Chancellor Alistair Darling, possibly with an eye to future job prospects, is expected to blow his own horn in the coming days, by claiming that the Labour government’s investment in jobs programmes are responsible for saving no less than £12 billion during the recession. Darling backed up his claims by stating that in the 2009 budget, the government’s prediction for unemployment was as high as 2.09 million by the end of 2009 and reaching close to 2.5 million in 2010. By the end of December of last year they had already revised, their estimates down to one and three quarters of a million by end 2009 and less than two million for 2010. The reduced number of benefit claimants, if maintained, will save £10 billion over the next five years according to the stressed Chancellor’s figures.

There is much speculation afoot that the UK government are about to introduce important legislation regarding the use of credit cards. The new legislation will prohibit credit card companies from using a method of calculating interest known as the "adverse order of payments method. The adverse order of payments is where credit card companies force customers to pay off the debts on their account holding the lowest rates of interest before higher interest rate debt is reduced. Figures show that currently there are close to ten million people in the UK holding credit card debts with multiple interest rates. The practice is said to cost credit card holders an average of around £250 pounds in the first year they hold the card.

Business Secretary Lord Mandelson has announced that the UK government will be offering a £270 million loan to GM designed to safeguard five thousand Vauxhall jobs in the UK. The money, which will go to Vauxhall’s parent company GM Europe, will guarantee production at the car maker’s plants in Luton and Ellesmere Port. According to a statement from Lord Mandelson, the outline deal followed "highly complex" talks between the Government and bosses in the US.

Lord Mandelson stressed in his statement: "I always said the Government would stand foursquare behind Vauxhall. With this announcement, we have kept our word." Unite boss Tony Woodley who represent the Vauxhall workers chipped in by saying that the loan is great news for British industry.

Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc improved on the increase in value of their U.S. bank shares. RBS soared 5 percent to 42.57 pence. U.S. banks yesterday closed at the highest since November 2008, led by Citigroup Inc. Lloyds climbed 3.4 percent to 58.47 pence. The bank is close to agreeing a joint venture to sell a number of the less than worthwhile assets assembled by HBOS.

BSkyB, the U.K.’s biggest pay-television provider, surged the most in almost eight months on a report that Rupert Murdoch’s News Corp. may bid for the shares that the y currently do not hold in the company. On the news BSkyB rose 5 percent to 598 pence, the biggest gain since July 30. News Corp, which already owns 39 percent of the pay-TV company, may be planning to pay 735 pence a share for the stake it doesn’t already own.

The Pound was still seen to be struggling again the main currencies, although the currency did rise slightly before the weekend. The pound was on $1.5183 while remaining almost on par with the Euro on €1.1033

As the markets closed for the weekend U.K. stocks gained, extending a second weekly increase for the benchmark FTSE 100 Index, largely on the back of increases in financial share values.

The FTSE 100 increased 0.2 percent to 5,625.65, bringing its weekly gain to 0.5 percent. The FTSE 100 has climbed to near the highest level since June 2008, lifted by optimism that the global economic recovery and higher earnings will support the 12-month rally in equities.

Former executives of the now defunct Lehman Brothers firm as well as the senior executives of their erstwhile auditor, Ernst & Young headed home for a weekend of self contemplation as they were severely censured in a recent report for some serious professional lapses that led to the firm’s collapse.

The report also went on to say that Lehman trading on knowing they were insolvent for a number of weeks before eventually declaring themselves bankrupt. Lehman’s bankruptcy is generally recognized as being the catalyst that sparked of the global financial meltdown. The collapse of the 158-year-old investment bank in September 2008 was the world’s largest bankruptcy at that time.

The report made for some heavy and disturbing reading, accusing the Lehman Brothers’ management of "actionable balance sheet manipulation" and using accounting tricks to hide debts. In their defence, Ernst & Young said that its last audit of Lehman was "fairly presented" according to accounting rules. As Lehman Brothers wobbled on the edge of collapse, a determined effort from Wall Street, the City of London, and the US and UK governments did all that they could to prevent the banks’ fearing the chain reaction that Lehman’s failure would set off around the globe.

Whether the long awaited report had an effect on Wall Street trading remains to be seen, but share trading was certainly restrained on Friday before the markets closed. The Dow Jones was up 12. 85 points to 10624.49 while the NASDAQ dropped less than a point to 2367.66

After weeks of crisis, it looks like the Eurozone region are on the verge of agreeing to support a multibillion-euro bailout for Greece as part of a package to shore up the Euro, the zone’s single currency.

Despite huge resistance, Germany, who were against the bailout, have bowed to pressure from fellow members of the 16 strong Eurozone members who expect to draw up the rescue package in the early days of this week. At the same time, the Eurozone members, at Germany’s behest, will introduce new legislation to enforce greater fiscal discipline among its members.

According to a senior European commission official, the Euro member states have agreed to provide a series of loans or loan guarantees to Greece in the likely event that Athens finds itself unable to refinance its soaring debt and requests help from the EU. Speculation has it that the initial aid to Greece could reach as high as €25 billion (£22.6 billion), with estimates that the total extent of Greece’s financial problems could see them needing up to €55 billion in loans by the end of 2010. Despite the fact that Germany were the most reluctant to come to the rescue of a fiscal delinquent in the current crisis, they have played the pivotal role in organising the rescue package, in their role as the EU’s traditional paymaster,

According to a report by the International Energy Agency (IEA),

China’s demand for oil jumped by an "astonishing" 28% in January compared with the January 2009. The IEA went on to point out that added that the estimated global demand for oil in 2010 would be driven by rising demand from emerging markets, with half of all growth coming from Asia while demand in developed countries is likely to fall by 0.3%.

The IEA has increased its global oil demand forecast for 2010 by 1.8% to 86.6 million barrels a day.

Oil prices were above $83 a barrel on Friday, the highest in two months.

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Tags: Alistair Darling, Bank of England, Banking, British Economy, British Pound, BskyB, Citigroup Inc, Dow Jones, Economics, Economy, Ernst & Young, Financial News, FTSE, GM Europe, HBos, International Energy Agency, Labour government, Lehman Brothers, Lloyds Banking Group Plc, Lord Mandelson, Money, Money Management, NASDAQ, News Corp, Oil prices, Recession, Royal Bank of Scotland Group Plc, Rupert Murdoch, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Vauxhall, Wall Street

Every cloud still appears to have a silver lining and the silver this time round will be coming from both the United States and Europe. UK fund managers are anticipating a wave of takeover activity as companies with some surplus cash sitting around might be looking to take advantage of the weak pound to snaps UN some bargains in acquiring smaller British firms.

