Recovery continues in the increasing shadow of UK political uncertainty

June 5th, 2009 by admin | Filed under Daily News, UK Bank Accounts, UK Banks, UK Small Business.

banking2 The Halifax Building Society, now part of the Lloyds Banking Group UK announced an increase of around 2.5% in house prices for despite the fact that purchasing activity still remains lower than expected.

However encouragement can be taken from the fact that property prices did increase for the first time in three months, and the increase, although minor, eases the annual rate of decline to 16.3%, with the average UK home now valued at around £160,000.

Also on the rise are demand for workers in the service sector according to figures released by the highly respected Chartered Institute of Purchasing and Supply’s (CIPS). Their survey revealed that the services industry sector has begun to employ more people for the first time since the spring of 2008.

The UK service industry is the largest employer in the country, with more than 60% of the country’s employees earning their living in the sector, which covers catering, entertainment, sports and leisure. Signs of increased activity in this sector are yet another sign that the UK citizen has more cash in his pocket to spend on entertainment, yet another indication that the recession is slowly easing.

The signs of revival are yet to make their way to the care industry where figures show that sales of new cars in May were down by close to 25% on the same month last year, despite the considerable efforts made by Business Secretary, Lord Mandelson to boost sales of new cars by offering subsidized trade ins. The figures, issued by the Society of Motor Manufacturers and Traders (SMMT), show that 134,858 new cars were registered in May.

On the Stock Exchange, partially state owned Royal Bank of Scotland (RBS), saw their shares recover by 3.3 percent to 37.3 pence after they had fallen by more than 10 percent over the previous two days. Shares in the U.K.’s second-largest real estate investment trust, British Land, also took a turn for the better, rising d 2.9 percent to 376 pence. Land Securities Group Plc, also jumped by 2.2 percent to close the day on 486.5 pence.

Food retailers seemed to be doing well, with Sainsbury, Britain’s third-largest supermarket company climbing by 2.3 percent to 323.75 pence, while William Morrison Supermarkets Plc also climbed a more modest 1.2 percent to reach 250.5 pence, on the announcement of .first-quarter sales growth that exceeded expectations.

On expectations that the global economy will be able to absorb increases in the price of crude oil, Shell, Europe’s largest oil company, saw their shares rise by 0.7 percent to 1,674 pence. BP Plc also climbed 1.4 percent to 525.75 pence The FTSE 100 Index added 23.77 to close on 4,407.19 while the FTSE 250 closed on 7,660.07 down 8.12 points from Thursday.

With the current political uncertainty surrounding Gordon Brown playing no little part, the pound’s revival drew to a minor halt yesterday.
Pound/US dollar 1.6112
Pound/Euro 1.1373
Pound/Japanese Yen 156.4584
Pound/Swiss Franc 1.7313

In the US retails sales showed a major downturn as the public seem to be making a major effort to cut spending despite the many attractive offers around.
Unfettered by political scandals and instead bolstered by President Obama’s impressive speech in Cairo, the Dow Jones returned to moving upwards, 74.96 points to 8750.24, while the Nasdaq followed suit up 24.1 points to close on 1850.02

Unemployment in Western Europe (the Eurozone) has reached its highest level for ten years. Taking into account seasonal adjustments, unemployment in the 16 country region rose to 9.2 percent in April, and an increase from 8.9 percent of the total labour force in March 2008.