UK Prime Minister Gordon Brown received a polite warning yesterday from international leaders who attended a conference in central London that Britain’s tax regime and infrastructure must be improved if the country is to continue attracting investment. Brown and business secretary, Lord Mandelson stressed that the UK still remained a competitive place to do business despite the turmoil caused by the recession.

Following in the footsteps of his opposite numbers at Barclays and Royal Bank of Scotland is Eric Daniels, chief executive of the taxpayer-supported Lloyds Banking Group. Daniels has joined them in waiving his right to a bonus for 2009 of around £2.25 million. Lloyds Banking Group have announced that they would pay 2009 bonuses to those who were entitled to them, whilst emphasising that these awards would be paid in shares and subject to clawback.

Criticism has been rained on the government’s planned 50 pence monthly tax on telephone lines designed to subsidise the cost of superfast broadband has come from all places, by a Labour-dominated group of MPs.

The Commons Business Committee said the new tax, which is expected to raise £175 million per year, would hit poorer families who were less likely to pay for faster broadband. The committee went on to add that the “regressive” tax would “place a disproportionate cost on a majority who will not, or are unable to, reap the benefits of that charge”.

The UK’s largest airports operator of airports BAA, announced on Monday that their pre-tax losses for 2009 had widened, partly because of losses of £277.3 million from the sale of Gatwick Airport, London’s second-largest. The £1.5 billion sale of the airport to Global Infrastructure Partners (GIP) took place just before the end of the financial year. GIP is an infrastructure fund backed by Credit Suisse and General Electric. Competition authorities had ordered a sale to meet concerns about BAA’s market dominance.

The loss on the sale helped inflate losses at BAA owned by a consortium led by Spanish group by Spanish group Ferrovial, from £324.2 million to £821.9 million. Total revenue for the year to December at the group’s London airports, including Gatwick, rose from £2.3 billion to £2.4 billion. Figures for the group excluded BAA’s other airports around the country at Glasgow, Edinburgh, Aberdeen and Southampton

The prospect of a strike is again raising its head for British Airway’s cabin crew. Their proposed strike action looks likely to cause travel chaos for hundreds of thousands of air passengers across the UK. The vote in favour of industrial action by the 12,000 member BA cabin crew comes as a reaction to ongoing disputes over pay and working conditions.

The cabin crew’s union Unite had already decided on a walkout in December, but that BA strike threat was defused by an eleventh-hour High Court ruling.

Meanwhile a strike by around four thousand German airline Lufthansa pilots has been suspended, with union officials agreeing to resume negotiations on disputes covering job security and pay issues.

The action, scheduled to run for four days, was suspended after less than 24 hours, and caused delays and cancellations for passengers. According to the pilot’s union, there will be no further action until at least March 9, the union said.

According to a company spokesman, electronics giant Samsung will introduce its 3D-enabled TVs to the UK within the coming month. No less than twenty different 3D-capable products, with Blu-ray players and the required 3D glasses are expected to be included in the range. To keep pace with demand, TV shows with 3D content will be making their debut in or around the same time, to a partnership with DreamWorks. The rapidly approaching 2010 soccer World Cup will also be broadcast in 3D.

Sterling fell on Tuesday after Mervyn King, governor of the Bank of England, said he could not rule out the possibility of further quantitative easing. Speaking before the Treasury select committee King confessed his concern over scant evidence of a pick-up in UK trade in spite of the weakness of the pound. The pound, which had risen to a high of $1.5575 ahead of the Bank’s statement, fell more than a cent to $1.5441, whilst rising to 1.1415 against the Euro.

The FTSE 100 turned negative on Tuesday following King’s gloomy assessment of the UK economy. The index closing 0.7 per cent lower at 5,315.09.

The US Senate on Monday voted to move forward on a $15 billion jobs bill.

The 62-30 vote in favour of ended months of gridlock in Congress, and is expected to pave the way for a jobs bill to clear the Senate, just as other critical employment benefits are set to expire.

The scaled-back measure is expected to create 250,000 jobs through an array of tax credits and payroll tax exemptions to stimulate hiring. The bill frees businesses from payroll taxes on workers who are hired after more than 60 days of unemployment and gives them a tax credit of $1,000 for new hires that they keep for more than a year.

A number of retail giants reporting positive earnings surprises were not enough to offset Tuesday’s poor macro data, as investors grow concerned that last week’s rally overshot.

Consumer confidence index dropped dramatically to 46.0 in February versus 56.5 in January, the lowest level since last April.

The Dow Jones Industrial Average dropped 126.41 points to 10,276.97 while the NASDAQ Composite also crept back by a significant 34 points to close on 2,209.6.

Chinese premier Wen Jiabao has announced his concern regarding the stability of his country’s investments in US bonds.

