In the first statement coming out of Labour election headquarters, current U.K. Business Secretary Peter Mandelson has put up an argument stating that the sitting government has the constitutional right for the “first go” in trying to remain in power when no party wins a majority in the House of Commons.

“The rules are, if it’s a hung parliament, it’s not the party with the largest number of seats that has the first go, it’s the sitting government,” Mandelson said. “After three terms in office, of course many people have turned away from the Labour Party but they haven’t embraced the Conservatives.” He added

According to a recent survey, manufacturing output and exports in the UK expanded at their fastest rate in 15 years. These findings meant that whichever party eventually wins the right to govern in the UK, are liable to inherit an economy already showing signs of recovery with manufacturing output growing by as much as two percent in the past three months. A growth level that suggests the manufacturing sector will make a significant contribution to second-quarter gross domestic product growth in the UK.

Recent figures also show that the next government are set to inherit a jobs market that, while currently still looking a little weak, looks is poised for recovery but still fragile. Unemployment stands at 2.5 million, or eight percent of the work force, far below the three million-plus predicted last year.

Channel 4 announced the public service broadcaster would boost the budget of its film division by a fifth this year to 10 million pounds. The decision returns Film 4’s budget to its 2007 level before the recession, and partly reflects a cautious confidence at the group. Chief executive David Abraham said the Digital Economy Act had also influenced the decision to increase investment in Film 4. The Act formally stated that as part of its public service remit, Channel 4 should make "high quality films" for cinema release in the UK.

Alliance Boots has replaced Marks & Spencer at the top of an annual ranking of UK companies by the strength of their corporate reputation. Boots, which enters the Reputation Institute’s UK Pulse Report for the first time, ranks first in the survey that measures corporate reputation among the general public. Other companies in the top 10 include Cadbury, Morrisons and Rolls Royce, with John Lewis Partnership, Debenhams, Sainsbury’s and Tesco among the top 20 places. In broadcasting, the BBC came ahead of ITV and BSkyB, and HSBC has become the top-ranked bank. Companies are selected by the organization based on revenue and visibility among the general public, but can decide whether or not to be included. There is no fee for inclusion.

Followers of Google’s UK-based email will now be able to have @gmail.com addresses, rather than @googlemail.com. The news comes after the search engine marketing giant won an arduous trademark battle with a British research company that had applied for the "gmail" name prior to Google launching its email service. After finally reaching a settlement, Google are now able to offer users that registered after 2005, a change to the shorter address of @gmail.com Google went on to use the @googlemail.com address for those that had registered after this time.

A spokesman for Google stated that the company was satisfied with the conclusion of the proceedings, saying:”We know how important email accounts are to users and we wanted to provide the best user experience possible. We engineered the infrastructure to enable users to switch their accounts to @gmail.com accounts should they choose, as well as directing all new users to set up @gmail.com accounts in the UK.”

Power and oil firm Essar Energy were left wishing that they had timed their entry onto the FTSE a little better than this week, after suffering the worst debut of a big London flotation since the early noughties. The group’s shares plummeted 7.2 percent to 389.5 pence on its first day of trading. The fall from the UK’s largest stock market listing in more than two years is the worst seen since HMV, the music retailer, dropped 7.5 percent in May 2002. Essar’s listing came on a challenging day for the markets, with the FTSE 100 index closing down 2.5 percent on the day

The Euro remains under heavy pressure, falling to below 1.27 against the dollar. The pound strengthened took a late slump against the dollar to 1.463 and at 1.550 against the Euro.

International rating agencies continue to voice concerns over the crisis of confidence which is spreading across Europe, with countries such as Portugal, Italy, Spain, Ireland and Britain looking unstable, as the public and politicians in Athens attempt come to terms with the harsh economic conditions which have come with the EEC and IMF bail-out. The European Commission has said it expects the Greek economy to shrink by 3% this year, amid continued market jitters over the country’s debt crisis.

Banking systems still face "very real, common threats" if doubts were raised about their governments’ abilities to pay debts.

Fears of another round of instability meant another volatile session for the FTSE 100 index, which saw it shed 80.9 points to close in 5261 as the UK also went to the polls, with the prospects of a hung Parliament looking very much a reality.

US mortgage giant Freddie Mac announced a loss of $8 billion (£5.3 billion) for the first three months of 2010. Reports from the company hint that they are liable to ask for a further $10.6 billion in state aid. The firm has made a number of federal cash requests since it was taken over by regulators in September 2008, whilst stating that as the US housing market has not yet fully recovered they would continue to be in need of continued government funding. If the latest request is granted, it will bring the total cost of the Freddie Mac rescue to $61.3 billion.

