A recent report has stated that UK House prices have raised by more than 0.7 % (£3,000), while updates forecasts show that annual property inflation is due to slow down from the current rate of 9%. The increase more or less cancels the 0.8% fall in February.

The average UK property is now valued at £164,519, £16,773 more than the in February 2009, which was the low point in the recent property value slump In from the worst recession since World War II.

In last week’s budget, Chancellor of the Exchequer Alistair Darling scrapped a tax on house purchases for first-time buyers spending £250,000 pounds or less. The tax previously started at 1 percent for properties costing more than £125,000 pounds. The policy will mean nine in 10 first-time buyers will avoid the levy, according to government forecasts. Signs of increased demand is recent mortgage approval figures s released that show that almost 60.000 new mortgages were approved in February, more than double those approved at the at the trough of the financial crisis in November 2008, and less than half the 120,000 reading at the peak of the boom.

The Bank of England said net mortgage lending for February 2010 rose by £1.6 billion pounds, the most since December 2008.

In addition, figures recently released show that UK households added to their unsecured debts in February, with net consumer credit rising by £528 million pounds, a significant increase on economist’s predictions of a £400 million-pound increase. Credit-card lending increased by £374 million, while personal loans and overdrafts increased by £154 million.

Royal Bank of Scotland (RBS) have been fined £28.6 million for breaking competition law in the first big case brought against a financial services company, potentially exposing the part-nationalised bank to lawsuits from clients. RBS admitted staff involved in making loans to big law and accounting firms had illegally given pricing data to counterparts at Barclays. Barclays reportedly escaped being penalised because it voluntarily disclosed its part in the affair to the Office of Fair Trading.

Desire Petroleum, the British company who are drilling for oil off the Falkland islands have seen their shares halve in value , after they revealed the existing supply may not be commercially viable.

In a statement on their Web site, Desire stated that "oil may be present in thin intervals, but the reservoir quality is poor."

Desire will release the final results of its 30-day test drilling operation in the South Atlantic archipelago on Wednesday. According to the company it may have to drill deeper to find greater quantities of oil and gas.

Desire estimated that the North Falkland Basin could contain 3.5 billion barrels of oil as well as having "significant gas potential."

Potential revenues from oil and gas reignited have already re-ignited a long-running dispute between London and Buenos Aires over ownership of the Falklands.

Leasing UK high street banking groups, Banco Santander SA and Royal Bank of Scotland Group Plc are reported to be in advanced talks with the U.K. government over allowing their client’s access to their bank accounts through Britain’s 11,500 Post Offices. According to a recent statement, the negotiations are part of a package of measures intended to breathe life back into the Post Office network. Business Secretary Peter Mandelson is about to announce another series of measures, including allowing consumers to open a Post Office current account, issue mortgages for up to 90 percent of a property’s value. Another revolutionary proposal will be subsidised savings accounts for people on low incomes. If Mandelson’s proposal bears fruit, it means that the government will add 50 pence for every pound saved.

Mandelson was reported to have said that the Post Office is a well-loved community institution. "This move will bring more banking services back to the heart of those communities.” He concluded.

Nowadays, with pensions and benefits being paid directly into bank accounts, and services including car licensing have gone online. Falling revenue has seen the number of U.K. Post Office branches declined from 25,000 in their peak during the 1960s.

U.K. publisher Daily Mail & General Trust PLC have announced their predictions that first-half operating profit will be up sharply for the last six months trading figures. They state that the increase is due primarily to improvements within its consumer businesses, but it remains cautious about the second half of the year given the political uncertainty in the U.K. ahead of the imminent general election. The Daily Mail and the Sunday Mail newspapers reported an 8% rise in underlying advertising revenues at Associated Newspapers for the six months period.

The pound was little changed at $1.5079 while the Euro rose on increased optimism on the Greek situation to €1.1249.

The FTSE 100 index dropped again on trading, finishing down 31 points to 5,672.32

The Dow Jones industrial average ended at a fresh 18-month high and the rest of the market churned Tuesday as investors weighed a rise in consumer confidence, more weakness in the housing market and a stronger dollar.

The Dow Jones industrial average added 11 points, or 0.1%, closing at 10,907.42, the highest finish since 11,143.13 on Sept. 26, 2008. The NASDAQ composite also added 6 points to close on 2410.69.