China disposed of $34 billion (£21.5 billion) of US government bonds in December 2009, raising fears that Beijing is losing confidence in American economic policy.

US treasury figures show that China is once again no longer the largest overseas holder of US treasury bonds. Beijing ended the year sitting on $755. Billion worth of US government debt, compared to Japan’s $768 billion.

Oil prices retreated below $80 a barrel Tuesday as r sluggish US crude demand justified a 14 percent rally over the last three weeks.

Benchmark crude for April delivery was down 34 cents to $79.97 a barrel, later rising 25 cents to settle at $80.31 on Monday.

Oil had jumped from $69.59 a barrel in early February due to optimism that the global economy will rebound strongly from recession last year. Yet growing inventories of crude, gasoline and diesel fuel suggest demand in the US remains weak.

Some analysts expect crude demand in the US and Japan will gradually follow overall economic growth and lift prices, with crude expected to trade at between $85 and $95 a barrel for most of 2010.

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Tags: 3D TV, 3D-enabled TV, BAA, Bank, Bank of England, Banking, Barclays, British airways, British Economy, Commons Business Committee, Credit Suisse, Currency, Dow Jones, DreamWorks, Ferrovial, foreign investment, FTSE, Gatwick Airport, General Electric, Global Infrastructure Partners, Gordon Brown, Lloyds Banking Group, Lord Mandelson, Lufthansa, Mervyn King, Money, NASDAQ, Recession, Royal Bank of Scotland, Samsung, UK Banks, UK government, UK Recession, Wen Jiabao

Rumours have it that Bank of England governor Mervyn King may have had some serious explaining to do Chancellor Alasdair Darling as to why the consumer prices index went shooting up to 3.5% added to the worst ever January figures on record with a first time deficit for the traditionally high income month. The deficit was a staggering £4.3 billion, largely due to higher government spending and considerably reduced tax receipts. Estimates were for a £2.6 billion surplus for the month. Income tax receipts were down a massive 20% on January 2009, while corporation tax receipts were 6% lower. The only plus was the 3% upturn on VAT receipts rose by 3% due to the rate hike. However total tax receipts for January still dropped by 9%.

It would appear that Royal Bank of Scotland Chief Executive Stephen Hester has decided to decline his 2009 bonus. According to reports, the bonus was to be around £1.6 million pounds, paid out under terms already announced by the bank. The terms were that the bonus payout would not be in cash, and deferred for three years.

Pressure has increased on both Hester and Eric Daniels, CEO of the Lloyds Banking Group, after top bosses at Barclays turned down their multi-million pound bonus payouts last week, despite the bank announcing bumper profits.

The ever optimistic Gordon Brown announced that the Government was continuing in their determination to invest in measures that will promote growth and preserve jobs in the industries of the future, adding weight to his backing of Chancellor Alistair Darling over his decision to delay spending cuts until next year.

Mr Brown, speaking at the Policy Network conference told the audience: "I say to the British people, this is not the time to put the economy at risk. This is the time to make sure that growth and jobs are secured. 2010 must be the year of growth. It must not be the year when the economy dips back into recession. Instead of admitting the mistakes of private banks and institutions in causing the recession, the well-financed right-wing are not only trying to blame governments for the crisis but trying to use legitimate concerns about deficits to scare people into accepting a bleak and austere picture of the future for the majority, and then to use what’s happening as a pretext for public services to be marginalised at precisely the moment they should become smarter and more personalised. "He summed up

Also on Brown and Darling’s side is UK Business Secretary, Peter Mandelson, who has told his senior colleagues that he intends to backs plans for a state-run investment bank that would use public funds and private capital to back small business and large-scale UK infrastructure projects. The new bank would be modelled on the KfW Bank in Germany, which provides funding for banks to loan to small businesses as well as capital for major projects. Apparently Mandelson has met senior KfW executives to discuss if such a bank could be feasible in the UK. Plans for such a bank are now being surveyed by a Treasury team. Hopefully some form of announcement of the formation of such a bank will be announced in the forthcoming Budget.

Overall Lord Mandelson has been increasingly seen and heard on the public stage these days. The UK Business Secretary was reported to have severely criticised monetarist economists for their involvement in getting Britain into its present economic "pickle". Mandelson has voiced his support for economists who have warned how "reckless" early spending cuts could hamper Britain’s fragile recovery. Mandelson’s comments come as Labour seeks to take advantage of the support for delaying spending cuts until 2011.

Also on the downward slope was mortgage lending with the council of mortgage lenders revealing that gross mortgage lending in January 2010 fell to its lowest level in ten years. Reasons given were that property buyers have been deterred by the end of the stamp duty holiday. Gross mortgages totalled £9.1 billion pounds in January, down almost a third from December 2009. These figures are despite a recent increase in mortgage availability, adding concern that poor market conditions would continue or even worsen as the government withdraws monetary support for banks between 2011 and 2014.

