According to a recent report by the Centre for Economics and Business Research (CEBR) UK house prices are liable to rise by about a fifth in the next four years. The forces that will push property prices up are increased lending levels by the banks and interest rates remaining at a low level.

Home values will rise 6.5 percent in 2010 and will have gained around 20 percent by the end of 2013, according to CEBR radically altering their forecast of October 2009, which house prices would increase by only 2.6 percent this year.

CEBR’s announcement strengthens reports from the Nationwide Building Society that showed house prices have begun rising again after the economy returned to growth. However their optimism was dashed by news that potential UK house buyers could soon face a chronic shortage of credit that will see mortgages ‘rationed’.

According to the Council of Mortgage Lenders (COML) as government schemes to keep mortgage lending afloat are due to dry up in 2014, their fears that a funding gap to the tune of £300 billion will open up. COML predicted in their recent report that the UK is at risk of a chronic under-supply of credit, bringing with it the rationing of mortgages for customers that will continue for many years. Before the financial crisis, the funding gap, meaning the difference between what banks took in savers’ deposits and what they lent out, was always covered by the wholesale market in mortgage debt.

As a result of lower oil and gas prices, oil giant BP have reported a 45% drop in annual profit Its replacement cost profit for 2009 was £8.75 billion, compared with £15.39 billion in 2008. The company said that its oil and gas production increased more than 4% in 2009 and its reserves had grown for the 17th year in a row. Profits during the final three months of 2009 were up 33% from the same period a year ago.

However, the fourth quarter results fell short of analysts’ expectations, causing BP shares to fall more than 4% in early trading.

Shares in Northumbrian Water surged 12 percent after press reports that the Ontario Teachers’ Pension Plan may bid £1.7 billion ($2.7 billion) for the company. The water utilities market in the UK is liable to benefit if the speculation on Northumbrian Water is confirmed as it will establish a higher trading range for the other water stocks. On the news, Northumbrian Water rose by 12 percent to close on 289 pence. The Ontario pension fund already owns 27 percent of the U.K. water company and wants to buy the remaining stake.

Severn Trent caught the wave and added 4 percent to 1,170 pence while United Utilities gained 2.8 percent to 551.5 pence.

South Korea’s National Pension Service, the world’s fifth biggest pension fund, will next week take a 12 per cent stake in Gatwick airport, stressing that investment in Britain will play a significant role in quadrupling its international exposure. The NPS, which is aiming to expand its overall portfolio, came to the attention of Britain’s financial community last year when it bought the headquarters of HSBC in Canary Wharf for £773 million. Gatwick airport was sold late last year to Global Infrastructure Partners, an infrastructure fund backed by Credit Suisse and General Electric, for £1.51 billion.

The longest running saga in recent UK takeover history drew to a happy close as US firm Kraft Foods sealed their takeover of Cadbury after shareholders in the UK chocolate maker voted in favour of the deal.

Cadbury said it had received valid acceptances of the offer from investors representing 71.7% of the firm. Kraft chief executive Irene Rosenfeld celebrated the takeover by announcing: "I warmly welcome Cadbury employees into the Kraft Foods family." Despite the warm welcome, Cadbury employees staged protests in London calling for government support to guarantee jobs

Budget airline Ryanair has raised its full-year profit forecast as passenger numbers continue to rise. The company announced that it said it expects full-year net profits of about 275 million Euros, whilst reporting a 10.9 million Euro; (£9.5 million) loss in fourth quarter of 2009, a considerable improvement on the 101.5 million Euro losses for the same period in 2008.

Ryanair said the result had been helped by a 37% fall in fuel costs and passenger numbers increased by 14%, which had offset a 12% drop in fares.

Europe’s second- largest tobacco company Imperial Tobacco Group Plc have announced a “good start” to the year with business “in line” with company expectations, despite the weak economic climate. Despite the news, their shares declined 1.2 percent, to 2,002 pence. The Royal Bank of Scotland Group Plc are to allow its top performing employees to convert a large portion of bonuses given in shares into cash within 12 weeks of receiving them, according to a letter sent to investors yesterday. On the day RBS shares rose 7.9 percent, to 34.86 pence.

The pound closed down at 1.5977 against the dollar, while the Euro traded at 1.1438

The FTSE 100 dropped 4.1 percent in January as the U.S. government called for limits on risk-taking by banks and China moved to restrict lending and cool economic growth. The gauge is still 49 percent higher than in March after governments and central banks around the world sought to encourage growth by maintaining low interest rates and committing more than $12 trillion to stimulate the economy.

The benchmark FTSE 100 Index added 35.9 points to reach 5,283.31 at the close of trading in London.

US President Barack Obama has announced a $3.8 trillion (£2.4 trillion) budget plan for 2011, which includes increased spending for job creation, but cuts in other areas.

He also forecast the US deficit would rise to a record $1.56 trillion this year.

He scrapped plans to send astronauts back to the Moon and will seek to save $250 billion by capping a range of domestic spending programmes for three years.

Congress must approve the budget for the financial year starting on 1 October for it to take effect.

Mr Obama blamed the huge deficit on the decisions of President George W Bush, previous Congresses and his administration’s moves to prevent an economic collapse.

Stocks continued to extend gains after reports showing the U.S. manufacturing sector expanded more than forecast. The Institute for Supply Management’s factory index showed U.S. manufacturing expanded in January at the fastest pace since August 2004, spearheading the recovery from the worst recession since the nineteen-thirties.

On the news, the Dow Jones rose sharply, to close on 10284.91, while the NASDAQ rose 38 points, to finish on 2185.32

Gold lost some of the previous day’s sharp gains, dropping 0.1 per cent to $1,105. Oil rose 0.5 per cent to $74.81 a barrel.

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Tags: Banking, Barack Obama, British Economy, Cadbury, Centre for Economics and Business Research, Council of Mortgage Lenders, Credit Suisse, Dow Jones, Economy, Employment, Financial News, FTSE, Gatwick Airport, General Electric, George W. Bush, Global Infrastructure Partners, HSBC, Imperial Tobacco Group Plc, Kraft Foods, Money, NASDAQ, Nationwide Building Society, Northumbrian Water, Oil, Ontario Teachers’ Pension Plan, Property Prices, Recession, Retail, Royal Bank of Scotland, Ryanair, Severn Trent, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession

While the UK economy snapped back into growth in the fourth quarter of 2009, it did so at a rate considerably less than economists’ forecast. It was thanks to the service industries and manufacturing sector, which expanded just enough to pull Britain out of its longest recession on record. According to figures released by the Office for National Statistics, gross domestic product (GDP) rose by a mere 0.1% from the third quarter. The weakness of the recovery will pose a challenge to Bank of England officials who are due to sit next week to consider week whether the economy is strong enough to begin winding down the Government’s emergency stimulus measures. Prime Minister Gordon Brown’ is regarded as being especially anxious to see and end his government’s propping up of the economy, as delaying it may hamper his efforts to win an election due by June of this year. Much of Brown’s campaigns have been based on promises to curb the budget deficit.

Brown is putting up his case that he is better placed that Conservative leader David Cameron to cut the ballooning budget deficit without hurting the economic recovery. Splits in the Labour Party are beginning to show as election day draws closer with Chancellor of the Exchequer Alistair Darling announcing that it would be “absolutely mad” to withdraw stimulus measures now.

The Bank of England’s £200-billion pound asset-purchase facility, designed to keep borrowing costs low and help pull the economy out of the recession also expired this week.

