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

UK public opinion is reported to be swinging the way of large scale cuts in the public service sector, according to recent reports. The sector, costing taxpayer’s record amounts of money each year. Is now employing more people than ever before. Unions who represent public sector employees are anticipating having a have a fight on their hands, if as expected, the Conservative party wins the next election and inherits an economy still struggling to pull itself out of recession.

According to statistics issued by the Office for National Statistics before the weekend, business investment in the UK fell 0.6% sequentially in the third quarter, significantly less than the 3% initially estimated. British private and public sector manufacturing investment has reportedly fallen 9.4% since the second quarter and by almost 30 % since the third quarter of 2008.

According to a recent report by the Bank of England the “probability of default by U.K. real estate companies has increased significantly” as households continue to face a weakening labor market paired with tightening credit conditions.

Amid concerns that the government’s 50% banking bonus tax could seriously damage future business levels, stock markets around the world have been focusing upon the city of London investment markets. The UK government went as far as issuing a report, released on Friday, clarifying who is liable to fall under the scope of the banking tax.

With reports in circulation that UK banks, and especially those whose activities are centered on in London continue to consider their position regarding the banking bonus tax, which has been mooted as a one-off charge, is making people in the banking world a little hot under the collar.

The Confederation of British Industry (CBI) has raised its 2010 economic growth forecast, whilst predicting that the Bank of England may place their bond-purchase plan on hold as soon as February as policy makers prepare to raise interest rates.

The CBI also predict that gross domestic product in the UK will increase 1.2 percent in 2010 after contracting 4.5 percent in 2009, up from their previously forecast expansion of 0.9 percent. The group also predicts the bank will raise the benchmark interest rate from 0.5 percent in the second quarter to reach 2 percent by the end of the year.

The recovery will be aided by companies rebuilding stocks to meet a rebound in world growth and as exporters benefit from a weaker pound, down almost a quarter since the start of 2007, making British goods cheaper to buy abroad.

Google, smart boys that they are, succeeded in not paying a penny in corporation tax on the £1.6 billion advertising revenues that it earned in Britain in 2008. The company, which enjoys an estimated 90% market share of UK internet searches, last year, used a cross-border network of subsidiary companies to keep the taxman at bay. Their smoothly interwoven international corporate structure enabled Google to avoid paying what could otherwise have been a corporation tax bill in the UK of as much as £450 million, according to recently filed accounts for subsidiary company Google UK Limited. The accounts show none of the search engine’s advertising revenues from British customers were accounted for in the business, despite operations in London and Manchester While much of the costs linked to the running of Google’s British operations are recognised for tax purposes in the UK. Revenues from customers in Britain, however, are diverted to another Google company in Ireland, where the corporation tax rate is between 10% and 25%, while UK corporation tax is levied at between 28 and 30%

The British Pound has begun to recover and bounced back to a high of 1.6251 on Friday following the rise in risk appetite. Analysts predict that Sterling may continue to recover as a recent Bank of England Financial Stability report said the U.K. financial system has become “significantly more stable”. This was credited to the unprecedented steps taken on by the government.

• Dollar 1.6152
• Euro 1.1262

Things were pretty brisk on the FTSE 100 approaching the weekend, with

nursing homes group Care UK drawing a lot of attention. The company has been reportedly been considering whether to accept a £275 million pound bid from Bridgepoint which will take them private. Care that runs 60 nursing homes, GP practices and NHS walk-in centres in the UK saw their shares rise 10.5 pence to 430.5 pence on Friday.

Overall U.K. stocks were on a minor downward spiral, with banks leading the way. Lloyds Banking Group Plc and Barclays Plc were are ever leading the way, as the European Central Bank (ECB) increased their estimate of the value of write downs by 13 percent. Lloyds, the 43 percent government-owned bank, lost 4.7 percent to 48.7 pence, to its lowest since July. Barclays, the U.K.’s second biggest bank, slid 3.5 percent to 264.25 pence.

Ryanair surged 5.8 percent to 3.282 Euros after the carrier said it will generate surplus cash for shareholders between 2012 and 2015 after they had suspended their talks with Boeing regarding future aircraft acquisitions.

Also on the up was Aggreko Plc, the world’s biggest provider of mobile power-supply gear. Their shares rallied 7.9 percent after announcing that trading in the fourth quarter was better than it estimated.