The Irish government are expected to inject a further €8.3 billion Euros (£7.4 billion, $9.9 billion) into the nationalised Anglo Irish Bank.

A spokesperson for the Irish Finance Ministry revealed that pumping in more money was the" best of a series of bad options". Although both Allied Irish Banks and Bank of Ireland will attempt to raise funding from private investors, it appears more likely that Allied Irish Banks will also require taxpayer support,

This second bailout follows the nationalisation of Anglo Irish Bank last year.

The Irish government also owns 25% and 16% stakes in Allied Irish Banks and Bank of Ireland respectively

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Tags: Alistair Darling, Anglo Irish Bank, Banco Santander SA, Bank, Bank of England, Banking, British Economy, British Pound, Budget, Credit Crunch, Desire Petroleum, Dow Jones, Economics, Economy, Financial News, FTSE, General Trust PLC, House Prices, Inflation, Money, Money Markets, NASDAQ, Peter Mandelson, Post Office, Recession, Royal Bank of Scotland, Savings, Stock Markets, Stocks and shares, The Daily Mail, UK Banks, UK Economy, UK government, UK Recession, Wall Street

Much as he tried to keep a low profile on the subject, Chancellor Alistair Darling’s budget speech on Wednesday had a definite pre-election feel to it as were most of the measures taken, with the useful suspects of cigarettes, spirits and petrol taking their usual pounding, but to varying degrees.

No sooner than Darling closed his famous red briefcase,

Shadow chancellor George Osborne launched his expected attack, describing Labour’s Budget as being empty and lacking in vision.

In his speech the Chancellor was not slow to point out that Labour’s policies were "bearing fruit" and expressed what appeared to be genuine concerns that if the Tories should get into power their spending cut plans could send the UK back into a much feared "double dip recession".

The Liberal Democrats, who obviously felt that they had to add something to the debate, chipped in with "Labour and the Tories are both in denial about the scale of spending cuts needed".

In his budget speech, Darling did announce that the government will need to borrow less than expected this year to plug the gap in the UK’s finances, with

Net borrowing for the financial year expected to total £167 billion, down from the £178 billion previously forecast. Borrowing this year is still expected to be at a record high – equivalent to 11.8% of GDP.

On the downside, Darling also downgraded his growth forecast for the UK economy.

Fuel duty will rise more slowly than previously planned, with a previously announced 3% rise in fuel duty l now be staggered, with a 1% rise in April, a further 1% rise in October, and then again in January. 2011, with phasing the increase rather than raising fuel duty by 3% immediately will cost £550 million.

UK banks received a number of mentions in Darling’s speech some of which were even favourable. The general underlying theme was that the UK taxpayer will be looking to see the banks move back to profit while increasing their support the economic recovery and improve financial expansion.

Alistair Darling noted that £2 billion had been raised through the 50 per cent one off "super tax" on bankers’ bonuses over £25,000, making for a 400% increase of the original forecast of £550 million. The windfall will largely be spent on further measures to stimulate the economy as well as some to be set aside to subsidies university places.

Other interesting snippets from the budget were that the government will allow tax breaks for companies who run zero-emission cars. Currently employees with a company vehicle for private use are required to pay a tax charge, with the exception of electrically propelled cars. However, the government has pledged to expand the exemption to cover "green cars" with these incentives to come into effect after April 6. Darling also threw in the information that the scheme to fund the deployment of superfast broadband looks likely to cost the industry and the consumer much more than expected, with every telecommunication line be subject to a monthly 50 pence levy on landlines. The government claims the new tax is necessary to ensure superfast broadband reaches suburban and rural areas.

It also appears that in order to partly fund the Budget’s 2.5 billion pound package for small firms, Darling intends to switch £230 million pounds of spending for 2010-11 from the departments for business and transport. The department for business said 1£50 million pounds will be transferred, largely at the expense of the £950 million pound strategic investment fund, which is supposed to provide state financing for strategic growth sectors, such as the civil nuclear industry.

Returning to reality, the UK’s two rail trade unions have announced their plans for four days of strikes to kick-off two days after Easter. If the industrial action from the RMT and the Transport Salaried Staff’s Association does transpire , it could see the UK hold its first national rail strike since the system’s privatisation. However, there is a strong possibility that the strikes will be called off, with negotiations with National Rail, the infrastructure owner, already well under way. .