Meanwhile it was announced that the UK economy shrank 4.8% in 2009, making for the biggest annual drop since records began in 1949. It was also reviled that the in the fourth quarter the economy contracted 3.2% compared to records from 2008.

The fourth quarter data, the first to be released by a Group of Seven nation, means Britain is the last member country to exit the recession that was sparked by the worst financial crisis since the Great Depression. The US Government was expected to release GDP data for the fourth quarter on late January 29.

The news that the Lloyds Banking Group has succeeded in placing of £2.5 billion pounds of mortgages with investors, has raised new hopes that securitisation markets are beginning to open for banks. A £4 billion issue last September by Lloyds recorded a first attempt by a bank to tap the securitisation markets since the onset of the credit crisis. However Friday’s issue was the first to cause any form of reaction interest among U.S. investors to purchase prime residential mortgage securities

There are strong signs of recovery popping up London’s financial services industry, which took a severe pounding during the credit crunch. Recruitment is already on the up, and a recent survey showed that more than 80 percent of hiring managers are expecting recruitment volumes to rise in 2010. Only five percent of those responding to the survey named handling redundancies as a key personnel challenge for the year ahead, will close to half of those interviewed pointed to the threat of competitors poaching staff as a problem. The main problem for 2010, according to close to two thirds taking part, would, be salaries and particularly of discretionary bonuses. Remuneration has become a major hot potato in the financial industry, as the sector has emerged from the crisis under increased public and regulatory scrutiny.

Irene Rosenfeld, chief executive of Kraft has predicted that Cadbury has a positive future under the ownership of the US conglomerate, whilst adding fears of job losses at the UK company are "greatly overstated" and.

In her first interview since the takeover was agreed by the Cadbury board earlier this month, Rosenfeld announced that Kraft would not be looking for any mergers and acquisitions activity in the "near term" following the purchase of the UK confectionary company. "We acquired Cadbury because we believe it is a fabulous business and it is our intention to protect those assets," Ms. Rosenfeld pointed out. "It is our intention to invest in the business; in fact, if anything, the opportunities for the business will be greater as a result of the combination than perhaps they might have been on a standalone basis, given some of the competitive pressures." She continued.

Speculation is growing that the planned sale of the discount fashion chain Matalan is unlikely to raise the sum in excess of £1.5 billion pounds targeted by the company’s owner John Hargreaves. American private equity firms TPG, Advent International among others are expected to make offers in time for next Friday’s deadline. Analysts fear that the parties involved are wary of paying too high a price for Matalan. A clause in the deal specifying a "break price" of between £1.2 to £1.25 billion pounds, has been inserted by Hargreaves, entitling him to refuse any bids below this figure

Expectations are that the release of British Airways’ results for the three months to the end of December 2009 will expose further heavy losses at the airline. BA is expected to reveal a loss of £151 million for the third quarter of the financial year, making for total losses up to the end of March to £602 million, up almost fifty percent from 2008, which was BA’s previous record loss. The threat of pre Christmas strikes and severe weather conditions are two factors among many that have contributed to the company’s already poor situation.

Carphone Warehouse subsidiary TalkTalk have announced the launch of a new television and mobile phone service. The launch is yet another sign of the telecoms group desire to step up its challenge to their sector rivals. Charles Dunstone, chief executive of Carphone Warehouse, outlined the plans for the new division on Friday as the company also released details of the demerger of its telecoms and retail interests. TalkTalk, due to gain a stock market listing in March, have identified TV and mobile services as potentially strong sources of growth. Carphone Warehouse’s broadband rivals already offer TV services, and the market is rapidly expanding.

UK Coal’s already stagnating share price was sent even lower as the mining and property group announced that were liable to increase by £100 million pounds in 2009. UK Coal has announced that they expect production in 2010 to be roughly seven million tonnes, compared with 7.9 million tonnes last year. The company faced severe technical and geological problems in its underground mines in the second half of 2008. The troubled company’s shares fell 4.5 pence to 61.5 pence.

The pound posted a weekly advance against the euro after the U.K. economy exited recession in the fourth quarter and Bank of England policymaker. Expectations are that the U.K. currency will continue to gain value as the government’s propping up of the economy may not be extended, with the decision to be announced when the Bank of England meets to decide on interest rates on Feb. 4. Sterling also posted a monthly gain against the Euro, when closing for the weekend at 1.532.

The pound strengthened 1.3 percent in the week, its strongest level in five months. It advanced 2.3 percent in the January. The U.K. currency dropped 0.7 percent to $1.5993 for a monthly decline of 0.8 percent.

The pound rose 8.5 percent against the euro in the first month of 2010, the biggest monthly gain since the single European currency was launched in 1999.

The US economy grew by an annual rate of 5.7% between October and December, official figures have shown.

The number, which is a first estimate, is a big rise from the previous quarter’s growth rate of 2.2%.

It suggests the country’s economy is growing at its fastest pace for six years and confirms the US economy has left its year-long recession behind.

But even with the rebound, gross domestic product (GDP) shrank by 2.4% across 2009 as a whole, making for the worst annual performance since 1946.

On the news, the Dow Jones fell again this time by 53.13 points, 135 points, to close on Friday at 10067.33, while the NASDAQ lost another 31 points, to finish for the weekend on 2147.35

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Tags: Advent International, Bank of England, Banking, British airways, British Economy, Cadbury, Carphone Warehouse, Charles Dunstone, David Cameron, Dow Jones, Economics, Economy, Financial News, GDP, Gordon Brown, Irene Rosenfeld, John Hargreaves, Labour party, Lloyds Banking Group, Matalan, Money, NASDAQ, Office for National Statistics, Recession, Retail, Stock Markets, Stocks and shares, TalkTalk, TPG, UK Banks, UK Coal, UK Economy, UK government, UK Recession

With an earlier than expected rise in inflation, which soared to 2.9% in December, interest rates could be rising sooner than expected in 2010.

The reading for the consumer prices index (CPI) came in well above the expected 2.4% figure making for the largest ever rise in inflation over a single month, according to figures issued by the Office for National Statistics (ONS) Reasons given were reduced s discounting from retailers in the run-up to Christmas and fuel prices remaining unchanged compared with sharp falls a year earlier.

The Bank of England had already expressed fears that inflation would rise this year, but this high figure will curtail the bank’s efforts to store up inflationary pressures while kick-starting the economy out of recession.

The Bank’s target for CPI inflation for 2010 is 2% and the jump to 2.9% puts its policymakers in a delicate position. While higher than expected inflation would force them to raise rates before the economy has properly recovered.

The head of the International Monetary Fund head has again warned that the global economy could yet experience another downturn, known in financial circles as a double dip recession.

Managing Director Dominique Strauss-Kahn said countries should rush to exit from stimulus packages that have bolstered growth through huge amounts of government spending and that it is too early for policy makers to withdraw stimulus that’s driving the global recovery.

“The global economy is recovering, even if its recovery is fragile,” Strauss-Kahn said in a recent speech. "While a plan to withdraw emergency measures “should be designed today” it should not yet be “implemented” because world economies are still dependent on government support and private demand remains weak" Strauss-Kahn has previously voiced his opinion that the world’s economic recovery is occurring “sooner and stronger” than anticipated. More than $2 trillion in government spending around the world has spurred growth, pulling economies out of a recession spurred by a meltdown in the U.S. housing market. Separately, Germany and France raised their growth forecasts for the year. Strauss-Kahn went on to add that China and Asian economies are leading the recovery.

