As was generally expected, the Bank of England (BOE) monetary policy committee has announced that they will not be extending their quantitative easing programme, under which it has purchased just over £200 billion, mostly in government gilts. The decision came after that the UK economy posted slight growth for the fourth quarter of last year However the BOE did retain their right to resume purchases should circumstances warrant it. At the same meeting, BOE officials voted to continue holding interest rates at their current record lows.

The Institute for Fiscal Studies (IFS) has issued a statement expressing their conviction that government’s plans to cut Britain’s yawning budget deficit after that do not go far enough. Instead the IFS called for "more ambitious plans", suggesting that no less than £13 billion of extra cuts or tax hikes will need to be implemented by 2015 to stabilise the country’s finances. The IFS also called for an independent body to oversee official forecasts for the public finances

In addition, the IFS’s statement pointed out that the UK Government needed to aim for a tightening of around 5 per cent of national income, amounting to a ballpark figure of £70 billion over the five years to 2015, in order to stem up the hole in the country’s public finances. Chancellor of the Exchequer Alistair Darling, in his pre-Budget report, pointed to a fiscal tightening of £57 billion in for the same term, which according to the institute would be slightly more than four percent national income for the entire period.

The IFS report is only one of a few that Darling has had to contend with, all of them criticising his plans to address the public finances saying his plans do not go far enough and that his aim of halving the budget deficit as a proportion of national income by the 2013-14 financial year was unlikely to succeed.

According to a report from, the Nationwide Building Society, U.K. consumer confidence rose in January, on news that the economy has eventually emerged from its worst recession on record. The index of sentiment increased 3 points from the previous month to 73, almost double the level of 39 measured in the same month last year.

Meanwhile it appears that the Government faces a battle to pass its flagship digital economy bill before the forthcoming election, largely due to the surprise resignation of one of the ministers charged with pushing it through parliament. Aims to address the UK’s future infrastructure needs, with regards to the digital industry, the bill is scheduled to deal with some controversial measures, including anti-piracy policies and the introduction of a 50 pence-a-month broadband tax on every phone line

Toyota world’s biggest car maker, with around 1.6 million of its cars on UK roads, is to recall millions of cars around the world following an accelerator pedal problem affecting seven of its models. The company’s UK division will be making contact with more than 180,000 UK drivers warning them to arrange repairs after a potential problem with sticking or jamming accelerator pedals was identified, but it will be nearly a week before it can start repairs on cars with defective accelerator pedals

In the meantime, the company’s financial results for the three months to December 2009 show a huge swing back into profit. Toyota announced a net profit of 153 billion yen (£1.06 billion) making for an almost 100% reversal on the same period last year.

Toyota also confirmed that they expect to £1.23 billion in recall costs and lost sales, but said it still expected sales to increase to 7.18 million units in the current financial year.

Broadband provider Virgin Media have announced that their TV subscribers will now be able to access to a high definition (HD) channel from Eurosport, which will be the first of several new services that will be launched on its TV platform over the next few months.

Eurosport typically covers such events as the Tour de France, French Open tennis and the World Touring Car Championships. A spokesperson for Virgin Media was quoted as saying: "With HD ready TVs now common in UK homes, the combination of HD channels as well as our pioneering TV on-demand service gives Virgin TV customers a huge range of HD programming with the unique flexibility to enjoy HD content whenever they want, at the touch of a button."

On the FTSE, U.K. pub chain owner, and brewers of London Pride ale saw their shares rise 1.8 percent, to 537 pence in anticipation of the release of their latest trading statement. Also due to publish their recent earnings are the Vodafone Group Plc. the world’s largest mobile phone company. The news failed to spark too much excitement, and their stock fell 0.6 percent to 134.5 pence. In the same boat were the Yell Group Plc who publish of the U.K.’s yellow pages directory, who are about to publish a trading statement. Their shares dropped 0.5 percent to 36.8 pence.