Also expecting a windfall in the near future is the HM Revenue & Custom (HMRC). As a result of the unexpected success of their business payment support,

The sum of corporate tax rescheduled service has reached five billion pounds, with more than 160,000 UK businesses having negotiated a "time-to-pay" agreement, since the launch of the in late November 2008. Since that time, the Enterprise Finance Guarantee scheme has secured £862 million of loans for more than right thousand UK businesses.

Britain’s one-time tax on bank bonuses could bring in more than £2.5 billion ($3.7 billion) to the government’s coffers this financial year, which works out at almost three times the £550 million estimated by Chancellor of the Exchequer, Alistair Darling. Darling announced the fifty percent levy for bank bonuses over £25,000 pounds in December last year.

Darling is expected to unveil the Governments plans to use the extra funds for “small targeted measures” during his budget speech later this month.

The people of Iceland are preparing to organise a referendum, on which they will decide to repay the UK and the Netherlands governments, the money owed to them after the collapse of Icesave bank.

The UK and the Netherlands want reimbursement for the £3.4 billion (€3.8 billion) paid out in compensation to customers in 2008.

Talks between the three countries broke down on Friday without agreement.

The Icelandic government had hoped to avoid the vote by agreeing a new repayment plan before the weekend, with the country’s Prime Minister Johanna Sigurdardottir calling for further talks to take place before the referendum card is called.

The serious concerns that residents of the North East are having regarding the possibility that the steel processing plant run by Corus on Teesside will be closed are to be aired at a meeting in London this week. The meeting will be between the Government department who are handling the Corus file on behalf of the government, and a group of local politicians and potential investors. The group is thought to be interested in acquiring the Teesside Cast Products plant, which is due to close. The plant began lying off the first of 1,600 staff before the weekend. .

Redcar MP Vera Baird said a sale of TCP was “the best outcome we could have” and urged patience while a deal was put together.

With prices up by an average of 3.2 percent, February showed the strongest monthly growth in house prices since August 2007 in central London. Strongest risers were properties in the £5 million pound bracket, which exceeded even the prices of March 2008 when the market was as its precession peak. Elsewhere in the UK figures show a drop in the average house prices for the first time in months, Reasons given were the bad weather experienced in January, as well as an increase in number of properties hitting the market. The weakening pound may also account for the fact that almost half of the properties worth £2 million pounds or more have been snapped up by buyers from overseas during the last year,

Equity strategists believe a weakening pound will cause shares in London-listed companies to rise over the coming weeks. The feeling is that asset managers are rebalancing their UK portfolios and issuing new stock recommendations following sterling’s continued poor performance in the currency market. Strategists are apparently encouraging investors to take long positions in UK firms with ties to foreign markets, will steering clear of UK businesses who rely extensively on the domestic economy.

The Financial Services Authority (FSA) has granted a licence to Metro Bank, which will mean a whole new face on the UK high street, and within the coming months. Metro’s plans are to create a network of over 200 Greater London branches, offering a "superior service", with branches open seven days a week.

The continuing uncertainty around the pound has caused a lot of ups and downs over the last week. At close of trading on Friday the pound closed on $1.5056, as well as 1.1044 against the Euro.

The benchmark FTSE 100 Index jumped 72 points, to close for the weekend on 5,597.76.

The US Labor Department has today revealed that unemployment rate remained unchanged at 9.7% in February, lower than the 10% rate that was expected. According to figures issued by the Labor Department, there were just 36,000 job cuts last month, considerably less than the 50,000 analysts had predicted. Since the beginning of the financial downturn in December 2007, employment has fallen by 8.4 million, making for almost 15 million unemployed people in the US.

These figures conform to the Federal Reserve’s forecast unemployment rate. The rate is expected to remain at between 9.5% and 9.7% for all of 2010, and could ease to as low as 8.2% in 2011.

On Wall Street, the Dow Jones Industrial Average continues to thrive, closing for the weekend up 122.06 points to close on 10,566.2. The NASDAQ Composite was still climbing also, rising 34 points to close on 2,326.35

According to official figures from the US Commerce Department the US economy grew at a faster rate than previous estimates in the fourth quarter.

The economy grew by an annual 5.9% between the October and December period, an improvement on the 5.7% previously estimated.

For the whole of 2009, the GDP declined at of 2.4%, making for the largest full-year contraction since the 10.9% fall immediately after the end of World War Two.

A spokesman for the Swedish venture capitalists Investor, has announced their approval to buy half of defence group BAE System’s stake in Swedish defence firm Saab. The statement read that Investor’s acquisition of half of BAE’s 20.5 percent stake "clarified the ownership structure in Saab" in a climate where there had been "less alignment of interests and the emergence of some overlapping businesses" between the two aerospace firms.

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Tags: Alistair Darling, BAE Systems, Banking, Currency, Dow Jones, Economy, Enterprise Finance Guarantee, Financial News, Financial Services Authority, FSA, FTSE, HM Revenue & Custom, HMRC, Icesave, Johanna Sigurdardottir, Money, Money Management, NASDAQ, Recession, Retail, Saab, Stocks and shares, Teesside Cast Products, UK Banks, UK business, UK Economy, UK government, UK Recession, US labor Department, 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

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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

Alistair Darling, UK Chancellor of the Exchequer has announced that he is open to discussion on the possibility of scaling back on the interest rate charges which Iceland is required to make on the £3.4 billion pound losses from failed online bank Icesave. After talks between the governments in London, Darling was reported as saying that although British taxpayers "must get their money back" the Treasury could be willing to negotiate terms. The Treasury is considering two options to scale back interest rate charges while insisting that both options must see debts being fully recouped. The Icelandic government is seemingly eager to arrive at a more flexible compromise as opinion polls in the country suggest the initial deal that was hammered out would be more than likely rejected in a forthcoming referendum.

According to a very recent survey, the UK personal computer (PC) market saw fourth quarter growth for the first time in a year, despite a fall in sales from the business sector. Holding the top spot were Acer with 19.1 per cent market share, with HP hot on their heels with an 18.9 per cent market share. Dell was in third place with 16.5 per cent, followed by Toshiba and Samsung with 10.4 per cent and 6.5 per cent respectively. The total UK market in terms of shipments in the fourth quarter of 2010 was 3.8 million units. A market analyst reported that the personal computer market in the UK was becoming increasingly dependent on laptops (mobiles), which accounted for 70 per cent of the total PC market, with growth in demand reaching 24 per cent in the fourth quarter of 2009. However, the report did state that despite the overall growth, the professional PC market declined by 25 per cent in the fourth quarter of 2009.

