Leader of the Conservative party David Cameron was finally accepted as the UK Prime Minister late on Tuesday after his party and the Liberal Democrats (the Lib-Dems) agreed on a five-year deal to form the UK’s first coalition government since the Second World War, on the promise of forming a “strong and stable government”. Lib-Dem leader Nick Clegg was confirmed as deputy PM while George Osborne will become Chancellor of the Exchequer. After winding up five days of political negotiations, Cameron pledged that the new government’s number one priority will be to tackle the UK’s £163 billion budget deficit., As Gordon Brown announced his resignation, Messrs. Cameron and Clegg declared that they had struck their remarkable political bargain to provide strong and stable government at a moment of crisis. A nation awaits with bated breath for the outcome

Meanwhile its has been announced that the number of UK unemployed rose by 53,000 to 2.51 million during the three months to March According to official figures issued by the Office for National Statistics the level of unemployment total is now since December 1994. On the positive front, the total number of people claiming unemployment benefit fell in April by 27,100 to just over 1.5 million, leaving the unemployment.

Data released on Tuesday by the Financial Services Authority revealed that banks and building societies had to deal with more than two million complaints between July and December 2009, as a waiver that had allowed them to defer claims relating to high penalty charges was lifted. The figure was more than double than processed in the first half of the year. The steep increase was mainly a result of the backlog of complaints relating to unauthorised bank charges. Complaints were put on hold for over two years as the Office of Fair Trading (OFT) entered a battle with a number of big banks to obtain a final ruling on the legality of the high level of charges imposed on customers who exceeded their overdraft limit. The waiver was lifted in December when the case was resolved, with banks winning a surprise victory over the OFT. Banks are estimated to have made more than £2.6 billion a year from unauthorised overdraft charges and might have faced claims of more than £1 billion if had they lost the case.

Blame for the "financial and economic crisis" in the UK has been attributed by the Organisation for Economic Cooperation and Development (OECD). To private sector wages tumbling further behind inflation more than in any other industrialised territory, excluding Mexico, Turkey and Iceland Research by OECD the Paris-based think tank revealed the gross average wage in Britain rose by 0.5 percent to £33,745, which is calculated to be the equivalent to a 1.6 percent fall after factoring in inflation. The OECD went on to warn that low-salaried workers were also more vulnerable to losing their jobs.

All in the entire financial well being of UK consumers was seen to deteriorate during the first quarter of 2010, following four successive quarters of relative improvement. A spokesperson for the body behind the index explained that the downward trend has been largely due to lower levels of earnings growth and the negative impact of higher levels of inflation on real disposable income. In addition, economic activity remains relatively subdued and there has been only a very slight improvement in the labour market.

UK Households have been helped during the last few months by some recovery in house prices and relatively strong equity market performance, but the prospect of cuts in public spending and increases in taxation following the election are expected to add further to the pressures facing households.

More evidence of a lack of confidence among UK consumers was an announcement from the British Retail Consortium (BRC) of a sharp fall in UK retail sales for the month of April.

According to the BRC, the total value of sales fell by 0.2% in April on an annual basis, while the like-for-like drop was 2.3%, making for the steepest fall since December 2008.

Again, the downturn could be attributed to uncertainty which surrounded the general election as well as the timing of Easter.

Broadband provider TalkTalk Telecom have announced their plans to target rapid customer growth in 2010, after it successfully boosted its new customer base by 144,000 in the final quarter of its year to March. In its first trading update since demerging from Carphone, TalkTalk credited their customer growth to the firm’s appeal as a straightforward broadband service provider and to the success of high-profile campaigns. However TalkTalk has ruled out the likelihood of rivaling Virgin Media and BT by buildings its own fibre optic cable to. Meanwhile, British Sky Broadcasting and Virgin Media have been seeking to encourage more new customers through bundling telecom and TV services.

A new company that has been formed after the T-Mobile and Orange’s UK merger has been named Everything Everywhere.

In a statement issued on Tuesday Deutsche Telekom and France Telecom, announced the name, along with a plan to launch a "new assault" on the UK business market. Orange and T-Mobile will retain their distinct brands, with their own shops, campaigns, pricing and service centres.

The Orange and T-Mobile brands have 713 high street stores between them. Orange is the larger brand of the two, with 17.3 million customers to T-Mobile’s 13 million. Orange also brings with it 863,000 fixed-line broadband customers.

Doubts about the strategy of both British Airways and the Unite union began to emerge as the two sides squared up for the three weeks of strikes the airline’s cabin crew have threatened from next Tuesday.

