There is a lot of speculation about that the Treasury has set the wheels in motion to reduce their stake in the Royal Bank of Scotland and Lloyds Banking Group, both of which are partially state-owned. The staged de-privitisation will be effected through the creation of "convertible gilts", or government bonds. These bonds could then be exchanged for Lloyds or RBS shares once certain price targets are achieved. This way the government might be able to slowly reduce the taxpayers’ stake in the banks, hopefully over the next five years.

On another vein, the Treasury has warned banks that investors could be given the powers to veto top salaries, even before they are paid. Current rules that allow shareholders to vote on remuneration reports detailing pay only for the previous year, meaning that anyone that votes against bonuses in particular or large and unjustified ones in particular are for the protocol only. The revised proposals were made in Budget documents issued by the Treasury, with a more detailed and final proposal unlikely to come before the election.

Telecoms Company Vodafone are reported to be in discussions with their US counterpart Verizon Communications over the future of Verizon Wireless, which is a US mobile phone joint venture between the two companies. Apparently the discussions are based around a full merger of the two groups, which could take the form of an all-stock combination with a value of more than £120 billion.

US consumer electronics retailer Best Buy have outline details of their expansion plans for the UK. Best Buy intends to open four stores across the UK in the spring. A fifth will open in south London in the autumn.

Ofcom has ruled that UK mobile phone companies will have to cut their charges by at least a billion pounds a year. The ruling comes after a review of the cost of connecting mobile phone calls from one network to another, with the move is expected to aid smaller operators as well as consumers, to cut losses through having to pay extra to connect customers to rival networks.

Toyota announced before the weekend that they are temporarily halting production at its factories in France and the UK. The stoppage, expected to last for a total of nine days, come as a result of falling sales that the company have partly attributed to its recent recall woes.

Toyota will put production on hold at its two factories in Britain for five working days sometime in May. In early June, Toyota also plans to halt one of its two assembly lines at its Burnaston plant for a further five working days. The stoppages come after Toyota recalled 8.5 million vehicles globally over braking problems in its Prius hybrid, sticky gas pedals and pedals that can get stuck under floor mats. Toyota’s sales in the 27-nation European Union sank 20 percent in February from a year earlier, even though overall EU car sales rose 3 percent.

News has been released that the Teeside Cast Products steelmaking site has been approached by a potential buyer, with the purchase offer being the first confirmed approach since Corus CSL announced last year it was to end production. The offer has come from Rutland Partners, a London-based mid-market firm specialises in turning round underperforming companies.

Operator of the National Lottery, Camelot have announced that they are to be sold to the Ontario Teachers’ Pension Plan (OTPP) for close to £400 million pounds. A representative of OTPP has stated that managed to defeat private equity group CVC’s bid, largely because as a pension fund they promises long-term stability for the lottery. The bid from OTPP is being underwritten by the Royal Bank of Canada.

The Times and Sunday Times newspapers will start charging to access their websites in June, owner News International (NI) has announced.

Users will be required to pay £1 for a single day’s access and £2 for a week’s subscription. The move looks likely to open a new front in the printed media/internet front and will be watched closely by the industry.

At long last the sale of the Independent and Independent on Sunday newspapers to Alexander Lebedev, owner of the London Evening Standard has been completed.

The Russian billionaire purchased the loss-making paper from Irish company Independent News & Media (INM) for £1, the cost of one daily edition of the newspaper.

The deal between the two parties has been under discussion for many months.

American businessman Stan Kroenke increased his stake in the Arsenal football club. His latest shares acquisition places him within 10 shares of the threshold that forces him to make a takeover bid of the English soccer power.

Kroenke now owns 29.9 percent after acquiring seven more shares ay at a cost of $12,650 each, the Premier League club announced before the weekend. If the Denver based Kroenke passes the 30 percent mark, he will be obliged to make an offer for the remaining shares in Arsenal Holdings.

Kroenke, who first bought a 9.99 percent stake in Arsenal in 2007

The Euro has strengthened against the dollar and the pound after eurozone leaders agreed a financial aid package to help debt-laden Greece.