The much loved general interest magazine Reader’s Digest UK has been forced into administration after failing to gain support from the UK pension’s regulator over an agreement for funding their £125 million pension deficit. The UK subsidiary of U.S. Reader’s Digest Association have recently brokered a deal with trustees of its pension plan and the Pension Protection Fund. The deal would have seen a capital payment alongside the transfer of a one-third interest in the equity of the UK business to the UK pension scheme trustees. The UK is the only branch of the multiple national Readers’ Digest Association with a large pension shortfall. The parent company said the UK insolvency is not liable to have a material impact on its other global operations.

Legal & General (L&G) has revealed plans to supply "longevity insurance" to pension funds, in a move which will see the insurer compete against the major European insurance companies. The launch of the new insurance product by L&G will precede similar plans by others in the insurance sector including Prudential, who are also considering moving into this market. A spokesman for L&G emphasised that the provision of longevity swaps will "develop alongside and not necessarily compete with" L&G’s bulk annuity business. Babcock International and RSA were reported to be the first companies to take out longevity protection in 2009.

Private equity group HgCapital Trust is seeking to raise more capital from investors by preparing a share issue to shore up its finances, amid expectation of a rise in new investments. Industry sources suggest the London-listed group could raise as much as 50 million pounds. As one of the best-performing listed private equity groups with a market capitalisation of 210 million pounds, HgCapital is hoping to appeal to investors from its position of strength by making a placing of ordinary shares with subscription shares attached. A spokesman for the company projected that HgCapital will invest more than it sells, as the market conditions present bargains.

Shares in Barclays were up 2.9 per cent to 302 pence on a positive response to their recent results. Ahead of their results due to be issued next week, Lloyds Banking Group rose 3.2 per cent to 50½ pence and Royal Bank of Scotland took on 1.9 per cent to 34 pence.

Sterling continued to slip against both the Euro and the Dollar. It closed at $1. 5392 while settling on 1.1409 against the Euro.

Overall, the FTSE 100 added 32 points to 5,307.85, meaning that it has risen for seven of the last eight sessions.

According to a report released on Thursday, certain of the states of the U.S. look like facing a total shortfall totaling no less than $1 trillion in their funds for employees’ pensions and retirement benefits. The state of Illinois is reported to be in the worst shape, with only 54 percent of its pension obligations funded, according to the report, taken into account only the fiscal years up to June 2008. That fact makes the picture even less than rosy as the downturn that began in the final six months of 2008 and continued till the end of 2009 – was when many funds’ investment portfolios suffered their most serious devastation. Regardless of stock market fluctuations, pension funds were destined to fall down a budget hole, the non-profit research center who prepared the report pointed out.

The US Federal Reserve has predicted that the US economy is still on target to grow strongly during 2010, but unemployment will remain high, has warned. In its latest forecast, the Fed said that the economy would expand between 2.8% and 3.5% in 2010, with the unemployment rate expected to remain between 9.5% and 9.7% in 2010.

Encouraging January housing starts, better-than-expected earnings and receding fears on the European sovereign debt situation boosted risk appetite prompted Wall Street stocks to rise moderately for the second consecutive session. The Dow Jones Industrial Average was up 93 points to 10,392.9 while the NASDAQ Composite rose 15 points to 2,241.71

Hewlett-Packard (HP) has raised its outlook for its financial year after strong sales over the Christmas period lifted its profits by 25%.

Higher demand for its personal computers and servers saw its net profit for the three months to 31 January total $2.32 billion (£1.48 billion).

This compares with $1.86 billion for the same first quarter period a year earlier. HP’s revenues for the quarter were up 8% to $31.2 billion, as its results came in ahead of market expectations.

The price of oil has risen sharply as the dollar, the currency in which the commodity is priced, weakened against the pound and the euro.

US light crude rose by $3 to $ $77.01 with London Brent settling at $75.68 a barrel.

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Tags: Alistair Darling, Babcock International, Banking, Barclays, British Economy, British Pound, Credit Crunch, Currency, Economy, Financial News, FTSE, Hewlett-Packard, HgCapital, Icesave, Legal & General, Lloyds Banking Group, Money, NASDAQ, Reader's Digest Association, Recession, Retail, Royal Bank of Scotland, RSA, Savings, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Wall Street

A recent report from the Chartered Institute of Personnel and Development (CIPD) has stated that the expected substantial cuts in the public sector, will mean that around one in three of the employers in the sector plan to shed jobs during the first quarter of 2010, which is now halfway through.

Despite the UK emerging from recession, CIPD’s latest quarterly survey found that the jobs outlook had worsened. UK unemployment currently stands at 2.46 million, with the number of people out of work steadily rising since the summer of 2008, despite a surprise fall in the three months to November.

British investors concerned about the outlook for UK inflation, consumer spending and the public finances following the recession, received some news that their fears would be confirmed. Inflation spiked up to a 14-month high of 3.5% in January, data released by the Office for National Statistics confirmed, as effects of the VAT hike and a number of other one-off factors such as the sharply falling oil and food prices of a year ago began to take their toll. The Bank of England’s forecasts suggest inflation should fall below the 2 per cent target in 2011 even though its latest analysis concedes that inflationary pressures are currently stronger than anticipated.

Taxpayers could be forced to wait five years before they start recouping the tens of billions of pounds spent propping up the banks.

UK Financial Investments, which oversees the Government’s stake in RBS, Lloyds and Northern Rock, fears it will be 2015 before it can sell off the shares.

It had hoped to start off-loading sooner after the bailout led by Chancellor Alistair Darling, but now believes that may not be possible without big losses. Officials, who have been careful not to give a timetable that could drive down share prices, are working on the basis of five years, while the Treasury fear that they may be forced to retain their minority stake for much longer.

According to a survey held by the Institute of Directors, sixty percent of UK companies who applied for a bank loan in 2009 ended up getting turned down. This sad and ridiculous situation has even led to company owners and directors being reduced to borrowing on their credit cards. Results of the Institute of Directors’ survey shows that the banks are simply not listening to Gordon Brown and Chancellor Alistair Darling orders to start lending again as payback for pumping £850 billion into the economy.

Even more of a cause for concern is that the report shows that 83% of businesses who were rejected for bank finance are also not receiving any information about alternative finance that may be available to them, including the Government’s Enterprise Finance Guarantee.