U.K. engineering-services firm Babcock International have announced their plans to acquire the VT Group for around £1.33 billion pounds, in a mix of cash and stock. The announcement comes after two previous bids had been rejected.

Babcock is to pay 361.6 pence in cash and 0.701 of its own shares for every share in VT Group. As the sale was concluded, the offer was valued at 734.9 pence a share, meaning that Babcock paid a 39% premium to the average closing price over the month VT investors will hold around 36% of the combined company once the deal is completed. On the news shares in VT Group rose 4.4% on the FTSE to 721 pence, while Babcock also posted strong gains, rising 3.8% to 553 pence. A spokesman for Babcock said that they expect the deal to boost their earnings significantly in the first full year after completion.

The pound continues to be a problematic issue in the Forex markets. It closed On Thursday on $1.4863 while the Euro rose a little to on €1.1143.

The FTSE 100 index seemed to be pushed forward by Darling’s budget as well as increased optimism on Greece. It closed up 54 points to 5,727.63.

The House of Representatives put the finishing touches on the overhaul of Obama’s pet Health Care bill by passing a companion package that would make insurance more affordable, raise taxes on the wealthy and close a gap for prescription drug coverage for seniors. The Senate approved the package earlier in the day, which means that it now goes to Obama to sign.

The votes concluded a yearlong political struggle that tied up lawmakers, as well as making for a noticeable dent in Obama’s popularity

However passing the Health Care bill might be causing some problems on Wall Street. The Dow Jones retreated a little after a week of impressive gains; down by 377 points to close on 10841.21 The NASDAQ also dropped 18 points to 2397.41.

Greece seems to be out of trouble, at least for the time being. All of the 16 Eurozone member countries have finally come up with their backing for a financing plan, with some of the funds coming from the International Monetary Fund (IMF). The loan will total €22 billion (£20billion), with the condition that it is only to be used if normal market lending facilities to Greece will dry up. According to French President Nicolas Sarkozy, the Eurozone nations would grant bilateral loans, totalling some two-thirds of the funding,

Greek PM George Papandreou was quoted as saying that it was "a very satisfactory" move.

Also breathing sighs of relief are the owners of the Dubai World investment vehicle who have just been granted a £6.4 billion ($9.5 billion) loan help it’s to restructure their debt burden from the Dubai government

Dubai World has presented a plan to restructure $ 23.5 billion of debt to its creditors, with the proposal including converting almost a quarter of the debt into equity. Creditors have now to decide on whether to accept the plan, with analysts predicting that it is as good as it gets. The troubled company stunned global markets in November last year when it asked for a six-month delay on debt repayments.

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Tags: Alastair Darling, Babcock International, Bank, bankers' bonuses, Banking, British Economy, Budget, Currency, Dow Jones, Dubai World, Economics, Economy, Financial News, Forex, FTSE, Fuel duty, George Osborne, George Papandreou, International Monetary Fund, Money, Money Management, NASDAQ, National Rail, Nicolas Sarkozy, Stocks and shares, superfast broadband, Transport Salaried Staff's Association, UK Banks, UK Economy, UK government, UK Recession, VT Group, Wall Street

It only stands to reason that the U.K.’s economic recovery will be slow in 2010. There is an election about to happen and the public have obviously chosen a path the correct path to save spend less and save more. According to the Confederation of British Industry (CBI) the economy will grow by 0.3 percent in the first quarter and move up to 0.4 percent in the second quarter, and will finally settle down to expanding 0.5 percent in the second half of the year. The CBI also predicted that gross domestic product (GDP) will increase by 1 percent in 2010 and 2.5 percent in 2011. Britain’s economy exited its deepest recession on record in the fourth quarter with growth of 0.3 percent.

Bank of England (BOE) officials were also expressing caution on the eve of what may well be the Labour Government’s last budget in well over a decade. The BOE have consistently issued warnings that financial recovery in the UK may prove uneven as credit strains persist.