Stock exchange bosses and regulators were last night scrambling to explain the cause of a plunge in the Dow Jones Industrial Average, which took the index down by the largest number of points in its history, setting off a short term panic in an already fragile financial market.

A little over an hour before the close of trading in New York. The result was a period of unprecedented chaos that also dragged in currency and credit markets. At 2.20 pm, EPT the Dow stood at 10,460, already down 400 points, when it suddenly tumbled 600 points with the space of just seven minutes to 9,869, a drop of 9.2 per cent, the largest points fall ever.

The Dow snapped back but continued to swing wildly until the close of trading, when it settled at 10,520.32, down 347.80 points on the day, a fall of 3.2 per cent. The NASDAQ also closed down 82.65 points to 2319.64.

US productivity grew at a better-than -expected annual rate of 3.6% in the first quarter of 2010, while a separate report showed that applications for jobless benefits dropped for a third week in a row.

The US economy has been growing since last summer, but firms have been reluctant to take workers back on, instead pushing smaller workforces to produce more, which has increased productivity – measured as the amount of output per hour of work.

Carmaker BMW has reported a return to profit compared with a year earlier and given an upbeat forecast for sales in the coming year.

The group reported a net profit of €324 million (£277 million) for the first quarter of 2010, compared to a loss of €150 million for the comparative period last year. Turnover was up 8% to €12.4 billion with the company reporting a 100% increase in sales in China as it did a year earlier

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Tags: Alliance Boots, Banking, BBC, BMW, British Economy, British Pound, BskyB, Cadbury, Channel 4, Conservatives, Credit Crunch, Currency, David Abraham, Debenhams, Digital Economy Act, Dow Jones, Economics, Economy, election, Employment, Essar Energy, Film 4, Financial News, Freddie Mac, FTSE, Google, Government, HMV, House of Commons, HSBC, ITV, John Lewis Partnership, Labour party, Marks & Spencer, Money, Money Markets, Morrisons, NASDAQ, Peter Mandelson, Recession, Retail, Rolls-Royce, Sainsburys, Stock Markets, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, Unemployment

Financial analysts fear that Britain could be among the countries that could follow Greece into a financial crisis. The uncertainty comes after Dominique Strauss-Kahn’s head of the International Monetary Fund (IMF) warned of economic "contagion" spreading across Europe.

The IMF urged politicians to finalise a bail-out for the debt-laden Mediterranean country, saying that every day lost in resolving the problems risked spreading the impact "far away".

Strauss-Kahn’s comments came amid growing evidence of Europe’s mounting fiscal problems after Spain’s debt was downgraded following in the footsteps of Portugal as well as Greece.

Late Thursday Germany was holding out for more economic reforms from Greece before agreeing to an unprecedented multi-billion euro bail-out plan.

UK house prices increased by 1% month-on-month in April, according to the latest house price index.

Property experts pointed out that April’s figures did receive an additional boost from the fact that April was one of the weaker months of 2009. However with property values beginning to increase from May last year, it will be difficult to maintain this rate of growth in the coming months.

On the commercial property front, it appears that the appeal of London’s robust shopping demand continues attract the leading for international retail chains to the city. A recent survey has revealed how 58 percent of international retail brands have opened outlets not just in London but throughout the UK, spurred by strong consumer demand.

Preliminary assessments have revealed that the European air transport sector swallowed as much as €2.5 billion in losses from disruption caused by Iceland’s volcanic eruption. The loss assessment conducted by the European Commission could well be the model that an industry bailout will be based on. Some of the airlines affected have argued that flawed computer models used by member states were partially responsible for grounding planes, even when the airlines insisted that was safe for them to resume their services. A spokesman for the UK Department for Transport stated that while the "UK cannot unilaterally provide new aid to affected companies it continues "to explore options" with the Commission. Meanwhile, budget airline EasyJet have cautioned that governments should be prevented from providing aid to "ailing national carriers" who might use the financial damage caused by the volcanic disruption as a pretext for a bailout.

Royal Dutch Shell today announced a 49% surge in first quarter profits as the energy giant joined rival BP in benefiting from higher oil prices.

The Anglo-Dutch group reported earnings of £3.2 billion ($4.9 billion) for the first three months of the year – a day after BP posted a profit of £3.6 billion for the same period. The company’s chief executive explained that rising energy prices and an improved operational performance meant Shell’s profits were sharply higher than the $1.18 billion in the final quarter of 2009.