The leaders agreed to provide €22 billion (£20 billion) should Greece run into difficulties borrowing money to service its high debt levels.

On Friday the euro rose by more than one cent to $1.3393 before falling back slightly. The pound also declined against the euro, paring a weekly advance, as a report showed U.K. business investment had the biggest annual drop on record in the fourth quarter, fueling concern the recovery has yet to take hold.

The pound headed for a second weekly loss versus the dollar.

The pound continues to be a problematic issue in the Forex markets. It closed on Friday y on $1.4877 while the Euro fell to €1.1113.

The FTSE 100 index dropped before close on Friday, finishing down 24.63 points to 5,703.02.

The White House announced on Friday that they will require lenders to lower the mortgage payments of some unemployed workers and encourage lenders to eliminate some principal debt of homeowners who owe more than their home is worth.

President Barack Obama’s plan comes after increasing political pressure to change his strategy for helping struggling homeowners and stem the tide of rising foreclosures. This is the second major housing initiative announced in as many months.

Delinquencies on U.S. mortgages rose to nearly 14 percent in late 2009, led by a sharp increase in seriously overdue home loans held by the most credit-worthy borrowers.

Obama’s $75 billion homeowner assistance program announced last year has been widely criticized as ineffective by both Democrats and Republicans on Capitol Hill.

The Dow Jones rose a little to complete a week of impressive gains closing on 10850.36. The NASDAQ dropped 2 points to 2395.41.

US economic growth has been revised down to an annualised rate of 5.6% for the fourth quarter of 2009 from 5.9%, in the US Commerce Department’s third estimate of fourth-quarter GDP.

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Tags: Alexander Lebedev, Bank, Banking, Best Buy, British Economy, Camelot, Corus, Dow Jones, Economics, Economy, Financial News, FTSE, Independent News & Media, Lloyds, Lloyds Banking Group, London Evening Standard, Money, NASDAQ, National Lottery, News International, Ofcom, RBS, Royal Bank of Canada, Royal Bank of Scotland, Rutland Partners, Stan Kroenke, Stocks and shares, Sunday Times, the Times, Toyota, Treasury, UK Banks, UK Economy, UK government, UK Recession, Verizon Communications, Verizon Wireless, Vodafone

Retailers won the closely watched holiday skirmish with shoppers, who opened their wallets a little bit despite a still struggling economy, fewer discounts than last year and limited variety on store shelves, according to recently released data. A late boost from last minute shoppers and an extra day of shopping increased total retail sales by 3.6% over the year. According to estimates Shoppers in Britain spent over £130 million pounds online on Christmas Day alone, a 29 percent increase from a year earlier. The number of U.K. customers on Boxing Day, the day after Christmas, also increased, by 19 percent. Retailers avoided last year’s pre-Christmas discounting by cutting inventory to “much healthier” levels, according to Morgan Stanley analysts. Prices, which were slashed by as much as 75 percent in 2008, were down by about 50 percent on London’s Oxford Street shopping district on Dec. 26 at retailers including the Zara clothing chain, House of Fraser Ltd, Bhs and Topshop clothing outlets.

Recent data has shown that demand from house buyers in the UK fell in December for the first time since January 2009, with the number of new buyers registering with agents down 2.2 per cent. The monthly survey showed a slight rise in prices for the month of 0.1 per cent and also noted that about half of all homeowners had no mortgage or owned less than 25 per cent of the value of their home. This is the sole sector of the community said to be behind the increased demand for new houses.

Britain’s recovery from recession has so far been sluggish compared with other developed nations but stronger growth in 2010 should help it narrow the gap. The UK economy is forecast to shrink 4.5 per cent this year and Consensus Economics says that the consensus forecast is for a rebound of 1.4 per cent in 2010. The UK looks set to lag behind the recovery in the US where the consensus forecast suggests growth of 2.7 per cent. The sharp fall in the value of the pound will help UK exporters and the manufacturing sector will see a projected growth of 2.1 per cent.

