After a nine-month run of steady increases, UK house prices were reported to have fallen in February, while the three-month rate registered a rise of 1.6 per cent. The three month property rise comparison chart was down from the 2 per cent increase seen in the three months to January as well as its peak of 3.7 per cent the three months to September 2009. According to the, prices fell by 1.0 per cent month on month in February,, although on a year on year level, house prices rose by 9.2 per cent against 8.6 per cent in January.

It now transpires that Britain’s escape from recession was stronger than previously thought in the final three months of last year, as the services sector bounced back.

According to the Office for National Statistics, the UK economy grew by 0.3% in the fourth quarter, rather than 0.1% as previously estimated, which marked the first time the economy had grown since the first quarter of 2008, when the UK’s deepest and longest postwar recession on record began.

City economists, who had predicted 0.2% growth, hastened to point out that the figures did not change the overall economic picture; with some of them even warning that the economy could even slip back into recession in the first three months of this year.

Before the weekend, the extent of the beating that the Lloyds Banking Group took through the acquisition of HBOS was revealed. The bank, who are partially owned by the UK public, revealed that no less than £30 billion had been set aside over the past two years to cover toxic debt hat Lloyds had inherited from the deal, with the bank indicating that they expect a further £12 billion of charges on HBOS loans this year, showing what a white elephant the bank had purchased for what then appeared to be a bargain price of £8 billion.

All these negative figures contributed to Lloyds announcing a worse-than-expected pre-tax loss of £6.3 billion for 2009. The figures make a somber contrast to those of Barclays and Royal Bank of Scotland who over the last ten days announced figures that beat market projections. Lloyds also came under a lot of stick over the issue of whether it had met lending targets agreed with the UK government.

Understandably shares in the bank fell heavily after having increased by 18 per cent in the previous nine days on what proved to be false optimism about its 2009 figures. In the event, Lloyd’s report of a series of unexpected bad debts for the fourth quarter sent their shares falling by 4.4 per cent to 52½ pence. Royal Bank of Scotland shares also faded 1.9 per cent to 37½ pence after analysts reduced their ratings which they claimed painted a too optimistic picture.

Financially troubled US insurer AIG are apparently on the brink of selling AIA, the US life group’s Asian business, to the UK’s largest insurer Prudential for about $35 billion in cash, shares and other securities The is deal expected to become official on Monday 1st March. The announcement will come after a weekend of talks, after which the AIG board decided to press ahead with the sale of AIA, one of the jewels in AIG’s crown, in preference to a planned partial listing of the unit. Under the terms supposedly being discussed, Prudential would pay about $25 billion in cash and the remaining $10 billion in shares and other securities for AIA. If the deal does go through, analysts prophesy that it would transfer would more than double the size of Prudential and mean that its business would be dominated by Asian sales and profits.

The UK’s oldest building society Chesham has agreed to merge with the Skipton Building Society, to create a mutual society with more than £15 billion. The merger brings to an end 165 years of high street presence for the society, although their name will continue to be used for the society’s existing share accounts and deposit accounts of assets. A spokesman for Chesham, who service over 20,000 members from their three branches, welcomed the merger, saying it would provide the security of being part of a larger group. In the past year Skipton Building Society, has seen annual profits increase to £63.5 million

According to a recent survey, the cost of car insurance jumped 12.7 percent in Britain in 2009 with the average quoted premium rising to £507 at the end of 2009 compared with £450 pounds a year earlier, The pace of the increase accelerated in the second half of the year, with prices rising by 6.3 percent in the final quarter alone. British car insurance prices have been held in check by stiff competition between providers, largely due to the spread of price comparison websites.

Write-offs at their troubled T-Mobile UK subsidiary helped to pushed Deutsche Telekom’s profits down by 77% in 2009, with profit slipping to €353 million from €1.5 billion in 2008, due to write-offs worth €2.3 billion on goodwill in T-Mobile. Deutsche Telekom and France Telecom have agreed to merge their UK mobile operations. They are awaiting regulatory approval for the deal, which will make the jointly-owned company the biggest UK mobile network operator with some 29.5 million subscribers.

Portsmouth Football Club have lost their battle to avoid entering administration as the Premier League side finally admitted defeat in their struggle to overcome a mountain of debt totalling £60 million, of which – g more than £12 million is owed to HM Revenue and Customs.

The process of administration automatically means that the club will be docked nine points by league bosses, making relegation almost certain and probably a welcome relief for the club’s supporters/ .

Portsmouth has already changed hands four times this season and has been at the bottom of the Premier League for most of it. .

On the foreign exchanges, the pound continued to fall . At close of trade Friday it was $1.5117, while standing at 1.1121 against the Euro.

As the markets closed for the weekend, the FTSE 100 was up 76.3 points, to 5,354.52. The rise erased most of the week’s trading losses, and made for a gain of 3.2 per cent for February.

According to revised figures, the US economy grew at an annual rate of 5.9% in the last quarter of 2009, higher than the first estimate of 5.7%.

According to economists, the rise was down to an increase in manufacturing output rather than stronger consumer spending; with the figures confirming that the world’s largest economy is moving rapidly away from recession.