British Airways cabin crew is to vote again on possible strike action, according to a recent announcement from the Unite union.

A spokesman for Unite predicted that a fresh ballot of its members would be held in the near future. The move came after recent talks with BA failed to find a resolution to a long-running dispute. BA announced in reply that they were "saddened but not surprised" by the decision, whilst promising to make every effort to allow talks to continue. If talks fail, a strike could begin as early as March if cabin crew vote in favour of industrial action.

BA had already planned a 12-day strike for Christmas last year which was blocked by a court injunction.

The long protracted takeover of Cadbury by US food company Kraft now appears to be going forward after the Cadbury board approved a new increased bid. Cadburys will now advise their shareholders to accept a new offer of 840 pence a share – valuing the company at £11.5 billion ($18.9 billion). Shareholders will also receive a dividend of 10 pence a share.

The additional cash represents a 90 per cent premium to the Cadbury share price before the deal was announced and a 50 per cent premium to Cadbury’s undisturbed share price of 568 pence before Kraft approached Cadbury in late August

Spokespersons from both Cadbury and Kraft jointly announced that details of the agreement were still being finalising and would make a statement later.

Many city pundits were surprised that the deal eventually went through so smoothly after months of animosity between the two companies.

It is expected that Kraft’s final offer consisting of 500 pence in cash, with the rest made of Kraft shares made the deal much sweeter for Cadbury shareholders. To finance the takeover Kraft will require borrowing around £7 billion ($11.5 billion)

Shares in Cadbury topped the FTSE 100 on Tuesday.

Sterling was among the few currencies to rise against the dollar and the Euro on Tuesday after UK inflation jumped in December, increasing the possibility of monetary tightening and increases in interest rates being brought forward. The pound closed at 1.636 against the dollar, with the Euro being traded at 1.1459

The FTSE 100 index rose 41.6 points to 5,496.9, while the FTSE 250 index added 33.4 points to 9,571.6.

In the US, Citigroup announced losses of $7.6 billion for the last quarter of 2009, large due to their efforts to repay US government bail-out funds, and coming after three consecutive profitable quarters. Citigroup’s ’s loss was in line with Wall Street analysts’ expectations and would amounted to a loss of $1.4 billion, had it not been for its repayment of the $20 billion in funds it received from the troubled asset relief programme. For the same period of a year ago, Citigroup reported a loss of $17.3 billion. In 2009 as a whole, Citigroup made a loss of $1.6 billion on $80.3 billion turnover.

The Dow Jones Industrial Average rose sharply on early trading after being closed on Monday for Martin Luther King Day. The index rose 115 points to close on 10,725.43. The NASDAQ Composite was also on the up, 32 points to 2320.4

Computer giant IBM has announced that after cost-cutting work helped to increase its earnings by 9% in the last three months of 2009.

They have raised their profit target for 2010. IBM made a net profit of $4.8 billion (£2.9 billion) for the fourth quarter, up from $4.4 billion from the same period in 2008, with turnover for the quarter increased by 1% to $27.2 billion

Crude prices fell to a three week low on Tuesday, with prices averaging around $77.00 a barrel. Traders pointed out the implications in the oil market of the bankruptcy of Japan Airlines, as the Tokyo-based carrier made extensive use of oil derivatives to hedge its cost and the bankruptcy is likely to force investment banks to unwind the hedges.

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Tags: Bank, Bank of England, Banking, British airways, British Economy, British Pound, Cadbury, Citigroup, consumer prices index, Crude oil, Currency, Dominique Strauss-Kahn, Dow Jones, Economics, Economy, Financial News, FTSE, IBM, Inflation, Interest Rates, International Monetary Fund, Japan Airlines, Kraft, Money, Money Management, Money Markets, NASDAQ, Office for National Statistics, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Unite, US Government

U.S. President Barack Obama has celebrated his first year in office by showing a more brittle side to his personality, and in recent statements has been particularly vehement in his comments regarding the US banking system. Obama has stated his intention to raise legislation that would force around 50 banks, insurance companies and large broker-dealers to pay a tax of 0.15 percent on all of their U.S. assets, less their capital and deposits. Falling into that category will be the Royal Bank of Scotland (RBS), Barclays Banks and HSBC who, if the legislation is passed, could be forced to pay more than $10 billion to the U.S. government over the next 10 years. Analysts have already calculated that HSBC could be forced to pay around $3.8 billion dollars and Barclays could face a total bill of around $5.6 billion dollars over ten years. While the RBS will only be paying out around one and half billion dollars, they appear to be already in the process of raising capital to meet the bill, when it comes. They have announced that the Grosvenor House hotel, , is to be put up for sale by the part-nationalised RBS and proceeds for the sale is expected to raise between £600 and £700 million as part of RBS’s unwinding of its property portfolio. The Grosvenor House hotel, which has previously hosted events such as the CBI annual dinner, could be on the market as early as this month.

Meanwhile the Bank of England (BOE) are still feeling the effects of their quantitative easing programme, with the news of the loss of £3.6 billion s on its purchases of government bonds, whilst projecting that capital losses from the purchase, so far of £192 billion pounds in gilts would be £8 billion if these were sold today. The reason for the shortfall is the steep drop in government bond prices as a result of the strengthening economic recovery felt the past month. On the upside, losses will be offset by £4.4 billion pounds, which is the interest payment the BOE has received from the securities.

Construction companies made up more than 20 percent of UK business failures in 2009, a recent survey has disclosed. While the number of companies involved in the construction sector that closed their doors in 2009,

decreased slightly from 2008, there were still 683 who fell into administration during 2009, compared with 716 in 2008. The fourth quarter of 2009 saw a 17 percent decline in construction administrations according to Deloitte with 129 compared with 155 in the third quarter.

Shares in Premier Foods have fallen by more than ten percent after the food manufacturer announced that full-year pre-tax profits would be lower than expected, at around £165 million pounds for the financial year to February 16. Total sales increased by 1.5 percent during the fourth-quarter with sales of the company’s branded goods increasing to around £1.7 billion, making up to two thirds of the total turnover for 2009, compared with 61 percent the previous year.

The bus operator FirstGroup has reported a drop in turnover of around 20 percent for the company’s U.S. Greyhound operation during the first half of their financial year. A little ray of sunshine was that revenue for the third quarter was only down by 11.4 percent and passenger revenue for the group’s UK bus business grew by 0.7 percent during the three months to December 31. On the upside, FirstGroup announced that they remain on course to achieve earnings targets for the year and that trading, was in line with management expectations.

The European electrical groups DSGi, who own and operate the Currys and PC World chains in the UK, have announced trading figures that are in excess of most City analyst’s projections. Group sales rose by eight percent during the 12 weeks to January 9, much higher figure than the three percent expected by most analysts, with the reason attributed to an upturn in consumer sales.

Home Retail Group (HRG) have also updated their predictions for its full-year profits, which they now expect to be around £20 million higher than the £265 million initially forecast, following a four percent improvement in sales at HRG’s DIY chain Homebase.

One of Cadbury’s major shareholders has indicated that US food giant Kraft will have to increase their hostile takeover offer if it wishes to win support.

Legal & General Investment Management, which owns 5% of Cadbury shares, said Kraft’s current offer did not meet "the long term value" of the UK firm. Legal & General’s comments come ahead of Tuesday’s eagerly anticipated deadline for Kraft to increase its offer to Cadbury shareholders.

Reports continue to gather strength that Hershey is also planning a rival bid for Cadbury which may be announced as early as this week. The current state of affairs is that Kraft is currently offering £10.5 billion or 761 pence per Cadbury share, which was rejected by the chocolate-maker’s shareholders. .

