According to information released by the Royal Institution of Chartered Surveyors (RICS) it looks increasingly likely that further price increases in the domestic property market may be put on hold, as more properties continue to come on to the market. RICS announced that in February more instructions to sell came on the market than enquiries to buy, making for the second month in a row that this has happened. Analysts have always speculated that

The rise in house prices during 2009 has been because there was a shortage of both new and second hand properties for sale. In spite of the rise in volumes, however, the average price paid for private homes during the year fell 9 per cent to £166,000.

That well known bearer of bad news and inaccurate predictions the Confederation for British Industry (CBI) have come up with another winner. This time they suggest that the cash-strapped U.K. government should aim to balance its budget two years earlier than currently planned. The CBI say that such a move would go a long way to calming investor fears that Britain could lose its top-notch credit rating. They have yet to come up with suggestions of how Chancellor of the Exchequer Alistair Darling or whoever is lucky enough to replace him should go about this mammoth task, although the traditional spending cuts and reforms to public services were mentioned rather than tax increases.

In the last few weeks, newspaper polls continue to point in the direction of a coalition government for Britain in the coming elections. This will mean the first minority government since 1974, and those who remember that far back, don’t recall it as a particularly pleasant experience.

It appears that the British Chambers of Commerce (BCC) has their feet more firmly on the ground than some of the other public bodies. They have proved it once again by suggesting that the UK government reduce their economic growth target for 2011 from 2.3 percent down to 2.1 percent. At same time, the BCC issued a strongly worded suggestion to the government to abandon proposals to raise national insurance. To complete a cheery picture, the UK trade organisation also suggested that the UK government should rapidly address public sector pensions as well as taking a close look at public sector levels to make any progress on tackling the UK’s ever increasing budget deficit.

One of the biggest clouds hanging over the future of the Royal Mail service has finally been lifted after an agreement was reached with postal workers which means that they could be eligible to salary increase of around seven percent over the next three years, as well as a more stable job security. In return for these favours, the Communication Workers Union (CWU) need to promise to cooperate in structural changes to the organisation that will eventually transform it .

The deal, which is still to be accepted in a ballot vote by CWU members, is designed to avert the threat of further union disruption and give the green light for the Royal Mail to proceed with their proposed £2 billion modernisation programme. With their union troubles hopefully behind them, the stage will be set for Royal Mail to face some of their other challenges, including revaluating their pension fund deficit, which currently stand as £3.4 billion to at least three times that sum.

The company that manages the Channel Tunnel, the aptly named Eurotunnel, announce that they had succeed in making a £1.3 million last year, despite the effects of the "poor economic environment" as well as one or two setbacks that they experienced in 2009, which they must hope will be one-offs. These included the tunnel being closed after the fire in late 2008, not returning to normal levels until February of last year, as well as the heavy snow that made it impassible in December of 2009.

There is a buzz in the city that states that Northern Rock are about to announce multi-million pound losses in 2009, and for the third year running, Pre-tax losses are expected to be around 400 million pounds, meaning that . The bank has made losses totaling of £2 billion since being bailed out by the UK government in 2007.

Sir Richard Branson’s Virgin Money, who at one time were said to be interest in acquiring Northern Rock, and are to launch themselves as a retail bank later this year, have come with a fairly innovative new proposal for potential customers. The proposal we that Virgin Bank will charge a fixed monthly fee for current account customers, payable in advance. A spokesman for the company did hasten to point out that the fees will be low and will replace high overdraft charges.

Virgin Money’s launch comes at a time when consumers have lost confidence in existing High Street banks and Virgin’s high profile as a high street trader who gets things done.

Another major UK retailer, supermarket giant Tesco are also set to expand into the banking industry, already offering credit cards, savings accounts and insurance via its Tesco Personal Finance (TPF) brand through their in-store banks.