The pound closed down at 1.5777 against the dollar, while the Euro the dollar was up a little at 1.1458

The FTSE 100 Index dropped 30.16 points to reach 5,253.15 at the close of trading on Thursday. The index has dropped 3.6 percent so far this year while still 49 percent higher than in March of 2009.

Troubled Asset Relief Program (Tarp) paymaster Kenneth Feinburg has called insurance giant AIG’s expected latest round of bonus payments "outrageous".

Feinburg’s comments came as reports say the insurance giant are to announce bonus payouts of around $100 million (£63 million) to its financial products division.

AIG was bailed out from bankruptcy thanks to $182.3 billion of US aid in 2008. Their staff has already been compelled to return $39 million of bonuses paid out last year, with Feinberg "insisting" that AIG workers repay a further $7 million of bonus payments.

Time Warner has announced a major leap in their fourth quarter profits, largely thanks to their two recent hit films Sherlock Holmes and The Hangover. This is the first profit that the company has reported since they

split from AOL in 2008. Net income for the leaner and meaner Time Warner was $627 million (£387 million), compared with a $16 billion loss for the last quarter of 2008, largely due to value write-downs for AOL as well as the company’s cable assets.

Even leaner and meaner AOL also reported fourth quarter results showing a reversal in fortunes from the year before.

Despite encouraging news from the retail sector, an unexpected rise in unemployment benefits claims for sent US stocks sharply lower in early trading on Thursday. On the news, the Dow Jones fell sharply by 192 points, to close on 10092.49, while the NASDAQ dropped 38 points, to finish on 2144.32

Oil prices CL-FT dropped by 5 per cent on Thursday’s trading , the steepest one-day drop since July, due to the fear that demand in debt-laden European economies is liable to fall as well as the rise in U.S. unemployment . U.S. crude for March delivery settled down $3.84 (U.S.) a barrel to $73.14, while London Brent fell $3.79 to $72.13 a barrel.

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Tags: Alastair Darling, AOL, Bank of England, Banking, British Economy, British Pound, Dow Jones, Economy, Eurosport, Financial News, FTSE, Institute for Fiscal Studies, London Pride, Money, Money Markets, NASDAQ, Nationwide Building Society, quantitative easing, Recession, Stock Markets, Stocks and shares, Toyota, UK Banks, UK Economy, UK government, UK Recession, Virgin Media, Vodafone

The Organisation for Economic Co-operation and Development (OECD) has predicted that the recovery and growth seen in the second half of 2009 is expected to continue in 2010. Their recent figures show that its 30 member countries, including the US and UK have more than doubled its growth projections for next year. However a spokesman from the OECD warned the developed nations not to expect a smooth ride and that "growth was being held back by still substantial headwinds" and would be restrained for some time in the near future. They went on to explain that some of the very measures that were being used to help the richer nation’s economies to recover might return like a boomerang upon them. The feeling was at the OECD was that the UK, needed to come up with a concrete plan to ease concerns about the stability of their public finances, and that the results that could be achieved through continuing the country’s quantitative easing programme remained uncertain. The UK, which now has overall debt of £825 billion, is set to borrow a record £175 billion over the next two years with further details of how and why due to be set out in Chancellor Darling’s pre-Budget report on 9 December.

US investment bank JP Morgan have announced that they are to complete their take-over of UK stockbroker Cazenove. Morgan are reported to be paying a further £1 billion ($1.67 billion) for the remaining 50% of Cazenove that is not in their hands. JP Morgan and Cazenove reached a joint venture agreement in 2004, where they merged their investment banking operations.

The news that Marks and Spencer have chosen Marc Bolland, current head of Wm Morrison, as its new chief executive, saw a dramatic and immediate shift in fortunes for both companies, at least in stock market terms. Shares in M&S rose 6 per cent to close on 390 pence while Morrisons’ fell by 5 per cent to 281 pence, making for a combined £600 million swing”.