Shell’s performance has lagged behind BP as it has been forced invest heavily in finding new sources of oil and gas at a time when refining margins are under pressure due to global overcapacity and economic weakness.

Today’s results are back to the levels of the first quarter of 2009, when crude prices averaged just over $41 dollars a barrel, while the figure today stands at an average of $76 dollars a barrel.

Imperial Tobacco has reported a 15 percent rise in profits for the first half of their financial year. The increase comes through an increase in demand in some of their key European markets for cheaper roll-your-own tobacco. From factory-made cigarettes Bristol-based Imperial Tobacco, whose brands include Lambert & Butler and Davidoff reported a pre-tax profit of £974 million for the six months to March 31, on turnover up eight percent at £13.4 billion.

Sterling continues to grow in strength against the dollar closing on $1.5351, whilst falling back slightly against the troubled Euro on €1.155

There was a positive mood on the stock exchange on Thursday, with U.K. stocks mostly on the up. Among the most active were Unilever, the world’s second-largest food and detergent company, whose shares advanced by 3.2 percent. After BSkyB the U.K.’s biggest pay-television provider reported an increase in third-quarter profit their shares rose by the most in more than a year. Also shares in AstraZeneca, the U.K.’s second-largest drug-maker, advanced by 2.3 percent.

The FTSE 100 rose 30.89 points to 5,617.8. The market appears to be rebounding from two days of losses prompted by the downgrading the credit ratings of Greece, Portugal and Spain.

Stateside, the Federal Reserve have conformed their pledge to keep interest rates low for an “extended period”, while offering a slightly more upbeat assessment of the US economy. The Fed’s open market committee reiterated that its main interest rate would remain at its target range of 0-0.25 per cent. The figure has stood at this level since December 2008.

Analysts point out that the financial recovery appears to be gathering steam in the US in recent months, with most economic indicators in line or ahead of previous expectations. However, pressure on policymakers to start raising interest rates has not risen accordingly, with inflation remaining in control.

On Wall Street, the Dow Jones made a recovery from early week falls, closing up 122.05 points to 11167.32, while the NASDAQ rose 40.19 points to 2511.92

It appears that American consumers have re-discovered the joys of shopping, with retail sales stronger than forecast. The US housing market, meanwhile, has shown fresh signs of a rebound, with home prices increasing on an annual basis for the first time in three years in February,

In the computer hardware world, the news is that Palm, one of the leading pioneer in the smart phone business, are to acquired by US computer giant Hewlett-Packard (HP) for £657 million ($1 billion)

A spokesman for HP said that Palm’s webOS operating system would help its expansion in the fast-growing market for smart phones and connected mobile devices. Although HP is paying a premium to Palm’s closing share price on Wednesday of $4.63, it is well below the company’s 52-week high of $18.09.

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Tags: AstraZeneca, Bank, BP, British Economy, BskyB, Davidoff, Dominique Strauss-Kah, Dow Jones, EasyJet, Economy, Employment, Financial News, FTSE, House Prices, HP, Imperial Tobacco, International Monetary Fund, Lambert & Butler, Money, Money Markets, NASDAQ, Palm, Recession, Retail, Royal Dutch Shell, Stock Markets, Stocks and shares, UK Banks, UK Department for Transport, UK Economy, UK government, UK Recession, Unilever, volcanic eruption, Wall Street

The Royal Bank of Scotland (RBS) has reported receiving five offers for their Williams & Glyn’s branch network. RBS were ordered to sell these branches as part of a European Commission state aid ruling in 2009, the business is valued at around £2 billion.

By Tuesday night’s deadline, speculations were that Santander, Virgin Money, National Australia Bank, BBVA and JC Flowers had all submitted bids, with Santander is widely believed to be the favourite bidder, with an offer potentially worth at least £2 billion. Santander recently completed the rebranding their UK operations under their own name

However, with Virgin now being backed by Wilbur Ross, the US billionaire, offering pledges on jobs their offer has to be taken seriously, with elections in a month’s time.

The UK government holds a 70 per cent equity stake in RBS, giving politicians and the public far greater influence over its fate.

The chief executive of U.S. telecommunications company Verizon Communications has said that there is "no compelling reason" for the U.S. Company to merge with British mobile network operator Vodafone. The two companies are continuing talks regarding their strategic options. Vodafone owns 45 percent of Verizon Wireless with Verizon holding the remaining 55 percent. However, there has been some conflict recently; with Vodafone pressuring Verizon to resume paying dividends since the U.S. Company blocked payments in order to reduce its debt burden. Shares in Vodafone dropped 2 pence to 149.6 pence on the statement.