The report shows that increasingly more businesses, and especially the smaller ones, are turning to forms of expensive unsecured finance, such as credit cards, to get them through their short-term cash-flow problems. Particularly hard hit by the loan famine are small to medium sized UK companies whose desire to expand will be critical to creating jobs and dragging Britain out of recession.

On the same tack, credit card interest rates in the UK have climbed to their highest level since 1998. Millions now find themselves facing crippling repayments on their debts, despite the historically low Bank of England base rates. Average credit card interest has now soared to a staggering 18.8%, leaving consumers facing the prospect of paying more than 40% on the cash they have borrowed, an increase of 25% in the last four years.

Barclays Bank has announced an increase in their full-year profits of 92% in 2009. There full year profits were an outstanding £11.6 billion ($18.2 billion), with the figure being largely boosted by the sale of its BGI fund management arm to US firm BlackRock last year. Without the input from the sale of BGI, Barclays would have made just £5.3 billion, with £2.5 billion of that coming from their investment banking division…

Barclays, who did not take any direct state help during the financial crisis, also saw the level of its total bonus payouts rise to £2.7 billion, with £1.5 billion of that to be paid out for 2009 and a further £1.2 billion to be paid out over the coming three years.

Virgin Media are believed to be in the final stages of an agreement over the sale of its television channels to rival BSkyB. , the channels that are entirely owned and produced by Virgin Media, Virgin 1, Bravo, Challenge and Living, are due to be sold to BSkyB. Rupert Murdoch’s News Corp has a 39.1 percent share in BSkyB.

Meanwhile, Cheltenham based fashion retailer Supergroup, have announced that they ate to launch a flotation designed to rise up to £125 million pounds. If successful, the valuation of the company is expected to be around £400 million, roughly nine times Supergroup’s forecasted 2011 earnings

The pound fell back against the dollar, closing at 1.5633 while also slumping to 1.1453 against the Euro.

Overall, the FTSE 100 was stronger at 5,244.06, a rise of 58 points, and its sixth rise in seven trading days

Foreign demand for US Treasury bonds and notes in December fell by $53 billion as China was seen to be reducing its holdings. China cut its holdings by $34.2 billion, will still remaining the second-biggest US debt holder after Japan.

On Wall Street the Dow Jones Industrial Average continues to climb up 169.67 points at 10268.81. The NASDAQ gained a further 30.66 points to close on 2,214.19

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Tags: Alistair Darling, Bank, Bank of England, Banking, Barclays, BGI, Bravo, British Economy, BskyB, Challenge, Chartered Institute of Personnel and Development, CIPD, Dow Jones, Economy, Enterprise Finance Guarantee, Financial News, FTSE, Institute of Directors, Living, Lloyds, Money, Money Markets, NASDAQ, Northern Rock, Office for National Statistics, RBS, Recession, Stock Markets, Stocks and shares, Supergroup, UK Banks, UK Economy, UK Financial Investments, UK government, UK Recession, Virgin 1, Virgin Media, Wall Street

According to a leading economist the UK should be classed with Greece and Spain, as countries carrying severe debt problems Not in agreement and understandably so are the UK Treasury sources who rebuked the suggestions that the UK was gradually becoming one of the poor relations of Europe by confirming that all of the three major credit-rating agencies had reaffirmed the UK’s triple A credit status.

Meanwhile Chancellor of the Exchequer Alistair Darling is the man faced with balancing the demands of investors and rating companies who fear that Britain’s top-level credit rating could be at risk, with the hopes of the UK public as well as some of his colleagues for an easing of taxation in the coming budget. Darling has already put the dampers on a lot of people’s hopes that this year’s budget will not be too populist, in a move to win votes for the general election that is due to follow a few months later

“People in the U.K. will want the budget to be realistic,” Darling was quoted as saying. “No one is looking for giveaways; that’s not the mood.” He summed up. Darling said voters realize the need to reduce Britain’s record budget deficit having already vowed to more than halve the £176 billion-pound deficit by 2014 starting next year.

Britain’s budget shortfall, which the Treasury estimates at about 12 percent of gross domestic product this year, is the biggest among the Group of 20 nations.

Dividends paid out shareholders by UK companies were honed back by to the tune of £10 billion in 2009, according to recent research.

Total dividends paid out by British listed companies amounted to £56.9 billion last year, down 15 per cent on 2008. The figures would have been considerably worse for investors if it not had been for the contribution of just five leading UK companies, with almost fifty percent of all dividends paid out coming from them. The e British business heroes were by BP, Shell, HSBC, Vodafone and GlaxoSmithKline. A sign of the shifting sands in the UK trading picture is that as recently as 2007, these companies accounted for 35 percent of the total dividend payout.

All the UK banks combined cut their dividends by half, adding up to around £6 billion less in dividends than in 2008. Performing particularly poorly was the high-street sector whose dividend payouts fell by 62 per cent.

At the recent meeting of the Group of Seven finance ministers’ tacit agreement was reached to draw up as set of common rules designed to force banks to pay for possible failures similar to the current one, which led to taxpayers being forced to take on trillions of dollars in liabilities.

The ministers said the world’s most advanced economies should adopt common rules as long as other major countries also agree. Apparently the G-7 is moving closer to an agreement on a bank insurance levy, one of a range of options proposed by the U.K. in November.

Already Sweden has taken the first step forward by creating a fund financed by their banks to help safeguard its financial system. In terms of the agreement, Swedish banks are required to make annual payments to the fund. The Swedish government injected 15 billion kronor (£1.2 billion) into the fund when it was set up, as well adding funds that had previously held in Sweden’s deposit guarantee fund.

According to government estimates, interest from the funds deposited by banks and on the money in the fund means it will swell to 150 billion kronor, or 2.5 percent of Sweden’s gross domestic product, by 2023.

U.K. stocks rose for first time in four days, led by a rebound in mining companies. The FTSE 100 Index increased 50.2 points to 5,111.84 at close of business in London.

The pound dropped to its lowest level in more than eight months against the dollar as growing concerns over the UK’s fiscal situation began to weigh on the currency. Sterling closed at 1.5701 and at 1.1388 against the Euro. The Euro has lost a lot of its attractions recently and was down to an eight-month low of 1.3583 against the dollar.

On Wall Street things were looking up. The Dow Jones Industrial Average finished up 74 points at 10058.64. The NASDAQ gained 15 points to close on 2,150.87.