Recent research has revealed that only one-in-three British businesses believe that plans by Lord Mandelson to boost production industries will do any good. In the survey of 57 manufacturers, only 20 said that the business secretary’s programme of ‘industrial activism’ was likely to benefit UK manufacturers. The remaining 37 said the programme would not help the sector or were unconvinced about its outcomes. However, there was better news regarding manufacturers’ expectations of an industrial recovery, with almost two-thirds of those polled saying the sector was in line for an upturn in 2010.

A spokesman for the Anglo-Dutch steelmaker Corus has said that Britain should shrug off worries about the huge government deficit and prepare to spend ‘tens of billions of pounds’ on infrastructure investment to push the economy out of recession. The spokesman went on to add that that the UK needed to draw up a ‘real industrial policy’ that would make the country more attractive to manufacturers. Lord Mandelson’s efforts to encourage ‘advanced manufacturing’ as a way of rebalancing the economy were worthy of praise, while stating that these initiatives did not go far enough, and that investment programmes should also railways, schools, roads, hospitals and other public amenities.

Virgin Money is reported to be in advanced talks to buy a small UK bank, which will provide an opening for the company to be granted a banking license, completing the Virgin’s long-standing ambition to provide a full range of financial products, including mortgages and current accounts to the British consumer.

The FTSE was closed on Friday as the market awarded itself a long weekend for the Festive Season.

Sterling remained below the $1.60 level on Fridays trading, although rising a little, whilst falling slightly s against the Euro

• Dollar 1.5962
• Euro 1.1089

A resurgent dollar is likely to power through to 2010 with its up-trend intact, as a steadily improving economy leads investors to believe U.S. interest rates will increase sooner than had been expected. The demand for riskier currencies has broken down as the year has come to an end, with the dollar now gaining on positive U.S. data. Analysts predict that the U.S. economy continues to show strength, the dollar stands to strengthen even more.

Wall Street was closed on Friday for the Christmas holiday.

In Japan early Monday the Nikkei average hit its highest close in four months on Monday as stronger-than-forecast output data boosted the manufacturing sector. Adding to the upbeat mood in the market, data before the start of trade showed Japan’s industrial output rose a better-than-expected 2.6 per cent in November, the strongest gain in six months as rising exports to Asia bode well for a recovering economy. The benchmark Nikkei climbed 1.3 per cent, or 139.52 points, to 10,634.23, its highest close since August 26.

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Tags: Bank, Banking, Bhs, British Economy, British Pound, Christmas, Consensus Economics, Corus, Currency, Economics, Economy, Employment, Financial News, FTSE, House of Fraser Ltd, industrial activism, Lord Mandelson, Money, Money Markets, Morgan Stanley, Mortgage, Mortgages, Nikkei, Recession, Retail, Stock Markets, Stocks and shares, Topshop, U.S. economy, UK Banks, UK Economy, UK export, UK government, UK manufacturers, UK Recession, Virgin Money, Wall Street, Xmas, Zara clothing chain

An increase in July of more than 75% in the number of home purchase loans approved by British banks, made for the most encouraging figures since February 2008, while net mortgage lending growth remained as its weakest level since the year 2000.

The British Bankers’ Association announced 38,181 mortgage applications were approved in July in comparison to 35,564 in June and up from 22,248 in July when demand for properties in the UK were are at an all time low. In addition, average loan values rose from 136,400 pounds in June to 139,700 pounds.

This month’s statistics add further proof that the housing market may be entering into a period of continued stability; however analysts hastened to temper enthusiasm by pointing oath that mortgage approvals remained below the average and were indicative of falling property prices.

Bovis Homes recently reported that they have moved into a positive cash situation, and for the first time in two years, yet another sign that of recovery in the UK’s hard pressed domestic construction industry.

The group’s who were holding a net debt package of £8 million at the end of June, are now in funds to the tune of £7 million.

It appears that the Royal Bank of Scotland have hit a stumbling block with the proposed sale of their retail and commercial assets in China to their preferred bidder, Standard Chartered. The company had entered exclusive talks with the RBS last month to acquire assets in China, India and Malaysia, and were excited at the prospect of closing the deal "within a matter of weeks " However reports now have it Standard Chartered and now a lot less enthusiastic about the deal than they were, which now appears to have been put on hold.

