Alistair Darling increased the levels of his undoubted popularity with the UK public by announcing some interesting cuts and about turns in his pre-budget cuts. The first was that VAT cut to 15% as recently as March in the Budget, is to be reversed as of 1 January 2010. Income tax bands are to be tampered with, meaning that people who earn £43,000 or more will feel the pain that little bit earlier. On the plus side national insurance bands are to be reduced downwards by a further 0.5% from April 2011, meaning that those earning less than £20,000 will no longer need to pay any contributions. State pensions and child benefits are also set to rise in April of next year.

Meanwhile it has been reported that U.K. consumer confidence stayed close to the highest level in the past eighteen months in November as shoppers have become more hopeful for the economy’s prospects in the coming year. 2010. The proportion of shoppers expecting the economy to worsen in the next six months fell to its lowest level since the survey began in 2004.

As expected, the Bank of England has held UK interest rates at the record low of 0.5%, whilst announcing that there are to be no changes to its programme of pumping newly-created money into the economy – so-called quantitative easing (QE). The Bank cut interest rates to 0.5% in March of this year in an attempt to boost the recession-hit economy while in November; they announced that another £25 billion would be injected into it, taking the total planned under QE to £200 billion. The bank is expected to wait until the current QE programme runs out in January before considering whether it should be expanded. As Chancellor of the Exchequer Alistair Darling announced earlier this week that he would rather suffer criticism for removing economic support too late than too early, Bank of England policy makers are waiting for the final quarter results to see if Britain has finally escaped the recession, and if the £200 billion spent to aid growth has finally brought some results..

Meanwhile in his pre-budget cuts speech, Darling appeared to back away from the bank bonuses issue, by announcing that there will be no windfall tax on banks, but they will pay a one-off levy of 50% on any bonus above £25,000

The number of loans approved for house purchase rose to 55,300 in October, up 9 percent from September and 43 percent higher on a year ago, the Council of Mortgage Lenders said on Thursday. According to an industry body, the amount of buyers has risen from its lowest point in January 2009 when only 23,000 loans were advanced. The number of loans for remortgaging remained weak, however, unchanged from September’s level of 33,000, one of the lowest levels since the series began in 2002.

Nokia have announced that they are to close their flagship store on London’s Regent Street, as a result of slow sales and poor customer traffic. The remainder of the company’s UK stores are to remain open. Nokia were reported to have spent £4 million creating the Regent Street store that was launched in February 2008, and will close in the first quarter of 2010, Seven other of Nokia’s UK stores, including its Heathrow Terminal 5 outpost, are set to receive a revamp.

Shares in Barclays Plc fell 3.2 percent, to 287.5 pence after allegations that they were withholding a “secret” $5 billion windfall profit from its purchase of Lehman Brothers Holdings Inc.’s North American brokerage, despite the fact that the gain was publicly disclosed before the sale closed 15 months ago.

Sterling continued to lose ground against the dollar on Thursday whilst rising slightly against the Euro, as implications of the UK government’s pre-Budget report weighed on the currency,

• Pound/US dollar 1.6278
• Pound/Euro 1.1058

After the UK finance minister forecast that the UK economy will shrink by 4.75 percent this year, rather than the earlier prediction of a 3.25 percent to 3.75 percent decline, the FTSE 100 fell by 0.37 percent to 5,203.89, while the FTSE 250 dropped by 1.24 percent to 8,919.49.

The US trade deficit unexpectedly narrowed in October as exports rose to their highest level in almost a year, official figures have shown.

The deficit fell to £20.2 billion ($32.9 billion), 7.6% lower than September’s downwardly revised $35.7 billion figure.

Helped by the weaker value of the dollar, US exports increased by 2.6% to $136.8 billion, led by civilian aircraft, cars and computer chips.

Imports rose 0.4% to $169.8 billion. Analysts had predicted the deficit to expand to $36.8 billion.

The value of US exports was the highest since November 2008, the figures from the Commerce Department showed.

The trade deficit is now expected to widen again in 2010 as the US economy continues to recover and consumers buy more imported goods.

On close of trading, the Dow Jones Industrial Average was up 120 points to 10,405.83 and the NASDAQ also rose 21 points to close on 2,190.86.

According to the latest figures from the Australian Bureau of Statistics, Australia’s unemployment rate fell in November to 5.7% from 5.8% in November, The figures came as a surprise to many analysts who had expected an increase to 5.9%. Australia is one of the few developed economies not to have fallen into recession like its counterparts throughout the world. The Australian economy has benefited from an increase in commodity prices, while exports have received a boost due to demand from China for its iron ore and other raw materials.