In the meantime, supermarket chain WM Morrison are expected to report a 16 percent increase of their in full-year pre-tax profit for 2009 to £757 million when its results are announced on Thursday. Sales are expected to have risen to £15.5 billion. The supermarket’s increased penetration in the south of England has led to industry-beating sales growth and large gains in market share.

Money markets continued to be unfavourable for Sterling with the pound closing yesterday on $1.499 while also falling against the Euro on €1.1028.

The benchmark FTSE 100 Index slowed down after a few days of heavy rises, up just five points, to close on 5,602.3.

Stateside, ailing insurance giant AIG have announced that they are to sell of yet another of their overseas insurance business, American Life Insurance Company (Alico) to rival MetLife for $15.5 billion (£10.3 billion), in a drive to raise funds to pay off their $182.3 billion federal bail-out.

MetLife will pay out $6.8 billion in cash and a further $8.7 billion in shares for Alico, which operates in more than 50 countries.

The announcement comes a week after AIG agreed to sell its Asian business AIA to UK group Prudential for $35.5 billion.

On Wall Street, the Dow Jones Industrial Average was holding its own, closing up 21 points on 10,585.62. The NASDAQ Composite was still climbing, rising 21 points to close on 2,347.13

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Tags: Alico, American Life Insurance, Bank, Banking, British Chambers of Commerce, British Economy, Channel Tunnel, Communication Workers Union, Confederation for British Industry, Credit Crunch, Dow Jones, Economics, Economy, Employment, Eurotunnel, Financial News, FTSE, House Prices, MetLife, Money, NASDAQ, Northern Rock, Recession, Retail, Richard Branson, RICS, Royal Institution of Chartered Surveyors, Royal Mail, Savings, Tesco, Tesco Personal Finance, UK Banks, UK Economy, UK government, UK Recession, Virgin Money, Wall Street, WM Morrison

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

financial

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

It wasn’t that long ago that if you went to your bank of building society looking to earn some interest on your deposit account, all you would get was a blank expression. A sign that things are getting better in the UK economy in general and banks and building societies in particular is that there are some fairly generous interest rates around if you are prepared to shop around online.

For example if you access Abbey National Building Society, online or even better through the http://www.bank–accounts.co.uk/ web site you will be able to discover that currently Abbey are offering interest rates on deposits starting at an annual rate of 2.5%. They can even get as high as 4.15% if you are prepared to close off some of your capital for two years.

Alliance and Leicester is another bank worth checking out for your online savings account. They are offering a fixed rate of 3.15% annually with no withdrawal restrictions. If you want to set aside a sum of up to £2,500 pounds Alliance and Leicester are currently paying out 6% annually.

Halifax International, a member of the HBOS group, have also been sharpening their pencil of late, and have come up with a 4% annual rate for online deposits of up to £24,000 as long as they do not exceed £2,000 monthly.

Banking online has never been easier, and the chances are that as the economy continues its recovery, the banks will continue to offer as generous rates as they can. After all it’s your money that will help to fire the UK economy, and you can deposit your savings and earn reasonable interest rates with total confidence. Nowadays it has never been easier to transfer money from account to account so it is time well spent to check out where the best interest rates can be found. Always begin your search by clicking on http://www.bank–accounts.co.uk/ to discover the best online interest rates.

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Tags: Abbey, Alliance and Leicester, Bank, Banking, Economy, Finance, Financial News, Halifax, HSBC, UK Banks

With the number of High Street banks branches getting smaller and liable to continue to do so for some time, not the only reason for this trend can be put down to amalgamation and cost savings. There is another reason, and it is the increasing number of companies and individuals who prefer to do their banking online. And you don’t have to be a genius to figure out why.

Predictions are that the physical presence of high street bank branch will be a rare a usual sight as virtual banking become increasingly common place. Virtual banking is a “win-win: situation. The banks love it and so do the World of business and even more so the consumer. As handling physical cash is becoming a thing of the past, and most salaries being paid by bank transfer and bills being paid by standing order, the days spent waiting in a queue to pay your gas, water and electricity or deposit you pay cheque will be long gone.