On Friday, the Dow Jones Industrial Average continued to creep upwards, but at a much slower pace. It rose just 4.23 points to close on 10,325.26 while the NASDAQ Composite also rose by 4.04 points to close on 2,238.26

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Tags: AIG, Barclays, British Economy, British Pound, car insurance, Chesham, Dow Jones, Economics, Economy, Financial News, FTSE, HBos, Lloyds, Money, NASDAQ, Office for National Statistics, Property Prices, Recession, Royal Bank of Scotland, Skipton Building Society, Stocks and shares, T-Mobile, UK Banks, UK Economy, UK government, UK Recession

Pension funds in the western world have made am almost one trillion pound ($1.5 trillion) recovery in the first half of 2009. Whilst commendable, this figure represents less than a third of what these funds have lost in market value last year. These figures were released by the Organisation for Economic Co-operation and Development (OECD) who have been tracking the progress of pension funds since the outset of the global economic turndown. According to the OECD who is based in Paris, the recovery in pension fund performance has continued through September 30, 2009, on the back of strong equity returns. However it will take some time before the losses that occurred during 2008 are fully recouped. Most pension funds staged a partial recovery in the first half of 2009, generating investment returns of 3.5 percent in nominal terms. Membership of OECD is made up from mostly financially developed industrialized economies

The cost of car insurance appears to be dramatically on the rise, according to a recent survey from the Automobile Association (AA) in the third quarter of 2009, insuring a car rose at its fastest pace in 15 years, driven by a spate of rising personal injury claims and exacerbated by fraud. Statistics issued by the AA show that the average quoted premium for comprehensive motor cover rose 5.6 percent to £821 pounds during the three months to September 30, and by 14 percent from 2008.

As news filters through to the market that Virgin Money has applied for a banking license through the FSA (Financial Services Authority) it now appears more than likely that Virgin Money will make an offer for part or all of the Northern Rock business, with many analysts claiming that an informal agreement has already been struck with the UK government, and all that is required is tie up a few loose ends before the deal can be officially announced. Speculation in banking circles point to the fact that the UK government will need to request a high asking price for Northern Rock. Any sale at a "knock down" price is bound to infuriate taxpayers whose money was used to keep the Rock from sinking. On the other hand, Branson’s company is not liable to pay an inflated price for the bank. This could lead to an impasse that could see the operation stay with the UK government for the foreseeable future. Analysts state that selling Northern Rock would be in the best interests of both the government and UK taxpayers, but only in the medium to longer term. With an election looming, questions remain whether Gordon Brown’s government could allow themselves such a luxury.

Discount retailer, Matalan is reputed to be weighing up a £1.5 billion offer, after a number of companies expressed their interest in acquiring the business which remains privately owned. Among the parties interested are private equity group CVC. Matalan were taken private by John Hargreaves, their founder and controlling more than three years ago with indications having it that Hargreaves is neither interested in entering into an auction to sell his company or at any price.

The employee owned department store chain John Lewis, has seen online sales of its clothing range, take tremendous steps forwards since the company re- launched their updated website last month. With the launch came the release of a wide range of new fashion brands exclusive to the company. A leading executive from John Lewis Direct announced the company’s satisfaction with results achieved till now, that far surpassed their predictions. In general, sales of clothing online from the company were about three times higher than last year.

Mobile phone company Orange are due to begin marketing the iPhone to UK customers in Early November, a move that is bound to mark strong competition with O2 as the Xmas run up gets under way. Orange’s announcement last month that it had become the first UK network breaks O2’s exclusive hold on marketing the iPhone device, caused shock waves in the industry. The iPhone is expected to be launched by Orange on 10 November, just one day after O2’s two-year exclusive contract with Apple ends. Carphone Warehouse, which was the only independent retailer able to stock the iPhone when O2 had it to itself, is also expected to sell the phone on behalf of Orange. The iPhone is seen as the best touchscreen phone in the market, and has won a clutch of industry awards.

In the money markets, Sterling was back on a rise against the leading currencies with the notable exception of the Swiss franc.

• Pound/US dollar 1.6322
• Pound/Euro 1.10979
• Pound/Japanese Yen 150.2587
• Pound/Swiss Franc 1.6629

The FTSE 100 suffered a late reaction to the news that the UK economy was still in recession, falling 50.83 points to close on 5191.74 on Monday. The FTSE 250 was also down by 137.55 points to 9186.10.

The world’s largest construction equipment maker Caterpillar, has announced their intention to permanently cut 2,500 jobs in the US. The news was a contradiction to predictions that economic recovery was on its way for the construction industry in general and Caterpillar in particular, with the company undertaking to reinstate 550 workers that they had previously laid off. During the downturn, Caterpillar has cut about 34,000 jobs globally.

On Wall Street, the Dow Jones also continued to decline, down a further 104.22 points to 9867.96. At the same time, the NASDAQ Composite index appeared to be on a never ending but steady decline, yesterday down a further 12.62 points to close on 2141.85

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Tags: AA, Automobile Association, Bank, Banking, British Economy, British Pound, car insurance, Caterpillar, Currency, CVC, Dow Jones, Economics, Economy, Employment, Financial News, Financial Services Authority, FSA, FTSE, Gordon Brown, iPhone, John Hargreaves, John Lewis, Matalan, Mobile phone, Money, Money Markets, NASDAQ, Northern Rock, O2, OECD, Orange, Organisation for Economic Co-operation and Development, Pensions, Recession, Retail, Stock Markets, UK Banks, UK Economy, UK government, UK Recession, Virgin Money, Wall Street