Good or bad news? The UK public are borrowing more

June 4th, 2009 by admin | Filed under Daily News, Money Management, The Markets.

moneyinfo1 Recent reports have it that the UK consumer has begun to gather a renewed taste for borrowing, this time in the hope that they now know that they have to pay back what they borrow. In April both secured and unsecured lending growth picking up considerably from the previous month, aided by sharply mortgage approvals that were as high as they had been for almost a year.

Total consumer lending for April raised £1.29 billion according to reports issued by the Bank of England said Tuesday, almost £400 million higher than anticipated, and due entirely to a £973 million increase in mortgage lending. An encouraging sign that the UK public is investing long term in bricks and mortar.

Europe’s leading budget airline Ryanair, who for years have defied logic by offering flights at incredibly low prices and still turn a profit have succeeded in shattering the myth, by announcing a loss for 2008. The factors that saw the company move into the red for the first time in twelve years was the erratic costs of fuel, as well as Ryanair’s eventually unsuccessful attempts to take over local rival Aer Lingus, Despite that setback, Ryanair remains among the few European airlines that aspires to expand despite the recession Laura Ashley the floral dresses and furnishings retailer have reported increased revenues against the current trend The group announced that a hefty promotions campaign and some heavy price cutting were factors that saw turnover increase by close to seven percent since the beginning of the year The company said it was “cautiously optimistic” about the current year.

The uncommonly good weather seems to be putting a smile on the face of a number of the UK’s leading retailers, among them Kingfisher, the UK home improvement group. The company announced increased profits for its first quarter, largely due to sales of garden equipment and barbecues at their B&Q chain. A dark cloud has passed over U.K. van maker LDV Group Ltd who announced on Tuesday that they will be reluctantly resubmitting their application for administration after a much welcomed rescue bid fell through.
The Malaysian company Weststar abandoned their rescue bid after they were unable to raise sufficient finance, despite the offer of a bridging loan from the UK Government.
A company spokesman announced “Weststar has explored all known avenues to access this funding, including assistance from the U.K. government, but without this in place; it is not possible to deliver the plan.”

On FTSE Shares in Barclays dropped by 14% as one of the bank’s key Middle Eastern based investors announced that they had sold of their entire shareholding in the UK bank. The shareholder, International Petroleum Investment Company, owned by a member of Abu Dhabi’s royal family, sold 1.3billion Barclays shares at a price of 265pence. The sell off made at a discount of 17% on the previous day’s closing price caused Barclays shares to drop 42.75 pence to 273.5p. U.K. supplier of water services, Northumbrian Water Group posted a full-year loss of 12.7 million pounds for 2008, a dramatic reversal in fortunes from 2007, where they made aprofit of 158.1 million. Despite the turnaround, the company’s shares gained 3 pence to close at 248.5.

The Web bookmaker Sportingbet Plc owner of the Paradise Poker web sites announced more than double third-quarter profits due to increased revenues from sports betting. Their stock remained unchanged at 64 pence. On the day the FTSE 100 Index fell 29.17 to close at 4,477.02. The FTSE 250 closed on 7,688.19
The pound continued its rally, rising to a seven-month high against the dollar as reports on U.K. and U.S. housing fueled optimism that the worst of the global financial slowdown is behind us.

Sterling peaked on the day to $1.656, rising to 158.56 yen from 158.81 yen,

On Wall Street the Dow Jones closed still moving upwards, this time by 19.43 points to 8740.87, while the NASDAQ index moved up 8.12 points to close on 1836.80
As GM motors begins its major re-organization program, the unknown Chinese company Sichuan Tengzhong Heavy Industrial Machinery Company announced that they will acquire the Hummer brand, a symbol of what is apparently a golden age gone by for the US motor industry. The deal, which passed with barely a whimper, marks one of the largest overseas auto manufacturers acquisitions by a Chinese group.

Sichuan Tengzhong obviously knew something that no else did, as crude oil prices dropped by more than $2 a barrel following the latest US weekly inventories data.
July West Texas Intermediate fell $2.43 to $66.12 a barrel while ICE July Brent lost $2.29 at $65.88 a barrel.