Industry analysts began to state their doubts and fears about the length of the threatened stoppages, and concern about how long it would take to restore relations between management and staff. Strong backing was given to Mr Walsh’s determination to lower costs permanently at the loss-making airline, although none wished to be publicly identified. But it is clear that both the BA chief and his counterparts at Unite are about to enter the most difficult phase of a dispute that has lasted more than a year

There were signs of a growing Eurozone backlash arising against the outgoing (and incoming) UK government for refusing to take part in the eurozone’s €750bn rescue plan. So strong was the reaction that a senior French policymaker was heard to suggest that it may cause Europe to think hard about coming to the UK’s help in a sterling crisis.

Analysts pointed to a “crack in the sign of strong unity in Brussels as, with astonishing insensitivity for the dramatic situation, Britain coolly declared that the crisis was a problem for the Eurozone, as if the crisis would make a point of avoiding the UK.” In the wake of the eurozone rescue deal, there is a view in government circles that speculators might turn their attentions to sterling,

Meanwhile a warning has emerged among some leading global financial experts that that the European debt crisis posed the biggest threat to the US economy, despite some recent relatively upbeat assessment of the US financial recovery.

Gold on Wednesday traded near record prices amid investor concerns that the massive rescue plan for indebted eurozone states will hit currencies. Gold prices hit record highs in Europe amid volatile financial markets. Spot gold in London surged to above $1,230 a troy ounce, exceeding the record set in December last year. Gold prices in euro terms also hit a fresh all-time high of €969 an ounce in late London trading, up almost 26% since the start of the year.

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Tags: Bank, Bank Charges, Banking, British airways, British Economy, British Retail Consortium, British Sky Broadcasting, Carphone Warehouse, Conservative, David Cameron, Economics, Economy, Employment, Financial News, Financial Services Authority, George Osborne, Gold, Liberal Democrats, Money, Nick Clegg, Office of Fair Trading, Orange, Overdraft Charges, T-Mobile, TalkTalk, UK Banks, UK consumers, UK Economy, UK government, UK Recession, unemployed, Virgin Media

Continued uncertainty regarding cash-strapped Greece’s ability to be granted loans from their Eurozone partners, and if they are granted them if they will agree to accept them, continues to cause uncertainty in both the currency markets and stock exchanges not only in the UK but in all of the Eurozone member countries. Recent reports coming out of Athens have stated that Greece is lacking in confidence that their partners in Europe are either willing or able to provide sufficient and timely aid, and that they may have no option but to turn to the International Monetary Fund (IMF) for a bail out. The principal stumbling block to the EU loan is Angela Merkel, the German chancellor who HAS repeatedly stated that any other form of loan agreement would be impossible in terms of the European Union’s Maastricht treaty and German constitutional law. Berlin has shared widespread EU hostility towards any involvement of the fund, fearing that such a move would demonstrate Europe’s inability to regulate its own economic and monetary union.

After the release of more positive figures for February and the revision of data for January, it begins to appear that UK government borrowing for 2010 could be less than forecast. According to official figures, government borrowing for February was £12.4, much less than economists had expected.

Borrowing figures for January were also reviewed and sharply downwards, to £43 million from £4.3 billion.

Analysts now predict that UK’s full-year borrowing total may work out a lot less than the government’s original £178 billion forecast.

The Office for National Statistics also announced that the overall effect of the latest revisions to historical data for the year had cut overall borrowing for 2009/10 by £2.9 billion.

The Co-operative which traces its roots to the founding of the co-operative movement in 1844 has reported a major profits surge in its banking division, on the back of thousands of bank account customers disillusioned with Britain’s big banks switching their allegiance to the "co". In addition, the acquisition of the Somerfield supermarket chain coupled with the merger of the Cooperative’s financial services arm with Britannia Building Society have provided a major boost in turnover and profit for the company. As part of a revised tradition, the Co-op will be paying their five million members- a dividend of £55 million, up 16% from 2008. The dividend scheme or "divi" as it is widely known was re-introduced by the group in 2006 after a break of 30 years. The Coop’s banking division reported a 38% jump in new current or 140,000 new customers, taking the total to 1.2 million. The increase effectively doubled their share of the current account market to reach 4%.

To scenes of great excitement, Japanese care manufacturer Nissan have announced that they are to build its new electric car, to be known as the Leaf, at their UK plant in Sunderland. Once production begins in 2013, it will mean that hundreds of jobs are expected to be safeguarded as part of the company’s £420 million investment in electric cars. Nissan’s investment will be backed by a £20.7 million government grant and up to £220 million from the European Investment Bank. About 50,000 Nissan Leaf hatchbacks, which will run entirely on lithium-ion batteries, will roll off the Sunderland production line each year. Business Secretary Lord Mandelson said the development was a "fantastic vote of confidence" in the plant and its "excellent workforce". Mandelson also confirmed the UK government will be providing £360 million in loan guarantees for Ford’s planned £1.5 billion investment in cleaner engines.