Honda has added close to half a million cars to its existing global safety recall list. The problem this time is over airbag inflation problems mostly affecting cars sold in North America, with others Japan, Mexico, Taiwan and Australia due for recall. There was also further bad news for e Japanese carmakers Toyota after they were forced to recalled nearly half a million hybrid cars over faulty brakes, and millions of other models will need to be brought back to dealerships worldwide, suffering from accelerator and floor mat problems.

General Motors’ (GM) Opel unit has announced their plans to will invest 11 billion Euros (£9.7 billion) in introducing new product ranges over the next five years. Opel’s investment plan to breaking even within two years, a move that will entail cutting 8,300 jobs across Europe as well as the closure of at least one company plant in Antwerp, Belgium. Opel are trying to persuade

European governments to provide them with billions of Euros in loans to help the company’s plan to return to profitability.

India has announced that its economy is looking at growth levels by 7.2% in the year to the end of March. Government stimulus measures helped to maintain strong growth during the global downturn, but attention is now turning towards cooling rising prices, raising the chance that state support could soon be withdrawn. Many financial analysts also expect the government to raise interest rates earlier than expected. Strong growth in manufacturing in India is helping to compensate for falling agricultural output.

Oil prices rose and base metals moved higher as commodity markets managed a partial recovery after a sharp sell-off in the previous week US crude oil prices traded above the $71 a barrel.

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Tags: Alistair Darling, Bank, Banking, BP, British Economy, Credit Crunch, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, G-7, General Motors, GlaxoSmithKline, Honda, HSBC, Money, Money Markets, NASDAQ, Recession, Retail, Shell, Stock Markets, Toyota, UK Banks, UK Economy, UK government, UK Recession, UK treasury, Vodafone, Wall Street

City minister Lord Myners, in a recent speech played down suggestions that Britain might follow in US President Barack Obama’s footsteps in introducing radical reforms to the UK banking system.

Myners stated that the UK had already taken sufficient measures to address the problems in its banking industry.

"President Obama came out with a solution to the idiosyncratic problems that he sees in the American banking system, based particularly around the investment banking" pointed out Milner "It’s worth remembering that proprietary trading, hedge funds, private equity, these were not at the heart of the difficulties that Northern Rock, or Royal Bank of Scotland or HBOS experienced." He summed up.

Alistair Darling, UK chancellor, was also reported to be against duplicating Obama’s moves to split commercial and investment banks.

Meanwhile U.K. Prime Minister Gordon Brown is expected to announce details of the release of £125 million pounds of venture capital aimed towards "low-carbon" businesses. The move is aimed to support his argument that the government should continue spending to bolster the UK economy.

The first slice of money from the Innovation Investment Fund will be released on Jan. 26th, according to an announcement on the prime minister’s official Web site.

“On Tuesday our new innovation investment fund will show our commitment to the industries and the technologies that will create the skilled jobs of the future,” Brown promised. “What is increasingly clear is that determined and active government can and does make a difference.” He continued

Public sector borrowing for December in the UK was lower than forecast,, However the government’s hopes of meeting its deficit target for the fiscal year still remain dependent on January’s tax receipts. However tax income for January, which is a key month for self-assessment, capital gains and corporation tax income, is expected to be down. This is due to reduced income and capital gains for 2008-09, when the UK economy was in the midst of recession. On a positive note UK financial analysts have pointed to the fact that recent receipts were stronger than predicted, with December’s income only 0.4 percent down on the previous year, favourable when compared with the average of 8.1 percent decline for 2009.

The Royal Bank of Scotland (RBS) plans to sell its U.S. trading business for $2 billion to JPMorgan could be in doubt following President Obama’s recent ban on banks trading on their own account. RBS has been urgently trying to complete the sale of their a 50 per cent stake in RBS Sempra Commodities, by the end of next week which would have been bound to create a much more positive view of their annual results due to be released by Feb. 25th. On the news of the positive standoff, RBS, saw their shares fall 0.64 pence to 34.68 pence

Northern Rock and the Post Office have announced cuts to their mortgage rates believed to be in response to Skipton Building Society’s shock increase to its standard variable rate, which rose from 3.5 per cent to 4.95 per cent. A spokesman for the Skipton quoted "exceptional circumstances" had forced them to renege on promises that their lending rate would not rise more than three per cent above the Bank of England base rate.

The first two British banks to come under state control are looking increasingly likely to be merged, in a controversial change of direction by the EU in Brussels. The EU is apparently on the verge of approving the state aid package that Bradford & Bingley received from British taxpayers, opening the door for their buy-to-let mortgage book to be merged with Northern Rock’s so-called ‘toxic bank’. The merger, which UK government officials have been working on for several months, comes in the wake of public pressure to remove some of Northern Rock’s taxpayer-funded benefits, including the customer savings guarantees held in the "good of non toxic "part of the bank.

British Airways has issued some fairly heavy threats to their cabin crew who are threatening strike action. If they do so they stand to lose some of the traditional perks of the job, and on a permanent basis. These include the ability to book standby flights for themselves and nominated friends or family at a 90% discount , as well as the standard of hotels that crew are put up in overnight while they are away would be substantially reduced.

The airline says a strike would have serious financial implications leaving them with no option but to cut staff benefits.

British Telecom, in a move to woo broadband customers from rival operators, has unveiled an aggressive pricing strategy. The fixed-line telephone company is to offer consumers high-speed broadband based on optical fibre for £20 pounds, eight pounds cheaper than a comparable service offered by Virgin Media. An executive at BT’s retail unit, announced that the company goal is to attract "customers to come back to BT for all their services." BT’s optical fibre broadband will be predominantly based in towns and cities, and is expected to be capable of servicing more than 40 percent of UK homes by mid-2012.

According to BSkyB their High Definition marketing campaign was a Christmas marketing hit will full details due to be revealed in their forthcoming half year results due to be released this week. The results are expected to show that capitalising on the stay at home ethos typical of a recession was a shrewd move, with Sky offering a free HD box for customers who signed up for their film channels. City analysts are expecting the company to produce strong results, with turnover up by an estimated £2.8 billion, and a customer base up by around 300,000 new HD subscribers.

The fast food chain McDonalds are looking to create 5,000 new jobs in the UK in 2010 after seeing an 11 percent rise in sales over 2009. McDonalds currently operate close to 1200 outlets in the UK. The new jobs would come from the opening of up to 15 new branches in 2010 and the extension of opening hours in existing outlets. The UK jobs being created would take McDonald’s workforce to 85,000 in this country. A spokesman for the company announced that McDonald’s had increased UK like-for-like sales by 30 percent over the last four years.