The trend for online purchases in the UK fell to its lowest level last month, according to recent figures. Electrical goods, clothes and holidays were the online sectors that recorded the biggest drop in sales, with monthly growth for January of just five percent compared with 19 percent for the same period in 2009.

On the business front, there appears to be increased optimism regarding lending. Research has shown that the number of private companies that anticipate finance to become more readily available has increased, with around 44 percent under the impression that finance would be more accessible this year, compared with eight percent with the same view in last year’s survey. However, despite rising confidence in the availability of finance, fewer businesses said their lender was more supportive than this time last year.

It now looks like BAA will be looking to sell off Glasgow Airport after new figures revealed it is lagging behind Edinburgh in customer traffic. The Glasgow branch has found it difficult to win new airlines who want to use the airport, and have lost a lot of passenger traffic, apparently around half a million a year after the collapse of Scottish airline Flyglobespan. Meanwhile a spokesman for Scotland’s capital has reported that Edinburgh has managed to fill the gap with new routes and extra flights added by air carriers in January, including Ryanair and Jet2. Their entry on the scene has already replaced the 400,000 Flyglobespan passengers a year that were passing through the airport. .

Sterling enjoyed mix fortunes on Fridays trading. It closed up 0.012 against the dollar at $1.54692 while falling to 1.1374 against the Euro.

Overall, the FTSE 100 added a further 51 points to 5,358.175, before the close of business on Friday.

In US forex trading, the dollar hit a nine-month high against the euro of $1.3477, whilst also rising against a basket of currencies. The rise came after the US Federal Reserve’s surprise increase in interest rates for emergency bank loans, to 0.75%, from 0.5%. Analysts saw the move as a sign that the Fed could soon raise its other key lending rate.

US stocks fell in early trading as investors feared any further rate rises could slow the economic recovery.

The Dow Jones Industrial Average was up another 9.45 points to 10,402.35 while the NASDAQ Composite also crept up another 2.16 points to 2,243.87 on Friday’s trading.

US consumer prices rose by less than expected in January, easing concerns about growing inflationary pressures. According to the Labor Department, prices increased by 0.2% last month, with analysts forecasting a rise of 0.3%.

The rise was largely driven by energy prices, which rose for the ninth consecutive month. Over the last 12 months, US energy costs have risen by close to 20 percent. Excluding food and energy, prices fell by 0.1% in January – the first monthly drop since December 1982.

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Tags: Alasdair Darling, BAA, Bank, Bank of England, Banking, Barclays, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economics, Economy, Employment, Financial News, Flyglobespan, FTSE, Glasgow Airport, Gordon Brown, KfW Bank, Labor Department, Lloyds Banking Group, Mervyn King, Money, Money Markets, NASDAQ, Peter Mandelson, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, US forex

The Royal Institution of Chartered Surveyors (RICS) has predicted that house prices are unlikely to rise by much more than one to two percent in 2010. The nation’s chief surveyors’ body did however raise the possibility that more properties would change hands in 2010. In their report, RICS pointed out that the housing market had come through the past year in better shape than many had predicted but said it believed several factors would limit price rises.

According to figures issued by the British Chambers of Commerce (BCC), the UK economy shrank by 0.2% between July and September, which is less than the previous estimate of a 0.3% contraction. While the news confirms that the country is not yet out of the recession, it does add weight to predictions that fourth quarter figures will show the economy is finally returning to growth.

The UK recession, which began in the second quarter of 2008, has seen the UK economy contract by 6%. Meanwhile the Confederation of British Industry (CBI) has forecast that in 2010 recovery for the UK economy will be at best ‘fragile’. The CBI confirmed that the UK economy was likely to come out of recession in the fourth quarter this year, driven by increased spending from consumers looking to buy before the January VAT increase. However, they went on to warn that economic growth would be weak, at around 0.3%, for the first two quarters of 2010, with wage freezes continuing into spring and job losses until the autumn

Lehman Brothers, one of the first major investment banks to collapse during the current financial downturn are back to their old ways, is hiring new staff on fat salary/bonus packages as well as paying generous bonuses in London to existing staff, to stop them from defecting. The bank is reportedly recruiting middle and back office staff in order that their administrators PwC can wade through the millions of transactions that must be reconciled with clients and trading partners to determine what is owed or can be claimed. Meanwhile the judge overseeing Lehman’s US bankruptcy in New York last week approved an extra $50 million (£30 million) in bonus pay-outs to some 230 derivatives traders working to help to untangle the dead bank’s $10 billion portfolio. The bonus pay-outs come as bankers face anger and derision over probable bonuses at the end of this year.

