Sweeping spending cuts and tax increases will be required across the industrialized world over the next decade to bring public finances under control following the economic crisis, the International Monetary Fund warned on Tuesday. The IMF projected that on current trends, even assuming some discretionary fiscal tightening next year, government debt in the advanced G20 economies would reach 118 per cent of gross domestic product in 2014.

The Fund warned against assuming that current low borrowing rates for these nations in the bond market would prevail forever, releasing research suggesting that the projected increase in government debt would result in a roughly 2 percentage point increase in government bond yields.

HSBC is to shed another 4 per cent of its UK workforce as pressure mounts across the banking industry to cut costs. The global bank said it would cut about 1,700 jobs in back-office functions, affecting mainly collections and credit card operations, in the next 12 to 18 months. The jobs would mostly be lost from regional centres in southern England. It also aims to add 400 to 500 jobs in Birmingham in that time. HSBC had previously announced the loss of 1,200 jobs in March and 500 in December last year. Of these, the bank said it had redeployed some 500 staff and would hope to redeploy a similar proportion from the latest round of job cuts.

Legal & General (LGIM) sought to defend itself against the idea of a break-up of its businesses as it reported its lowest level of quarterly sales figures for at least seven quarters on Tuesday.

The life and pensions said that keeping its annuity, protection and asset management businesses under one roof brought valuable “synergies” across all three.

Tim Breedon, chief executive, said that about 30 per cent of its new business either came from cross-selling or was business the company would not have won if it did not have all three elements.

Mr Breedon highlighted stronger-than-expected cash flow at the group and the performance of LGIM, the group’s asset management arm, which attracted net inflows of £12.2 bn ($20bn) over the first nine months, outstripping the £11.1 bn seen at M&G, Prudential’s asset management arm.

Marks and Spencer has confirmed it will start selling branded goods at its stores across the UK.

It will mean 400 household brands, such as Kellogg’s and Coca-Cola, will be sold alongside M&S’ own products in areas such laundry, beer and pet food.

The decision comes after successful trials in stores in the north-east and south-east of England.

The announcement came as M&S reported profits of £306.7 million for the six months to September.

The figure was little-changed on the profit of £307.8 million made in the same period last year.

Associated British Foods (ABF LN): The maker of Silver Spoon sugar reported a 12 percent rise in full-year group revenue. The company also said it’s cautious about the outlook for the U.K. consumer. The shares gained 5.5 pence, or 0.7 percent, to 833.

Aviva Plc (AV/ LN): The U.K. insurer raised 1.02 billion euros ($1.5 billion) selling stock in its Dutch insurance unit Delta Lloyd NV, pricing the shares near the low end of its forecast range after insurance companies slumped.

The U.K.’s biggest insurer by market value sold 63.5 million Delta Lloyd shares at 16 euros each. Aviva had sought 15.50 euros to 19 euros a share. Delta Lloyd will begin trading today in Amsterdam.

The shares rose 5.5 pence, or 1.4 percent, to 389.1.

British Airways Plc (BAY LN): Europe’s third-biggest carrier may face its first cabin-crew strike since 1997 before the end of the year as the union representing flight attendants at Europe’s third-largest airline prepares to vote on a walkout.

Members of the Unite union will meet on Dec. 14, by which time union leaders aim to have the results of a strike vote. The stock dropped 1.9 pence, or 1 percent to 179.9.

GlaxoSmithKline Plc (GSK LN): The U.K.’s largest drugmaker received a letter from Connecticut Attorney General Richard Blumenthal saying he was investigating allegations of price gouging, according to a faxed statement. The shares fell 3 pence, or 0.2 percent, to 1,247.

Cadbury Plc (CBRY LN): The U.K. confectioner is targeting an “unrealistic” price as a starting point for talks about a merger with Kraft Foods Inc., the Sunday Telegraph said, citing people it didn’t name. Kraft will probably make a hostile takeover bid if Cadbury’s management doesn’t support a tie-up. Reports have it that Kraft is preparing another bid for Cadbury which will be put to investors within the next 10 days. The newspaper did not say where it obtained the information. The stock fell 2.5 pence, or 0.3 percent, to 770.5.

DUTCH parcel firm TNT, which is trying to cash in on the disruption caused by the UK’s postal strikes, yesterday posted better-than-expected quarterly results due to cost-cutting and highlighted signs of revival in its business parcels arm. TNT, which has lobbied the government to allow it to launch a door-to-door postal service to challenge the strike-hit Royal Mail, said third quarter profits dipped 14.4 per cent to €179m (£162m), although margins recovered to nearly match last year’s levels. The group uses the Royal Mail for the so-called “final mile” of its British postal network, but has been trialling its own door-to-door letter deliveries in several areas including Merseyside, using orange-clad postmen. TNT said UK business-to-business parcel volumes had increased about 10 per cent in the few couple weeks since the strikes by the Communication Workers Union kicked in, but a spokesman said the rise had come too late to affect the third quarter numbers.