Chancellor of the Exchequer Alistair Darling is due to deliver his budget today, with just a few weeks before the general election, the date of which is yet to be announced. A spokesman for the CBI stated that the government must avoid “damaging” tax rises and focus on spending cuts to narrow the record deficit,

As budget fever mounts, speculation is rife as to what Chancellor of the Exchequer Alistair Darling will reveal in his speech. Darling has repeatedly stated there will be no pre-election giveaways in the budget but he wants to encourage more investment in UK business after an 18-month recession.

It is expected that government departments which be called on to cut costs that will add some credibility to the U.K.’s deficit reduction plan and Yvette Cooper, the work and pensions secretary, has set the wheels in motion by announcing her department are plan to introduce savings of at least £500 million pounds by the 2012 / 2013 fiscal year.

What is for sure is that the Labour government will unveil their plans to establish a £2 billion "green" investment bank in the budget, designed to help Britain’s transformation to a low carbon economy. The green bank, designed to help finance projects such as railways, offshore wind power generation and eco-friendly waste management, will be partially funded by sales of government assets with the remaining money being drawn from the private sector.

Strike hit British Airways have come up with an estimate that the current three-day strike by the airline’s cabin crew will cost them around £7 million a day in lost earnings. However the airline hastened to point out that the industrial action was unlikely to have much impact on its earnings for the full-year. According to a company spokesman, around a third of flights to and from the UK’s main airports on Monday have so far been cancelled.

BA Heathrow suffered the biggest disruption on Monday, with 201 of the 443 flights on BA’s online schedule being cancelled.

Every cloud does have a silver lining and one of them appears to be that because of the recession, one in four children have reduced their spending. According to new research published this week t children’s attitudes to money have been strongly impacted by the recession with 80% of the children polled stated that they would prefer to save up to buy something rather than get into debt.

The latest financial results from fashion retailer Monsoon show an increase in profits for 2008/2009 eight times higher than the previous year. Over the year to August 29, 2009, the privately owned company showed a profit of taxes of £32.9 million, up from £3.9 million the previous year. Monsoon, who currently operate over 1,000 outlets, report strong sales at its overseas division. Over the next 12 months Monson plan to open another 140 stores.

Another fashion in the financial spotlight is New Look who has announced that they may resurrect their £1.7 billion flotation plans. The decision may come as soon as this week when the New Look board meets to consider whether market conditions have sufficiently improved. The fashion retailer shelved its planned IPO in February, blaming volatile markets. Meanwhile sales at the group are said to be ahead of expectations.

In a move which could raise as much as £400 million pounds Music recording giants EMI are reported to be considering plans to licence its music catalogue. Competitors in the industry would manage the music group’s catalogue, which includes music from The Beatles. If successful the licensing would enable EMI to meet their debt repayments and stave off an attempt by Citigroup, to take control of the company.

Sterling continues to fall ahead of this week’s budget and the fast-approaching general election due to be held in early May, and the prospects that it will be closely fought and may even result in a hung parliament.

The pound continues to be stuck around the $1.50 mark, closing at $1.5037 on Tuesday, while the Euro was on €1.1137.

As concern consists about debt levels whether the next government will be equipped to tackle challenges on public finances the pound looks likely to continue in the doldrums.

The FTSE 100 index closed on Tuesday up 23 points at 5,673.63.

On Wall Street, the Dow Jones was still on the rise, this time by 147 points to close on 10888.83 The NASDAQ also was on the rise up 42 points to 2415.24

According to Greece’s central bank the country’s economy is trapped in a "vicious circle" and is liable to contract more severely than government predictions. .

The Bank of Greece (BoG) said economic output in 2010 will fall by 2%, much higher than the Greek government’s prediction of between 1.2% and 1.7%.

BoG says the recession will be worse due to planned public spending cuts.

The report comes ahead of a European Union summit to discuss Greece’s economic crisis, as German resistance towards financial aid for Athens persists.

Athens has already come close to defaulting after misleading European partners about the scale of its financial problems, which last year saw its public sector deficit hit almost 13 per cent of gross domestic product

Meanwhile Germany’s coalition government is reportedly planning to establish a banking levy that will protect taxpayers from the costs of any future bank bail-outs. The German government was obliged to seriously deplete their treasury coffers to provide a €500 billion rescue package to shore up the banking system late in 2008.

On the other side of the World, in Dubai, bank officials await anticipation of the severely troubled Dubai World company presenting their long-waited proposals on how they intend to restructure $26 billion of toxic debt.