Kraft’s current bid is worth less than Cadbury’s share price which closed on Friday at 793.5 pence.

British Telecom (BT) announced their intentions to enter a price war with Sky over the price charged for fans to watch premium sports events on TV, including football and cricket.

The telecoms firm is awaiting the outcome of an Ofcom probe, which will be known in March, examining whether Sky must drop the wholesale price it charges rivals for content.

BT Vision has leaked their intentions to charge about £15 a month for Sky Sports 1, about £10 cheaper than Sky currently charges. A spokesman for BT projected that there would be benefits to the viewing public for choosing BT as they would be getting more choice

Vodafone UK has launched a new online business centre, bringing information and insight on its full range of capabilities in mobile, fixed and unified communications together in one place. The site, www.vodafone.co.uk. Has been designed to make it even easier for private and business customers to find the information they need and the solutions that best suit them. Meanwhile Vodafone (has become the third mobile phone operator in Britain to begin to market the Apple iPhone in the UK. Results are encouraging with a total of 50,000 units delivered on the first day of sales. Until recently, Vodafone had been disallowed from marketing the premier smartphone due to exclusivity rights brokered between Apple and O2.

Vodafone is now the fourth company in the U.K. to carry the iPhone, following O2, Orange and Tesco. While O2 once enjoyed a two-year exclusive deal with Apple to offer the iPhone in the U.K., that exclusivity ended last year and Orange and Tesco began offering the Apple smartphone in November and December, respectively.

Orange sold 30,000 iPhones on its first day of its launch in November 2009 while Tesco has not disclosed any sales figures.

Also enjoying some good trading on the back of the iPhone launch is the Carphone Warehouse. Their trading update for the last quarter of 2009 is expected to show a four percent increase in the number of phone connections compared to the same period in 2008. Sales of the most expensive products, such as the Apple iPhone and BlackBerry, are believed to contribute considerably to sales and profits, while the company’s fixed-line division TalkTalk is reported to have added 46,000 new subscribers during the last three months of last year.

The pound improved a little against the dollar before the weekend, closing at 1.6301, while the Euro being traded at 1.321

The FTSE 100 Index dropped 43 points before closing on Friday finishing on 5,455.37.

Wall Street bank JP Morgan Chase has reported profits of $3.3 billion (£2 billion) for the last three months of 2009, compared with profits of $702 million for the same period in 2008, which was the height of the financial crisis. Total profits for the bank for year were $11.7 billion, with investment banking providing the bulk of the profit.

The Dow Jones Industrial Average took a tumble before closing on Friday down 81 points to 10,609.65. The NASDAQ Composite was also down. 23 points to close on 2287.99

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Tags: Apple iPhone, Bank of England, Banking, Barack Obama, Barclays Banks, BlackBerry, British Economy, British Telecom, BT Vision, Cadbury, Carphone Warehouse, Currys, Deloitte, Dow Jones, DSGi, Economy, Employment, Financial News, FirstGroup, Grosvenor House hotel, Home Retail Group, Homebase, HSBC, JP Morgan Chase, Kraft, Legal & General, Money, NASDAQ, O2, Ofcom, Orange, PC World, Premier Foods, Recession, Retail, Royal Bank of Scotland, Sky, Stock Markets, Stocks and shares, Tesco, UK Banks, UK business, UK Economy, UK government, UK Recession, Vodafone UK, Wall Street

While the UK and with it almost all of Western Europe and the West Coast of the US are caught in the grip of the longest running and most severe cold spell that it has seen for close to thirty years without a break in the foreseeable future, many analyst are now scratching their heads and asking themselves "what will this do to the price of oil?"

Since the weather began to turn incredibly difficult about a week ago the price of oil has risen steadily from the around $78 to $82 within the space of one week, the highest price it has been all of 2009, and to those of you who may have forgotten, sat on a low of $32 a barrel towards the end of December 2008. With the news that the major economies, and especially China, were starting to build up stockpiles of oil, hopes were that prices would begin to fall and settle around the ideal figure of between $68 to $72 a barrel.

Analysts fear that if the span weather persists, and predictions are that at least in the UK it could continue to the end of January, and the increase in demand could push the price up oil even further, as stocks diminish. Meanwhile leading bodies in UK industry bodies have asked head- teachers to minimize snow-linked school closures to reduce levels of absence from the workplace. Although 61 percent of 200 companies surveyed by the British Chambers of Commerce said less than one in 10 employees was absent, the Federation of Small Businesses warned that childcare-related absences following school closures would become a serious problem. The cold snap looks likely to cost the economy close to £700 million pounds a day, meaning total financial damage of £14.5 billion pounds if, as expected. The bad weather lasts a further three weeks.

As expected UK interest rates will remain unchanged at 0.5%, meaning that the cost of borrowing has remained at a record low since March 2009. Economist are not expecting to see a rates increase s in the near term, despite expectations that the UK will finally have exited recession in the last quarter of 2009.

Formula 1 boss, Bernie Ecclestone is looking to buy a Saab, not the car but the company, and intends to do so in partnership with the Luxembourg-based private investment company, Genii Capital, which recently invested in Renault’s Formula 1 team.

Ecclestone’s dramatic announcement came shortly after the deadline for expressions of interest in the company closed without any public bids.

As well as Ecclestone’s offer, a second bid s also emerged, from the Dutch sports car maker, Spyker Cars.

U.S. food giant Kraft has received a ticking off from the principal shareholder Warren Buffett who has also thrown a spanner in the works of their proposed transaction. The Buffett-owned holding company Berkshire Hathaway who Hold 9.4% of Kraft’s stock announced that they will be voting against it is the proposal to issue up to 370 million shares to facilitate the Cadbury deal.

A spokesman for Kraft reacted to Buffet’s statement by saying that "Mr. Buffett is our largest investor and one of the most respected investors in the world. We take his opinion very seriously. We agree Kraft shares are deeply undervalued. We would not do anything to hurt shareholder value and we intend to remain disciplined in this process." Shares fell 7 pence, or 0.9 percent, to 772 pence on trading.

In their annual Christmas trading statement, Majestic Wine announced a rise in sales of 11.7 percent between Nov. 3 and Jan. 4 in the UK, with champagne sales regaining their seasonal appeal over Christmas. While champagne sales grew 11 percent, fine wine sales climbed 30 percent and online trading rose by 20 percent.

Family-owned brewer Fuller Smith & Turner also managed to increase its profits, sales and dividend in the six months to September, largely bucking the trend prevalent in the brewery sector. With members of the controlling families owning more than half of the company equity and 60 percent of the voting rights, executive chairman Michael Turner pronounced the effect that company’s long-term, risk-averse strategy was paying dividends.

The FTSE 100 brought in the New Year and new decade by closing above 5,500 for the first time since the start of September 2008 – before the Lehman Brothers collapse, coming after a 22% rise over the whole of 2009 and a 53% rally from the low last March. The FTSE 100 closed on Tuesday on 5522.5.

Britain’s currency weakened possibly due to U.K. Business Secretary Peter Mandelson hints that the pound’s devaluation aided the economy in the recession.

• Dollar 1,5967
• Euro 1.1126

The U.K.’s largest home builder by market value Persimmon Plc has announced that they completed the sale of 8,976 new homes in 2009 with a total value of around £1.4 billion pounds. On the news their shares gained 1.2 percent, to 469 pence. Wolseley Plc, the world’s largest supplier of heating and plumbing gear seemed to be moving in a positive direction, with their shares added 4.7 percent, to 1,361 pence.