Triumph, the UK motorcycle maker have announced an amazing upsurge in interest in their product with new bike sales for Triumph were up 26 per cent in 2009, at 7,450. This means that the company outperformed industry leader, the Japanese Kawasaki company for the first time since the early 1980s. Triumph has now captured 13 per cent of the British market and in the past year witnessed their global market share rise from 3.3 per cent to 4.4 per cent. Turnover in 2009 increased seven per cent to £304 million.

Sterling fell slightly against the dollar and the Europe before the weekend. The pound closed at 1.6118 against the dollar, with the Euro being traded at 1.1404

Shares in the FTSE 100 recovered some of their earlier falls closing on

Friday down by 0.6% at 5,302.99, Fears that the US President’s sweeping reforms would affect UK banks were seeing to recede.

In the US stock markets tumbled for a second consecutive day, over continued concern over President Obama’s plan to revamp the US banking industry.

The Dow Jones plunged by 216 points, to close at 10172.98, while the NASDAQ fell by 60 points, to finish at 2205.29.

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Tags: Alistair Darling, Bank of England, Barack Obama, Bradford & Bingley, British airways, British Telecom, BskyB, Dow Jones, FTSE, Gordon Brown, HBos, Innovation Investment Fund, JPMorgan, Kawasaki, Lord Myners, McDonalds, NASDAQ, Northern Rock, Post Office, RBS Sempra Commodities, Royal Bank of Scotland, Skipton Building Society, UK Economy, UK government, Virgin Media

Iceland’s president has refused to sign a controversial bill to repay £3.1 billion previously promised to the UK and the Netherlands. The news came after Iceland’s President Olafur Ragnar Grimsson announced a change of a heart following public protest and instead the country will now hold a referendum on the bill, which was designed to compensate governments forced to bail out their savers with Icesave accounts following Iceland’s banking crisis.

Legislation to repay the money was approved by Iceland’s parliament in December, but the approval of the president is also required before it can be passed into law.

Things must be getting strained again between Alistair Darling and Gordon Brown who were reported to have contradicted each other once again and in public. The contradiction was on that hot potato over how to handle public spending. Darling was reported to have argued that revenue from stronger than expected growth should be used to cut borrowing in a bid to allay the concerns of bond market investors, while Brown was said to be of the view that strong recovery may help to sustain spending, warding off fears of significant cuts to public services. Government officials hastened to deny a split between Brown and the chancellor. But they would, wouldn’t they.

Kraft have announced that they expect to increase the cash proportion in their offer to Cadbury in an attempt to make their bid more attractive to shareholders. The cash will come from the sale of its North American pizza business, strangely enough bought by erstwhile takeover bid competitors, Nestle who paid over £2 billion for a slice (of the company) .Meanwhile and contrary to recent speculation, Nestle have announced that they do not intend to table a takeover bid for Cadbury,. The company having been linked to a possible offer following Kraft Food’s hostile bid for Cadbury that was announced in December.

As part of their new strategic review, the English Premier League is looking to increase its international reach by inviting companies to become an official technology partner, aimed at tapping global opportunities more successfully. With current sponsorship making up just five per cent of the Premier League’s one billion pounds annual turnover, from sponsors that including Nike, Lucozade, Wrigley, and EA Sports, Topps Merlin and Sporting iD and title sponsors Barclays Bank.

One of the companies brave enough to raise their prices to match the return of VAT to its previous 17.5 per cent rate are Apple, who have increased the prices of many products on the Apple Store, including Macs. On 1 Jan 2010 the VAT level in the UK returned to 17.5 per cent, up from the reduced rate of 15 per cent (VAT is the UK term for sales tax). The UK government temporarily reduced the rate of VAT during 2009 to add some life into the UK economy, and it was thought that many of the UK’s leading retailers would continue to subsidise the increase, at least for January.

However Apple’s move seems likely to prompt some discussion surrounding the pricing of Apple products in general, which has steadily increased in the UK over the last two years.

Encouraging evidence of better retail conditions with record sales over the Christmas and New Year period were provided by the John Lewis employee-owned department store and chain. The company reported sales strongly ahead of the last two years that in the five weeks to January 2. John Lewis’s performance offers hope to retailers as they begin to release figures on their trading in the crucial festive period on Tuesday. John Lewis said total sales rose 15.8 per cent in the five weeks to January 2, compared with the same period a year earlier, while sales based on stores open at least a year were up 12.7 per cent.

On the stock exchange, shares in partly-nationalised Royal Bank of Scotland rose 9.9%, helped by analyst’s predictions that the bank is liable to "outperform" in 2010.

The FTSE 100 brought in the New Year and new decade by closing above 5,500 for the first time since the start of September 2008 – before the Lehman Brothers collapse, coming after a 22% rise over the whole of 2009 and a 53% rally from the low last March. The FTSE 100 closed on Tuesday on 5522.5.

Britain’s currency weakened possibly due to U.K. Business Secretary Peter Mandelson hints that the pound’s devaluation aided the economy in the recession.

• Dollar 1,5967
• Euro 1.1126

The chairman of the US Federal Reserve Ben Bernanke has blamed poor financial regulation for the financial crisis and defended the record of America’s central bank, whilst calling for urgent improvements to financial oversight to prevent a repeat of an economic storm that he said could ultimately prove to be "the worst in history".

In a recent speech, Mr Bernanke argued that low interest rates in the first five years of the new millennium were "appropriate" for the time and had not caused the "bubble" in US house prices. His reaction came after the Fed has recently come under criticism by certain US economists who argue that it kept rates too low for too long, encouraging an artificial property boom. The subsequent crash led to a surge in repossessions, leaving lenders with huge losses, causing a financial contagion that spread around the world.

On Wall Street, the Dow Jones Industrial Average closed on Tuesday up 144 points to 10,572, while the NASDAQ also rose 39 points to 2,308.71.