The Dubai stock market has surged 11% this month on speculation a proposal is imminent.

Crude oil prices managed to rebound from early weakness to settle at around $81.25 a barrel.

Analysts at the Centre for Global Energy Studies said that global oil demand was on the path to full recovery but upward pressure on prices would be limited due to supply side changes.

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Tags: Alistair Darling, BA Heathrow, Bank, Bank of England, Bank of Greece, Banking, British airways, British Economy, Budget, CBI, Centre for Global Energy Studies, Citigroup, Confederation of British Industry, Dow Jones, Dubai World, economic recovery, Economics, Economy, EMI, Employment, Financial News, FTSE, green bank, Money, Money Management, Money Markets, Monsoon, NASDAQ, New Look, Recession, Retail, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Wall Street, Yvette Cooper

For the first time in many a long while, Prime Minister Gordon Brown has been drawn to admit that he would have no option but to make some public spending cuts, and that they would be both considerable and imminent.

Brown, addressing a meeting of trade unionists announced that the government would have no option but to “cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets”. He went on to admit that a new pay austerity for the UK was on its way, hinting strongly that “realistic” public sector pay settlements were a must.

The Prime Minister’s comments were made at a meeting to the Trade Unions Council (TUC) held in Liverpool were obviously designed to pre-empt the forthcoming pre-Budget report due to be released in the autumn. The report will set out Labour’s plans for priority public spending and any cuts. Full details of departmental spending from 2011 are not expected to be included.

The suggestion that there me be public spending cuts is certainly radical, as Brown has steadfastly refused to admit the need for cuts in any form till now,

Not slow to take political advantage of Brown’s apparent turnaround was shadow chancellor George Osborne, who described the PM’s statement a “complete capitulation”.

The prime minister claimed the recession had thrown up some fairly major challenges and on each occasion the government had made the right choice: whether propping up the banks or cutting taxes to boost the economy.

Chancellor Alasdair Darling is expected to use the pre-Budget report to try to identify net cuts to accelerate the government’s plan to halve the deficit to 5.5 per cent by 2014. Never slow to criticise, Bank of England governor Mervyn King, says that the deficit cuts will be too timid.

Summing up his speech in Liverpool, Brown admitted that Britain was only just on the road to recovery – and conditions were “fragile”. He defended his governments over the last year by stating that they had rescued the banking system, saved up to half a million jobs and taken specific actions to help not business and home owners.

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Tags: Bank, Banking, British Economy, British Pound, Budget, Credit Crunch, Economics, Economy, Financial News, George Osborne, Gordon Brown, Money, pre-Budget report, Prime Minister, Recession, spending cuts, Tax, Trade Unions Council, TUC, UK Banks, UK Economy, UK government, UK Recession

It was a day for financial contemplation on Tuesday as the first anniversary of Lehman Brothers filing for Chapter 11 bankruptcy protection in the early hours of 15 September 2008 was marked, not quite by a minute’s silence but by many hours of contemplation of who the World’s financial systems almost went into meltdown.

Following the collapse of Lehman Brothers, once the fourth-largest US investment bank, the knock on effect caused meant that governments around the world had to pump trillions into their financial systems. The previously unimagined bank bail-outs, central bank actions and huge stimulus plans to save their biggest banks followed. Moves that are estimated to have cost every citizen of the developed world around $10,000 each..

On the day, Paul Myners, the minister who job it is to oversee London’s financial district, announced that he remains “very confident” that the UK’s multibillion-pound bailout of its troubled lenders will result in a profit for the country.

Last year the U.K. orchestrated a rescue package for banks including Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc. In the April annual budget the government submitted to Parliament it estimated that the bailout may cost taxpayers £50 billion

When asked to give his impressions when investments in the UK banking system would result in profit for members of the U.K. public, Myners replied by assessing that it will take “much less” time than a decade, and when it came it would add up to a “a nice little nest egg for the British taxpayer.”

Speaking of nest eggs or was it Easter eggs, Cadbury’s chief executive Todd Stitzer is due to be in the hot seat today, when he faces a group of the company’s’ top level investors since Kraft’s £10.2 billion unsolicited takeover proposal was rejected by the company. Stitzer as well as Andrew Bonfield, Cadbury’s chief financial officer are expected to be asked to outline the confectionery group’s long-term growth plans. The address was scheduled before Kraft approached Cadbury late last month.