The Vodafone Group PLC expects to be able to offer Google Inc.’s Nexus One smart phone to its U.K. customers in the next few weeks, with their rivals reported to be already in advanced talks with the Internet giant about the device.

Vodafone, the world’s biggest mobile operator, is also in early discussions with Google about supporting the phone in France, Germany and Spain, a Vodafone spokesman told Dow Jones Newswires Wednesday, and hopes to offer it across the rest of Europe through the course of 2010.

JD Sports Fashion Plc, the U.K.’s second- largest sportswear chain said sales at stores rose 6.6 percent in the five weeks up to the Ist of January .2010. On the news their shares jumped 6.2 percent, to 550 pence.

Marks & Spencer Group on Wednesday reported a small increase in third-quarter sales, despite not slashing prices in the run-up to Christmas, as customers snapped up cashmere sweaters and clothing for kids. But the company cautioned that trading will remain challenging this year.

Group sales at the iconic British retailer rose 2.6% in the three months to Dec. 26. In the U.K. same-store sales rose 0.8%, with general merchandise up 1.2% and food up 0.4%. Underlying sales returned to growth for the first time in two years.

Still, the results missed the consensus forecast for a 1.2% increase in same-store sales, partly because this year’s trading period excluded the first day of the company’s post-Christmas sales, when it typically sees a surge in revenue. Online sales increased 32% and international sales climbed 6%

Britain’s Home Delivery Network said it would buy DHL’s UK parcel delivery operations, DHL Domestic, from Deutsche Post DHL (DPWGn.DE), growing its market share in a sector profiting from a boom in online shopping.

With many of the UK s leading retailers, among them John Lewis and Next reporting significant online growth, companies such as Home Delivery Network have felt the impact.

The parcel delivery company, headquartered in Merseyside, northwest England, said the combined businesses would have annual revenues of more than £600 million pounds, delivering over 180 million parcels a year, with a combined market share of 17 percent.

Britain’s currency recovered slightly over the last two days

• Dollar 1,5992
• Euro 1.1198

The FTSE100 finished trading on Thursday in a fairly static position at 5526.72 barely moving on the week’s trading.

On Wall Street, the Dow Jones Industrial Average closed on Thursday up a further 24 points to 10,607 while the NASDAQ also dropped 8 points to 2,300.71.

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Tags: Bank, Banking, Bernie Ecclestone, British Chambers of Commerce, British Economy, British Pound, Cadbury, Currency, DHL, Dow Jones, Economics, Economy, Federation of Small Businesses, Financial News, Freezing Britain, FTSE, Fuller Smith & Turner, Genii Capital, Home Delivery Network, Interest Rates, JD Sports Fashion Plc, John Lewis, Kraft, Lehman Brothers, Majestic Wine, Marks & Spencer, Michael Turner, Money, Money Markets, NASDAQ, Nexus One, Oil, Persimmon Plc, Peter Mandelson, Recession, Saab, Spyker Cars, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Vodafone, Wall Street, Warren Buffett, Wolseley Plc

Iceland’s president has refused to sign a controversial bill to repay £3.1 billion previously promised to the UK and the Netherlands. The news came after Iceland’s President Olafur Ragnar Grimsson announced a change of a heart following public protest and instead the country will now hold a referendum on the bill, which was designed to compensate governments forced to bail out their savers with Icesave accounts following Iceland’s banking crisis.

Legislation to repay the money was approved by Iceland’s parliament in December, but the approval of the president is also required before it can be passed into law.

Things must be getting strained again between Alistair Darling and Gordon Brown who were reported to have contradicted each other once again and in public. The contradiction was on that hot potato over how to handle public spending. Darling was reported to have argued that revenue from stronger than expected growth should be used to cut borrowing in a bid to allay the concerns of bond market investors, while Brown was said to be of the view that strong recovery may help to sustain spending, warding off fears of significant cuts to public services. Government officials hastened to deny a split between Brown and the chancellor. But they would, wouldn’t they.

Kraft have announced that they expect to increase the cash proportion in their offer to Cadbury in an attempt to make their bid more attractive to shareholders. The cash will come from the sale of its North American pizza business, strangely enough bought by erstwhile takeover bid competitors, Nestle who paid over £2 billion for a slice (of the company) .Meanwhile and contrary to recent speculation, Nestle have announced that they do not intend to table a takeover bid for Cadbury,. The company having been linked to a possible offer following Kraft Food’s hostile bid for Cadbury that was announced in December.

As part of their new strategic review, the English Premier League is looking to increase its international reach by inviting companies to become an official technology partner, aimed at tapping global opportunities more successfully. With current sponsorship making up just five per cent of the Premier League’s one billion pounds annual turnover, from sponsors that including Nike, Lucozade, Wrigley, and EA Sports, Topps Merlin and Sporting iD and title sponsors Barclays Bank.

One of the companies brave enough to raise their prices to match the return of VAT to its previous 17.5 per cent rate are Apple, who have increased the prices of many products on the Apple Store, including Macs. On 1 Jan 2010 the VAT level in the UK returned to 17.5 per cent, up from the reduced rate of 15 per cent (VAT is the UK term for sales tax). The UK government temporarily reduced the rate of VAT during 2009 to add some life into the UK economy, and it was thought that many of the UK’s leading retailers would continue to subsidise the increase, at least for January.

However Apple’s move seems likely to prompt some discussion surrounding the pricing of Apple products in general, which has steadily increased in the UK over the last two years.

Encouraging evidence of better retail conditions with record sales over the Christmas and New Year period were provided by the John Lewis employee-owned department store and chain. The company reported sales strongly ahead of the last two years that in the five weeks to January 2. John Lewis’s performance offers hope to retailers as they begin to release figures on their trading in the crucial festive period on Tuesday. John Lewis said total sales rose 15.8 per cent in the five weeks to January 2, compared with the same period a year earlier, while sales based on stores open at least a year were up 12.7 per cent.

On the stock exchange, shares in partly-nationalised Royal Bank of Scotland rose 9.9%, helped by analyst’s predictions that the bank is liable to "outperform" in 2010.

The FTSE 100 brought in the New Year and new decade by closing above 5,500 for the first time since the start of September 2008 – before the Lehman Brothers collapse, coming after a 22% rise over the whole of 2009 and a 53% rally from the low last March. The FTSE 100 closed on Tuesday on 5522.5.

Britain’s currency weakened possibly due to U.K. Business Secretary Peter Mandelson hints that the pound’s devaluation aided the economy in the recession.

• Dollar 1,5967
• Euro 1.1126

The chairman of the US Federal Reserve Ben Bernanke has blamed poor financial regulation for the financial crisis and defended the record of America’s central bank, whilst calling for urgent improvements to financial oversight to prevent a repeat of an economic storm that he said could ultimately prove to be "the worst in history".

In a recent speech, Mr Bernanke argued that low interest rates in the first five years of the new millennium were "appropriate" for the time and had not caused the "bubble" in US house prices. His reaction came after the Fed has recently come under criticism by certain US economists who argue that it kept rates too low for too long, encouraging an artificial property boom. The subsequent crash led to a surge in repossessions, leaving lenders with huge losses, causing a financial contagion that spread around the world.

On Wall Street, the Dow Jones Industrial Average closed on Tuesday up 144 points to 10,572, while the NASDAQ also rose 39 points to 2,308.71.