Official figures have revealed that orders for Japanese machinery orders fell by 4.5% in October compared with the previous month, with analysts expecting a fall of just 4.3%. The figures come just a day after the Cabinet Office revealed that the Japanese economy grew at a far slower rate in the third quarter than previous estimates showed.

Meanwhile, the price of crude oil dropped on new data from the US Energy Information Administration showing that gasoline stockpiles grew last week while demand declined. The price of oil dipped below $70 a barrel, falling to a two-month low, amid continuing concerns over demand.

US crude for January delivery fell 84 cents to $69.81 a barrel, before settling at $70.13 as it lost ground for the seventh consecutive day.

London Brent crude fell 81 cents to $71.58 a barrel.

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Tags: Alistair Darling, Australian Bureau of Statistics, Bank, Bank of England, Banking, Barclays, Barclays Plc, British Economy, British Pound, Cabinet Office, Council of Mortgage Lenders, Credit, Credit Crunch, Currency, Debt, Dow Jones, Economics, Economy, Finance, Financial News, FTSE, Global Credit Crisis, Lehman Brothers Holdings Inc, Money, Money Markets, Mortgages, NASDAQ, Nokia, pre-budget cuts, Recession, Retail, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, VAT

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

In times gone by, the self righteous members of the community were often heard to say "neither a lender nor a borrower be." Not a bad piece of advice it would transpire and one that should have been heeded more carefully a few years ago. However it must have been hard to take when handed out by your maiden Aunt who refused to lend you sixpence for your bus fare, which you had mistakenly spent on liquorice allsorts.

The last year has seen an all time low for both savers as well as those whose life style forces them to borrow just to survive. For savers it has been especially tough. According to statistics gathered by the Bank of England’s the average interest rate for savers has plunged from 4.49% to 0.41% in the last twelve months, as the BOE has cut interest rates to the bone to prop up the banks.

Interest rates for the average instant access account has plunged from 1.85% before tax (2.31% after tax) to 0.14% (0.17%), while the average price of fixed rate bonds has fallen from 4.53% (5.66%) to 2.42% (3.03%).

However the true picture for many savers is a lot less colourful than that, as these rates are only on offer frosh fresh deposits, while much of the money held in UK banks are on older long terms plans, where interest rates have plunged as low as 0.08% (0.1 %) interest, returning just 80 pence interest a year for every £1,000 saved.

For borrowers the picture is just as gloomy. Overdrafts are being cut and default interest rates being applied with a heavy hand. Those whose debt package is linked to their credit card have fared no better. Reports of rates hiking reduced borrowing limits or even having their credit cut off completely abound. And balance transfer deals and reward schemes are rapidly becoming part of banking history.

It may be a bitter pill for many to swallow, but Auntie might have been right!

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Tags: Bank of England, Banking, BOE, British Economy, British Pound, Credit, Credit Crunch, Current Account, Debt, Economy, Financial News, Interest Rates, Money, Money Management, Overdraft, Recession, UK Banks, UK Economy, UK Recession

Recent suggestions are that UK banks and building societies will come under increasing pressure to reduce their fixed mortgage rates after government bond markets began to increase rapidly. Analysts in the bond market have recommended that, as a result of the rise in the price of government bonds which is causing an attendant and converse relationship to yields, lower mortgage rates should automatically follow.

The feeling running high among UK mortgage brokers is that the banks and building societies are simply holding tight from reducing interest rates for as long as possible, in order to earn some extra profit on the backs of the hard-pressed British home owners who are carrying equity on their property. These large financial bodies are manipulating swap rates, used to set fixed-rate mortgages, and which currently account for about half of the mortgages held in the UK.

Swap rates define the cost incurred when a bank or building society alters or "swaps" from a floating interest rate to a fixed rate. Two years of fixed swap rates fell recently by 1.95 percent to a low of 0.785 percent, taking a plunge of nearly half a percentage point since the beginning of August – the lowest level since records began in 1985 – while five-year gilt yields fell to 2.43 percent. As government bond yields have fallen, it would follow that the swap rates should also have dropped, in line with them. This event is taking too long to happen, mortgage analysts claim, while adding that the banks have also shown a determined reluctance to pass over reduced borrowing costs to potential customers, as long as demand for mortgages outstrips supply.

