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

Signs are beginning across the Atlantic that consumers are beginning resurrect the practice of borrowing their way out of trouble. A recent surge in consumer debt defaults in the US could well spread to the UK, according to a recent report issued by the International Monetary Fund (IMF).

The IMF have forecasted that of the almost £1.5 billion of credit card debt currently held in the UK, around seven percent of that, or around £100 million may need to be written off. Confirmation of the sad facts is expected to be released next week when UK banks begin reporting their first-half results. Some of them have already warned that a sharp increase in credit card debts will need to be taken into account.

House prices in the U.K. continue to solidify, expected to hold their value for a third consecutive month in July. While the credit squeeze and the recession continues to prevent the property market from improving the average cost of a home in England and Wales was stable at £155,600 pounds, which was still almost eight percent lower than in July 2008.

The National Express takeover saga continues. The company announced that they are liable reject the Cosmen family takeover bid, which only values the group at around £500 million.

It is expected when National Express present their interim results towards the end of the week, they will explain to their shareholders that their desire to remain independent, and become profitable through cutting costs and reducing their debt burdens. Steps that should make the company far more attractive for takeover in the future. ,

Two potential suitors for National Express have been turned away as they have offered around 325 pence per share, while National Express are looking for 400 pence, giving the company a value of around £620 million.

The Cosmen family are National Express’s largest single shareholder, with an 18.5 per cent holding, and Jorge Cosmen is its deputy chairman. Shares in the company have risen since Friday when the Cosmen family in partnership with CVC confirmed their interest.

It was carnival time on the FTSE as the market equaled its record of eleven consecutive positive session

Among the best performers was Lloyds Banking Group who added 6.9 per cent to close on 88.33 pence. Analysts expect shares in Lloyds to reach as high as 100 pence in anticipation of the bank’s half year results to be announced on Wednesday.

The FTSE 100 index closed up by only 9.52 points to 4586.13, taking e index’s gains over the past 11 sessions to 10.6 per cent which is a new record, beating the 7.1 per cent in 1997.

Meanwhile the FTSE 250 recorded its first reverse for a while down 61.58 points to 7,876.86

The pound gained a little ground on Monday against the leading currencies.

Pound/US dollar 1.6464

Pound/Euro 1.1573

Pound/Japanese Yen 156.5371

Pound/Swiss Franc 1.7634

Chairman of the US central bank Ben Bernanke rushed to defend the US bail-out plan of which he was among the principal architects. Bernanke admitted that his fears that the UK were heading into a second Great Depression had helped him to decide to back the stimulus plan which has so far cost the US taxpayer around $700 billion. Bernanke went on to point out that the bailout had widely benefitted the US economy and that no one should be surprised if further capital might be required to prop up the system.

Seemingly unfazed, the Dow Jones continued its steady rise, up by 15.27 points to 9108.51. The NASDAQ made a small gain, up a mere 1.93 points to close on 1967.89.

Recent reports have revealed that the annual rate of new home sales in the United States has risen by more than ten percent in June, further signs that the property sector is over the worst.

The US Department of Commerce announced that sales of new properties have hit a seasonally-adjusted annual rate of 384,000 in June, against 346,000 in May.

Whilst June’s figures were the strongest seen since November 2008, the average sale was down 5.8% from May and 12% lower than a year ago at $206,200 (£125,000),

On Monday Commodities made a strong start to trading, continuing last week’s gains. Prices of European crude rose beyond the $70-a-barrel mark while base metals staged a broad advance, led by copper that

jumped to its highest level in almost 10 months in the London, New York and Shanghai markets. The commodities are always an excellent barometer to gauge the extent of the global economic recovery.

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Tags: Bank, Bank of England, Banking, Ben Bernanke, British Economy, British Pound, Cosmen, Credit Card, credit card debt, Credit Crunch, Currency, Debt, Dow Jones, Economics, Economy, Financial News, FTSE, House Prices, IMF, International Monetary Fund, Lloyds Banking Group, Money, Money Management, Money Markets, Mortgage, Mortgages, NASDAQ, National Express, property market, Recession, UK Recession