British steel-maker Corus announced recently that they intend to kick start production at its Llanwern works in Wales. Their decision was prompted by a revival in the demand for steel, as the global economic downturn eases and generates a rise in the price of steel. Corus, Europe’s second-biggest steel concern, are to restart production at their hot rolling mill, shut down in January due to lack of demand.

Reactivating the plant will not mean that 500 or more jobs cut by Corus at the time when they put the plant in mothballs will automatically be restored, as the company claims that their operating costs have since risen.

Home improvement chain Focus DIY has reached an agreement with their creditors, particularly their landlords, which will save them from administration.

An overwhelming majority of the company’s creditors voted in favour of the company’s proposal to enter into a Company Voluntary Arrangement (CVA).

Under the terms of the CVA, an increasingly popular insolvency process, Focus will be able to reduce annual overheads by £8.6 million by shedding leases on 38 stores where the company has ceased to operate, and in return Focus has offered their landlords partial compensation. In addition the landlords of the company’s 180 stores have agreed to accept monthly rather than quarterly rent payments until 2011.

Focus, acquired by Cerberus, the US private equity group, has been carrying a heavy debt burden which has been exacerbated by a marked reduction in consumer spending.

On the FTSE, optimism lifted shares in Diageo, producers of Smirnoff vodka and brewers of Guinness beer up 0.9 per cent to 971½ pence, in anticipation that results due to be issued on Wednesday will show that the company’s sales have taken a turn for the better. Demand is expected to be on the increase among US wholesalers with Diageo looking to increase their market share.

Shares in National Express rose to their highest level since January, gaining 3.5 per cent to 395 pence, as speculation increases that that any break-up bid could value the transport group at as much as 450 pence a share.

Shares in the Royal Bank of Scotland rose by 3.9 per cent to 54 pence, fired by speculation that the bank may try to buy back some of the seventy percent stake held by the UK government.

Profit taking weighed on car insurers Admiral Group, whose shares dropped by 2.6 per cent to close on 1044 pence, after the company released first-half results that exactly matched analysts’ expectations. The company’s stock has gained 20 per cent recently.

Increased US consumer confidence and housing data helped the FTSE 100 reverse to close up 20.57 points, at a new 10-month high of 4,916.8, at its highest level for the year. The FTSE 250 rose by a further 28.92 points to close on 8,860.81

Sterling continued to weaken on Tuesday’s trading, remaining in a 10-week trough against the Euro,

• Pound/US dollar 1.6329
• Pound/Euro 1.1429
• Pound/Japanese Yen 153.6205
• Pound/Swiss Franc 1.7364

The Obama administration is bracing for a political backlash on Tuesday when it issues national debt numbers showing federal debt rising by $9,000 billion over the next decade, a figure significantly higher than forecasts made earlier. In addition the both the White House and Congress have warned that US budget deficit will soar to almost $1.6 trillion (£978bn) this year, the highest on record,.

Fuelled by President Obama’s $787 billion stimulus package and reduced tax revenues due to the recession, this year’s deficit compares with $455 billion for 2008.

The White House also expects that US unemployment will pass a 10% figure during 2009, before slowly beginning to decline in 2010.

US stocks once again rose to record heights for the year on Tuesday as encouraging economic data was enough to keep the rally going as well as optimism sparked by Ben Bernanke staying on for a second term as chairman of the Federal Reserve.

The Dow Jones Industrial Average and the NASDAQ Composite index both gained 0.3 per cent to 9,539.29 and 2,024.23, respectively.

Commodities markets ticked lower on Tuesday as investors paused for breath following the recent run higher in anticipation for a swift and sustained world economic rebound.