British Telecom (BT) are reported to by pushing forward the launch of its super fast broadband network to make sure that the infrastructure is completed in time for the 2012 Olympic Games in London. Britain’s broadband speeds lag behind those of many industrialized countries and BT is under pressure to fix the problem. The company is planning to spend £1.5 billion on a new broadband network based on optical fiber, but it will run past only 40 per cent of homes, mainly in towns and cities. BT originally pronounced that it could take until March 2013 to build the urban-focused network, but, following successful trials, it now appears that the project will be completed by June 2012, with the Olympics beginning the following month. When it does get going, the new network is designed to increase broadband download speeds 10-fold, to about 40 megabits per second, to cope with the rise of bandwidth-hungry services such as high-definition video.

BAA has won its appeal against the Competition Commission but remains unsure whether the judgment means the company will have to sell airports in London and Scotland. In March of this year, the UK’s largest airport operator was ordered to sell three of its seven airports: Gatwick, Stansted and either Glasgow or Edinburgh. The company won their appeal on a number of arguments, one of them that a decline in passenger numbers should have been considered in the decision

The Competition Commission (CC) has finally cleared the merger of ticket agent Ticketmaster and concert promoter Live Nation. The UK regulator has confirmed that the merger would "not result in a substantial lessening of competition in the market" in the UK.

CC’s decision marks a reversal from their provisional ruling, where they vetoed the merger, stating that they were concerned about its ramifications.

The US Justice Department is also investigating the proposed merger, which was originally closed in February.

According to a new poll by the Auto Trader magazine, the Ford Focus has been voted the UK’s most popular car of the decade. The small family car beat our sports cars, SUVs and city cars to take first place. Despite the company being rocked by financial issues in the past ten years, Ford has retained its place as an iconic motoring brand, with two of its other models, the Fiesta and Mondeo, ranking high in the list of most loved cars by the British public. The Auto Trader poll, designed to analyse the key motoring trends over the past ten years, also looked at categories including ‘greenest’ car and ‘best value for money’ car.

Sterling was seen to be weakening in mid week trading against the dollar and the Euro.

• Dollar 1.5956
• Euro 1.111922

On the FTSE house builders edged higher after analysts announced that the sector valuation was looking brighter after a period of under performance that left them trading below book value. Forecasts are that UK house prices are to fall by 5 to 10 per cent as unemployment peaks in the second quarter of 2010, and saw rising interest rates damping the recovery for the next two years. Despite the less than encouraging forecasts, Taylor Wimpey was up 4 percent to 35¾ pence while Barratt rose 1.7 per cent to 116 pence. However, Redrow fell 0.2 per cent to 131½ pence.

The FTSE 100 gained for a second day, adding 34.67 points to close on 5,328.66, just 54 points off its 2009 high.

Official figures show that the US economy grew by less than originally estimated in the third quarter, with the latest estimate showing an annual growth pace of 2.2%, the figure was down from the previous estimate of 2.8%. In any case, July- September was the first quarter in which the US economy returned to growth, after four quarters of decline.

On Wall Street, the Dow Jones Industrial Average gained 0.8 per cent to 10,414.14 while the Nasdaq Composite was 1.2 per cent higher at 2,237.66, a welcome recovery after losses last week as the dollar strengthened and concern grew over the prospect of a tighter monetary policy.

A report issued by the National Association of Realtors (NAOR) showed new home sales in the US rose 7.4% in November, apparently spurred on by government incentives. NAOR also announced that property sales rose in the month to an annual rate of 6.5 million, making for the highest level in more than two years.

On Tuesday the OPEC oil cartel provided its strongest indication yet that it aims to keep oil prices at $70-$80 a barrel next year as it tries to support the economic recovery. As a first step, the cartel, which controls more than 40 per cent of the world’s oil output, agreed to leave its production levels unchanged at least until the end of the first quarter of 2010.

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Tags: 2012 Olympic Games, Auto Trader, BAA, Bank, Barrat, Barratt, Barratt Developments, BCC, British Chambers of Commerce, British Economy, British Pound, British Telecom, BT, CBI, Competition Commission, Confederation of British Industry, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, Gatwick, House Prices, Lehman Brothers, Money, Money Markets, Mortgage, Mortgages, NASDAQ, National Association of Realtors, OPEC, Property Prices, Recession, Redrow, RICS, Royal Institution of Chartered Surveyors, Stansted, Taylor Wimpey, Ticketmaster, UK Banks, UK Economy, UK government, UK Recession, US Justice Department, Wall Street

Qatar Holdings, who were and still remain Barclays’ largest shareholder, have realized their profits on 3.5% of their stake in the bank, taking home a tidy £615m profit in the process. People in the know are saying that Qatar Holdings, who act as the emirate’s private investment vehicle, will use the money to increase their holdings in UK supermarket giants, J Sainsbury. The share sell off transaction, valued at around £1.4billion, would allow the Qataris sufficient funding to increase their existing 26% stake in Sainsburys. Despite the share disposal, Qatar Holdings will still retain 7.1% equity in Barclays.