Dutch born Bolland’s appointment puts a long awaited end to the speculation of who will replace incumbent chairman, Sir Stuart Rose, who will remain with the company as part-time chairman until mid-2011.

ITN were expected to reveal the first trading first-ever loss on Thursday as the company launched a set of austerity measures which will be required to put the company back on track. ITN, who produce news bulletins for ITV, as well as for Channel 4, is owned by four media companies, ITV Daily Mail & General Trust, United Business Media and Thomson Reuters, each of whom hold a 20 percent share, except ITV who hold 40 percent. Reasons given for the drop in sales and profit were mainly the recession, which has affected advertising revenues on all commercial broadcasters, and the closure of Setanta Sports News, the news channel operated by the Ireland-based sports channel network that went into administration this year. Revenue from Setanta made up approximately 5 per cent of ITN’s sales in 2008. ITN made a profit of £4.1 million on turnover of £105 million.

Postal and parcel delivery company UK Mail, who only this moth adopted their new trading title from Business Post, have announced a rise in their interim profits, despite of a fall in revenues caused by a recession driven fall in demand. A spokesman for the company pointed out that their parcel business, which holds around a 7 per cent share of the UK market, has witnessed an upturn is sales during the period of postal strikes, as the public began to seek alternatives to Royal Mail’s service. However the company, which also handles around 17 million items of mail a day, said the strikes affected the volumes of mail handled by the company much less significantly than they had hoped for. UK Mail, who relies on the Royal Mail for “last mile” delivery of its sorted post, pointed out that the impact the strikes had been less severe than anticipated.

Sterling lost some of its gains against the major currencies in midweek trading.

• Pound/US dollar 1.6636
• Pound/Euro 1.1163
• Pound/Japanese Yen 148.0862
• Pound/Swiss Franc 1.6881

The UK’s benchmark FTSE 100 index lost the bulk of its early gains for the week, down 78 points to 5,267.70. The FTSE 250 took its usual midweek tumble down 165 points to 9,237.

New home construction in the US have taken a surprise drop fall in October, down 10.6% to an annual rate of 529,000 homes, making for the lowest level in housing starts since April of this year, Reasons for the decrease in demand was put down to .a fall in demand for both single and family housing.

On the news, the Dow Jones average slumped 105 points to close on 10332.42. The NASDAQ also took a tumble, but for reasons of its own and finished the day on Thursday on 2156.92.

Internet giant America on Line (AOL) have announced that they are to lay off more than 2,000 of their staff , representing one third of their entire work forces when it completes its spinoff from Time Warner, with whom they have been in partnership since 2001. Representatives from Time Warner have stated that the separation will be completed by the end of 2009.

Also cutting jobs are Air France-KLM who plans to cut their work force by cut 1,700 during 2010. Their decision comes after the airline posted a worse than predicted third quarter loss of 147 million Euros (£131 million) the job losses are in addition to the 3,000 already cut in 2009.

Silver, platinum, palladium and copper have reached fresh highs for the year while gold continued to extend its record-breaking run breaching the $1,150 mark, seen as the next key milestone in the rally, to reach a record $1,152.74 an ounce, before easing back to $1,148.

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Tags: Air France-KLM, Alastair Darling, America on Line, AOL, Bolland, British Economy, British Pound, Business Post, Cazenove, copper, Credit Crunch, Currency, Daily Mail, Dow Jones, Economy, Financial News, FTSE, General Trust, Gold, ITN, JP Morgan, M&S, Marc Bolland, Marks and Spencer, Money, Money Markets, NASDAQ, OECD, Organisation for Economic Co-operation and Development, palladium, platinum, quantative easing, Recession, Retail, Royal Mail, Setanta, Silver, Stock Markets, Stocks and shares, Stuart Rose, Thomson Reuters, Time Warner, UK Banks, UK Economy, UK government, UK Mail, UK Recession, United Business Media, WM Morrison