Five-year swap rates also fell to 3.33 per cent, close to a drop of 0.5 percent. These falls were driven by forecasts that official interest rates would remain at historic lows of 0.5 per cent and speculation that the Bank of England might even introduce negative interest rates on commercial bank deposits.

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Tags: Bank of England, British Economy, British Pound, building societies, Credit, Debt, Economy, Financial News, government bonds, home owners, Interest Rates, Loans, Money, Money Management, mortgage brokers, mortgage rates, Mortgages, Swap rates, UK Banks, UK Economy, UK government

The signs are definitely there: Germany and France have already done it, even Japan, Hong Kong, Singapore and Thailand. The US is still in it, yet in name only. And the UK will be following not long after. To where?

If you haven’t already guessed, the answer is out of recession.

So what happens in post-recession Britain? Have we learned our lessons? Will the man in the street work longer hours, save up to buy that new 42" plasma, that Mediterranean holiday or to upgrade the family car? Or will he fall back into credit euphoria? Will UK businesses cut costs to build up their cash reserves or will they revert to being cash loan and overdraft junkies like before?

And the most leading question of them all is, will the banks be responsible and, if they succeed in becoming autonomous, will they once again become the profit-hungry, bonus-driven monsters that played a significant part in almost bringing the UK economy to total meltdown?

If there is a precedent to prevent the disasters of the first decade of the 21st century ever happening again then it is written in America’s 1933 Glass-Steagall Act. The act was drawn up following the Wall Street Crash that sparked one of the greatest depressions the world has ever known. One of the act’s principle provisions was to disallow risky investment banking and to channel bank funds and lending into the safer realms of retail banking, which the sort the UK public needs to finance the model life style that they deserve: everyday needs.

UK financial analysts hasten to point out that if such a system had been in place from around 2001 onwards, when the profit chasing was at full steam, the checks and balances would have prevented the UK banks from going as far over the top as they did. They would have been unable to hold the UK government to ransom and force the public to become reluctant shareholders in their business. Instead, the British public could have stood back and watched some of the more rickety financial institutions go to the wall, and without too many tears being shed in the process.

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Tags: Banking, British Economy, British Pound, Credit, Debt, Economy, Financial News, Glass-Steagall Act, Money Management, negative equity, Overdraft, post-recession Britain, Recession, UK Banks, UK businesses, UK Economy, UK government, Wall Street Crash

Although your bank manager will tell you that he or she is your friend, and that they have your best interest at heart when they cut your overdraft or credit card levels, don’t believe them. The truth is that banks thrive on people who are in financial trouble and know exactly how to play on your weakened situations to continue to feed their insatiable drive for profit.

More so, that when you go to them on your knees asking for just a little more leeway, they will already have made sure that you will find it difficult if not impossible to find alternative finance elsewhere, and will take full advantage by providing you with additional finance at horrendously high interest rates.

The UK public must surely have learned one expensive and painful lesson from the current financial crisis and that is to keep the credit under control, and to try to do so by achieving and maintaining a credit rating that is as pure and white as the first snows of winter.

And believe it or not, despite prodigious efforts by the FSA to prevent this from happening, lenders, be they banks, building societies or credit card companies, are pooling their efforts to make sure that people who have fallen into debt in the past will find it very difficult to improve their credit rating.

There is, and always has been, a great anomaly about how finance providers look upon a potential client. If someone has money, why should they need to borrow it? Yet in many cases it is sensible to borrow money, particularly for a mortgage, or to buy a new car or even some major household appliance. Banks carry out tens of thousands of transactions every month, although secured loans are much less attractive to them than unsecured loans, where they can make more than twice the interest.

The sad truth of the matter is that if people are in severe financial trouble the last place they should set foot in is a bank, building society or credit card company, except to ask for an extended agreement on the same terms. Under no circumstances should they agree to accept a new refinancing agreement which will certainly be on prohibitive terms.

Only time will cure most people’s problems, and eventually better times will come. In the meantime it is everyone’s interest to keep the head down, draw in the belt even tighter, and repair each credit status. Learning to be less credit dependent will be a challenge for all of us, but it will be justified by never having to bend your knees to your bank manager again.