BAA has finally reached an agreement to sell Gatwick for a sum of £1.5 billion, setting the long-awaited break-up of the UK’s biggest airport group in motion. Final details of the sale were expected to be announced early on Wednesday morning before the FTSE opened its doors. After lengthy and intricate negotiations, the Competition Commission finally approved the late on Tuesday. The anticipated sale sees the end of a process which began when BAA, a subsidiary of Spain’s Ferrovial infrastructure group, put Gatwick up for sale in an attempt to head off competition concerns about its market dominance. Initially BAA had hoped to receive around £1.8 billion for Gatwick, and held on grimly for this sum; till the realization sunk in that they were pricing themselves out of the market. They reduced their asking price to £1.6 billion and finally have accepted even less for the airport from Global Infrastructure Partners, an infrastructure fund backed by Credit Suisse and General Electric who already own London City Airport. The Competition Commission expects BAA to sell two of its remaining six airports, within the next two years: while still leaving the group in control of the country’s biggest airport, Heathrow.

The Euro zone’s largest bank, Santander, continues to generate turnover and profit at such an outstanding rate it may have no option but to pay their shareholders a significant cash dividend in the coming year, according to a leading executive of the company. The ongoing financial crisis has prompted regulators to press European banks to increase their capital ratios, with Santander setting a target of seven per cent of their risk weighted assets, regarded as adequate for its retail banking model.

By the end of June, half way through their financial year, Santander had succeeded in increasing their ratio to 7.5 per cent, and have since added a further 0.6 % in October alone with the bank now expected to surpass their target and reach as high as 8.5 per cent of capital ratio, some of which will be able to be dispersed to their shareholders. RBS eat your heart out…

In the money markets, the pound continued its steady rise, despite faltering slightly against the Euro and the Swiss Franc.

• Pound/US dollar 1.6373
• Pound/Euro 1.10971
• Pound/Japanese Yen 147.9728
• Pound/Swiss Franc 1.6587

Tesco was among the few stocks to beat a weakening trend as the FTSE 100 began to lose some of the heights it had achieved in the last week or so. The UK grocery chain has been described by analysts as a “cash cow” and ripe for rapid expansion, both in grocery and non-grocery sectors in the UK as well as overseas. Shares in Tesco closed higher on Tuesday by 1.2 per cent at 383½p.

Their progress was overshadowed however by J Sainsbury who were the day’s biggest gainer, up 5.4 per cent to 348 pence after Qatar holdings looked likely to add to its 26 per cent stake in the company or even make a takeover approach after selling a block of shares in Barclays. Barclays did less well, and closed down 4.8 per cent to 364 pence.

An upbeat trading statement from Pearson, owner of the Financial Times, lifted its shares by 4.4 per cent to 858½ pence which had a knock on effect on many players in the publishing sector. Reed Elsevier was among those feeling the ripples, and their shares rose 1.4 per cent to 466 pence. This increase may have been largely fired by reports that Reed was potential bidder for United Business Media, whose shares also rose in turn, up 0.5 per cent to 504½ pence. .

Shares in National Express edged 1 per cent higher at 404 pence after news broke that the company’s largest shareholder is backing the merger proposal from Stagecoach, the bus and train operator and National Express competitor. The move, which shines a light on the depth of boardroom divisions within the company. In a meeting with the National Express board on Monday, Jorge Cosmen, the company’s deputy chairman and its largest shareholder, announced his support for Stagecoach’s approach.

Shares in Greggs, the high street bakery chain were down by 3.7 per cent weaker at 448 pence, largely due to misplaced speculation that the group was considering outsourcing its bakery operations.

The FTSE 100 had a good day, up 91.34 points to 5281.54 The FTSE 250 rose strongly on the day’s trading, up 138.44 points to close on. 9564.64.

In the US, the number of new housing starts was reported to have increased in September, but at a lower rate than expected, raising limited concerns about the strength of the recovery in the country. Housing starts rose by 0.5% to a 590,000 homes, compared with a revised figure of 587,000 in August, down by 28.2% on the 822,000 homes started in September 2008, according to the US Department of Commerce.

As a possible reflection, the Dow Jones was down 50.71 points to close on 10041.48 The NASDAQ Composite index continued to fluctuate, this time down 12.85 points to close on 2,163.47.