General Motors (GM) has cancelled plans to sell a majority stake in its European car business Opel, including its UK brand Vauxhall.

The US giant said in a statement that its board had made the decision because of "an improving business environment for GM over the past few months".

GM had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna.

It added that it would now be seeking aid for Opel from the German government and other European states. GM added that it had also come to its decision because of the importance of Opel and Vauxhall to its global strategy. General Motors (GM) has confirmed that it plans to cut 10,000 jobs across its European car unit Opel, which includes the Vauxhall brand in the UK. The announcement comes a day after GM said it was cancelling its deal to sell Opel to Canadian car parts firm Magna. Unions in Germany said workers would begin walk-outs from Thursday in protest at GM’s decision.

The German government, which had backed the sale of Opel, demanded GM repayment of a 1.5bn euro ($2.2bn; £1.3bn) loan.

The pound fell for a second day against the dollar and snapped a five-day gain versus the euro on speculation that forced asset sales by banks may weaken the country’s financial institutions.

Billionaire Warren Buffett’s investment firm is to take control of the second-biggest US railroad, in what is said to be his biggest deal yet.

Berkshire Hathaway agreed to buy the 77.4% of Burlington Northern Santa Fe (BNSF) it does not already own for about $26bn (£16bn) in cash and stock.

BNSF is the biggest US hauler of products such as corn and coal.

Mr Buffett said that the deal was "an all-in wager on the economic future of the United States". Including past investment and the assumption of $10bn of BNSF debt, the deal is valued at $44bn. Warren Buffett on Tuesday struck the biggest deal of his life with the $26.6bn purchase of Burlington Northern Santa Fe, one of the largest US railroad operators, in what the billionaire investor called an “all-in wager” on America’s economic future. The cash-and-shares deal by Mr Buffett’s Berkshire Hathaway, which already has a 22.6 per cent stake in BNSF, caps a long search by the legendary investor for an “elephant” deal to deploy his vast cash pile. The takeover deepens Mr Buffett’s exposure to the US-focused old-economy sectors that have long been the backbone of his empire alongside financial services, and underlines his confidence in a rebound in domestic growth

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Tags: Associated British Foods, Attorney General, Aviva PLC, Bank, Bank of England, Berkshire Hathaway, BNSF, British Airways Plc, British Economy, Burlington Northern Santa Fe, Cadbury Plc, Coca-Cola, Credit Crunch, Delta Lloyd, Economics, Economy, Employment, Financial News, General Motors, GlaxoSmithKline Plc, GM, HSBC, International Monetary Fund, Kellogg's, Kraft Foods Inc, Legal & General, LGIM, M&G, M&S, Marks and Spencer, Money, Opel, Prudential, Recession, Retail, Richard Blumenthal, Royal Mail, Silver Spoon, Sunday Telegraph, Tim Breedon, TNT, UK Banks, UK Economy, UK government, UK Recession, Unite, Vauxhall, Warren Buffett

The Bank of England has announced that they are to inject a further £25 billion into the UK economy. The move is seen as an almost desperate bid to drag the economy reluctantly out its longest recession on record, after the announcement last week that the UK economy had shrank 0.4% in the third quarter. The BOE’s gesture extends the quantitative easing programme to a total of £200 billion, meaning 14% of UK’s gross domestic product (GDP). The £25 billion will be released over the next three months.

According to that perennial bearer of bad news, the International Monetary Fund (IMF), sweeping spending cuts and tax increases will be required across the industrialised world over the next decade in order to bring public finances under control following the economic crisis, The IMF projected that on current trends, even assuming some discretionary fiscal tightening next year, government debt in the advanced G20 economies would reach 118 per cent of gross domestic product in 2014.

As pressure mounts across the banking industry to cut costs, HSBC have announced that is to pay off another four per cent of their UK workforce The job cuts would affect around 1,700 HSBC staff involved in back-office functions, and would come into effect over the next 12 to 18 months, and would mostly be lost from regional centres in southern England

Marks and Spencer have stepped into new territory with the announcement that they will begin to market branded goods at their stores across the UK.

This will mean the unfamiliar site of such household brands as Kellogg’s and Coca-Cola, appearing on the M&S’ shelves alongside their own label products. M&S have reported profits of £306.7 million for the six months to September, down just a smidgeon (£1.1 million) from the same period in 2008.