Recent figures released by the Society of Motor Manufacturers and Traders (SMMT) show that the number of cars on the UK roads has decreased for the first time since records began in 1904. The country’s total car fleet has declined by 0.7 percent in 2009. According to the SMMT factors that had to be taken into account for decline are the recession, the government car scrappage scheme, and new Driver and Vehicle Licensing Agency (DVLA) regulations which remove the details of unlicensed vehicles from the database.

Kraft Foods came under attack in a report from a committee of U.K. lawmakers in a report critical of moves the American company made after its hostile $17.5 billion (£12 billion) takeover of Cadbury, the beloved British chocolate maker. The report by the U.K.’s Business Select Committee accuses Kraft of acting "irresponsibly and unwisely" after reneging on a promise to keep a Cadbury factory in Somerdale open, instead planning to move the plant’s production to Poland, resulting in the loss of 400 jobs. Meanwhile, British union leaders have called for a "Cadbury law" to protect British businesses from aggressive foreign takeovers.

ESPN, the Disney-owned sports television channel, has acquired the rights to deliver Premier League football highlights on UK mobile phones until 2013, supplanting British Sky Broadcasting, which has held the rights since 2007-08. The move strengthens ESPN’s position as a competitor to BSkyB and underlines the US broadcaster’s determination to expand its share of the UK sports market. For the three football seasons from August onwards, ESPN will deliver in-match, post-match and highlights from all 380 Barclays Premier League matches, Purchase of the mobile rights is the latest in a series of additions to ESPN’s sports portfolio.

Research conducted on behalf of the Association of Convenience Stores (ACS), representing an association of 33,500 small shopkeepers, indicates that 85 percent of the public oppose a liberalisation of trading laws that, if passed would allow large retail chains to open for longer on Sundays. The ACS stated that the current regulations assisted small retailers by encouraging local shopping in small stores. Large retailers including Topshop and House of Fraser have recently been lobbying the Business Secretary Lord Mandelson with requests to relax the existing laws.

The pound fell continues to recover if ever so slightly closing on $1.5273, whilst also gaining against the Euro to close on 1.1441

The U.K.’s FTSE 100 Index retreated from a 21-month high after a sell-off in commodity production shares .The benchmark Index lost 67.65 points to 5,712.7.

Former Federal Reserve governor Alan Greenspan has defended his record at a congressional hearing into the financial crisis. In a statement, Mr Greenspan denied that his policy of maintaining low interest rates had been a major factor in the crisis. Consistently low interest rates have been blamed for the expansion in the sub-prime mortgage market which led to the credit crunch. However, Greenspan voiced his opinion that the way the banks repackaged their loans was a major contributing factor to the crisis.

Stocks rallied yesterday after U.S. jobs increased by the most in three years, boosting optimism about the strength of a recovery in the world’s largest economy. Since March last year, the gauge has rebound more than 60 percent.

The Dow Jones closed up 45.87 points to 10943.39, while the NASDAQ index rose 9.15 points to close on 2440.31

As part of a global tie-up of the brands German carmaker Daimler announced that they are to give Renault and Nissan a 3.1% stake in its business, with Daimler taking a 3.1% stakes in both Renault and Nissan, in exchange. Renault and Nissan have held a trading alliance for more than a decade.

The deal will allow the companies to share technology and development costs while remain separate trading entities. According to a spokesman for Nissan, one of the key areas of co-operation will be in the development of electric cars and light commercial vehicles.

European financial markets continue to feel the pressures over the state of Greece’s debt-ridden economy. Banking stocks in particular, not only in Greece but in most of the other leading European countries, have seen sharp falls. Meanwhile it has been reported that the Greek government’s cost of borrowing has risen to record levels, reflecting investors’ concerns that Greece might not be pay back the loans due to the poor state of the country’s public finances.

The Athens Composite share index fell by 3.1%, with banks down 6.4% on average.

All major European markets also suffered, and banks in France and Germany were especially hit due to their exposure to Greece’s borrowing.

