Dow Jones average had a quiet day on Friday; closing on 10318.16 The NASDAQ dropped just ten points on the day’s trading to close on 2146.04.

Gold maintained a grip near its all-time high while oil prices dipped and base metals eased as commodity markets paused for breath after their recent strong run.

financial

• How Corporate Executives Should Be Paid Yesterday, The Weakonomist introduced you to how executives are paid....
• My Life as a Volunteer Tax Preparer - Week 9 I had five appointments this week. The first was a...
• 10 Off the Beaten Path ETFs That Everyday Investors (Probably) Haven't Heard About Have you noticed that everyone seems more interested in the...

Tags: Alistair Darling, Bank, Bank of England, Banking, British Economy, British Pound, Cable & Wireless Plc, Confederation of British Industry, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, Financial Stability, FSA, FTSE, Fuller Smith & Turner Plc, General Lambert, Gold, London Pride ale, Miller Genuine Draft, Money, Money Markets, NASDAQ, National Grid, Pilsner Urquell, Punch Taverns Plc, Recession, Reckitt Benckiser, Richard Lambert, SABMiller Plc, Stock Markets, Stocks and shares, Taylor Wimpey Plc, Thomas Cook, Tui Travel, UK Banks, UK Economy, UK Financial Services Authority, UK government, UK Recession, Unemployment, Wolseley Plc

The Organisation for Economic Co-operation and Development (OECD) has predicted that the recovery and growth seen in the second half of 2009 is expected to continue in 2010. Their recent figures show that its 30 member countries, including the US and UK have more than doubled its growth projections for next year. However a spokesman from the OECD warned the developed nations not to expect a smooth ride and that "growth was being held back by still substantial headwinds" and would be restrained for some time in the near future. They went on to explain that some of the very measures that were being used to help the richer nation’s economies to recover might return like a boomerang upon them. The feeling was at the OECD was that the UK, needed to come up with a concrete plan to ease concerns about the stability of their public finances, and that the results that could be achieved through continuing the country’s quantitative easing programme remained uncertain. The UK, which now has overall debt of £825 billion, is set to borrow a record £175 billion over the next two years with further details of how and why due to be set out in Chancellor Darling’s pre-Budget report on 9 December.

US investment bank JP Morgan have announced that they are to complete their take-over of UK stockbroker Cazenove. Morgan are reported to be paying a further £1 billion ($1.67 billion) for the remaining 50% of Cazenove that is not in their hands. JP Morgan and Cazenove reached a joint venture agreement in 2004, where they merged their investment banking operations.

The news that Marks and Spencer have chosen Marc Bolland, current head of Wm Morrison, as its new chief executive, saw a dramatic and immediate shift in fortunes for both companies, at least in stock market terms. Shares in M&S rose 6 per cent to close on 390 pence while Morrisons’ fell by 5 per cent to 281 pence, making for a combined £600 million swing”.

Dutch born Bolland’s appointment puts a long awaited end to the speculation of who will replace incumbent chairman, Sir Stuart Rose, who will remain with the company as part-time chairman until mid-2011.

ITN were expected to reveal the first trading first-ever loss on Thursday as the company launched a set of austerity measures which will be required to put the company back on track. ITN, who produce news bulletins for ITV, as well as for Channel 4, is owned by four media companies, ITV Daily Mail & General Trust, United Business Media and Thomson Reuters, each of whom hold a 20 percent share, except ITV who hold 40 percent. Reasons given for the drop in sales and profit were mainly the recession, which has affected advertising revenues on all commercial broadcasters, and the closure of Setanta Sports News, the news channel operated by the Ireland-based sports channel network that went into administration this year. Revenue from Setanta made up approximately 5 per cent of ITN’s sales in 2008. ITN made a profit of £4.1 million on turnover of £105 million.

Postal and parcel delivery company UK Mail, who only this moth adopted their new trading title from Business Post, have announced a rise in their interim profits, despite of a fall in revenues caused by a recession driven fall in demand. A spokesman for the company pointed out that their parcel business, which holds around a 7 per cent share of the UK market, has witnessed an upturn is sales during the period of postal strikes, as the public began to seek alternatives to Royal Mail’s service. However the company, which also handles around 17 million items of mail a day, said the strikes affected the volumes of mail handled by the company much less significantly than they had hoped for. UK Mail, who relies on the Royal Mail for “last mile” delivery of its sorted post, pointed out that the impact the strikes had been less severe than anticipated.

Sterling lost some of its gains against the major currencies in midweek trading.

• Pound/US dollar 1.6636
• Pound/Euro 1.1163
• Pound/Japanese Yen 148.0862
• Pound/Swiss Franc 1.6881

The UK’s benchmark FTSE 100 index lost the bulk of its early gains for the week, down 78 points to 5,267.70. The FTSE 250 took its usual midweek tumble down 165 points to 9,237.

New home construction in the US have taken a surprise drop fall in October, down 10.6% to an annual rate of 529,000 homes, making for the lowest level in housing starts since April of this year, Reasons for the decrease in demand was put down to .a fall in demand for both single and family housing.

On the news, the Dow Jones average slumped 105 points to close on 10332.42. The NASDAQ also took a tumble, but for reasons of its own and finished the day on Thursday on 2156.92.

Internet giant America on Line (AOL) have announced that they are to lay off more than 2,000 of their staff , representing one third of their entire work forces when it completes its spinoff from Time Warner, with whom they have been in partnership since 2001. Representatives from Time Warner have stated that the separation will be completed by the end of 2009.

Also cutting jobs are Air France-KLM who plans to cut their work force by cut 1,700 during 2010. Their decision comes after the airline posted a worse than predicted third quarter loss of 147 million Euros (£131 million) the job losses are in addition to the 3,000 already cut in 2009.

Silver, platinum, palladium and copper have reached fresh highs for the year while gold continued to extend its record-breaking run breaching the $1,150 mark, seen as the next key milestone in the rally, to reach a record $1,152.74 an ounce, before easing back to $1,148.

financial

• Cisco ISR Upgrades Gain Momentum on Secondary Market July 5, 2007: Beginning with the 2005 release of Cisco...
• Chrysler Seeks $224 Million for Plug-In Products The bankrupt Chrysler has submitted a proposal to the Department...
• DOW 14,000 - All Time High The broke the 14,000 level today. Despite Bear Stearns warning...

Tags: Air France-KLM, Alastair Darling, America on Line, AOL, Bolland, British Economy, British Pound, Business Post, Cazenove, copper, Credit Crunch, Currency, Daily Mail, Dow Jones, Economy, Financial News, FTSE, General Trust, Gold, ITN, JP Morgan, M&S, Marc Bolland, Marks and Spencer, Money, Money Markets, NASDAQ, OECD, Organisation for Economic Co-operation and Development, palladium, platinum, quantative easing, Recession, Retail, Royal Mail, Setanta, Silver, Stock Markets, Stocks and shares, Stuart Rose, Thomson Reuters, Time Warner, UK Banks, UK Economy, UK government, UK Mail, UK Recession, United Business Media, WM Morrison