At a hearing of the Commons business, innovation and skills committee held on Tuesday, representatives of Kraft Foods made a commitment not to close any more Cadbury factories in the UK or make compulsory redundancies in its domestic manufacturing operations for at least two years, The promises came as Kraft were seen trying to placate furious MPs and union members over its broken promise to save a Bristol factory from closure.

The US food group came under heavy fire for reneging on a pledge made last September to keep open the Somerdale factory, near Bristol, within days of agreeing an £11.7 billion take¬over of Cadbury in January, having overcome hostility from the UK-based maker some of the UK’s favorite chocolates.

On the FTSE, the Royal Bank of Scotland Group Plc had a bad day, their shares dropped by more than 3 percent as the biggest government-controlled bank issued warnings that their £2.9 billion pound ($4.45 billion) pension deficit looks likely to rise. The bank today reported a 46 percent rise in its pension deficit. .

Sterling fell to $1.5229, with the Euro coming under heavy pressure at €1.1181

The FTSE 100 jumped 17 points to close on 5,642.62.

According to official figures US consumer prices have risen very little between January and February.

The report issued by the US Labor Department showed the consumer price index was flat in February, though prices were 2.1% higher than a year ago , indicating that there were little sign of inflationary pressures in the offing for the US economy, allowing interest rates to remain low.

US stocks closed modestly higher on Thursday, aided by some strong corporate results. At close of trade the Dow Jones Industrial Average was up 0.4 per cent at 10,779.17 and the NASDAQ Composite index rose 0.1 per cent at 2,391.28.

Crude oil prices have fallen to an average of $81.85 a barrel, yet still placing them within levels are within Opec’s preferred price band of about $75-85 a barrel. The cartel reasons prices below that band risk choking off investment in new oil projects while prices above it could threaten the recovery of world economies

The fall came after the OPEC oil cartel announced on Wednesday their intention to hold production quotas at the same level for the time being.

The price of gold rose 0.1 per cent to $1,126 a troy ounce after ending Wednesday’s session in New York at $1,124.05.

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Tags: Angela Merkel, Bank, Banking, British Economy, Cadbury, Credit Crunch, Dow Jones, Economics, Economy, electric car, Employment, Financial News, FTSE, Gold, International Monetary Fund, Kraft Foods, Lord Mandelson, Money, NASDAQ, Nissan, Office for National Statistics, OPEC, Recession, Retail, Royal Bank of Scotland, Somerfield, Stock Markets, Stocks and shares, The Co-operative, UK Banks, UK Economy, UK government, UK Recession, US labor Department

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.

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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

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

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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.

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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

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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.

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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.

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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.

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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

The planned merger, between British Airways and Spanish carrier Iberia Lineas Aereas de Espana SA, which is expected to get regulatory backing and be concluded by the end of next year, will create the world’s third largest airline.

According to Willie Walsh, British Airways (BA) chief executive the planned merger with Iberia is "great news for British Airways, our customers and our shareholders". His comments came after British Airways Plc agreed to the $7 billion merger ending more than a year of talks on a tie-up, largely aimed at fighting a slump in travel and closing the gap with competitors.

Under the all-share deal, British Airways investors will own about 55 percent of the business. The merger due to be completed by late 2010 is still subject to cancellation by Iberia if BA fails to resolve their pressing pension deficit issues.

UK engineering firm Rolls-Royce have announced that they have been awarded contracts to produce aircraft engines to the value of £1.2 billion, The engines will be used to power Airbus planes for Air China and Ethiopian Airlines. Rolls Royce made the announcement the first day of the Dubai Airshow on Sunday. The engines are scheduled to be delivered in stages from 2011 to 2017.

According to representatives from one of the UK’s most powerful unions, Unite, the leading banks have still to absorb the reasons behind the current credit crisis, and continue to set unrealistic sales targets for their staff in order for them to earn their salaries. Instead they continue to apply pressure

On staff to promote financial products, often to those who can ill afford them.

The union says that legislation forcing banks to pay theory staff higher basic salaries and placing less emphasis on bonuses should be implemented. The new breed of British bank should instead focus on high standards of customer service and pay fair wages for all staff. The British government will announce legislation next week giving regulators the power to stop bankers from pocketing big bonuses that could destabilize the financial system, a newspaper reported Saturday. Treasury chief Alistair Darling told the Sunday Telegraph that the new Financial Services Bill will allow financial watchdogs to cancel pay packages that reward undue risk-taking. The bill is due to be announced Wednesday as part of the Queen’s Speech, in which the government lays out its plans for the next session of Parliament.