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Tags: Alan Greenspan, Association of Convenience Stores, Bank, Banking, Barclays, BBVA, British Economy, British Sky Broadcasting, BskyB, Cadbury, Credit Crunch, Daimler, Dow Jones, Driver and Vehicle Licensing Agency, Economics, Economy, Employment, ESPN, Financial News, FTSE, House of Fraser, JC Flowers, Kraft Foods, Money, Money Markets, NASDAQ, National Australia Bank, Nissan, Recession, Renault, Retail, Royal Bank of Scotland, Santander, Society of Motor Manufacturers and Traders, Stocks and shares, Topshop, UK Banks, UK Economy, UK government, UK Recession, Verizon Communications, Virgin Money, Vodafone, Wilbur Ross, Williams and Glyn

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

With the Bank of England (BOE)’s decision to put its quantative easing programme on hold, the Debt Management Office, held with the task for issuing of bonds to pay off the public deficit, are expecting difficulties in finding buyers. A spokesman for the DMO has said that the agency will continue to use new methods of issuing debt bonds in what will be a record number, including syndications.

According to official data released on Friday, by the UK Insolvency Service, the number of companies going into liquidation fell in the final quarter of 2009 for the first time in more than a year on an annual basis. However the report showed that the number of individuals who succumbed to insolvency was on the increase.

The quarterly figures may be a sign the economy is slowly getting back on its feet, with companies finding it easier to get credit. A Bank of England survey which showed the flow of lending to businesses picked up in November for the first time since the beginning of 2009. However UK business analysts hastened to point out that the number of liquidations were liable to be high unless access to finance continued to improve.

Private demand in the UK will remain weak for the most part of 2010 and the British government will maintain its stimulus measures, UK Business Minister Lord Mandelson said after a meeting with German Economics Minister Rainer Bruederle here. "As private demand remains weak, as I suspect it will for a lot of this year, it is the job of the government to balance that weakness and to maintain our stimulus while it is needed," Mandelson said. "We also have to plan the exit from that stimulus and we will do that step by step and in coordination with each other." he continued.

Lord Mandelson also announced on Friday that European governments could consider some support for U.S. carmaker General Motors’ European operations if the carmaker presented them with a business plan.

General Motors’ European arm Opel plans to slash thousands of jobs as part of a restructuring plan and also wants around £2 billion in state aid either as loans or loan guarantees to help finance the 3.3 billion euro revamp.

UK Business Secretary Mandelson in Berlin for a meeting with German Economy Minister Rainer Bruederle said "The primary responsibility for bringing about the future investment, the use of new technologies and models, the reduction of emissions, rests with the private companies concerned, not with the governments,".

"If in the case of General Motors, they present a business plan that involves some financial role or underpinning by our governments, then of course we will consider that. But first we have to see the business plan," continued Mandelson

U.K. defense company BAE Systems announced on Friday that it had reached settlements with the U.S. Department of Justice and with the U.K.’s Serious Fraud Office regarding investigations into the company’s activities in Saudi Arabia as well as the sale of radar systems in Tanzania. Under the U.S. deal BAE will plead guilty and will pay a fine of $400. Under the deal with the U.K. authorities, the company will plead guilty to one charge of breach of duty and pay a fine of £30 million pounds. BAE issued a statement both regretting and accepting full responsibility for both offences.

The Digital TV Group (DTG), made up from a consortium of broadcasters, technology providers and set top box manufacturers, has expressed widespread industry concern regarding a proposed new venture, aimed to market a £200 pound set-top box, which will provide internet services to the television, to be launched later this year. Project Canvas, a joint venture between the UK’s public sector broadcasters and two of the country’s broadband providers, has won initial approval from the BBC Trust. However in a submission to the BBC Trust’s consultation, the DTG, whose members include Virgin Media, BSkyB and Sony expressed their fears that Canvas’ members had not engaged fully with the industry. DTG will need to wait a few months to discover the BBC Trust’s final ruling on the matter.

The pound weakened 0.7 percent to $1.564, its lowest level since October 2009. The decline came after the Bank of England kept the door open to more asset purchases to safeguard the economic recovery.

Sterling closed up at 1.1447 against the Euro.

The benchmark FTSE 100 Index was taking a beating before the weekend put an end to the shares sell-off. It closed down 223 points at 5060.92

U.S. stocks on Friday pared earlier losses as the equities tracked the dollar and the commodities market. Stocks came off their lows as the price of crude oil pulled back above $70 a barrel. The Dow Jones Industrial Average finished down 27.2 points at 9,974.98. The NASDAQ gained 9.73 points to close for the weekend on 2,135.16.

Following the devastating earthquake that struck Haiti last month, the world’s leading industrialised nations have pledged to write off the debts owed to them by the country. Canada’s finance minister made the announcement at a Group of Seven countries summit in Canada. A spokesman for the group announced that they would encourage international lenders to do the same.