According to expert analysts, the US public pension system faces a higher-than-expected shortfall of more than $2,000 billion that will increase pressure on many states’ strained finances and crimp economic growth. Recent estimates of aggregate funding requirement of the US pension system have ranged between $400 billion and $500 billion, however recent speculation has concluded that public funds would need to find more than $2,000 billion to meet future pension obligation

Commodities prices are set to rise further this year as the global economy expands faster, according to an International Monetary Fund forecast, following the biggest annual price increase for raw materials in nearly four decades in 2009

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Tags: Alistair Darling, Apple, Apple Store, Bank, Banking, Barclays Bank, British Economy, British Pound, Cadbury, Credit Crunch, Currency, Dow Jones, EA Sports, Economy, English Premier League, Financial News, FTSE, Gordon Brown, House Prices, International Monetary Fund, John Lewis, Kraft, Lehman Brothers, Lucozade, Money, Money Markets, NASDAQ, Nestle, Nike, North American pizza, Olafur Ragnar Grimsson, Peter Mandelson, Recession, Retail, Royal Bank of Scotland, Sporting iD, Stock Markets, Stocks and shares, Topps Merlin, UK Banks, UK Economy, UK government, UK Recession, US Federal Reserve, Wall Street, Wrigley

Key figures in the UK banking world announced their dismay and subsequent anger after Alistair Darling confirmed plans for his 50 per cent "supertax" on banks’ bonus pools. The reaction from one leading UK going as far as went as far as describing the measure as an "assault on the prudent and the profitable". Bob Diamond, the president of Barclays continued to voice his displeasure by implying that that bankers and institutions were "mobile and they might desert London’s financial centre. The one-off tax will be imposed on banks rather than individuals, and will also apply to building societies

Similar moves to tax bonuses on bankers are also being considered by both Germany and France, with the German banks even considering the imposition of self-discipline on pay while France is in favor of matching the U.K.’s planned one-off tax on bank bonuses, and is likely to slap such a levy on bonuses to be paid out in 2010 for the past year.

According to a report released last week, London could be pushed into third place as a global financial centre by Shanghai within the next ten years.

Global business leaders apparently are becoming increasingly convinced that the West is facing accelerated competition from the East, with more than 90% of company owners and managers in Shanghai and Mumbai are confident in their economic outlook for 2010, compared to 22% of business leaders in London and 35% in New York.

Meanwhile to add to the U.K.’s banking system’s woes, comes the news that the Financial Services Authority intend strengthening their rules governing the amount as well as the quality of capital that banks in the U.K. need to hold against potential losses as part of an effort to implement changes to European Union rules. Their proposals are expected to result in a £33 billion, or 5%, increase in the total amount of capital held by banks, with the bulk of this required to be held by the start of 2011.

On the FTSE before the weekend, shares in Barclays Plc , climbed 4.6 percent, to 290.75 pence, possibly on news that the bank is about to eliminate around 150 jobs from its retail and commercial banking operations in India. With the news that British Airways Plc have decided to retain p full ownership of its OpenSkies subsidiary, their shares rose 1.1 percent, to close on 202.3 pence.

The U.K.’s largest CD retailer HMV Group Plc posted a loss after tax of £17.8 million in the six months period ending Oct. 24, an improvement on the loss of £19.8 million pounds in the year-earlier period. Despite the relatively positive news their stock dropped 0.2 percent to 106.6 pence.

Independent News & Media Plc, publisher of The Independent Newspaper is looking to reduce their holding in APN News & Media Ltd. One the news their shares advanced 0.2 cent to 10 cents.

As the Cadbury takeover sage continues, news that rift has opened up between Hershey’s management and the Hershey Trust over whether to trump Kraft’s hostile bid for the company. The Trust, a philanthropic body that controls Hershey, is pressing the management to go ahead with an offer while the board argues that a bid financed by extra debt could put the company’s investment grade rating at risk. Cadbury chief executive Todd Stitzer has let it be known that he considers Hershey a better cultural fit than Kraft. On Monday morning, Cadbury is expected to make a formal rejection of that Kraft offer but is unlikely to make any official statements regarding their talks with Hershey, as a formal bid has yet to table. However the company is expected to release an interim update of their trading figures.

Sterling lost ground against the dollar before the markets closed for the weekend whilst rising slightly against the Euro.

• Pound/US dollar 1.6221
• Pound/Euro 1.1081

The FTSE 100 Index rose 17.2 points to close on 5,261.57. The index has shown a 50 percent recovery since March and looks to be heading for its biggest annual gain since 1997.

The US House of Representatives has approved the most sweeping changes to the country’s financial sector since the Great Depression of the 1930s. The 223 to 202 vote is a victory for President Obama who has made financial reform one of his main goals. The bill aims to create a new agency to monitor consumer banking transactions and give the government powers to break up companies that threaten the economy. The US Senate will have to pass the bill before the president can sign it. The legislation would give regulators the power to dismantle the companies in a way which ensures shareholders and unsecured creditors, not taxpayers, bear the losses. It also hopes to strengthen the powers of the Securities and Exchange Commission to detect irregularities that could provide an early warning of fraudulent investment schemes. Plans to regulate the vast $600 trillion market in products called derivatives are also included.

On close of trading Friday, the Dow Jones Industrial Average had risen 186 points to 10,471.5 and the NASDAQ was also up around twenty points to 2,190.31

Kenneth Feinberg, the White House "pay czar" has extended limits on the pay of executives at four US firms who were given government bailout money.

Under the restrictions, employees will not be able to earn more than $500,000 (£307,770) per year.

The companies involved are Citigroup, AIG, General Motors and GMAC, with the rule applying to the 26th to 100th highest paid staff. The top 25 at each firm had their pay limited in October. Free of any such pay restrictions are the

Bank of America who succeeded in repaying their "bailout "money as recently as this week, while Chrysler and Chrysler Financial were exempted because total pay for their second-tier executives is already under the magic $500,000 barrier.

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Tags: AIG, Alastair Darling, Bank, Bank of America, Banking, Barclays Plc, Bob Diamond, British Airways Plc, British Economy, British Pound, Cadbury, Citigroup, Currency, Dow Jones, Economics, Economy, Financial News, Financial Services Authority, FTSE, General Motors, GMAC, Hershey Trust, HMV Group Plc, Independent News & Media Plc, Kraft Foods, Money, Money Markets, NASDAQ, OpenSkies, Recession, Stock Markets, Stocks and shares, supertax, UK Banking, UK Banks, UK Economy, UK Recession

The Treasury was "justified" in using taxpayers’ money to bail out banks to protect the wider financial system, according to an official report.

The National Audit Office (NAO) review said the cost to the UK public so far totalled £850 billion.

"It is difficult to imagine the scale of the consequences for the economy and society if major banks had been allowed to collapse," the NAO said.

It said that the final cost to the taxpayer will not be known for "years".

During the financial crisis, the UK government nationalized Northern Rock and took stakes in the Royal Bank of Scotland (RBS) and Lloyds Banking Group in return for bailing them out.

RBS also put £282 billion of its assets into a government insurance scheme for toxic assets.

Despite the fact that Royal Bank of Scotland has signaled that it will succumb to pressure to pay its high-flying investment bankers substantially less than rival institutions amid an escalating row with the government, it is feared that Alistair Darling may still be heading for a potentially disastrous showdown with the bank over their plans to pay £1.5 billion in bonuses to its staff.

