Economic recovery slowing down as property prices continue to fall

July 8th, 2009 by admin | Filed under Daily News, Mortgages, Saving, UK Bank Accounts, UK Banks, World Banks.

financial news UK house prices fell more quickly in the first three months of this year than even in the fourth quarter of 2008, a trend that looks set to dim Great Britain’s hopes for a more rapid economic recovery. A recent survey has shown that house prices in England and Wales were 12.7 per cent lower in the first quarter than in the same period in 2008.

Under new proposals to be set by the city regulator, penalties for financial wrongdoing will be tripled with fines for insider dealing and other market abuse set at a minimum of £100,000. The FSA also proposed that a company could be fined up to 20 per cent of its income from the product or business line related to the regulatory action. Individuals could lose up to 40 per cent of their pre-tax income, including bonuses, from a job related to non-market abuse cases. The proposals are part of the FSA’s new emphasis on credible deterrence.

Shares in sports retailer JJB Sports fell by more than 25 per cent after the company confirmed that they are liable to tap shareholders for funds. The news came just weeks after JJB Sports became the first listed UK Company to be saved from administration through a Company Voluntary Agreement.
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A spokesman for the sports and leisure wear retailer said they were reviewing a number of options, including the disposal of non-core assets, an extension of the maturity date of its working capital facility beyond September 2010, and possibly raising equity capital by way of placing an open offer”

The company has already secured £17.6 million of the £33.9 million it expects to receive from the sale of 53 leases following the disposal of its Fitness Clubs business in March to Dave Whelan Sports, owned by JJB’s founder and former owner.

Supermarket chain, Wm Morrison saw their shares rise by 1.1 per cent to 243 pence on positive news from their broker. Industry forecasts are that sales in the croup will take a downturn after the summer heat wave. However Morrison will be well placed to continue to make profit due to improved margins.

The construction sector held firm on the FTSE yesterday.
Persimmon was up a handsome 7.4 percent to 390 percent after it was announced that their reservation rates had been showing consistent improvement since mid April. As part of a knock on Effect, Barratt Developments rose 7.2 percent to 156 pence, while shares in Bovis Homes rose by 4.3 percent to 406 pence.

The Footsie closed 7.91 points down at 4,187 with trading volumes about three-quarters of the daily average, while the FTSE 250, stood its ground, closing just 1.84 points down on 7,318, 51

Sterling had an indifferent day, retreating slightly against all the leading currencies.
Pound/US dollar 1.6132
Pound/Euro 1.1589
Pound/Japanese Yen 152.9046
Pound/Swiss Franc 1.7573

In the United Sates, figures revealed that the level of people falling behind with repaying their consumer loans hit a new high in the first quarter of 2009; The American Bankers Association who compiled the report suggested that rising unemployment in the US was a key figure behind people missing payments.

The percentages of payments that were more than 30 days overdue rose to 3.23 percent making for the highest delinquency levels the 1970s.
Credit card loan payment defaults were also on the rise, rising to 4.75% in first quarter 2009 from 4.52% in the last quarter of 2008.

On Wall Street, the Dow Jones index closed down 161.27 points to 8136.6. The NASDAQ closed again down for the day, this time by 41.23 points on 1746.17, more or less reversing its impressive gains of the last few weeks.

In a definite signal that a tougher approach is on its way, new trading curbs designed to clamp down on companies and individuals who speculate in oil and the other commodity markets are being examined by US regulators. The move will place further scrutiny on the role of financial investors in the commodities markets, with certain legislative bodies openly placing speculative demand as being among the principal causes for exaggerating price rises.

According to market analysts, the reason that oil prices have risen by more than 60 per cent since the start of March, is that speculators are looking to gain from any rebound in business activity.