Bi- and multilateral lenders including international bodies have already canceled some £800 million ($1.2 billion) of Haiti’s debt in 2009.

Toyota’s reputation was in danger of plunging into freefall tonight when it admitted investigating reports of brake faults in Prius hybrid cars in the US and Japan in a move that could trigger another recall.

The possibility that an estimated 270,000 of the latest model of the Japanese company’s flagship vehicles could be withdrawn because of safety fears follows 77 reported cases of braking problems among cars sold in Japan and 100 similar complaints in the US.

Prius owners have reported momentary loss of braking ability at low speeds on bumpy roads. Two of the incidents reportedly ended in crashes that resulted in injuries.

US safety regulators opened a formal investigation today.

The company is already reeling from a recall of more than eight million vehicles worldwide because of problems with accelerator pedals. A number of cases were reported where pedals jammed in causing vehicles to speed out of control.

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Tags: BAE Systems, Bank of England, Banking, British Economy, BskyB, Currency, Debt Management Office, Digital TV Group, Dow Jones, Economics, Economy, Financial News, FTSE, General Motors, Haiti, Lord Mandelson, Money, NASDAQ, Opel, Prius, Project Canvas, Rainer Bruederle, Recession, Stock Markets, Stocks and shares, Toyota, UK Banks, UK business, UK Economy, UK government, UK Insolvency Service, UK Recession

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

According to Thomas Huertas, the banking director at the U.K.’s Financial Services Authority, London’s role as the European Union (EU) equivalent to Hong Kong as a self-regulating financial center, is drawing to a close.

The group of 27 European states that comprise the EU plans to centralize oversight of markets in the wake of the global financial crisis, with proposals for new regulators for the banking, securities and insurance industries, Huertas said. Evidence of a continental European sway away from London was provided by recent statements from Michel Prada, former chairman of French market regulator "the Autorite des Marches Financiers", who said that while continental Europeans “admire the City,” the also felt high levels of jealousy and irritation towards it.

About 10 percent of jobs in Britain’s financial services industry could be cut, equivalent to over 110,000 jobs. An official from one of the UK’s leading union Unite has announced estimates that 38,000 jobs had gone this year at banks and other financial firms it represents and that was set to rise substantially.

The financial services industry employs between 1.1 million and 1.3 million people. Part-nationalised banks Royal Bank of Scotland and Lloyds Banking Group have cut thousands of jobs, and planned restructurings at the two banks are likely to affect about 25,000 employees,

Dubai World began negotiations to restructure about $26 billion in debt and said the remainder of its $59 billion of liabilities is on “a stable financial footing. Dubai World began talks with banks; easing concern a delay in debt payments will hurt U.K. lenders.

Chelsea Building Society has confirmed it is in advanced merger discussions with its Bradford-based larger rival Yorkshire Building Society.

It said the talks are part of a detailed review of its activities, financial position and corporate structure, which includes looking at the benefits of a possible merger. However the group, which is the UK’s fourth largest building society, stressed that it remained well-funded and had strong liquidity. Yorkshire Building Society is already the UK’s second biggest society, and a tie-up with the Chelsea would create an organization with more than £35 billion of assets, 178 branches and 2.7 million members. Cheltenham-based Chelsea said the merger would boost its capital position by around £100 million. Both the societies said the deal would only go ahead if it produced mutual benefits.

According to a survey of leading UK mortgage lenders, Home owners are choosing to make bigger repayments on home loans instead of increasing spending. This news, whilst pleasing to most, will come as a blow to attempts to drive economic recovery through consumer demand. A rising household saving rate means the Bank of England must instead look to exports to fuel growth. A spokesman for the Lloyds banking group which includes Bank of Scotland, Cheltenham and Gloucester, Birmingham Midshires, Lloyds TSB and Halifax, confirmed that the percentage of customers making regular overpayment on their mortgages has doubled compared to last year. With the average monthly overpayment within the group being around £350 pounds.

BSkyB has been named as Britain’s most admired company by City experts. The media giant, owner of Sky News is the youngest company ever to win Management Today’s top award.

Tesco came in at number two, with its chief executive Sir Terry Leahy retaining his most admired leader crown. BSkyB topped its sector in every one of the nine criteria decided upon and rated by industry peers and City analysts as well as winning the ‘quality of goods and services’, ‘quality of marketing’ and ‘capacity to innovate’ overall awards.

Online retail sales are expected to rise 14 percent to £5 billion this month, According to a recent study, almost three quarters of Britons will do more than half of their Christmas shopping on the Internet,.