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Tags: BAA, Bank, Banking, Barclays, British Economy, British Pound, Competition Commission, Credit Suisse, Currency, Dow Jones, Economics, Economy, Ferrovial infrastructure group, Financial News, Financial Times, FTSE, Gatwick, General Electric, Global Infrastructure Partners, Greggs, J Sainsbury, London City Airport, Money, Money Markets, NASDAQ, National Express, Qatar Holdings, RBS, Recession, Reed Elsevier, Retail, Royal Bank of Scotland, Sainsburys, Santander, Stagecoach, Stock Markets, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, United Business Media

In a recent interview, Business Minister Lord Mandelson gave the first veiled indication of concern over the increasing number of Britain’s major businesses under foreign control. Mandelson pointed out that while the UK remained committed to open markets for trade and investment entailing that companies should remain open to foreign takeovers, whilst adding that the country should be "mindful" of the implications of foreign ownership

Mandelson’s comments appeared to signal a shift in the government’s open approach to takeovers by overseas firms and come amid a rising tide of protectionism around the world. In response to Mandelson’s comments, union leaders accused Lord Mandelson of "closing the stable door after the horse had bolted".

In his speech, Mandelson forecast that, foreign ownership could "disadvantage" the location of UK manufacturing plants over the next 20 years. His comments emphasised a growing concern as the government seeks to rebalance the economy and lessen the reliance on financial services.

Mandelson’s comments echoed those from City minister Paul Myners, who also has publicly expressed fears that too many British companies were falling into foreign hands because their shares are owned by international funds, and little concern was felt for their domestic heritage.

Britain has been a leading proponent of open markets and countless household names have been taken over by foreign companies. These include BAA, BOC, Marconi, Abbey National, Alliance & Leicester and British Energy.

Mandelson’s comments are bound to reverberate around the Vauxhall plants, fearing for their future after the car maker was bought by Canadian car parts firm Magna as well as at Cadburys where the American giant Kraft has attempted a hostile takeover.

When asked to comment on his speech Mandelson hastened to explain that while globalisation has served the UK well in the past and will do so in the future, there are issues around corporate institutional ownership and responsibility ". A major corporate buy-out by private equity can reshape a community or an industry, and there will always be a legitimate demand for transparency and accountability when that happens." He summed up.

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Tags: Abbey National, Alliance & Leicester, BAA, BOC, British Economy, British Energy, Cadburys, Credit Crunch, Economics, Economy, Financial News, Financial Services, Kraft, Lord Mandelson, Magna, Marconi, Paul Myners, Recession, UK Banks, UK companies, UK Economy, UK government, UK manufacturing, UK Recession, Vauxhall

According to Royal Bank of Scotland its chief executive, Stephen Hester UK Taxpayers will lose out if the bank unable to pay bonuses, in what some could construe as a veiled threat o what could happen if the intense public scrutiny faced by the bailed-out bank is not eased and bonus hungry staff continue to seek greener pastures.

When the bank released their half year profits, an uninspiring increase in profits of £15 million was offset by “poor” net attributable loss to shareholders of £1.1 million.
Hester, whose £9 million pay deal only delivers if the shares reach 70 pence within three years, said the bank had suffered a “damaging but not yet destructive” exodus of staff. He said some guaranteed bonuses were being paid, but that they complied with the demand by the Financial Services Authority of being for no longer than 12 months.

Meanwhile Spanish bank, Santander has shown RBOS the meaning of profit, with an increase of 41 per cent in the first half of this year, totaling £790 million for their UK businesses.
Santander, who owns Abbey, Alliance & Leicester and part of Bradford & Bingley, reported revenues had also increased by 20 per cent, aided by increased cost savings, as also increased their deposits by 66 per cent, following the integration of Alliance & Leicester and Bradford & Bingley.

Santander’s gross mortgage lending through its UK brands totalled £10.8 billion in the first six months of the year, giving it a 16 per cent share of the market. António Horta-Osório, chief executive of Abbey, announced that the first half of the year has been a very good one for the bank.

Company liquidations and individual insolvencies in England and Wales soared to record levels in the second quarter as the economy was throttled by recession and the global credit crisis, data from the government’s Insolvency Service showed Friday.

There were 33,073 individual insolvencies in the second quarter on a non seasonally adjusted basis, the highest level since records began in 1960. That compared with 30,253 in the first quarter of this year

Company failures remained at a 16-year high in the second quarter, but figures on Friday revealed a marked slowdown in the rate of firms falling victim to recession. The Government’s Insolvency Service recorded a 39 percent rise in liquidations in England and Wales.

The Office of Fair Trading has approved Centrica’s bid to buy a 20 percent stake in British Energy from EDF. The £2.3 billion deal will allow Centrica a share in both electricity as well as future profits from four soon-to-be-built nuclear power plants, in addition to claiming 20 percent of British Energy’s un-contracted power output. The OFT granted the approval after concluding that a Centrica-EDF tie-up would be unlikely to create volatility in energy prices,

BAA Aviation has announced that they will be raising their annual cost cuts target by £14 million to £30 million as it continues to identify acquisition opportunities during the economic downturn. The aircraft-servicing company continued to outperform the market despite posting a two percent drop in half-year revenues to £550 million and a similar fall in pre-exceptional operating profits to £50.6 million.