Makers of Silver Spoon sugar, Associated British Foods have reported a 12 percent rise in full-year group revenue. Their shares gained 5.5 pence to close on 833.

Meanwhile, Europe’s third-biggest airline, British Airways Plc is staring in the face of a cabin-crew strike, which could happen before the end of the year. The Unite union representing flight attendants are preparing to vote on a walkout on December 14th. On that less than encouraging news, stock in BA dropped 1 percent to 179.9 pence.

U.K. confectionary giant Cadbury Plc is said to be setting an unrealistically high price as their starting point for merger talks with Kraft Foods Inc. Reports have it that Kraft is preparing another bid for Cadbury which will be put to investors within the next 10 days, and Kraft will probably make a hostile takeover bid if Cadbury’s management doesn’t support a tie-up The uncertainty in the air caused Cadbury’s stock to fall 0.3 percent to 770.5 pence.

Dutch parcel firm TNT, busily trying to cash in on the disruption caused by the UK’s postal strikes have lobbied the government to allow it to launch a door-to-door postal service to challenge the strike-hit Royal Mail. The group has been testing out its own door-to-door letter deliveries in several UK areas. A spokesman for the company said that UK business-to-business parcel volumes had increased about 10 per cent in the last couple weeks since the strikes began, but added that the rise had come too late to affect the third quarter numbers, which, in any event were higher than expected.

General Motors (GM) have sensationally cancelled their plans to sell a majority stake in its European car business Opel, including its UK brand Vauxhall to Canadian car parts firm Magna.

The US giant announced that their board had made the decision because of "an improving business environment for GM over the past few months", as well as marking the importance of Opel and Vauxhall to their overall global strategy. Unions in Germany said workers would begin walk-outs from Thursday in protest at GM’s decision and the German government, who had backed the sale of Opel, demanded that GM repayment of a 1.5 billion Euro, (£1.3 billion) loan. British unions were reported to be delighted with the news of GM’s rapid reversal, in the hope that the move will result in increased protection of Vauxhall jobs in the UK

The pound recovered from early losses against the dollar on Thursday after the Bank of England extended its asset purchase plan, but by less than forecast.

• Pound/US dollar 1.6606
• Pound/Euro 1.1162
• Pound/Japanese Yen 150.6643
• Pound/Swiss Franc 1.6881

The London equity market took a decided upturn as news of an extension to the Bank of England’s economic stimulus measures broke. At close of trading, the FTSE 100 was up to 5,125.64.

The FTSE 250 limped back above the 9,000 point mark to close on 9,020.40

US shares have risen strongly over the last 24 hours on the news that US business productivity has risen at its highest rate for six years. Official figures showed that productivity, as measured by output per hour of work, rose at an annual rate of 9.5% between July and September.

The data suggests that the increase in productivity may lead to an increase in demand for staff.

The US Dow Jones index continued to make serious bounds forward closing on Thursday on me recoveries from the last two days trading; up 61 points to 10005.96. The NASDAQ also climbed, reaching 2105.32.

Billionaire Warren Buffett’s investment firm, in what is said to be their largest deal in their history, are to take control of the US’s second-biggest US railroad.

Berkshire Hathaway have agreed to buy the remaining 77.4% of Burlington Northern Santa Fe (BNSF) that it does not already own for about $26 billion (£16 billion), with the deal to be financed with cash and stock. .

Mr. Buffett proudly stated that the deal was "an all-in wager on the economic future of the United States and underlines his confidence in a coming rebound in domestic growth.

Gold held its price at almost $1,100 an ounce after hitting a record high in the previous session while oil prices dipped and base metals edged lower

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Tags: Associated British Foods, Bank, Bank of England, Banking, Berkshire Hathaway, BOE, British Airways Plc, British Economy, British Pound, Burlington Northern Santa Fe, Cadbury Plc, Coca-Cola, Currency, Dow Jones, Economy, Financial News, FTSE, General Motors, GM, HSBC, IMF, International Monetary Fund, Kellogg's, Kraft, Magna, Marks and Spencer, Money, Money Markets, NASDAQ, Opel, Recession, Retail, Royal Mail, Silver Spoon, Stock Markets, Stocks and shares, TNT, UK Banks, UK Economy, UK government, UK Recession, Vauxhall, Warren Buffett

Royal Bank of Scotland, 70 per cent taxpayer owned, has begun to act in that manner by announcing that they will be halving some of their draconian fees for customers who find themselves overdrawn.