Darling was quoted as saying that the legislation would give the Financial Services Authority the power to cancel contracts that breach a banking remuneration code agreed by the Group of 20 nations earlier this year. The regulator could fine banks that fail to comply.

Liberty International, the U.K.’s biggest shopping-center owner, added 3.9 percent to 504 pence. British Land, the U.K.’s second-largest real estate investment trust, rallied 2.8 percent to 498.2 pence. Land Securities Group Plc, the largest real estate investment trust, added 2.3 percent to 726.5 pence.

Investment Property Databank Ltd. today said the average value of U.K. stores, offices and warehouses rose 1.9 percent in October, a third month of gains, and the steepest advance since December 2005.

The total return for commercial real estate, which measures the change in capital values and rental income, rose by 2.5 percent in October.

U.K. supermarkets are getting a record amount of sales from promotions as they attempt to lure shoppers before the holiday season. At big supermarkets, 35 percent of sales by value are on promotion, compared with 26 percent a year ago. This year’s level is a record high

Recent figures released show a continued improvement in recruitment activity in October, within the UK financial services sector. Job offers in the month increased by approximately 4%, which is accredited to a significant increase in recruitment activity by stock brokers. On the downside, investment banks are reported to be reducing their intake of new people.

Sterling retreated on Friday before the strengthening dollar, gaining only against the Yen.

• Pound/US dollar 1.6668
• Pound/Euro 1.1201
• Pound/Japanese Yen 149.3497
• Pound/Swiss Franc 1.6883

The FTSE closed at a 14-month high, aided by gains in property shares. At end of trading Friday the guide was up 20 points to 5,296.55. The FTSE 250 also rose, up 83 points to 9,373.74.

It is now official- The French and German economies, the Eurozone’s two largest, are out of recession.

Figures recently release show that both economies show both grew between July and September, Germany by 0.7% and France by 0.3%. However, both the French and German economies grew by less than analysts had expected.

Lagging behind is the UK, still apparently bogged down in their longest economic contraction since World War II.

Recent figures show that the US trade deficit unexpectedly widened by the largest amount in 10 years in September.

The trade gap, the difference between US imports and exports, grew 18.2% to $36.5 billion (£21.9 billion) from August.

Imports or the same period rose by 5.8%, the strongest increase since 1993, providing yet another indication that consumer spending is recovering.

The Dow Jones made a late rally on Friday, closing for the weekend up 52.30 points to 10280.22. The NASDAQ was seen to be holding its own, up just three points 2160.96.

Hewlett-Packard has announced that they are to acquire the 3Com company for $2.7 billion. A spokesman for HP projected that the acquisition will give HP an added edge in the data centre networking sector. The deal will give HP capabilities in a number of areas in which the company was lacking, he said. Both 3Com and HP have been strong in the small and mid-size business networking space, However analysts predict that the addition of 3Com to their stable will create for HP an enterprise data switch portfolio to better compete with main rivals, Cisco.

Leaders of the 21 nation Asia-Pacific Economic Co-operation group(Apec) who are meeting have gathered in Singapore for the annual meeting of the have proclaimed that Asia is leading the world out of recession. Their claims may be backed by the announcement last month from the International Monetary Fund (IMF) that the Asian economy is expected to grow by 2.75% in 2009 and 5.75% in 2010. These projections compare very well with the flat to negative growth in the US and Western Europe. Statistics which can be seen to reflect the shifting balance of power between the US and Asia.

Gold prices were receding before the weekend, after rising above the $1,100 mark in the previous session. On the other hand crude oil prices were steadying after dropping more than $2 a barrel, which analysts interpreted as being because of fears of reduced US demand.

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Tags: 3Com, Alistair Darling, Apec, Asia-Pacific Economic Co-operation group, BA merger, Bank, Banking, British airways, British Economy, British government, British Land, British Pound, Cisco, Credit Crunch, Crude oil, Currency, Dow Jones, Economics, Economy, Employment, Financial News, Financial Services Authority, Financial Services Bill, FTSE, Gold, Hewlett-Packard, HP, Iberia, Iberia Lineas Aereas de Espana SA, International Monetary Fund, Investment Property Databank Ltd, Land Securities Group Plc, Liberty International, Money, Money Markets, NASDAQ, Queen's Speech, Recession, Retail, Rolls-Royce, Stock Markets, Stocks and shares, UK Economy, UK government, UK Recession, Unite, Willie Walsh