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Tags: bank manager, Banking, Building Society, Credit, Credit Card, Credit Crunch, credit rating, Current Account, Debt, extended agreement, Finance, finance providers, financial trouble, FSA, Interest Rates, Loans, Money, Money Management, Mortgage, Mortgages, negative equity, Savings, UK Banks, UK Credit Cards, unsecured loans

Thursday saw the launch of a long awaited white paper on consumer affairs that would prevent the practice of banks increasing customers’ credit card limits without their permission, as well as completing disallowing the them from sending out unsolicited ‘credit-card cheques’ . According to almost ten percent of the UK population had their credit card limits increased last year without them asking, meaning that to date less than three per cent of the UK’s 30 million card holders have had their borrowing power reduced since the credit crunch began. Banks continue to defend their in your face credit marketing tactics, insisting that full credit checks are made.

Bowing to increasing investor pressure, Royal Bank of Scotland chief executive Stephen Hester has announced his intention to defer part of his controversial 9.6 million pound pay package for an extra two years. Hester has been the subject of criticism for accepting such a large overall package before achieving real results at the loss-making bank,

Disproving the theory that lawyers make money no matter what, was the news that the World’s largest law firm are reporting a very significant dip in profits and the need to make significant cutbacks. The practice, Clifford Chance boasts a client base that includes some of the financial institutions hardest hit by the downturn, from Royal Bank of Scotland to Citigroup.

The prospect of a bidding war for T-Mobile UK was hotting up on Thursday, on the news that Telefonica are also taking a close look at the mobile phone service operator. Spain based Telefonica has been spurred into action by the possibility that Vodafone purchases T-Mobile UK. France Telecom is also reportedly in the running, through forming a joint venture between its UK mobile business Orange and T-Mobile UK.

Marks & Spencer executive chairman Sir Stuart Rose has hinted strongly of his intentions to step down as chief executive in 2010, with his likely replacement looking like being director of food at the company, John Dixon. Rose has insisted that he would only relinquish the chief executive’s role if a successor was found, and after he hands on the keys, will stay on for a period as chairman.
The search for a new executive chairman at M&S could officially begin as early as September.

London equities fell on Thursday as the improving economic outlook failed a stern test in the form of closely-watched US jobs data.
The FTSE 100’s losses accelerated due to a sluggish start to trade across the Atlantic. London’s benchmark index fell 106 points, to 4,234.27. The FTSE 250 closed on 7,374.01 down 132.70

Sterling had another bad day against the leading currencies, falling on all four fronts.
Pound/US dollar 1.6418
Pound/Euro 1.706
Pound/Japanese Yen 157.2965
Pound/Swiss Franc 1.7772

The number of jobs lost in the US last month which was much more than had been expected, coming in at 467,000, as the grass roots of the US economy continued to struggle.

The jobless rate was 9.5% in June, up from 9.4% in May and
The highest since August 1983.

On Wall Street, the Dow Jones took a major tumble on the announcement of the unemployment figures, closing the day down 180.09 points to 8323.97, while the NASDAQ lost 33.02 points to close on 1802.76.

Confirming that the world’s third-largest economy is continuing to expand, China’s manufacturing and business activity for June finished in positive mode.
Another emerging superpower, India has announced a slight step up production, since a sharp downturn began in late 2008.
Meanwhile Japan and Australia are both displaying tentative signs that the worst of the economic downturn may soon be behind them.
Oil fell on Thursday as the market continued to digest US government data showing a large increase in gasoline stocks, increasing crude oil producer’s worries that consumer demand was flagging and the energy markets had been overbought.

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Tags: Bank, Banking, Credit, Credit Crunch, Debt, Financial News, Royal Bank of Scotland, Stephen Hester, UK Banks, UK Credit Cards

Whilst it is easy to gain the government and the banks for the financial quagmire that the UK succeeded in sinking itself in, the public also have to be levied a portion of the blame. As a leading financial analyst proudly proclaims, it was the shopping centres and the credit cards that did it as much as anything else. The banks and credit card seemed driven to provide unlimited credit, and the government turned their backs and pretended that it wasn’t happening. And the British public at large had a great time running up debts on their credit cards that they had no chance. And in some cases, no intention of repaying.

There are people who will be saddled with debts for at least the next decade, and will be paying fairly exorbitant interest on those debts as a lesson on how to use credit cards in the era which is hopefully not too far away. The end of the first great economic turn down of the 21st century.

Let’s face it. Having a credit card at your disposal is very convenient. And make no mistake about it, the majority of people whose lives became very difficult through misuse of the powers and responsibilities that being issued with a credit card entails, will continue to use them in the future.