UK oil and gas explorer, BG Group have announced another oil and gas discovery in a giant field off the coast of Brazil on Monday, making it the second in less than a week.

BG said further work was needed to evaluate the results before any concrete announcement can be made.

Hopes of a swift economic rebound and warned households and businesses of a “slow and protracted” recovery, according to Mervyn King, Bank of England governor.

King’s comments led to a sharp reassessment in financial markets of the likelihood and timing of any rise in interest rates.

The pound has taken a beating in the last few days, falling against all the major currencies for the last three months.

• Pound/US dollar 1.6477
• Pound/Euro 1.122
• Pound/Japanese Yen 148.8052
• Pound/Swiss Franc 1.7034

The FTSE 100 continued its upswing rising 60.31 points to finish on 5.102.44 while the FTSE 250 rose on Tuesday by 87.24 points to 9251.84/

The US recession is probably over but the economy will remain weak for some time due to unemployment, Federal Reserve chairman Ben Bernanke has said.

But he added that the economy would still feel "very weak" to Americans concerned about job security.

A year after Lehman Brothers collapsed, a think tank has warned the lessons of the crisis have not been learned.

The Institute for Public Policy Research (IPPR) says the rapid return to the City’s bonus culture shows that real reform has been "very limited".

The warnings echoed a speech by US President Barack Obama, who warned of complacency in the banking sector.

Despite President Obama’s and Bernanke’s comments , stocks on Wall Street rose on the day’s trading. The Dow Jones rose by 56.61 points to 9683.41, while the NASDAQ rose by 10.86 points to 2102.64.

Japan Airlines (JAL) plans to cut 6,800 jobs, as an airline trade body upped its projected losses for the global industry this year.

Media reports have said several US and European airlines are in the running to take a stake in the loss-making carrier.

The airline had already launched a programme of job cuts, plans for fuel-efficiency and a focus on business customers.

Reports this week have suggested that Delta Airlines and American Airlines are in talks to invest in JAL to expand into Asia via code-sharing agreements.

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Tags: Andrew Bonfield, Bank of England, Banking, bankruptcy, Barack Obama, Ben Bernanke, BG Group, British Economy, British Pound, Budget, Cadbury, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, FTSE, Gordon Brown, Institute for Public Policy Research, Investment, IPPR, JAL, Japan Airlines, Kraft, Lehman Brothers, Lloyds, Mervyn King, Money, Money Markets, NASDAQ, Paul Myners, Recession, Retail, Royal Bank of Scotland, Stitzer, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, US President

Recent reports have it that the injection of public money that is supposed to pump new life into the construction industry is just not making it. Construction projects across the UK lay abandoned and uncompleted sector, glaring evidence that the sharpest contraction that the building sector has ever known looks a long way from ending.

According to a recent survey carried out on behalf of the industry, the UK government pledge to re-programme more than £3 billion of publicly owned construction projects , that were due to begin in 2010 and 2011 to this year, have failed to materialise as yet. The idea of bringing these projects forward was to offset that painful lack of new building starts in the private sector.

However a recent report from the Construction Products Association revealed that a nationwide cross section of their members reported that instead of the promised increase in new projects, even existing construction projects have been mothballed by the UK government as funding dries up. These projects include important and much needed public works including schools, hospitals road works and general infrastructure, had found public work had declined over the past year. Of the civil engineering and building companies contributing to the survey, 47 per cent of them reported lower work rates in the first quarter of 2009. Construction companies involved in building social housing reported a fall of project completions 27 percent compared to last year.

According to a spokesman for the UK Contractor’s Group, the government stimuli that was promised in Darling’s budget and pre-budget reports have so far failed to appear and their absence is having a very distinct impact on the UK construction industry, which has been hardest hit by the recession. The sector accounts for about 8 per cent of UK output and a similar percentage of jobs.

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Tags: Alastair Darling, Alistair Darling, British Economy, Budget, Construction Industry, Construction Products Association, Credit Crunch, Economy, Employment, Recession, UK Contractor’s Group, UK Credit Cards, UK government, UK Recession

For the average UK family times are still tough and they best that they can hope for is that they can retain the status quo until better times come around.
Surveys are beginning to show that there is more optimism around, the worst is over and most families are digging in for the long haul.