A leading industry body specialising in global e-retail, forecast that Monday, December 7 would be the busiest online shopping day this year, with spending reaching £350 million. The survey also states that around 90 percent of consumers plan to buy at least some of their Christmas presents online this year.

The pound retreated strongly against the dollar and the Euro whilst rising against the Yen.

• Pound/US dollar 1.6528
• Pound/Euro 1.10975
• Pound/Japanese Yen 145.6191
• Pound/Swiss Franc 1.6537

The FTSE 100 has rebounded 51 percent from its low on March 3 amid government stimulus programs and record low- interest rates. The gauge fell 3.3 percent from Nov. 25 till the end of trading Thursday as Dubai World’s move to delay debt payments risked triggering the biggest sovereign default since 2001. The FTSE 100 closed on Thursday on 5313.00.

According to a recent survey, the US private sector job cuts narrowed in November for the eighth consecutive month, with less than 170,000 jobs being lost last month, 26,000 fewer than in October. The US services sector shed 81,000 jobs in November, up slightly on October, with fewer jobs being lost in the manufacturing sector. According to a spokesman for the Obama administration, since the beginning of the £473 billion jobs stimulus package, passed in February, it has saved or created more than one million jobs across the US. According to the latest US Labour Department figures, the unemployment rate in the US rose to 10.2% in October, and its highest rate since April 1983. Since the recession began in the US in December 2007, the number of unemployed has risen by 8.2 million, while the jobless rate has risen from 4.9%.

The Dow Jones index closed down 86.53 points, on 10,366.15 points, while the NASDAQ remained steady on 2173.14.

Bank of America has announced plans to repay the £27 billion US government bailout it received during the credit crisis of 2008 as well as after the purchase of Merrill Lynch earlier this year.

The move is designed to allow Bank of America to free itself from government restrictions, including executive pay limits that were a stipulation of granting the funds. The bank reported a $1 billion net loss for the three months from July to September, worse than had been expected, especially when compared to a net profit of around £2 billion in the previous quarter and around £1 billion in the same period of 2008.

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Tags: Autorite des Marches Financiers, Bank, Bank of America, Bank of England, Banking, Birmingham Midshires, British Economy, British Pound, BskyB, Chelsea, Chelsea Building Society, Cheltenham and Gloucester, Currency, Dow Jones, Dubai World, Economics, Economy, Financial News, Financial Services Authority, FTSE, Halifax, Lloyds Banking Group, Lloyds TSB, Michel Prada, Money, Money Markets, NASDAQ, Recession, Royal Bank of Scotland, Sir Terry Leahy, Stock Markets, Stocks and shares, Tesco, Thomas Huertas, UK Banks, UK Economy, UK government, UK Recession, Yorkshire Building Society

Royal Bank of Scotland is considering approaching the market for extra money to avoid handing more control to the government. The bank, now 70% owned by taxpayers, is preparing to join the government’s Asset Protection Scheme (APS) to stop some toxic investments going bad. But it is also considering asking shareholders to invest further to prevent the government’s stake rising to a possible 84.5% if it insured all its bad assets with the APS.

According to official figures released on Friday, the UK government posted a record budget deficit for an August as the recession continues to bite into government tax receipts, The Office for National Statistics said the public sector net cash requirement (PSNCR) stood at £10.379 billion in August. That was lower than the 12 billion pounds expected by analysts but still twice the level of the same month a year ago and a record for the month of August. July’s PSNCR was also revised up by some £1.5 billion. The government’s preferred accruals-based measure, public sector net borrowing came in at £16.119 billion s, also weaker than expected and a record high for August, versus £9.876 billion pounds in 2008.

The flow of net lending to companies fell in July by the largest sum on record, according to a statement issued by the Bank of England on Friday. The figures provide further indication that more action may be needed to get credit flowing in the UK economy.

On a more positive note, mortgage approvals by major UK lenders rose in August for the seventh consecutive month to 57,000 from 53,000 in July. The net flow of lending to UK businesses fell £15.5 billion in July after a £3.6 billion pounds fall in June, making for the largest single decline since 1998.

UK Business Secretary Peter Mandelson has called on the European Union to intervene to prevent governments using state aid as a bargaining chip to protect jobs during Magna International Inc.’s takeover of General Motors Co.’s EU plants. Mandelson has joined the list of European politicians concerned that a German plan to provide €3 billion in loan guarantees to support the GM-Magna deal will sway the company. As the carmaker struggles with overcapacity, Magna has said it plans to cut about 10,500 jobs.