Pre-tax profits declined from £46.7 million pounds to £25.8 million pounds after taking £12.6 million of exceptional charges into account, partly for restructuring. The company’s debt dropped from £554 million to 449 million, while the dividend remained static at 2.3 pence.

Health and beauty retailer Superdrug reported a pre-tax loss of £7.4 million pounds in 2008, compared with a profit of £21.6 million in 2008 For the year to December 27 2008, revenue at the AS Watson-owned group declined marginally by two percent to £1.07 billion.

Signet the jewellery group, has announced that its outlook on both sides of the Atlantic remains “uncertain” after it reported a four percent drop in total sales. The group said like-for-like sales in the UK declined by 4.2 percent in the six months to August 1, with H Samuel falling by 2.2 percent and Ernest Jones down 6.5 percent

Shares in Smith & Nephew edged 0.8 per cent higher at 474 pence on renewed speculation it might become a takeover candidate for US giant Biomet. The speculation follows a period of underperformance for S&N stock, which has slipped 14 per cent from its 2009 high as the weakening economy led patients to delay hip surgery.

Shares in sporting goods retailer, Sports Direct lost 2.5 per cent to close 89 pence on news that the Competition Commission are liable to examine its purchase of 31 stores from rival JJB Sports. If the commission arrives at the conclusion that competition was lessened by the sale. It could bar trading at five overlapping stores, or even place an embargo on the entire sale.

In the banking sector Royal Bank of Scotland fell for the first session in eight, losing 12.1 per cent to 47 pence after it provided a downbeat outlook statement with wider underlying losses than analysts had expected. Lloyds Banking Group, whose more optimistic view of 2010 led its stock to surge this week, took a minor retreat on Friday falling 2.6 per cent. However Barclays continued to remain supreme, gaining 3.1 per cent to close on 365 pence.

The UK’s FTSE 100 index finished for the weekend up 41 points, or 0.9%, at 4,731.56 – its highest close since early October. The FTSE 100 has rebounded 34 percent since March 3 Meanwhile the FTSE 250 continued to climb, rising on Friday by a further 43.91 points to close on 8,421.46

The pound continued to wobble against the other major currencies on Friday.
Pound/US dollar 1.6717
Pound/Euro 1.1761
Pound/Japanese Yen 162.2643
Pound/Swiss Franc 1.8033

Leading US and UK shares closed at their highest levels since last year after better-than-expected US jobless data boosted investor confidence. On the news, the Dow Jones index jumped 114 points, to close for the weekend at 9,370.07, its highest level since November of last year. The NASDAQ also did better, up 27.09 points to close at 2000.25

US President Barack Obama said over the weekend that the fact that the US economy lost only 247,000 jobs in July meant “the worst [of the recession] may be behind us”.
The unemployment rate fell to 9.4%, down from 9.5% in the previous month, the first drop since April 2008.

After reporting a rare loss in the first three months of the year, US financier Warren Buffett’s investment firm has reported a jump in profits.
Between April and June, Berkshire Hathaway made a profit of £2 billion up 15% on the same period a year ago, although revenues fell slightly too around £20.5 billion
In the first quarter, the company made a loss of around £1 billion.

According to official figures, German exports have risen by 7% in June, the fastest pace in nearly three years. In the latest sign of recovery in Europe’s economy, exports for the period totalled 67.4 billion Euros (£57.8 billion) which, while imports of 56.4 billion Euros, brought the country’s trade surplus to 11 billion Euros. These figures are the latest positive signal from the export-focused economy. At the same time, France reported that its trade deficit widened to 4 billion Euros in June, from 3.137 billion Euros for May.

Joining the ever increasing chorus that recovery is just around the corner were the European based Organisation for Economic Co-operation and Development,

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Tags: Abbey, Alliance and Leicester, BAA, Bank, Banking, Barack Obama, Barclays, Bradford & Bingley, Centrica, EdF, Financial News, Financial Services Authority, JJB Sports, Royal Bank of Scotland, Smith & Nephew, Superdrug, UK Banks

The FTSE was at the centre of UK financial news with many of its major companies announcing or about to announce their half year results. Which till now have been mostly encouraging.

The UK companies owned by Spanish bank Santander saw their profits rise by a third in the first half of the year as bad debts showed a second consecutive quarterly decline.

Santander announced that their bad debt provisions in its UK business were £176 million pounds in the second quarter, up from £92 million pounds a year ago but still considerably less than the £189 million in the first quarter of this year. The first-half provision of £365 million pounds doubled from a year ago.