RBS which is 70 per cent owned by taxpayers, is hoping to avoid the high-stakes showdown after it was forced to give the Treasury the final say over the total size of its bonus pool as a condition of signing up to a scheme that will insure £240 billion in toxic assets, with hints coming from the bank that pay-outs in its investment banking division would be “at the low, low end of the scale”. They also hastened to send out a veiled threat, that reduced pensions and bonuses could meant them losing experienced staff to competitors. The bank is confident of forging an agreement with the government after it emerged that RBS directors had sought legal advice about whether they would have to resign if the Treasury vetoed pay deals agreed by the board, Darling, who to be granted the right to veto bonus payments at the bank, is left with a dilemma of waving through potentially huge bonus pay-outs at RBS just months before a general election or plunging the bank, which has already received unprecedented support from taxpayers despite widespread fury over bonus levels, into further crisis.

The value of UK commercial real estate debt in default or in breach of key lending agreements more than doubled to about £30 billion in the first six months of the year, adding pressure on the banking sector, a survey has revealed. Banks have also extended or refinanced an extra £16 billion in the first-half of the year, rolling over maturing debt that could not be paid back by cash-strapped borrowers or restructuring loans when breaches were threatened owing to the steep fall in values. This strategy has been dubbed “extend and pretend”, with some banks even refusing to test loan covenants, given a reluctance to crystallize losses by selling the property asset or the debt attached to it. De Montfort University, which compiles the most comprehensive study of the sector, announced that banks are beginning to deal with the massive £224 billion of outstanding debt to the real estate sector.

Lord Mandelson, business secretary, on Friday issued a blunt warning to Kraft and hedge fund investors that they will face “huge opposition” from the British government if a takeover of Cadbury is used as a means to make “a fast buck” The comments represent a government intervention that is unprecedented in recent years, extending the business minister’s policy of “industrial activism” into a live bidding situation. Meanwhile a strategy appears to be emerging to fend off a hostile takeover from Kraft. The Cadbury strategy emphasizes the value of its brand image and its emerging markets footprint as well as highlighting the progress made on during their restructuring program

Kingfisher, the owner of B&Q DIY stores, has cut net debt by 90 per cent since the start of 2008 and on Thursday confirmed its debt burden at the end of the financial year will be lighter than previously forecast. Net debt fell to £200 million in the third quarter and Kingfisher forecasts net debt of about £300 million at its year end in January, an improvement on previous guidance, which was for £800 million.

The pound continued to lose value strongly against the dollar and the Euro before the weekend.

• Pound/US dollar 1.471
• Pound/Euro 1.1086

U.K. stocks climbed, with the FTSE 100 Index extending this week’s advance, after a government report showed the U.S. rate of unemployment declined in November.

The FTSE 100 climbed 9.36 points to 5,322.36, bringing this week’s gain to 1.5 percent. The measure has rebounded 52 percent from its low on March 3 as governments committed about $12 trillion and central banks cut interest rates to record lows to end the global recession and revive credit markets.

US labor Department figures show that unemployment rate fell in November to 10% from 10.2% in October, meaning that 11,000 jobs went over the month, a figure far lower than expected by most analysts.

On Friday’s trading, the Dow Jones Industrial Average gained 0.2 per cent to 10,388.22 and the NASDAQ was up 1 per cent to 2,194.35.

The price of gold price has taken a surprise slump after surprisingly positive US unemployment data sent the US dollar higher, making gold a less attractive investment.

Gold fell more than $65, or 5%, to $1,161.4 an ounce, down from a record high of $1,226.56 in early trading.

After the release of figures showing that the US jobless rate was on the decrease, the dollar gained 2% on the Japanese yen and 1.3% on the euro.

As the dollar weakened due to low interest rates in the US, gold has hit a number of record highs in recent weeks

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Tags: Alistair Darling, B&Q DIY, Bank, Banking, British Economy, Cadbury, Currency, De Montfort University, Dow Jones, Economics, Economy, Employment, Financial News, FTSE, Global Credit Crisis, Gold, Kingfisher, Kraft, Lloyds Banking Group, Lord Mandelson, Money, Money Markets, NAO, NASDAQ, National Audit Office, Northern Rock, Recession, Retail, Royal Bank of Scotland, Stock Markets, Stocks and shares, taxpayer, Treasury, UK Banks, UK Economy, UK government, UK Recession, US labor Department

In the Queen’s speech to be made today, Gordon Brown is expected to emphasize the need for fiscal discipline as the UK seeks to extricate itself from the current financial downturn, and catch up with the rest of the major global economies who have already done so. At the heart of his message will be a very strong hint to ministers to accept budget cuts. What he will be implying is that it is important for the Labour party to show unity and credibility on public spending ahead of the forthcoming election battle with the Tories. The prime minister’s package will feature a fiscal responsibility bill, that will confine to law Brown’s programme significantly reduce Britain’s £175 billion deficit by 2014 and cast it into history by 2018.

Meanwhile the people who are generally regarded as being responsible for the UKs financial quandary, the bankers, are beginning to bleat a little at the prospect of having their bonuses cut by the Financial Services Authority (FSA) This time the banker’s plight is being supported by no less than a former banker, Sir George Mathewson who acted as chairman of Royal Bank of Scotland. Sir George complained that any moves to cancel any pay deals which appear to reward undue risk-taking would interfere with the rule of law.

But Sir George said he feared

According to the Office of National Statistics, UK inflation has jumped to an annual figure of 1.5%, largely driven up by a sharp annual rise in the cost of petrol and a huge jump in the prices of second-hand cars. Economists were not taken by surprise by the increase in the consumer prices index (CPI, which they expected to rise by between 1.4% and 1.5% for October. The incredible 14% rise in second-hand car prices was one of the driving forces behind the inflation rise.

ITV have confirmed that Archie Norman, the former chief executive of supermarket group Asda, will be taking over the role of chairman in their company. Former Tory MP Norman’s appointment brings to an end a seven-month search to find a replacement for outgoing chairman Michael Grade,

Archie Norman comes to the ITV with an impressive track record, having being credited with the turnaround of Asda in the 1990s. He will face no less of a daunting challenge at ITV, where increased competition and difficult trading conditions has caused a major downturn in advertising revenue.

Chocolate makers Hershey and Ferrero are said to considering a joint bid for Cadbury that could be welcomed by the UK confectionery manufacturer as they fight to fend off the hostile takeover by Kraft Foods. Discussions between the two sides have been reported to be at the “very preliminary" stage. Apparently Hershey executives have been more aggressive about pursuing a deal; however no offer has been made. The talks are the strongest sign that a possible rival bid to Kraft’s $16.7 billion offer is in the offing. Kraft’s initial bid was rejected by Cadbury as being “derisory”.

Sterling increased against the major currencies on trading since the weekend

• Pound/US dollar 1.6793
• Pound/Euro 1.1283
• Pound/Japanese Yen 149.9328
• Pound/Swiss Franc 1.706

World stocks continue to gain ground as optimism regarding the global economic recovery continuing. UK shares have again reached and broken their 14-month high.

In the UK, the FTSE share values improved as commodities and especially gold touched a new record on the general positive mood.

The UK’s benchmark FTSE 100 index closed up 1.6%, or 86.29, to 5,345.93. The FTSE 250 also rose, up 28 points to 9,401.15.

US Commerce Department figures have shown that retail sales rose by more than expected in October, largely due to the resurgent car market, Sales rose by 1.4%, offsetting September’s 1.5% fall was revised with both months’ figures were dominated by the impact of car sales.

If car sales are taken out of the equation, retail sales rose by just 0.2% in October.