However the rules of the game will be different. Anyone who has found themselves under an immense burden of debt would never have enjoyed the experience, and will never want to repeat it. And even if they did, the banks will have imposed such a strict system of checks and balances that the chances that it will happen will be miniscule. Credit cards were meant to replace cash and cheques, and when viewed in that light, they do an excellent job. A responsible person with a credit card should only use that card to cover around 40% of their monthly financial outlay, and should stagger payments amounting to no more than a quarter of their monthly credit card bill.

These are very simple rules, but if adhered to, will prevent a repeat of the most uncomfortable experiences that too many people have gone through in the last couple of year.

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Tags: Bank, Banking, Budget, Credit, Credit Crunch, UK Credit Cards

Bank of England profits soared to nearly £1bn last year on the back of operations supporting the financial sector.

Pre-tax profits quintupled to a record £995m in the year ended February, the most since the Bank began revealing its earnings in 1971.
This allowed the bank to pay out a dividend to the Treasury of £417m, up from more than five times from the previous year, according to the bank’s annual report.
The scale of the BOE profits has raised a few eyebrows however, with some analysts of the opinion that the Bank has been charging troubled lenders “distress rates”.

Meanwhile the organisation formed by the UK treasury to handle their interest in the semi-nationalised banks under their control have begun to sound out investors about the possibility in selling off some of their share holdings as stock market revival appears to be increasing confidence in the financial sector.
The body, UK Financial Investments, manage the 43.5 per cent stake in Lloyds Banking Group as well as the 70 per cent stake in Royal Bank of Scotland, hope to have completed some sell offs within the next twelve months.

Shares in both banks rose strongly on Tuesday after news of this possible development began to filter through. Royal Bank of Scotland Group PLC (RBS) and Lloyds Banking Group (LYG) rose strongly Tuesday following a report that the government is sounding out investors with a view to selling its interests in the banks – even though that sale could take up to several years. RBS was up 5.8% at 44 pence while Lloyds was up 4.8% at 103 pence, both outperforming the FTSE100 index which was up 0.9%.

The report also said it could take five or six years for the U.K. government to exit the two banks.
HSBC Holdings PLC (HSBA.LN) was up 3.5% at 575 pence while Barclays PLC (BCS) was up 2.4% at 288 pence.

A UK car scrappage scheme championed by Gordon Brown, Britain’s prime minister, got off to a stuttering start on Monday as confusion about how it would work prompted several leading manufacturers to delay their involvement.

Glitches over tax and other administrative issues marred the launch of the scheme while Honda, Ford and GM were reported to be waiting to clear up some important details on how the trade-in scheme will operate , with the first scraps of information only being received from the Department for Business and Regulatory Reform before the weekend.

As expected, Marks & Spencer confirmed yesterday that the dividend due to be paid to shareholders will fall by a third after annual results revealed a near 40% drop in profits. (£604.4million compared to £1billion in 2007) This is the first time that M&S has been forced t cut their dividend since 2000, causing considerable consternation among their shareholders.

Doing better is Scottish & Southern Energy (SSE), who is expected to announce “modest” increase in profits, when producing their annual results on Thursday. Analysts predict that SSE will post underlying profits of about £1.25 billion for the year to the end of March, up only £200,000 from 2007, but still showing an increase. To retain their market share, the energy group has been forced to cut both electricity and gas tariffs during 2008, although both by much less than had been feared.

The benchmark FTSE 100 Index continued to impress, rising 36 points to 4,482.45, while the FTSE 250 index also rose by 121.69 points to close on7698.32
Sterling rose slightly against the dollar and the Euro and rose slightly against the Japanese Yen and the Swiss Franc:
· Pound/US dollar 1.5484

· Pound/Euro 1.11367

· Pound/Japanese Yen 149.02

· Pound/Swiss Franc 1.719

Wall Street had a reasonable day on trading The Dow Jones Average dropped a mere 6.7points to close at 8497.39, while the NASDAQ rose 7.36 points to 1739.72.
The US Senate have voted overwhelmingly in favour of a bill that will impose new restrictions on the credit card industry. Designed to set a curb on sudden interest rate increases and hidden fees The bill marks the first major financial reform made by the Obama administration.

Spokesmen for the credit industry have warned that the measure could lead banks to issue fewer credit cards thus making it more difficult for consumers to get credit.

