Lloyds agree to participate in the government sponsored insurance scheme – Eventually.

September 18th, 2009 by tom | Filed under Central banks, Daily News, Debt, Employment, Exchage Rate, Recession, Stocks and shares, UK Bank Accounts, UK Banks, UK Small Business, UK employment, World Banks.

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In spite of various and long ranging attempts to steer clear of it, Lloyds Banking Group now appear likely to participate in the government sponsored insurance scheme to freeze their toxic assets

Despite the fact that Lloyds signed up for the insurance scheme way back in March, giving itself the option of freezing £260 billion of toxic assets, mostly taken on when it acquired mortgage lender HBOS, the bank has made no serious attempts to participate in the scheme. It would mean that up to £20 billion would be freed for fresh lending but in turn would allowed the UK taxpayer to own close to thirds of the bank. When the deal was first signed in March, shares in stood at 36 pence per share, and yesterday they were almost three times that amount.

At their meeting on Thursday, European Union leaders are expected to urge sanctions for banks that pay excessive bonuses. Ahead of the meeting, UK Prime Minister Gordon Brown has insisted that there was broad backing for bonus restrictions. The EU leaders are likely to urge the Group of 20 (G20) richest nations to maintain their stimulus spending as signs of global recovery grow stronger. Many EU countries blamed excessive bonus taking as a principal cause of the crisis and are seeking to regulate how bonuses are paid at banks in the future.

Vodafone are seeking to assure their investors that they stand to benefit from the recent plans of UK mobile phone businesses of France Telecom and Deutsche Telekom to merge. If the merger does take place, Vodafone once the market leader in the UK, faces falling down the ladder to become the third largest British mobile operator. Currently Vodafone is the second largest UK network operator, behind Telefonica’s O2 subsidiary. Orange UK and T-Mobile UK are respectively the third and fourth largest UK mobile phone operators, but would become the market leader after the proposed merger. On the announcement, stock in Vodafone rose 0.2 percent, to 139.5 pence.

On the FTSE yesterday HSBC provided the foundation for the climb for a fifth straight day of gains. Shares in the bank’s shares gained 2.5 per cent to 717 pence amid growing optimism about its household consumer credit division, now renamed HSBC Finance.

Europe’s largest home-improvement retailer Kingfisher Plc are due to report their interim trading results. In anticipation, their stock rose 1.9 percent to 205.5 pence.

Stuart Rose, chairman and chief executive officer of the Marks & Spencer Group has dismissed the suggestion that his plan to remain as chairman of the company after the hiring of a new CEO was deterring candidates for the job. After that matter was put to rest, stock in M&S climbed 1.7 percent, to 373.8 pence.

Meanwhile Britain’s second-largest clothing retailer Next Plc announced pre-tax profits for the six months through the end of July profit had increased by 6.9 percent to reach £185.5 million pounds. Despite the fact, their stocks fell 1.2 percent, to 1,699 pence.

The UK’s FTSE 100 index continued to climb, rising 39.82 points to close at 5163.95 while the FTSE 250 rose on Thursday by a further 58.84 points to finish the day on 9364.08.

The pound, after making a minor recovery yesterday, fell back against the main currencies yesterday.

Pound/US dollar 1.6443
Pound/Euro 1.1155
Pound/Japanese Yen 149.8274
Pound/Swiss Franc 1.6914

The Dow Jones Industrial Average adjusted downwards but only slightly on Thursday trading, downing 7.79 points at 9,783.02. The NASDAQ also fell, but just a little, 6.4 points to 2126.75.

The European plane maker Airbus has raised its forecast for new aircraft demand over the next 20 years.

It predicted global demand for 25,000 new aircraft across the industry between 2009 and 2029, up from the 24,262 it forecast for 2007 to 2027.

Airbus have also said that passenger numbers would fall by 2% this year but rise 4.6% next year going on to add that that demand for aircraft would be susceptible to economic upturns and downturns.

Their principal rival the Boeing Company predicted in June that 29,000 new planes would be ordered between 2009 and 2029.

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