According to expert analysts, the US public pension system faces a higher-than-expected shortfall of more than $2,000 billion that will increase pressure on many states’ strained finances and crimp economic growth. Recent estimates of aggregate funding requirement of the US pension system have ranged between $400 billion and $500 billion, however recent speculation has concluded that public funds would need to find more than $2,000 billion to meet future pension obligation

Commodities prices are set to rise further this year as the global economy expands faster, according to an International Monetary Fund forecast, following the biggest annual price increase for raw materials in nearly four decades in 2009

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Tags: Alistair Darling, Apple, Apple Store, Bank, Banking, Barclays Bank, British Economy, British Pound, Cadbury, Credit Crunch, Currency, Dow Jones, EA Sports, Economy, English Premier League, Financial News, FTSE, Gordon Brown, House Prices, International Monetary Fund, John Lewis, Kraft, Lehman Brothers, Lucozade, Money, Money Markets, NASDAQ, Nestle, Nike, North American pizza, Olafur Ragnar Grimsson, Peter Mandelson, Recession, Retail, Royal Bank of Scotland, Sporting iD, Stock Markets, Stocks and shares, Topps Merlin, UK Banks, UK Economy, UK government, UK Recession, US Federal Reserve, Wall Street, Wrigley

Heathrow baggage handlers and Eurostar train drivers have said they are ready to join British Airways cabin crew and strike in the lead-up to Christmas. Following a breakdown in talks with managers over pay, British Eurostar drivers announced they will go on strike on Friday and Saturday. Unite, the union representing BA cabin crew, said the 500 baggage handlers and check-in staff it covered at Heathrow and Aberdeen airports also planned to strike over pay from Tuesday 24th December, the same day that BA cabin crew are set to commence their 12-day strike action.

Meanwhile an operation is under way to recover the UK thousands of people left stranded after Flyglobespan, Scotland’s biggest airline, collapsed. After their parent company, Globespan, entered administration on Wednesday. Around 4,500 passengers were stranded by the airline’s collapse, mostly in Spain, Portugal, Cyprus and Egypt, with the Civil Aviation Authority expected to be repatriating about 1,100 of those stuck overseas.

A recent poll has shown that UK business leaders have become more gloomy about the recovery of the British economy over the last month, with only 36 percent of business leaders sensing that a financial recovery is in the offing, down from 49 percent in November.

The survey, taken in the five days after Finance Minister Alistair Darling’s pre-budget report last week, found the number of business leaders who had confidence in Darling had fallen five percentage points to 20 percent following the statement. Almost three-quarters of businessmen reckoned that Darling was "out of his depth" while less than a quarter believed he "understands business".

Public sector net borrowing in the UKs hit a record high of £20.3 billion in November, according to figures issued by the Office for National Statistics.

The public sector net debt as a percentage of overall UK economic output now stands at 60.2%, a considerably rise since the start of the financial crisis.

UK insurance companies also have little positive to report about, with worldwide premium income plunging 18% in 2008 to £215.3 billion, with 2009 also looking to be a fairly tough year. The financial crisis has had a definite effect on insurance rates, with premium income it falling almost 25% to £168.1 billion in 2008. The first nine months of this year, however, do show some promise. Long-term premium income was off 35% relative to the same period in 2008, but general insurance premiums gained 8% to £47.2 billion, mostly due to overseas business.

Virgin Group controlled by billionaire entrepreneur Richard Branson have announced the launch of a new company, designed to come to the rescue of consumers experiencing technical problems with their such as PCs as well as wireless networks not connecting. The opening of this new company, to be known as Virgin Digital Help, is Virgin’s up’s first new UK company in three years offers free online self-help guides such as "speed up" to make computers go faster, or "get connected" to fix links to printers or wireless networks .

Shareholders in Punch Taverns revolted on Wednesday over the pay for executives at Britain’s largest pub owner, voting against its remuneration policies, in one of the biggest shareholder protests over pay this year. 55 per cent of votes on the remuneration policies of the heavily indebted company were cast against them as shareholders objected to the scale of the awards given to executives in a year in which the group suspended dividend payments after its annual pre-tax loss quintupled to £406 million. While the vote on pay was advisory only, a spokesman for Punch announced that they are to conduct “a full review of the remuneration policy and its future implementation” in the wake of the result. The ABI, which represents shareholders that account for about 20 per cent of investments in the UK stock market, signalled its objection to the pay policies by issuing a “red top” alert to its members. Under a long-term incentive plan, Giles Thorley, chief executive, and three other executives were awarded shares worth 200 per cent of their base salary that would vest if total shareholder returns were in the top quartile of the company’s peers over three years. Mr Thorley earned a base salary of £525,000 during the 2008 financial year to August 23. The vote at the annual meeting came after the company warned slowing food sales and patchy trading at its leased estate were depressing profits. Punch shares fell 4.7 per cent to 77.3 pence.

Carphone Warehouse, broadband group TalkTalk and Channel 4 have opted into a joint venture between the BBC, ITV RTL’s AUDK.LU Five and BT to install internet video on television sets. The backing from all public service broadcasters and the UK’s two biggest broadband providers for the project to be known as Project Canvas will help it "secure the future of free-to-air broadcasting" in the Internet age. The venture partners will share an estimated £115 million in yearly costs over the next four years.

Rentokil Initial was among the talking points in the London market on Wednesday, with the stock registering its biggest gain since July.

The pest control-to-package delivery group bounced 4.8 per cent to 105 pence ahead of its relegation from the FTSE 100 next week, with Rentokil management already hinting of a further £150 million of cost savings expected for next year.

Shares in the U.K.’s second-largest drug-maker AstraZeneca Plc climbed 0.5 percent to 2,843 pence after they won a U.S. panel’s backing to expand use of the cholesterol pill Crestor in the prevention of heart disease, a move that, if allowed, could add up to £300 million in annual sales.

Imperial Tobacco Group Plc Europe’s second- largest publicly traded cigarette company, lost 1 percent to 1,894 pence on threat that Japan, the fifth-largest tobacco market, are about to announce further tax increases on cigarettes . U.K. furnishings and clothes chain known for floral pattern Laura Ashley Holdings Plc added 3.8 percent to 13.75 pence, after analysts predicted a better 2010 for the company.

Barclays, Britain’s second-largest bank, slid 6.2 percent to 273.85 pence. HSBC Holdings Plc, Europe biggest, fell 3.5 percent to 684.1 pence.

Lloyds, the 43 percent government-owned bank, lost 8.1 percent to 51.1 pence, the steepest slump since May. Royal Bank of Scotland Group Plc fell 3.5 percent to 30.74 pence.

Sterling lost ground against the dollar and improved against the Euro in sluggish mid week trading.

• Pound/US dollar 1.6167
• Pound/Euro 1.1273

The benchmark FTSE 100 Index slid 102.65, or 1.9 percent, to 5,217.61. The index has rebounded 49 percent since March and is heading for its biggest annual gain since 1997 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy

As had been widely expected, the Federal Reserve have announced that US interest rates will be kept on hold at between 0% and 0.25%, despite continuing signs that the US economy is recovering. The central bank reiterated that rates would stay at the low level for an "extended period".