Federal Reserve chairman Ben Bernanke has revealed that the US central bank was monitoring currency markets "closely" and will conduct policy in a way that will "help ensure that the dollar is strong". In one of his rare public comments on the state of the dollar, Bernanke predicted that currency’s recovery would begin to gain momentum despite "headwinds" from credit and unemployment, while inflation was likely to remain "subdued". However the dollar, after a brief upturn, continued to retreat against other major currencies. Bernanke also added that the Fed still expected to keep rates near zero for an "extended period", hastening to add that his statement was, not a commitment.

In the US, all the trading indexes were seen to be advancing at lightning pace.

The Dow Jones industrial average gained 1.3%

Or 52.30 points to 10437.42. The NASDAQ continues to move forward, up 43 points 2203.78

US car giant GM recovery continues. This week the company announced that they will begin returning their US government loans earlier than expected.

The first payment of $1.2 billion will be made in December, and the company predicts that the loans could fully repaid 2011, four years earlier than expected. The news comes as GM reported a third quarter net loss of $1.2 billion. GM currently has debts of $6.7 billion to the US government, $1.4 billion to the Canadian government and 400 million Euros to the German government, which the company received in support of GM’s European subsidiary Opel.

US billionaire Warren Buffett’s investment firm have increased their stakes in the Nestle and Exxon Mobil companies. .

The news has created a strong buzz among investors as stock picks by Buffett always create interest, as the 70 year old super entrepreneur is considered to be one of the world’s shrewdest investors.

Recent figures released by the Japanese government have shown that the country’s economy has grown for a second successive quarter.

The world’s second largest economy grew by 1.2% in the third quarter, much faster than economists had predicted. Analysts have hastened to predict that say overall growth is likely to remain sluggish for the foreseeable future.

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Tags: Archie Norman, ASDA, bankers, Banking, Ben Bernanke, British Economy, British Pound, budget cuts, Cadbury, Currency, Dow Jones, economic recovery, Economy, Employment, Exxon Mobil, Federal Reserve, Ferrero, financial downturn, Financial News, Financial Services Authority, FSA, FTSE, GM, Gordon Brown, Hershey, Interest Rates, ITV, Kraft Foods, Labour party, Michael Grade, Money, Money Markets, NASDAQ, Office of National Statistics, Opel, Recession, Retail, Royal Bank of Scotland, Sir George Mathewson, Stock Markets, Stocks and shares, The Queen’s speech, UK Banks, UK Economy, UK government, UK inflation, UK Recession, US Commerce Department, Wall Street, Warren Buffett

Lloyds Banking Group is to cut 5,000 more jobs by the end of next year as it continues to reduce overlap following its merger with HBOS last year.

While almost half of these posts are among staff, 2,600 permanent jobs would be lost. The union Unite accused the bank of "corporate arrogance" and short-termism following the announcement, which will mean that Lloyds will have cut 15,000 jobs this year.

Japan’s second- largest carmaker Honda Motor Co have announced that they will be widening job cuts at its UK factory in Swindon, due to a major fall in demand in Europe as the end of government stimulus programs draws close.

According to a company spokesman, Honda plans to expand their voluntary early retirement plan, which succeeded in reducing the number of workers at the factory by 1,300 last December, although the spokesman declined to say how many additional jobs would be cut. The plant, which builds the CR-V and Civic models for the European market, saw production plunge by 75 percent to 400,000 units in the year until end September 2009.

A rapid recovery in UK commercial property values conditions could see the sector turn positive this year. The recovery comes after the deepest slump on record that looks like leading to an almost boom like situation according to forecasts. Real estate values are set to overturn most of the losses suffered in the first half as booming investor demand has taken prices back to near peak levels in some sectors.

As was widely expected, Cadbury have rejected the formal bid from Kraft on Monday, going as far as to describe the US food group’s offer as “derisory”. Roger Carr, Cadbury’s chairman, declared the formal offer “worse than the proposal the board has previously rejected” as it made no attempt to improve the terms of its original offer of two months ago. In the meantime Kraft’s share price has fallen steadily since their offer in early September, reducing the value of the bid from 745 pence a share to 717. Cadbury’s shares closed up 3 pence to 761 on the FTSE, while Kraft’s shares fell 31 cents in New York in midday trading to $26.47. However, Kraft have not rules out making an increased offer during the formal takeover offer period, which could last up to three months as analysts predict that the company may wait until towards the end of the offer period before making a final offer.

Company management at Sainsburys will be feeling the pressure as recent figures show that the supermarket group sales were expanding at the lowest rate of the UKs "big four " supermarkets. Sainsbury’s sales were shown to have risen by 4.7 percent in the 12 weeks to October 31, making for the lowest turnover expansion, less than the 5.6 percent recorded by Tesco, with Asda and Morrisons leading the way.

Unofficial reports have it that Orange UK sold more than 30,000 iPhones on launch day. Orange is the second carrier to offer the iPhone in the UK behind O2, while Vodafone has announced plans to begin offering the handset early in 2010, as well as the iPhone, Orange UK have also launched a so-called business homescreen for the soon to be launched Samsung Omnia Pro B7330. The Omnia Pro is reputed to be a smartphone based on a different concept from the iPhone, featuring Windows Mobile 6.5 and a full QWERTY keypad. Orange’s new homescreen provide quick access to email, voicemail, contacts, calendar and so on, “ensuring vital business applications are right at their employees’ finger tips”. The Samsung Omnia Pro B7330 will be soon available through Orange, coming as the carrier’s first “business WM6.5 device,” targeted at medium and large business customers.

For more information about The Samsung Omnia Pro B7330 Visit Compare-Mobile.co.uk

Sterling lost ground on Tuesday after a ratings agency said the UK was the major economy most at risk of losing its AAA credit rating , Since then the pound has weakened in value over the last two days against all the major currencies.

• Pound/US dollar 1.6719
• Pound/Euro 1.1161
• Pound/Japanese Yen 149.468
• Pound/Swiss Franc 1.6852

The FTSE 100 has rallied strongly since the beginning of the week up 86 points to 5,230.55. The FTSE 250 also rose 38.3 points to 9,120.96. London equities principally made progress on Monday, largely thanks to strong trading in insurance stocks.

As US carmaker General Motors (GM) were seen to be making efforts to calm the waves after their surprise decision last week to retain ownership of their European plants, a spokesman for the company has forecast that Opel and Vauxhall will retain consider independence as well as receiving considerable financial support . The US carmaker has announced that that they will provide a “reasonable and sizeable” portion of the restructuring costs for Opel and Vauxhall, rather than seek 100 percent government aid. GM have forecast that they will need €3 billion ($4.5 billion) to restructure the Opel and Vauxhall operations and intend to raise at least partial funding from interested European governments.

The Dow Jones has made some major steps forward since the weekend, up 243 points to 10246.97, closing at the highest level since October 2008.

The NASDAQ also jumped, reaching 2151.08.

US software company Adobe Systems has announced that it is to cut almost 10% of its workforce, a total of 680 jobs. Adobe Systems best known for Photoshop, Flash and Acrobat, said the cuts were necessary to cut costs.

Gold extended its record-breaking run above the $1,100 mark on Monday while crude oil raised more than $2 a barrel as markets made a strong start to the new trading week. Gold hit a record at $1,110.85 a troy ounce, a rise of 26.5 per cent this year, before easing back to $1,107.00, up 1.1 per cent on the day as analysts digested the implications of India’s decision last week to buy half of the gold the International Monetary Fund has put up for sale.

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