From the beginning of October, fees for paying an item will be cut in half to £15 a day while see the fee for returning a cheque, direct debit or standing order cut to £5 from £38.

Brian Hartzer, new chief executive of RBS’s retail bank, is believed to be behind this refreshing change in attitude from the bank.

Signs of rampant chauvinism in the UK financial sector abound with reports that female employees are not getting their fair share on pay and bonus packages, with a considerable number receiving around 80 percent less in performance-related pay than their male counterparts, according to a recent report from the Equality and Human Rights Commission.

According to the inquiry female employees in the financial sector earned an average of £2,875 in performance-related pay per year, compared to an average of £14,554 for men, making a gender pay gap of 80 percent,.

The finance sector has long been known as showing the highest overall gender pay gaps in the UK economy, with women working full-time jobs earning 55 percent less than men, compared to a pay gap of 28 percent for the general economy.

Results from a recent survey shows that the British consumer is still feeling the pressure of the recession, the survey suggest that in spite of official data to the contrary, UK households remain cautious about spending.

The survey held on behalf of the British Retail Consortium has shown that strong demand for consumer goods that was seen earlier in the summer flagged during August, with only food sales increasing

Overall, total sales rose 2.2 per cent in August from July, down from rises of 3.6 and 3.2 per cent in the two previous months.

T-Mobile and Orange plan to merge their UK businesses, creating a mobile phone giant with a client base of 28.4 million customers.

If completed, a deal between Deutsche Telekom’s T-Mobile and Orange owner France Telecom would see a firm with sales of £8.2 billion. (9.4 billion Euro)

The new company will be the UK’s largest provider of mobile phone services, with about 37% of the UK market.

Spokespeople for both Orange and T-Mobile said that the deal would "bring substantial benefits to UK customers", and promised expanded network coverage, better network quality and improved customer services.

However, it is likely that competition authorities in the UK and EU will probe the deal which is due to be signed in November.

Recession-hit customers flocking to discount clothing chain Primark helped its parent Associated British Foods lift its profit forecasts on Monday.

ABF said it expected Primark to achieve an annual like-for-like sales rise of seven percent in the second half of Primark’s financial year to September 12.

Primark’s momentum is in stark contrast to retailers in the middle price range market, who have reported declines in sales for the first half of this year.

Primark’s sales had been boosted not only by consumers being more price conscious during the recession, but also by good weather and a more fundamental shift shopping at discount retailers.

Shares in Yell, the directories group struggling under a £3.8 billion debt burden, continued on its amazing recovery on Tuesday shares in the company rose a further 21.5 per cent to 65 pence, making their gains in the past month 113 per cent.

There was a little less excitement around the FTSE 100 index as the news from Cadbury began to calm down. The index rose by 14.16 points to close on 4947.34. Meanwhile the FTSE 250 continued to climb on Tuesday, up 98.87 points to close on 9,035.33.

The pound recovered against the dollar, yet continued to fall against the Euro.

• Pound/US dollar 1.6494
• Pound/Euro 1.1382
• Pound/Japanese Yen 152.2926
• Pound/Swiss Franc 1.727

Figures released by the US Federal Reserve have shown that showed consumer debt has been reduced by a record amount in July. Reasons given ranged from rising job losses and uncertainty about the stability of the economic recovery.

Consumer credit fell by $21.6 billion (£13.1 billion) from the previous month June, considerably more than analysts expected. Debt reduction in June was also considerable, $15.5 billion from $10.3 billion in May.

Trading on Wall Street returned briskly to life after the Labour Day holiday. The Dow Jones Industrial Average looked refreshed up 56.07 points to 9497.34 while the NASDAQ Composite also climbed 18.99 points to close on 2037.77.

Due to concerns over its reserve status, the US dollar slumped to its lowest level in almost a year on Tuesday. The feeling amongst analysts was that the dollar was suffering from data suggesting the global economy was recovering.

The dollar index, which tracks its progress against a basket of six leading currencies, fell to a low of 77.093, its weakest level since September 2008.

For the first time in six months, the price of gold, which has risen 13.6% in value this year, has reached and passed the $1,000 an ounce marker. In early morning trading in London, spot bullion traded as high as $1,005, up one per cent on the day. It is the third time since March 2008 that gold has moved above the key level.

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Tags: Associated British Foods, Banking, Brian Hartzer, British Economy, British Pound, British Retail Consortium, Cadbury, Credit Crunch, Currency, Dow Jones, Economy, Equality and Human Rights Commission, Financial News, FTSE, Money, Money Markets, NASDAQ, Orange, Primark, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, T-Mobile, UK Economy, UK government, UK Recession, US Federal Reserve, Wall Street, Yell