According to senior officials at the State Bank of India,(SBI) India’s largest lender, are looking at acquisitions of up to $1 billion in the UK and expect to maintain a 40 per cent growth rate in its UK business.

The bank’s overseas business plans, expected to be driven by both expansion and acquisitions, include the opening of 40 overseas branches, according to SBI chairman OP Bhatt. The bank was looking at all regions of the World, including the UK, for acquisitions. Besides the UK, the regions where the bank plans to open new branches include North America, Bangladesh and Nepal, where its subsidiary will set up 11 more outfits. It will open five more in branches in the UK by June next year and make London a hub for its European operations to boost international business. At present, the lender has seven branches in the UK and plan to open another, hopefully in October.Currently, the UK contributes over $3 billion to SBI’s turnover.

British Sky Broadcasting has accused the media regulator of making elementary errors in an official review of the pay-television market, and said that Ofcom, the independent regulator and competition authority for the UK communications industries, was exceeding its powers. BSkyB delivered its detailed response to the regulator’s findings that it should sell its most valuable content, including Premier League football and first-run films, to rivals at prices set by Ofcom. In the document, the broadcaster accuses the regulator of producing a financial analysis is fundamentally flawed, as well as challenging Ofcom’s right to even rule on the case, that has taken two years to decide. The pay-TV review was prompted by a complaint from four of BSkyB’s competitors, Top-Up TV, BT Vision, Virgin Media and the now defunct Setanta.

The biscuit group that makes Jammie Dodgers and Wagon Wheels, Burton’s Foods have been taken over by its lenders in a debt restructuring move that leaves Duke Street Capital, its private equity owner, nursing a considerable loss. The fate of Duke Street’s investment in Burton’s comes just over two years after its plans to close one of the biscuit maker’s factories caused the private equity group to be invited to a parliamentary inquiry for questioning.

On the FTSE Standard Life rose 1.8 per cent to 283 pence after Goldman added the insurer to its “buy” list.

Leading property stocks were higher. British Land gained 3.3 per cent to 528 pence after completing the sale of half its Broadgate development to Blackstone. Hammerson followed, gaining 2.6 per cent to 439½ pence.

The UK’s FTSE 100 index continued to climb but at a slower pace , rising 8.94 points to close at 5172.89, making for a 3.2 per cent gain for the week.

Meanwhile the FTSE 250 lost almost all of its previous day’s gains on Friday, falling 57.15 points to wrap up for the weekend on 9,306.93

The dollar fell to fresh one-year lows this week as rising risk appetite stemmed haven demand for the US currency. Continued improvement in sentiment encouraged investors to abandon the low-yielding dollar to seek higher returns elsewhere. The pound continued to lose value against the main currencies on Friday’s trading.

• Pound/US dollar 1.6271
• Pound/Euro 1.1059
• Pound/Japanese Yen 148.7878
• Pound/Swiss Franc 1.6751

Another two US banks have been closed by the federal regulator, taking the total number of American banking failures this year to 94.

The Federal Deposit Insurance Corporation (FDIC), which controls the banking sector, has shut Irwin Union Bank & Trust and Irwin Union Bank.

The move comes after their parent firm – Irwin Financial – was unable to meet an FDIC demand to boost their capital.

The failure of the two banks is likely to cost the FDIC £522 million.

The Dow Jones Industrial Average continued to move upwards towards the weekend , up 36.28 points at 9,820.2. The NASDAQ consolidated a little, up 6.11 points to 2132.86.

Gold dominated trading this week with bullion inching towards its record high of $1,030.80 a troy ounce set in March 2008.

It reached $1,023.85 on Thursday but was back to $1,012 on Friday, up 0.7 per cent on the week. It found support from dollar weakness and concerns about the outlook for inflation.

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Tags: APS, Asset Protection Scheme, Bank, Bank of England, Banking, British Economy, British Pound, British Sky Broadcasting, BskyB, BT Vision, Burton’s Foods, Currency, Dow Jones, Duke Street Capital, Economy, FDIC, Federal Deposit Insurance Corporation, Financial News, FTSE, General Motors, GM-Magna, Irwin Financial, Irwin Union Bank, Magna International Inc, Money, Money Markets, NASDAQ, Ofcom, Office for National Statistics, Peter Mandelson, PSNCR, RBS, Recession, Royal Bank of Scotland, Setanta, State Bank of India, Top-Up TV, UK Banks, UK business, UK Economy, UK government, UK Recession, US Banks, Virgin Media

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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