The benchmark FTSE 100 Index dropped 20.8, or 0.4 percent, to 5,196.81. The FTSE 100 fell 1.2 percent this week. The gauge has still rebounded 48 percent since March and is heading for its biggest annual gain since 1997 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy.

On close of trading, the Dow Jones Industrial Average was up to 10, 328.61 while the NASDAQ was stable on 2,211.69

GM says it has failed to sell its Swedish car brand Saab and will begin "an orderly wind-down of Saab operations".

GM had been in talks with the Dutch specialty car maker Spyker over a sale. Talks with Sweden’s Koenigsegg also fell through earlier this year.

GM has been trying to sell Saab as part of its turnaround plans since January. Dutch luxury car maker Spyker has submitted a new offer to General Motors (GM) for its Swedish car brand Saab.

Spyker has submitted a new 11-point proposal to GM, addressing the issues that ended talks.

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Tags: Aggreko Plc, Bank, Bank of England, Banking, Barclays Plc, Bridgepoint, British Economy, British Pound, Care UK, CBI, Confederation of British Industry, Credit Crunch, Currency, Dow Jones, Economics, Economy, European Central Bank, Financial News, FTSE, General Motors, Google, Koenigsegg, Lloyds Banking Group Plc, Money, Money Markets, NASDAQ, NHS, Office for National Statistics, Recession, Ryanair, Saab, Spyker, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession

According to a survey for the Confederation of British Industry (CBI), UK companies will be relying much less on banks for credit in the future, instead pinning their hopes funding from bonds and equities.

The survey showed that half of the companies will be looking to decrease financing from bank debt after the recession winds down. More than forty percent of the companies who took part in the survey said that they could see no change in bank funding.

The new Supreme Court is expected to rule on Wednesday on whether overdraft charges can be assessed for fairness under the Unfair Terms in Consumer Contract regulations. If the Supreme Court rules in favour of consumers, banks could be forced to pay out hundreds of millions of pounds if the overdraft charges levied were ruled to be unfair, and the public could seek to recoup losses through charges on current accounts and ATM withdrawals.

The British Bankers’ Association announced that the number of home purchase loans approved by banks in October was almost double that of a year ago, with 42,238 mortgage applications being approved. The figure was slightly higher than the 42,073 loans approved in September, while they almost double what they were from the same period on 2008. Net mortgage lending rose by £3.1 billion pounds in October, the same figure as in September.

Up to their knees in this week were the Association of British Insurers (ABI), who have received between 500 and 1,000 claims relating to recent flooding in Cumbria and southern Scotland where claims totaling up to £100 million have been recorded. At least 1,500 homes were affected by the floods, six bridges are reported to have collapsed and 5,000 households were left without power. The ABI announced that it was difficult to ascertain how many more claims could be expected. Insurers have said they might have to reconsider current arrangements, whereby all homes in the UK are offered flood insurance

Britain’s biggest mortgage lender, Lloyds Banking Group Plc is scheduled to publish results of a debt exchange. Meanwhile it was reported that the banking group is in talks with Execution Ltd. and a deal may result in the creation of a joint venture. Shares in Lloyds dropped 2 percent to 88.15 pence

Following its successful merger with Spain’s Iberia Lineas Aereas de Espana SA, British Airways Plc could revive plans for a tie-up with Australia’s Qantas Airways Ltd. Chief Executive Officer Willie Walsh has suggested that the Iberia model would allow Qantas to retain a separate brand and home base.

British Airways has agreed to combine with Iberia to boost its network amid a slump in international travel that contributed to a record first-half loss. The carrier abandoned merger talks with Qantas last year after the airlines failed to agree on who would control the new company. Shares in BA gained 1.6 pence, or 0.8 percent, to 202.6 pence.

Rumours abound that Nestle SA has thrown their cap into the ring in the who will buy Cadburys circus. The company is said to be weighing options would challenge Kraft Foods Inc.’s offer as well as a potential move by Hershey Co.

Cadburys are seemingly expecting a friendly bid from Hershey Co. if it can arrange the financing, with the company’s controlling trust supposed to be in favour of a $17 billion bid for Cadbury. The only thing that is certain is that Cadbury’s stock keeps on rising, up 1.2 percent to 800.5 pence.

Marks & Spencer Group Plc’s incoming chief executive officer Marc Bolland, has announced that he will focus on growth on foreign markets especially China, when he takes the reins next year. The markets remained indifferent, as shares dropped or 0.1 percent, to 380 pence.

The pound rose against the dollar, while falling against the Euro and the yen on continued concerns regarding the U.K. budget deficit.