The Fed’s hand was strengthened by official data showing earlier on Wednesday that US inflation remains under control, rising by just 0.4% in November, as had been predicted.

With inflation continuing to be low, the Fed is not under pressure to increase interest rates as a means to tackle any inflationary pressure.

On close of trading, the Dow Jones Industrial Average had dropped more than 130 points to 10, 33.61 while the NASDAQ also dropped to 2,183.55.

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Tags: Alistair Darling, AstraZeneca Plc, Bank, Bank of England, Banking, Barclays, British airways, British Economy, British Pound, cabin crew, Carphone Warehouse, Christmas, Civil Aviation Authority, Credit Crunch, Crestor, Currency, Dow Jones, Economics, Economy, Eurostar, Financial News, Flyglobespan, FTSE, Globespan, Heathrow, HSBC Holdings Plc, Imperial Tobacco Group Plc, Interest Rates, Laura Ashley Holdings Plc, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, Office for National Statistics, Punch Taverns, Recession, Rentokil Initial, Richard Branson, Royal Bank of Scotland, Royal Bank of Scotland Group Plc, Stock Markets, Stocks and shares, TalkTalk, UK Banks, UK Economy, UK government, UK insurance companies, UK Recession, Virgin Digital Help, Virgin Group

Alistair Darling increased the levels of his undoubted popularity with the UK public by announcing some interesting cuts and about turns in his pre-budget cuts. The first was that VAT cut to 15% as recently as March in the Budget, is to be reversed as of 1 January 2010. Income tax bands are to be tampered with, meaning that people who earn £43,000 or more will feel the pain that little bit earlier. On the plus side national insurance bands are to be reduced downwards by a further 0.5% from April 2011, meaning that those earning less than £20,000 will no longer need to pay any contributions. State pensions and child benefits are also set to rise in April of next year.

Meanwhile it has been reported that U.K. consumer confidence stayed close to the highest level in the past eighteen months in November as shoppers have become more hopeful for the economy’s prospects in the coming year. 2010. The proportion of shoppers expecting the economy to worsen in the next six months fell to its lowest level since the survey began in 2004.

As expected, the Bank of England has held UK interest rates at the record low of 0.5%, whilst announcing that there are to be no changes to its programme of pumping newly-created money into the economy – so-called quantitative easing (QE). The Bank cut interest rates to 0.5% in March of this year in an attempt to boost the recession-hit economy while in November; they announced that another £25 billion would be injected into it, taking the total planned under QE to £200 billion. The bank is expected to wait until the current QE programme runs out in January before considering whether it should be expanded. As Chancellor of the Exchequer Alistair Darling announced earlier this week that he would rather suffer criticism for removing economic support too late than too early, Bank of England policy makers are waiting for the final quarter results to see if Britain has finally escaped the recession, and if the £200 billion spent to aid growth has finally brought some results..

Meanwhile in his pre-budget cuts speech, Darling appeared to back away from the bank bonuses issue, by announcing that there will be no windfall tax on banks, but they will pay a one-off levy of 50% on any bonus above £25,000

The number of loans approved for house purchase rose to 55,300 in October, up 9 percent from September and 43 percent higher on a year ago, the Council of Mortgage Lenders said on Thursday. According to an industry body, the amount of buyers has risen from its lowest point in January 2009 when only 23,000 loans were advanced. The number of loans for remortgaging remained weak, however, unchanged from September’s level of 33,000, one of the lowest levels since the series began in 2002.

Nokia have announced that they are to close their flagship store on London’s Regent Street, as a result of slow sales and poor customer traffic. The remainder of the company’s UK stores are to remain open. Nokia were reported to have spent £4 million creating the Regent Street store that was launched in February 2008, and will close in the first quarter of 2010, Seven other of Nokia’s UK stores, including its Heathrow Terminal 5 outpost, are set to receive a revamp.

Shares in Barclays Plc fell 3.2 percent, to 287.5 pence after allegations that they were withholding a “secret” $5 billion windfall profit from its purchase of Lehman Brothers Holdings Inc.’s North American brokerage, despite the fact that the gain was publicly disclosed before the sale closed 15 months ago.

Sterling continued to lose ground against the dollar on Thursday whilst rising slightly against the Euro, as implications of the UK government’s pre-Budget report weighed on the currency,

• Pound/US dollar 1.6278
• Pound/Euro 1.1058

After the UK finance minister forecast that the UK economy will shrink by 4.75 percent this year, rather than the earlier prediction of a 3.25 percent to 3.75 percent decline, the FTSE 100 fell by 0.37 percent to 5,203.89, while the FTSE 250 dropped by 1.24 percent to 8,919.49.

The US trade deficit unexpectedly narrowed in October as exports rose to their highest level in almost a year, official figures have shown.

The deficit fell to £20.2 billion ($32.9 billion), 7.6% lower than September’s downwardly revised $35.7 billion figure.

Helped by the weaker value of the dollar, US exports increased by 2.6% to $136.8 billion, led by civilian aircraft, cars and computer chips.

Imports rose 0.4% to $169.8 billion. Analysts had predicted the deficit to expand to $36.8 billion.

The value of US exports was the highest since November 2008, the figures from the Commerce Department showed.

The trade deficit is now expected to widen again in 2010 as the US economy continues to recover and consumers buy more imported goods.

On close of trading, the Dow Jones Industrial Average was up 120 points to 10,405.83 and the NASDAQ also rose 21 points to close on 2,190.86.

According to the latest figures from the Australian Bureau of Statistics, Australia’s unemployment rate fell in November to 5.7% from 5.8% in November, The figures came as a surprise to many analysts who had expected an increase to 5.9%. Australia is one of the few developed economies not to have fallen into recession like its counterparts throughout the world. The Australian economy has benefited from an increase in commodity prices, while exports have received a boost due to demand from China for its iron ore and other raw materials.

Official figures have revealed that orders for Japanese machinery orders fell by 4.5% in October compared with the previous month, with analysts expecting a fall of just 4.3%. The figures come just a day after the Cabinet Office revealed that the Japanese economy grew at a far slower rate in the third quarter than previous estimates showed.

Meanwhile, the price of crude oil dropped on new data from the US Energy Information Administration showing that gasoline stockpiles grew last week while demand declined. The price of oil dipped below $70 a barrel, falling to a two-month low, amid continuing concerns over demand.

US crude for January delivery fell 84 cents to $69.81 a barrel, before settling at $70.13 as it lost ground for the seventh consecutive day.

London Brent crude fell 81 cents to $71.58 a barrel.

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