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

The minor upturn that U.K. stocks had been experiencing over the last three days suffered a minor reverse yesterday. The fall was hastened by the announcement that the U.K.’s second later water utility company Severn Trent Plc announced that their income forecast for 2009 will be much lower than previously forecast.

Shares in Severn Trent dropped by 3.5 percent on this news, with rival utility suppliers falling under a similar spotlight. Those whose shares took a downturn included United Utilities Group Plc and Pennon Group Plc, both whose shares declined by more than 2.5 percent.

Reasons given for the downturn included falling commercial and domestic consumption.

Other stock values that fell on the U.K. stock market yesterday included:

AstraZeneca Plc who dropped by 3.9 percent (115 pence to 2,832) after the US drug maker was asked to strengthen warnings about potential side effects on its antipsychotic medicine Seroquel.

Property group Workspace who as their name suggests specialize in renting space to small businesses, announced the launch of an almost £90 million share issue on Tuesday. It was expected that the share issue would spark off a wave of cash calls as cash strapped property companies attempt to bolster their balance sheets.

Workspace announced that the five-for-one issue was fully underwritten and would allow the extension of a key August 2010 credit facility to November 2012.

Under terms of the deal, new shares will be offered to shareholders at 10 pence per share on the basis of five new ordinary shares for each existing share.

Workspace shares, which have fallen by 88 percent in the past 12 months, were trading 7.7 percent lower at 30 pence.

The star of the show yesterday on the FTSE was Barclays Bank whose shares rocketed by a massive 73 per cent yesterday. This dramatic surge in value came after the bank took the unprecedented steps in an open letter of reassuring investors and shareholders that the bunk would remain both well funded and profitable for the foreseeable future.

Chief executive John Varley and chairman Marcus Agius jointly announced that Barclays was on track to exceed 2008 market forecasts of GBP 5.3 billion and added that the bank had no need for government assistance.

Barclay’s shares immediately raised 37.5p to 88.7p by the close.

Other banks also rallied with Lloyds Banking Group up 32 per cent, (15.9p, to 65.2p), Royal Bank of Scotland rose 20 per cent, (2.4p to 14.5p) and HSBC also rose by around 20 per cent (25.5p to 541p.)

On the industrial front Charter International Plc rose by 5 percent (16.5 pence to 348.25.) Charter, Europe’s largest manufacturer of welding equipment announced that its annual profit was higher than previous estimates, largely due to cutting overheads, particularly work force at ESAB, their welding and cutting unit

The FTSE 250 index rose by 1.49% or 93.35 points to 6351.92 The FTSE 100 finished the session 3.9 per cent, or 156.5 points, higher at 4,209.

Sterling continued to hold firm against the leading currencies:

Pound/US dollar 1.4267

Pound/Euro 1.0776

Pound/Japanese Yen 127.38
Wall Street shares advanced on Mondays trading largely on the announcement that pharmaceutical giant Pfizer planned acquisition of Wyeth, for a tidy $68 billion. The fact that a deal of this size can still go through even in the worst of recessions appeared to reassure investors and set trades rolling. Overall there was a mixed bag of news from companies. Downbeat comments from Caterpillar about the health of its business and warnings of substantial job cuts from Home Depot threw a wet blanket on earlier optimism.

The Dow Jones Industrial Average rose 38.47, or 0.48 per cent, to close at 8,116.03.

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Tags: AstraZeneca Plc, Barclays Bank, British Pound, Credit, Credit Crunch, Economics, Economy, Financial News, FTSE, Recession, Severn Trent Plc, UK Recession