• Pound/US dollar 1.6581
• Pound/Euro 1.1077
• Pound/Japanese Yen 146.6185
• Pound/Swiss Franc 1.6718

The FTSE 100 Index jumped by 82.55 points to 5,323.98, while the FTSE 250 rose by 14 points to close on 9,181.

In the US, the National Association of Realtors announced that sales of previously-owned US homes jumped by 10.1% in October as buyers rushed to take advantage of tax credits, which have now been extended.

Sales hit a seasonally adjusted annual rate of 6.1 million, up from a revised 5.54 million in September. First-time buyer tax credits had been due to expire at the end of November, but have been extended until 30 April.

The jump in October home sales was the biggest in almost three years.

The Dow Jones average took a turn for the better after the weekend, up 93 points to 10411.5 The NASDAQ rose seventeen points to finish up on 2163.73

Computer hardware giant Hewlett-Packard (HP) has announced a rise of 18% in profits for the third quarter, despite that the fact that their sales had fallen for the period. A spokesman for HP revealed that the company’s major cost-cutting initiatives had been the driving force in the £1.4 billion profit earned during the period. The firm has cut 6,700 jobs this year to trim costs.

The price of gold has hit a new all-time high, boosted by continued concerns about the weakening dollar.

Gold hit a record of $1,173.50 an ounce, up almost 2% from Friday close.

The expectation that US interest rates will remain low has put pressure on the dollar, making both gold and oil more attractive as an investment.

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Tags: ABI, Association of British Insurers, ATM withdrawals, Bank, Banking, British Airways Plc, British Bankers Association, British Economy, British Pound, Cadburys, CBI, Confederation of British Industry, Credit, Currency, Dow Jones, Economy, Execution Ltd, Financial News, FTSE, Gold, Hershey Co, Hewlett-Packard, HP, Iberia Lineas Aereas de Espana, Interest Rates, Kraft Foods, Lloyds Banking Group Plc, Marc Bolland, Marks & Spencer Group Plc, Money, Money Markets, NASDAQ, National Association of Realtors, Nestle SA, Oil, Qantas Airways Ltd, Stock Markets, Stocks and shares, Supreme Court, UK Banks, UK companies, UK Economy, UK government, UK Recession

The UK looks like being in the financial doldrums for years to come, largely due to placing too much faith n the financial service sector and not enough on building up the heavy to medium sized industries that once made Britain Great. Financial experts are now convinced that that the reasons why the UK is taking longer than their European rivals to move out of the recession is too much of an emphasis been placed on saving the banks and too little on pushing industry forward as the French and German governments succeeded in doing. The mood on the street is that Britain has got to get a grip on its public finances.

This mood is emphasized by recent statements made by head of the Confederation of British Industry General Richard Lambert who reminded all of us that didn’t know it that how to reduce the 175 billion pound deficit will become a major battleground ahead of the next election, due next year, which the Conservatives are expected to win. General Lambert did point out that in his opinion there is very little to choose between both main parties’ deficit-reduction plans.

Meanwhile public borrowing in 2009 is almost treble what it was the previous t year with some analysts even forecasting that could even surpass the government’s forecast of £175 billion pounds, equivalent to no less than 12 percent of GDP. Chancellor Alistair Darling, who for some reason thinks he will be around to make it happen, has pledged to halve the deficit within the next four years and to even balance the budget by 2018, although he has yet to explain how.

What does appear likely to happen in the near future is that the UK Financial Services Authority (FSA) begins responsibility for financial stability as well as market regulation, consumer protection and investigating financial crime in the UK. Under a new bill that entered Parliament yesterday, to be known as the. Financial Services bill, a formal three-member Council for Financial Stability will be created. The council will consist of the finance minister, the governor of the Bank of England and the head of the FSA, who will be jointly responsible for overseeing UK financial stability. The Treasury will also start be held responsible for publishing annual reports on the stability of the UK financial system. The FSA will also gain long awaited veto power over bankers’ pay arrangements. This new authority will allow them to act if they believe that a bank employee’s contract would damage the bank’s risk management.

A recent survey has predicted that it may take until 2014 for UK property prices to return to the levels they peaked at in 2007 peak, the height of the country’s biggest housing boom.

After a surprise rebound this year, the survey predicts that U.K. house prices will probably fall next year, with predictions of an average drop of about 1.6 percent being bandied about.

