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

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

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

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

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

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

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

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

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

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

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

• Dollar 1.5956
• Euro 1.111922

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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