To be fair, the main UK banks woke up to the cost cutting possibilities that the internet will provide them a long time ago, and have made consistent efforts to educate the public on how to handle their bank account and providing financial incentives to do so.

While the trend to bank online is still in its infancy in the UK, in American banks report that they have been far more successful in persuading their customers to do their banking online. For the time being, only 30 percent of British families reportedly conduct their banked online while in the States that number is a lot closer to 50 percent. However predictions are that the number of internet based accounts will grow, as the number of middle class families in the UK continues to increase the number of common daily activities, such as reading the news online, increases.

One fear that the banks have voiced that the growth of internet banking may bring is the ease that customers will be able to switch accounts in search of better interest rates and lower bank charges.

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Tags: Bank, Bank of England, Banking, Economy, Financial News, Money, Money Management, Online banking, UK Banks

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The International Monetary Fund (IMF) is on the verge of issuing some updated figures on losses made by banks during the current financial meltdown. Their updated forecast that banks losses could reach as high as £2.75 trillion resulting in damage to the global financial network that could take years to repair.

Was it only one year ago that the IMF announced their estimations of total losses from the credit crunch would reach a staggering one trillion dollars? It is now fairly obvious that this figure was totally realistic, and globally banks will need almost three trillion dollars, with the UK economy accounting for a mere $400 million dollars of that, leaving Britain holding the highest per capita deficit in the World.

On the high street, it was reported that in March UK retail prices for the first time in nearly 50 years have fallen below the zero mark, according to a report issued by the Office of National Statistics. In a sign that increasing deflationary pressures were beginning to hit the economy, the retail price index fell to minus 0.4 per cent during the month.

Yesterday on the Stock Exchange, share prices inched slightly lower, largely due to losses made by banks and insurance companies.

Insurance giant, Prudential were on the block, with their shares dropping 4.5% (45 pence to 363) in value

Other insurance firms shared a similar or often less drastic fate, with Aviva shares down 7.5 %,( 18 pence to 253) and Old Mutual shares declined by 5.5%. (3 pence to 56)

Banks also had a bad day with Lloyds Banking Group dropping the furthest, down by 9.1 percent to (9 pence to 95), and while Royal Bank of Scotland fell by 5.9 percent (1.8 pence to 30.6). Barclays shed 4.8 percent of their share value (10 pence to 199).

Premium drinks producer Diageo, the name behind the Guinness and Johnnie Walker brands, celebrated with a 1.2 per cent price hike (10 pence to 793) after analysts raised their price target.

To indicate that all is not lost for the British Empire, luxury goods manufacturer Burberry Group announced a 21% increase in second-half sales to 663 million pounds. Reasons for this dramatic upturn were put down to increased demand for outerwear and luggage, largely fuel by weak sterling abroad.

The FTSE 100 closed down 3.4 points, at 3,987.46, while the FTSE 250 index also dropped by 28 points to close on 6,987.25

Sterling fell slightly against the dollar and the Euro and rose slightly against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4634

Pound/Euro 1.1315

Pound/Japanese Yen 144.03

Pound/Swiss Franc 1.7111

U.S. stocks turned higher after starting weakly on Monday. The Dow Jones Average rose by 127.83 to close at 7969.56. Nasdaq crept up a little, 35.64 points to 1643.85

Constantly basking in the shadow of Google, search engine operators, Yahoo announced that their profits had fallen sharply in the first three months of 2009, with the obvious reason that the recession prompted advertisers to cut back on spending.

Yahoo did report a profit of £80.4million in the first quarter of 2009; however it was down by 78% from the same period a year ago.

Revenue had also contracted by 13% to around one billion pounds for the period, causing the company to announce their intention to their workforce by 5% (between 600 and 700 jobs) as part of cost cutting exercise.

Oil prices were reported to have weakened on Tuesday, while base metal share values stuttered as the recent uncertainty about the actual state of health of the global banking system gained ground.