This means that when the family sits down to discuss their budget (which we all know that they should) then the principal factors that should be taken into account are:

1) How much do we earn?
2) How much do we spend?
3) How much can we afford to spend?

Hopefully all three questions should have roughly the same answer, but if they don’t adjustments have to be made. If cuts have to be made they should be, and families that have attempted to borrow their way out of income shortfalls have learned that in the long term this is a recipe for disaster.

The next stage for many families the next decision is where do we cut? Many families make the wrong decisions at this stage, usually under peer pressure, a modern epidemic of the Western World. Why do with a model 2000 car when the next door neighbor has a 2002, and so on. Why should your little Arthur have a 17″ computer screen, when Damien his best friend has a 22″ with quadraphonic speakers? The list is endless.

And does your next door neighbor or spoiled little Damien know or even care that you are under-insured and even under-pensioned?

The sad facts are that too many families in the UK fail to take their responsibilities seriously as far as insuring their properties, their possessions and even worse, their health or their lives. The theory that “it can’t happen to me” or” let me get through the next six months, and I will see to it” is as dangerous as it is irresponsible. Too many families or individuals don’t get that six months and when calamity strikes they are left totally or at best partially exposed and the ramifications can be much more traumatic than the event itself.

So when it comes down to look at what to cut, do yourself a favour; add insurance and pensions to your list of “untouchables”

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Tags: Banking and Insurance, Budget, Economy, Financial News, Insurance, Tesco

Whilst it is easy to gain the government and the banks for the financial quagmire that the UK succeeded in sinking itself in, the public also have to be levied a portion of the blame. As a leading financial analyst proudly proclaims, it was the shopping centres and the credit cards that did it as much as anything else. The banks and credit card seemed driven to provide unlimited credit, and the government turned their backs and pretended that it wasn’t happening. And the British public at large had a great time running up debts on their credit cards that they had no chance. And in some cases, no intention of repaying.

There are people who will be saddled with debts for at least the next decade, and will be paying fairly exorbitant interest on those debts as a lesson on how to use credit cards in the era which is hopefully not too far away. The end of the first great economic turn down of the 21st century.

Let’s face it. Having a credit card at your disposal is very convenient. And make no mistake about it, the majority of people whose lives became very difficult through misuse of the powers and responsibilities that being issued with a credit card entails, will continue to use them in the future.

However the rules of the game will be different. Anyone who has found themselves under an immense burden of debt would never have enjoyed the experience, and will never want to repeat it. And even if they did, the banks will have imposed such a strict system of checks and balances that the chances that it will happen will be miniscule. Credit cards were meant to replace cash and cheques, and when viewed in that light, they do an excellent job. A responsible person with a credit card should only use that card to cover around 40% of their monthly financial outlay, and should stagger payments amounting to no more than a quarter of their monthly credit card bill.

These are very simple rules, but if adhered to, will prevent a repeat of the most uncomfortable experiences that too many people have gone through in the last couple of year.

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Tags: Bank, Banking, Budget, Credit, Credit Crunch, UK Credit Cards

Estimates have it that by next year, the U.K. will have the unfortunate distinction of being the holder of the largest budget deficit in the developed world, almost entirely reversing the country’s hard earned status as the role model of a successful and wealthy financial services epicenter. A status that she has held for the last decade.

With the UK’s s budget deficit soaring to a staggering twelve percent of gross domestic product, who could now take Great Britain’s role as the key player on the global financial services stage seriously, and with forecasts that it could take at least another ten years to get the country’s finances back into some form of healthy financial situation, it seems likely that the UK financial service industry will be placed on a back burner for years to come.

While no one is confirming the fact that the UK crown has slipped, it is hard to disguise the fact that our credibility has slipped, and at a very crucial time. Jobs in the financial service industry in Great Britain are under serious threat. Tens of thousands have already disappeared as cut backs continue on a widespread basis, and the estimates are that more than 70,000 will disappear till the crisis runs its course

Despite the fact that the UK Treasury has pumped billions of pounds into the Banking and Insurance sectors to prevent a meltdown in the city, there seems a scant chance of a return in confidence any time soon. In order o recover at least some of their investments; the Treasury is demanding a whole new set of standards from the financial institutions. These standards mean that, in any event, dealing with the “city” will be a lot less attractive, it is only reasonable to suspect that the World’s financial movers and shakers may well be taking their business elsewhere.