Most of the UK banks are expected to report a jump in bad debts when they report next week, while analysts and investors as one are looking for clues as to whether the levels of bad debt have been arrested

UK Profits for Santander, taking in includes Abbey, Alliance & Leicester and Bradford & Bingley were £790 million in the six months to the end of June, helping the bank’s Spanish parent to a net profit of 4.5 billion Euros, down 5 percent on the year but ahead of forecasts.

British Airways has reported a pre-tax loss of £148 million in the three months to the end of June, compared with a profit of £37 million in the same period last year, with revenues falling l 12.2% to £1.983 billion for the quarter.

Also falling deep into the red were German airline Lufthansa, Europe’s largest measured by turnover, who reported to a net loss of €216 million from a net profit of €381 million a year ago.

Leading airline chief executives have told the European Commission the industry on the ground as well as in the air is facing “the worst economic conditions on record”.

Meanwhile British Airports Authority (BAA) continue to make every effort to offload Gatwick Airport, but not at any price.

This example of possibly false bravado came as the UK’s largest airports operator revealed interim pre-tax losses for the six months to June 30 widened to £545.7 million from £135. 3 million

On one of the busiest results days of the year eight FTSE 100 companies released their half year results on Thursday including the BT Group which announced first-quarter adjusted earnings of £1.37 billion, larger than the £1.27 billion originally forecasted.

Pay TV operator BSkyB announced year end profits of £456 million an increase of £60 million. Company revenue rose by 8.2 per cent to £5.4 billion. BSkyB announced that during the last quarter It added a further 124,000 subscription holders.

Also rising was the FTSE 100, up 84 points to 4,631.6 and only seven points from away from its year high. The index has gained 9 per cent so far this month and is looking good to overtake its best monthly gain, reached in September 1992.

The FTSE 250 leapt forward 172.04 points to close on 7,934.63

Sterling was among the best performing of the major currencies against a generally weaker dollar, as rallying equity markets and better-than-expected housing data drove appetite for risk

Pound/US dollar 1.6516

Pound/Euro 1.1695

Pound/Japanese Yen 157.3943

Pound/Swiss Franc 1.7916

According to a prominent US financial regulator, the Obama administration’s plan to give US states more power to protect consumers from unfair banking practices would make it more difficult and costly for large lenders to operate across the country.

The regulator, Mr. John Dugan, head of the Office of the Comptroller of the Currency, who job it is to oversee national banks as comptroller of the currency, announced recently that the proposals to create a federal consumer protection agency and give states more leeway to crack down on unfair practices would have negative “ramifications for companies operating across state lines”.

On Wall Street the Dow Jones made a strong recovery on Thursday’s trading, up 83.74 to 9154.46 The NASDAQ also rose by 16.54 points to 1984.3

Japanese industrial output rose in June for its fourth straight month and it appears that they will be no looking back as electronics manufacturers, steel makers and chemical producers begin to climb back to full production…

Preliminary data has shown that in June industrial production was up 2.4 per cent from May, less than half the revised 5.7 per cent growth recorded the previous month but broadly in line with economists’ expectations.

However despite encouraging growth over the last quarter, production in June was still down 23 per cent compared with the same month of 2008.

A spokesman for Arcelor Mittal, has predicted that world steel demand will pick up by at least 10% next year, as emerging economies were coming out of the downturn “reasonably quickly” and that stimulus spending in the US and Europe was having an impact. Arcelor Mittal reported a second quarter net loss of $792 million, against a $5.8 billion net profit a year ago, causing their shares to fall 4.4% to €24.20.

Two of the world’s largest oil companies, Exxon Mobil and Royal Dutch Shell, have announced major profit setbacks in the wake of tumbling international oil prices and weaker demand.

Exxon, the largest US oil group, and Shell, the biggest in Europe, on Thursday unveiled post-tax profits for the second quarter that were roughly a third of those a year ago, with both companies attributing the blame to the continuing global economic crisis and softer demand for the collapse in their revenues..

Exxon’s profits dropped by two thirds $3.95 billion, the steepest fall in profits for more than a decade, and Shell’s 70 per cent decline in post-tax profit to $3.24 billion.

On the day US light crude was up $3.66, or almost 6%, to $67.01 a barrel, while London Brent was ahead by $3.68, at $70.21.

US light crude slumped $3.88 on Wednesday after figures showed a rise in US oil stockpiles, indicating too much supply in relation to demand

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Tags: Abbey, Alliance & Leicester, Arcelor Mittal, BAA, Bank, Banking, Bradford & Bingley, British Airports Authority, British airways, British Economy, British Pound, BskyB, BT, Credit Crunch, Currency, Dow Jones, Economics, European Commission, Exxon, Financial News, FTSE, Gatwick Airport, John Dugan, Lufthansa, Mobil, Money, Money Markets, NASDAQ, Obama, Oil, Recession, Santander, Shell, Stock Markets, Stocks and shares, UK Banks, Wall Street