The 7 percent gain in average prices in the UK that have been going on since April were driven by a shortage of properties for sale and are unlikely to be sustained, while Britain’s longest recession on record fuels unemployment and makes banks hesitant to lend.

National Grid, the company that operates electricity and gas networks in the UK as well as in the US, has reported a 16 per cent rise in underlying pre-tax profit for the six months to the end of September. The rise comes despite a steep fall in energy use, demonstrating what the company describes the success of their extremely low risk business model. Pre-tax profits, were £649 million in the first half of 2009, up from £91 million from the equivalent period of 2008. The company benefited from the favourable effect of 2008’s high UK retail price inflation, which governs the charges that National Grid is allowed to earn from energy suppliers for using its networks. The company was also helped by the steep fall in interest rates, as about a third of its debt is at floating rates.

The world’s largest maker of household cleaners Reckitt Benckiser is close to a “multibillion pound cross-border transaction,” most likely candidate being industry giant Colgate. The news added 1.1 percent to Reckitt’s shares which closed at 3,140 pence.

Brewers SABMiller Plc who produces the Pilsner Urquell and Miller Genuine Draft beers among others saw their shares rise 3.4 percent to 1,714 pence on trading before the weekend. The rise was a result of their announcement of first-half profits that beat analysts’ estimates, as well their plans to launch a four year cost reduction program to save around £200 million annually by 2014.

U.K. pub owner Fuller Smith & Turner Plc, producers of London Pride ale, has announced first-half profits up 47 percent, as the company benefited from acquisitions and by selling more of its own beer brands. A spokesman for the company said that they expect the second half to be “significantly tougher,” as factors including good weather and the benefits of the purchases are unlikely to be repeated The company has added 11 pubs over the past year, seven in central London acquired from Punch Taverns Plc.

There was a lot of movement on the FTSE 100 before the index closed for the weekend. In the travel sector both Thomas Cook and Tui Travel sank at least 4 percent. Wolseley Plc and Taylor Wimpey Plc led a retreat among home builders after reports that unemployment will continue to force down property prices. Cable & Wireless Plc added 1.8 percent after positive market reports on the company’s performance.

The pound fell against the dollar, the euro and the yen on concern that the U.K.’s worst budget deficit since records began will hamper the nation’s recovery. The pound slid to its lowest level in more than two weeks against the U.S. currency. Britain’s £11.4 billion-pound budget deficit in October was the worst for the month since records began in 1993, according to data released on Friday by the Office for National Statistics.

• Pound/US dollar 1.6504
• Pound/Euro 1.1099
• Pound/Japanese Yen 146.7564
• Pound/Swiss Franc 1.6803

U.K. stocks declined for a fourth day with the benchmark FTSE 100 Index slipped 0.3 percent to 5,251.41, bringing this week’s loss to 0.9 percent. The gauge has rebounded 50 percent from this year’s low on March 3 amid signs government stimulus policies and record-low interest rates are leading the UK economy out of recession, albeit at a slow pace. The FTSE 250 dropped another 70 points to close on 9,167.60

Stateside the Dow Jones average had a quiet day on Friday; closing on 10318.16 The NASDAQ dropped just ten points on the day’s trading to close on 2146.04.

Gold maintained a grip near its all-time high while oil prices dipped and base metals eased as commodity markets paused for breath after their recent strong run.

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Tags: Alistair Darling, Bank, Bank of England, Banking, British Economy, British Pound, Cable & Wireless Plc, Confederation of British Industry, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, Financial Stability, FSA, FTSE, Fuller Smith & Turner Plc, General Lambert, Gold, London Pride ale, Miller Genuine Draft, Money, Money Markets, NASDAQ, National Grid, Pilsner Urquell, Punch Taverns Plc, Recession, Reckitt Benckiser, Richard Lambert, SABMiller Plc, Stock Markets, Stocks and shares, Taylor Wimpey Plc, Thomas Cook, Tui Travel, UK Banks, UK Economy, UK Financial Services Authority, UK government, UK Recession, Unemployment, Wolseley Plc

Government ministers will use this week’s Labour party conference to claim government action helped pull the country back from the economic abyss, while their Tory counterparts will as surely use their own conference next week to blame the government for the downturn’s depth.

According to the Confederation of British Industry (CBI) employers’ organisation, after the general election, public spending should be cut harder and faster than the government intends. The next government should aim to balance their books by 2015-16, which is two years earlier than the plan set out in this year’s Labour Party Budget. The feeling at the CBI is that while it was essential an incoming government laid out a “clear and credible” plan to get the budget back into balance, the organisation remains undecided whether the process of cutting spending should start next year, according to the opposition Conservative party’s proposals.