In Asia, Japan reported its first annual trade deficit in 28 years, with exports having dropped by more than £4.8billion for the first quarter of 2009. .

Total exports were down by 16% in the year to March and around half of what they had been for the same period in 2008. Reasons stated was that demand for Japanese cars and electronics in the United States and Europe has plummeted by 45.6% due to current global economic woes.

The news came in conjunction with the Japanese Government’s announcement that they are to issue an extra 10,800billion Yen ($110bn) of government bonds in 2009 in an effort to tackle the county worst recession since after World War Two.

The bonds are expected to fund the bulk of the government’s $154bn stimulus plan, bringing its expected total new issuance for the fiscal year nth to a record 44,100 billion Yen , up 33 percent on last year

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Tags: Alastair Darling, Bank, Bank of England, Banking, British Economy, Credit Crunch, Gordon Brown, IMF, International Monetary Fund, UK Banks, UK Recession

Recent figures have shown that the aggregate deficit of corporate UK pension funds has now soared past the benchmark figure of £250 billion. This record breaking shortfall which was arrived at in March was attributed to, drop in gilt yields, apparently caused by the Bank of England’s policy of quantitative easing. According to a spokesman from the Pension Protection Fund, the aggregate gap between the values of assets of liabilities it raised to £253.1bn, reflecting 90% of all the UK’s 7,400 current pension plans. The deficit is now more than 10 times higher than the level it was in the corresponding month of last year.

On the FTSE yesterday the carry forward of disappointing economic data coming out of Wall Street, seemed to curtail gains across the board although banking stocks did continue to move forward after strong 1st quarter results from Goldman Sachs gave the sector a boost. This piece of positive news was dampened by the news of an unexpected drop in US retail sales

Lloyds Banking Group rose by 11% (8.4p to 87.9p)and Barclays already on a role buoyed by last week’s iShares deal struck with CVC announced that it could still sell its entire asset management arm also jumped by 10.5% (18p to 195.5p)

The insurance sector saw some price adjustment after analyst comments that recent share price falls were overdone. Legal and general rose by more than 13% (5.7 pence to 54.5) with Friend Provident rising 3.7p to 68.6p and Standard Life up 9.7 pence at 183.1p.

The mining community on the Stock Exchange also had smiles on their faces with Vedanta Resources humping 15% (134.5 pence to 1008) Trailing in their wake, but not by a distance were Kazakhmys who rose 47.5pence to 513.5and Xstrata whose shares moved forward by 41pence to close at 613.5 .

It was a much stormier ride for British Telecom investors yesterday, with shares dropping by 6% on early trading on news that the group’s annual results next month may include a £1.5bn write down. Later trading saw their shares make a rally closing 0.1p higher at 81.1p

BP didn’t enjoy the same relative fortune, with the petroleum giant’s shares losing 7.5 pence to close the day on 438.5. Reasons given were the decrease in crude oil prices and expectations of falling demand

To prove the point that if people won’t buy crude oil but will still buy fruit drinks was the news that Britvic, the Robinsons and Fruit Shoot company enjoyed a sugar intake of 4% on their shares for the day. They raised 9.75p to 255.25p, after the company announced that they had successfully arranged new banking facilities, which will run through to 2012.

Over the day, the FTSE 100 peaked at 4039.67 points during early trade, and then closed up just 5.28 points, or 0.1 per cent, at 3988.99 points. The FTSE 250 closed the day on 7152.16, up nearly 175 points on the day.

The pound hit a five-week high against the euro and rose against the dollar on Tuesday as well as rising slightly against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4879

Pound/Euro 1.11268

Pound/Japanese Yen 147.80

Pound/Swiss Franc 1.7057

Uncertain corporate outlooks and data showing the U.S. economy is still suffering weighed on global stocks on Wednesday, despite claims from U.S. President Barack Obama that his remedies were starting to work. The Dow Jones Average dropped 137.63 to close at 7920.18. NASDAQ fell 27.59 points to close at 1625.72.