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Tags: Admiral Group, Banking, Bovis Homes, British Bankers Association, British Economy, British Pound, Cerberus, Congress, Construction, Corus, Currency, Diageo, Dow Jones, Economy, Financial News, Focus DIY, FTSE, Guinness, Loans, Money, Money Markets, Mortgage, mortgage application, Mortgages, NASDAQ, National Express, Obama, Property Prices, Royal Bank of Scotland, Smirnoff vodka, Standard Chartered, Stock Markets, UK Banks, UK government, US budget, White House

As the UK wakes up this morning to the reality of being officially in recession, the three day working week is starting to look inevitable in certain sectors of industry. The news that Britain’s largest steel maker,

Corus, is to lay off 3,500 of its work forces added to the expected announcement that auto parts manufacturer GKN is due to announce that they will also be laying off thousands, in the wake of negative profits.

Signs that the automobile industry is being especially hard hit by the recession is the news that Jaguar Land Rover are also considering making yet another 1,500 job cuts within the next week or so. .

Corus, who employ 24,000 in plants situated throughout the UK, are in a period of restructure in an attempt to withstand strong competition in a rapidly dwindling market, and exceptionally strong competition from Brazil and India.

In what be a last minute attempt to prevent these painful job cuts, Business Secretary Lord Mandelson is believed to be in talks with the Treasury. His obvious goal is to prevent these cuts in work force for the car industry, and a probable compromise is to partially finance the salary costs, as well as suggesting that a three day working week be implemented at these plants still things begin to recover in the economy, which might well be a few years away. With car manufacturers throughout the World hinting and threatening that three day weeks and production breaks are inevitable, it looks like the UK will have no option but to follow suit.

On a more positive note, it appears that the UK public while cutting back on major purchases, such as property, cars, electrical goods and just about everything else, are spending more on cosmetics and personal hygiene products as well as on entertainment . These positive trends were well in evidence on Friday as PZ Cussons, whose brand name Imperial Leather and Carex both announced growth figures of more than ten percent in the last quarter of 2008.

The PZ Cussons group, awarded a M.E.N. Business of the Year prize for 2008, announced that it was continuing to witness growth in their UK business. A spokesman for the company said that they had put their success down to new initiatives, such as the re-launch and update of fragrances and domestic products in their Carex range. This included anti-bacterial wipes and waterless hand gels.

Another company that seems to be bucking the downward trend exceptionally well is BSkyB who’s expected announcement of trading results for the second half of 2008 December 31 will show a downturn, but one that is minor when compared to the state of the UK economy as it stands at the moment.
The forecast of pre-tax profits of £290m for BSkyB shows an increase of fifteen per cent on the same period in 2007.

So while the UK publics are digging in to see this recession through, it would appear that the trends are many of them are spending more time at home, and making a determined effort to look and smell better!

Late Friday on the US stock market, stocks continued their decline with disappointing earnings being reported by some industry standards such as Microsoft and Fifth Third Bancorp. The announcement, although expected, that Microsoft were to pay off 5,000 people Worldwide did send a chill down a few people spines on Wall Street as they announced to shareholders that they would be unwilling to provide a profit forecast for 2009.

The Dow Jones industrial average slipped 2.5 percent, to 8077.56, with Wells Fargo and Bank of America slumping by more than 13 percent for the week. These falls added fuel to the fire that the banks may well is forced to take decisive steps in order to shore up their balance sheets.

Average annual profits have decreased since January 2008 by sixty percent for the 69 companies that make up the S&P 500 whose fourth-quarter results have been released to date. U.S. financial analysts are now forecasting that most companies will report more than a 30 percent drop in profits for the last quarter of 2008 alone.

President Obama in a determined effort to show that he will be a skilled president as well as a great orator began to pressed congressional leaders to reach a consensus on an $825 billion stimulus plan. He warned that the country may be facing an economic crisis that was “unprecedented”. Obama’s warnings were given some added weight with the announcements that average home prices dropped the most since 1990 in November 2008, housing starts fell 16 percent in December and the number of Americans filing first-time claims for jobless benefits climbed to its highest level since 1983.

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Tags: Corus, Jaguar, Jaguar Land Rover, Land Rover, Lord Mandelson, PZ Cussons group, Recession