According to internal company data, Opel’s U.K. and Spanish car plants are more efficient than two of its three German factories. Figures for December show the Russelheim plant in Germany took almost 10 hours more to assemble a car than the Ellesmere Port factory in Britain and 14 hours more than in Zaragoza, Spain. These figures are likely be used by those demanding the European Commission “take a tough stand” on the sale of General Motors’s Opel unit to Magna International Inc. Job losses are expected to be heavier outside Germany under that proposal, which is being brokered by the German government.

The proposed UK government six pound telephone line tax due to be implemented by the end of 2010 has apparently raised some eyebrows in the business community. The proposal, aimed to partly fund the investment required for a new UK national broadband network. Has met with a surprising response from British business who claim that six pound per telephone line would prove insufficient and could hold back the UK broadband sector for some time to come. Government thinking is apparently that many consumers are already upset about the need to pay six pound every year, although they have no current access to broadband, and the government is trying to keep the cost per family down, but to what effect.

UK-based domestic insurance group HomeServe has sold its loss-making emergency repair services unit for £11 million. HomeServe Emergency Services (HES) was acquired by Midlands-based LDC, the private equity arm of Lloyds Banking Group. The division posted a loss for the first half of this year, and HomeServe was reportedly keen to sell it off, reducing its valuation by £97 million to make the sale. HES, who employ 2,400 people at offices in Norwich, Nottingham, and Beverley, is made up of three trading businesses, including HomeServe Glass and Locks, who provide and emergency glazing and locksmith service; HomeServe, Chem-Dry, who provide emergency restoration of water damage and accidental damage; and HomeServe Content Services, who have developed a software designed to assist insurance firms validate contents insurance claims.

The FTSE 100 registered its sharpest gain in three weeks on Monday, as it jumped 83.50 points to close on 5,165.70 The FTSE 250 reversed most of last week’s fall, up 108.96 points to 9169.40.

The pound continued to enjoy mixed fortunes against the major currencies.

• • Pound/US dollar 1.5879
• • Pound/Euro 1.10867
• • Pound/Japanese Yen 142.4182
• • Pound/Swiss Franc 1.64

Photocopier giant Xerox, already the world’s biggest supplier of digital printer and document management services, has unveiled a takeover deal which takes it into the fields of data management and technology outsourcing. The company is buying fellow US firm Affiliated Computer Services (ACS) in a cash and shares deal worth £4 billion.

Wall Street on Monday recorded its biggest daily gain for over a month after merger deals lifted investor confidence. The Dow Jones Industrial Average was up 124.17 points to 9,789.36. The NASDAQ jumped 39.82 to close on 2130.74. Last week, Wall Street suffered its biggest weekly loss since July after disappointing data on durable goods and housing sales.

Germany equities led European bourses higher on Monday aided by a particularly strong performance from the German utility sector, after Chancellor Angela Merkel’s Christian Democratic Union and her Free Democratic allies gained a majority in parliament on Sunday.

In a move designed to ease the impact of the global economic crisis on central and Eastern Europe, the European Bank for Reconstruction and Development has appealed for an increase of 50 per cent in working capital.

The multilateral bank, controlled by some 60 governments, including European Union members, the US and Japan, is asking for an extra £9 billion (€10 billion,) necessary to expand their lending capabilities as well as compensating for a sharp decline in private capital flow, especially into the cash strapped former communist countries.

The bank’s move highlights the bank’s concerns that the region’s difficulties may be forgotten as world leaders grapple with the effects of the global crisis.

The yen rose to a seven-month high versus the dollar as Japan’s new government reiterated its opposition to intervening to stem a currency’s gain and the Federal Reserve pledged to keep interest rates low. Japan’s yen advanced 1.8 percent this week to 89.64 per dollar, from 91.29 on September the 18th at one point touching 89.51 yen, the strongest level for almost nine months.

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Tags: Affiliated Computer Services, Banking, Brighton conference, British Economy, British Pound, Confederation of British Industry, Currency, Dow Jones, Economy, European Bank for Reconstruction and Development, Financial News, FTSE, General Motors, Gordon Brown, Government, HomeServe, HomeServe Emergency Services, Labour Party Budget, Magna International Inc, Money Markets, NASDAQ, Opel, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Wall Street, Xerox

Signs are growing stronger daily that the Bank of England is about to cut the umbilical cord on the UK economy, with the first stage being to cease the purchase of bonds when its current £175 billion pound plan draws to a close. News from the Confederation of British Industry (CBI) states that gross domestic product will rise 0.3 percent in the third quarter, reversing their June prediction for a drop of the same size. The CBI have forecast a 0.4 percent growth for the last quarter, and also predict that the central bank will begin to raise their benchmark interest rate during the first half of 2010.