Europe was in shock Wednesday on the news that Swiss banking group UBS were about to announce a very heart loss for the first quarter of this year, during their annual meeting to be held in Zurich. Investors’ worst fears will be confirmed along with the news that the Swiss banking group will be dispensing with the services of more than ten per cent of their global workforce.

In Asia, early trading saw stocks values dropping back from the six-month highs achieved on Wednesday after the drops on Wall Street. Later hopes for increase Chinese stimulus spending helping offset these early losses. The feeling was that investors were cashing in on gains after many equity markets have jumped between 20 percent and 30 percent since early March.

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Tags: Bank, Bank of England, Banking, British Economy, Credit Crunch, FTSE, Money Management, Pensions, Private Pension, Recession, UK Banks, UK Recession

The beautiful island of Jersey, for so long identified as the number one tax haven for Brits, is to mark an end to decades of sheltering those who are not so keen on paying their income taxes. The U.K. government will sign a tax- information sharing agreement with Jersey tomorrow, making the island the last of Britain’s offshore tax havens to agree to a new level of transparency.

Jersey will honour their agreement to sign a tax information exchange with the UK today The agreement to exchange of information in criminal tax matters with the UK Government follows the signing of the island’s first Tax Information Exchange Agreement in 2002 (TIEA), with the US Government. Agreements have also been reached with the Netherlands in 2007, as well as the Faroe Islands, Greenland, Iceland Denmark, Finland, Norway and Sweden. The last major European to sign a TIEA with Jersey was Germany, who put pen to paper last year.

The new agreement will be signed in London by Jersey’s chief minister, Senator Terry Le Sueur, and the UK’s financial secretary to the Treasury, Stephen Timms.

Le Sueur recently confirmed d Jersey’s intentions to fully cooperate with the major economies to stamp out illegal financial transactions by stating ‘Our continuing programme of signing agreements with jurisdictions across the globe confirms our commitment to the OECD standards of tax information exchange, and demonstrates our willingness to comply with international standards of financial regulation, anti-money laundering, and combating the financing of terrorism,’

‘We are particularly pleased to have Jersey recognised by the UK as a member of the community of jurisdictions committed to international co-operation and information exchange on tax matters, and to have their assurance that Jersey will be treated as such by the UK authorities.’ He continued.

As well as the US, Jersey has already signed tax information exchange agreements with the ‘Last year the OECD secretary-general referred to the fact that Jersey has signed a number of tax information exchange agreements, and called for clear political recognition for those offshore financial centres that have made this kind of progress,’ Le Sueur says.

‘We hope to see this reflected in the outcome of the G20 summit in London on April 2 and that there will greater pressure put on those countries, including some OECD members, who have not yet shared Jersey’s commitment to transparency and co-operation.’

A TIEA is scheduled to be signed with France later this week, and in the near future with Eire. Signs that the issue is being taken seriously is the fact the discussions are also taking place between Jersey and both the Spanish and Italian governments prior to signing agreements.

Jersey says it is ready to extend such agreements to all other jurisdictions, including OECD countries. Negotiations are well under way with Australia and New Zealand to also display mutual transparency.

Prime Minister Gordon Brown has consistently stated the government view that new financial rules under negotiation by Group of 20 industrial nations need to be extended to tax havens. Countries that extend favorable tax policies for investors are estimated to be costing the U.K. Treasury at least 4 billion pounds a year in revenue.

Alistair Darling, UK Chancellor of the Exchequer recently commissioned an independent review into how the financial transparency of not only Jersey, but also the Isle of Man, Guernsey and the British Virgin Islands will be affected after signing the agreements.

The agreement will require ratification by both the UK and Jersey parliaments before it comes into force.

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Tags: Alastair Darling, Alistair Darling, Bank, Banking, Economics, Economy, Finance, Financial News, Gordon Brown, Money Markets