The financial input from the financial services industry will be sadly missed, contributing almost eleven percent of the UK’s gross domestic product as recently as 2007, more than double of what it was just ten years previously.

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Tags: Budget, Financial News, London, UK Recession, UK treasury

Most people who had the courage to listen to Chancellor Alasdair Darling’s budget speech yesterday were left shocked but not particularly surprised by its content. One group who were left speechless however was the Federation of Small Businesses (FSB) who complained that the budget had largely ignored the small businesses. Businesses that are predicted to be the driving force behind the nation’s economic recovery as well as being one of its principal forces in creates new jobs.

Whilst the FSB expressed their appreciation of the Treasury’s focus on saving as well creating new jobs in the Budget, they also pointed out that small business enterprise must be encouraged in order to present a framework for job creation.

The majority of small to medium sized business in the UK are suffering from short and long term cash flow problems, with the Government’s proposed trade credit insurance scheme being seen as a lifeline for many. However ,

the FSB announced their disappointment that the Government had failed to announce automatic rate relief for small firms in the budget, and expressed their fears that the Chancellor missed the opportunity to give those firms the immediate financial boost they need at this time. This announcement came in the wake of U.K. Business Secretary Peter Mandelson plans released on Wednesday that the government to actively intervene in the trade credit insurance market with a temporary scheme designed to five billion pounds of Treasury guarantees. The feelings from the FSB is that the sum is insufficient and without a specific time frame.

Another brainchild of Mandelson, appeared to be given the “green light” in the budget are plans to boost the struggling motor industry with the introduction of a “car scrappage” scheme The scheme will allow consumers a £2,000 subsidy against exchanging their car for one that is more environmentally friendly.

Apart from the glum budget, it was also revealed yesterday that unemployment in the UK continues to climb. It has now reached 2.1 million in the first quarter, with last month’s figures signalling the 13th consecutive monthly rise.

The latest figures showed that a further 177,000 jobs have been lost, marking a 6.7 percent increase in unemployment, up by 0.6 percent from the previous quarter, according to figures released by the Office for National Statistics

The figures also showed that the number of people who have been unemployed for more than a year increased by 49,000 in the first quarter and is now approaching half a million.

Despite the doom and gloom, things on the stock exchange were still positive

On the day, the FTSE 100 added 43 points to close at 4,030.66 in London, while the FTSE 250 rose around 180 points to 7,159.96.

Retailers were the sector who showed the highest gains, led by auto retailer Inchcape, followed by video games retailer Game Group. Also doing well were sporting goods retailer Sports Direct International

Sterling fell back on Wednesday after the budget speech revealed the unhealthy state of public finances and the UK borrowing requirements for the coming fiscal year

Pound/US dollar 1.4566

Pound/Euro 1.1173

Pound/Japanese Yen 143.19

Pound/Swiss Franc 1.6979

US equities fell on Wednesday as a late sell-off in the financial sector as investor’s comments from Tim Geithner, the Treasury secretary, that the government wanted to retreat from the banking sector as soon as possible.

The Dow Jones Average dropped 83 points to close at 7886.57. Nasdaq rose by 2 points to close at 1645.85

Markets in the Asia-Pacific region were mixed again.

In Tokyo, the Nikkei 225 added 0.18 percent to 8,727.3 but the Topix index was down 0.09 percent to 829.96 and the Mothers market dropped 0.26 percent to 321.84.

Crude oil prices were lower right after the US Energy Information Precious metals prices were up but copper declined, while grains prices were mixed on the Chicago Board of Trade.

The International Monetary Fund (IMF) announced that they had revised their predictions and that the global economy is set to decline by 1.3% in 2009, instead of their original prediction of half a percent.

They also narrowed down their predictions to announce that major economies such as Germany, Japan and Italy will shrink in 2009 by an average of five percent.

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Tags: Alastair Darling, Budget, Economics, Economy, Employment, Financial News, Small Businesses, UK Small Business