Peer Steinbrueck, the Finance Minister of Germany has accused the UK of blocking tougher financial rules ahead of the G20 summit. According to Steinbrueck "There clearly is a lobby in London that wants to defend its competitive advantage tooth and claw. Both Germany and France have led calls for more restrictions on banks, which have been resisted by the US and UK.

JD Sports, who made their first foray into Europe with the for £7.2 million purchase of French footwear chain, Chausport in May are said to be considering further deals in Europe after increased interim profits increased its cash holdings.

The company’s focus on young shoppers, apparently less affected by the recession than the older home-owning generation , has allowed it to outperform most of its rivals, who have been beset with trading woes.

On the news that the Royal Bank of Scotland (RBS) are looking to launch a rights issue, their shares dropped 5.2 percent to 53.4 pence. Experts predict that RBS hope to rise between three to five billion pounds. Lloyds Banking Group Plc lost 2.8 percent to 107.6 pence on widespread reports that the lender is likely to participate in the U.K. government’s asset protection plan.

The U.K.’s largest shopping-center owner Liberty International Plc have announced plans to issue more than 56 million new shares in order to kick start their investment programme in shopping centers. Their shares rose 5 pence to 564 pence on the news.

National Express Group Plc, the U.K. rail company have apparently received a written undertaking from the Cosmen family to subscribe to a rights offer of at least 300 million pounds. This in the event its bidding group fail to make 500 pence a share offer for the company. National Express’s east coast franchise is to be seized by the UK government. On the news, shares in the company fell 0.2 percent, to 475 pence.

The U.K.’s largest publicly traded water supplier, United Utilities Group Plc announced that they were “on track” to deliver results in line with previously outlined expectations. Despite that encouraging news, their shares slipped 2.2 percent to close on 455.4 pence.

On the news that the Vodafone Group Plc, who are currently the world’s largest mobile phone company are about announce a whole new range of services today, their stock rose by 1 percent, to 141 pence.

The services are aimed to capitalize on the increasing popularity of Internet surfing through mobile phones.

The FTSE 100 made a minor downward adjustment, down 3.23 points to close on 5,139.37, while the FTSE 250 fell by 31.66 points to close on 9,217.01.

Sterling rallied sharply on Wednesday after the Bank of England’s monetary policy committee quashed rumours of a possible extension of its quantitative easing programme.

• Pound/US dollar 1.6345
• Pound/Euro 1.1107
• Pound/Japanese Yen 148.7512
• Pound/Swiss Franc 1.6817

A spokesman for the US Federal Reserve has suggested that despite the fact that economic activity is "picking up" interest rates will be held close to zero for an "extended time". The comments from the Fed. came as they confirmed that interest rates will remain at their current record low level current level of between 0% and 0.25%, where they have been held since December 2008. Economists continue to predict that the rate will stay at this level throughout the rest of this year, and perhaps well into 2010.

The Dow Jones Industrial Average took a tumble yesterday down 81.32 points to 9,748.55. The NASDAQ lost most of its recent gains, down 14.88 points to 2131.42

Ahead of the forthcoming G20 meeting of world leaders, the US dollar has fallen to a one-year low against the euro the dollar dropped to $1.4840 against the euro as well as against most of the leading currencies. Foreign exchange traders have been switching to rival currencies as signs of economic recovery continues to grow stronger.

Gold rose to $1,012 a troy ounce, as investors awaited the dollar’s reaction to Wednesday’s US Federal Reserve meeting.

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Tags: Bank, Bank of England, Banking, British Economy, British Pound, CBI, Chausport, Confederation of British Industry, Cosmen, Credit Crunch, Currency, Dow Jones, Economy, Financial News, FTSE, G20 summit, JD Sports, Liberty International Plc, Lloyds Banking Group, Money, Money Markets, NASDAQ, National Express Group Plc, Peer Steinbrueck, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, U.K. government, UK Banks, UK Economy, UK government, UK Recession, United Utilities Group Plc, US Federal Reserve, Vodafone Group Plc