Hewlett-Packard (HP) reported a 17% fall in quarterly profit, attributed to reduced businesses and consumers spending on computers, printers and ancillary products. .
The world’s top PC marker said that net profit totalled £1.1billion in the three months ended 30 April, whilst warning that profits and revenue were likely to continue to fall during 2009 HP made the expected announcement that they are about to cut around 2% of its global workforce, making for a job loss of more than six thousand people.

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Tags: Credit, Credit Card, Gordon Brown, Hewlett-Packard, Marks & Spencer, Scottish & Southern Energy, UK Credit Cards, UK Financial Investments

As the finance industry appears to be pulling out all of the stops to win back the hearts of the UK consumer, the news announced recently that MasterCard, one of the World’s most well-known, widely accepted payment cards brands have agrees to significantly reduce the fees that they have been charging to banks across Europe. The hope is that these savings will be passed on to the consumer in compensation for some of the hefty fees that had been imposed in autumn of last year. MasterCard had been under considerable pressure to reduce their fees and eventually have bowed to the weight of public opinion as we well as no little pressure from the European Union to reduce their fees. Pressure that appears to have borne fruit with the announcement that MasterCard will reduce their fees to the banks by 50% at least temporally. Estimates are that their generosity will be worth around £15m a year on MasterCard transactions in the UK.

In another move that might appear to be an effort to buy time, representatives of the major UK’s banks have petitioned the House of Lords to appeal against a recent judgement on inflated bank charges that was awarded against them after appeal.

The move comes after the High Court had decided to allow the Office of Fair Trading (OFT) to investigate the legitimacy of excessive overdraft charges levied by banks on individuals or business that had exceeded their overdraft levels. This test case has already been going on for 18 months, and with no end in sight due to possible delaying tactics by the banks, many tens of thousands of similar cases have been frozen till a final decision is reached on the subject.

Another sign of increased consumer confidence is that on the FTSE, retailers were leading the way on share value increases. Analysts confirmed that stock prices in the sector were being pushed up amidst increasing speculation that the coming Budget will introduce measures designed to underwrite trade credit insurance.

Star of the day was the Home Retail Group whose shares rose by 7.8 per cent (20 pence to 242) Not far behind were Kingfisher whose shares rose by 4.8 per cent (8 pence to 157) Major high street fashion group, Next Plc also fared well rising 6.5 percent (91 pence to 1410)

The mobile phone and internet company Vodafone had a good day on the news that interest was remaining stable in the UK market. Shares in the company began to surge forward rising by 4.4 percent (6 pence to 128)

The commodity market also was positive with the “diamond of the day” being Randgold Reserves whose shares rose by 5.4 percent (200 pence to 3883). The rise was in anticipation of the release of the company’s annual report due today, which is expected to include details of the company’s successful Massawa gold project in Senegal.

Property owners Hammerson saw their shares rise by a modest 1.6 per cent to (4 pence to 258). The rise came after speculation that the company was considering offers to acquire their Bishops Square development in the City of London.

Transport companies were also in the spotlight as they awaited news on the Government’s decision to allow them to re-negotiate contracts signed during more positive times for the UK. National Express pushed forward by a whopping 23.2 percent (43 pence to 187) with Stagecoach also doing well. Their shares rose by 9.8 percent on the day (13 pence to 131)

The FTSE 100 embarked on the first day of the second quarter of 2009 on a rise, reaching at one point its highest level since mid February, closing up 2.23 percent by 88.34 points at 4,043.95. The FTSE 250 also did well climbing 1.37 percent (89.77 points to 6,630.79)

Sterling rose conservatively against the dollar and the Euro and more strongly against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4553

Pound/Euro 1.0977

Pound/Japanese Yen 144.04

Pound/Swiss Franc 1.6676
Wall Street enjoyed its second consecutive session of gains as stocks rallied after some early uncertainty regarding the state of the economy.

The Dow Jones Average rose 152.68. to close at 7761.6. Nasdaq also rose 23 points to 1551.6

The rises came despite figures announced showing that around three quarter of a million Americans has lost their private sector jobs during March, which is more than fifteen percent above the figure expected. Long term confidence however allowed the stock prices to rise.

Crude oil prices fell on Wednesday large due to a very significant drop in Japanese energy consumption. Demand of oil in February was at its lowest level since 1970, causing US oil inventories to reach a 16-year high. Crude oil is now trading at less than $50 a barrel on average

According to a recent survey, the Chinese manufacturing sector continued to shrink and it has now been eight months since the index has actually risen.

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Tags: Credit, Credit Crunch, Financial News, MasterCard, UK Credit Cards