Much as he tried to keep a low profile on the subject, Chancellor Alistair Darling’s budget speech on Wednesday had a definite pre-election feel to it as were most of the measures taken, with the useful suspects of cigarettes, spirits and petrol taking their usual pounding, but to varying degrees.

No sooner than Darling closed his famous red briefcase,

Shadow chancellor George Osborne launched his expected attack, describing Labour’s Budget as being empty and lacking in vision.

In his speech the Chancellor was not slow to point out that Labour’s policies were "bearing fruit" and expressed what appeared to be genuine concerns that if the Tories should get into power their spending cut plans could send the UK back into a much feared "double dip recession".

The Liberal Democrats, who obviously felt that they had to add something to the debate, chipped in with "Labour and the Tories are both in denial about the scale of spending cuts needed".

In his budget speech, Darling did announce that the government will need to borrow less than expected this year to plug the gap in the UK’s finances, with

Net borrowing for the financial year expected to total £167 billion, down from the £178 billion previously forecast. Borrowing this year is still expected to be at a record high – equivalent to 11.8% of GDP.

On the downside, Darling also downgraded his growth forecast for the UK economy.

Fuel duty will rise more slowly than previously planned, with a previously announced 3% rise in fuel duty l now be staggered, with a 1% rise in April, a further 1% rise in October, and then again in January. 2011, with phasing the increase rather than raising fuel duty by 3% immediately will cost £550 million.

UK banks received a number of mentions in Darling’s speech some of which were even favourable. The general underlying theme was that the UK taxpayer will be looking to see the banks move back to profit while increasing their support the economic recovery and improve financial expansion.

Alistair Darling noted that £2 billion had been raised through the 50 per cent one off "super tax" on bankers’ bonuses over £25,000, making for a 400% increase of the original forecast of £550 million. The windfall will largely be spent on further measures to stimulate the economy as well as some to be set aside to subsidies university places.

Other interesting snippets from the budget were that the government will allow tax breaks for companies who run zero-emission cars. Currently employees with a company vehicle for private use are required to pay a tax charge, with the exception of electrically propelled cars. However, the government has pledged to expand the exemption to cover "green cars" with these incentives to come into effect after April 6. Darling also threw in the information that the scheme to fund the deployment of superfast broadband looks likely to cost the industry and the consumer much more than expected, with every telecommunication line be subject to a monthly 50 pence levy on landlines. The government claims the new tax is necessary to ensure superfast broadband reaches suburban and rural areas.

It also appears that in order to partly fund the Budget’s 2.5 billion pound package for small firms, Darling intends to switch £230 million pounds of spending for 2010-11 from the departments for business and transport. The department for business said 1£50 million pounds will be transferred, largely at the expense of the £950 million pound strategic investment fund, which is supposed to provide state financing for strategic growth sectors, such as the civil nuclear industry.

Returning to reality, the UK’s two rail trade unions have announced their plans for four days of strikes to kick-off two days after Easter. If the industrial action from the RMT and the Transport Salaried Staff’s Association does transpire , it could see the UK hold its first national rail strike since the system’s privatisation. However, there is a strong possibility that the strikes will be called off, with negotiations with National Rail, the infrastructure owner, already well under way. .

U.K. engineering-services firm Babcock International have announced their plans to acquire the VT Group for around £1.33 billion pounds, in a mix of cash and stock. The announcement comes after two previous bids had been rejected.

Babcock is to pay 361.6 pence in cash and 0.701 of its own shares for every share in VT Group. As the sale was concluded, the offer was valued at 734.9 pence a share, meaning that Babcock paid a 39% premium to the average closing price over the month VT investors will hold around 36% of the combined company once the deal is completed. On the news shares in VT Group rose 4.4% on the FTSE to 721 pence, while Babcock also posted strong gains, rising 3.8% to 553 pence. A spokesman for Babcock said that they expect the deal to boost their earnings significantly in the first full year after completion.

The pound continues to be a problematic issue in the Forex markets. It closed On Thursday on $1.4863 while the Euro rose a little to on €1.1143.

The FTSE 100 index seemed to be pushed forward by Darling’s budget as well as increased optimism on Greece. It closed up 54 points to 5,727.63.

The House of Representatives put the finishing touches on the overhaul of Obama’s pet Health Care bill by passing a companion package that would make insurance more affordable, raise taxes on the wealthy and close a gap for prescription drug coverage for seniors. The Senate approved the package earlier in the day, which means that it now goes to Obama to sign.

The votes concluded a yearlong political struggle that tied up lawmakers, as well as making for a noticeable dent in Obama’s popularity

However passing the Health Care bill might be causing some problems on Wall Street. The Dow Jones retreated a little after a week of impressive gains; down by 377 points to close on 10841.21 The NASDAQ also dropped 18 points to 2397.41.

Greece seems to be out of trouble, at least for the time being. All of the 16 Eurozone member countries have finally come up with their backing for a financing plan, with some of the funds coming from the International Monetary Fund (IMF). The loan will total €22 billion (£20billion), with the condition that it is only to be used if normal market lending facilities to Greece will dry up. According to French President Nicolas Sarkozy, the Eurozone nations would grant bilateral loans, totalling some two-thirds of the funding,

Greek PM George Papandreou was quoted as saying that it was "a very satisfactory" move.

Also breathing sighs of relief are the owners of the Dubai World investment vehicle who have just been granted a £6.4 billion ($9.5 billion) loan help it’s to restructure their debt burden from the Dubai government

Dubai World has presented a plan to restructure $ 23.5 billion of debt to its creditors, with the proposal including converting almost a quarter of the debt into equity. Creditors have now to decide on whether to accept the plan, with analysts predicting that it is as good as it gets. The troubled company stunned global markets in November last year when it asked for a six-month delay on debt repayments.

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Tags: Alastair Darling, Babcock International, Bank, bankers' bonuses, Banking, British Economy, Budget, Currency, Dow Jones, Dubai World, Economics, Economy, Financial News, Forex, FTSE, Fuel duty, George Osborne, George Papandreou, International Monetary Fund, Money, Money Management, NASDAQ, National Rail, Nicolas Sarkozy, Stocks and shares, superfast broadband, Transport Salaried Staff's Association, UK Banks, UK Economy, UK government, UK Recession, VT Group, Wall Street

It only stands to reason that the U.K.’s economic recovery will be slow in 2010. There is an election about to happen and the public have obviously chosen a path the correct path to save spend less and save more. According to the Confederation of British Industry (CBI) the economy will grow by 0.3 percent in the first quarter and move up to 0.4 percent in the second quarter, and will finally settle down to expanding 0.5 percent in the second half of the year. The CBI also predicted that gross domestic product (GDP) will increase by 1 percent in 2010 and 2.5 percent in 2011. Britain’s economy exited its deepest recession on record in the fourth quarter with growth of 0.3 percent.

Bank of England (BOE) officials were also expressing caution on the eve of what may well be the Labour Government’s last budget in well over a decade. The BOE have consistently issued warnings that financial recovery in the UK may prove uneven as credit strains persist.

Chancellor of the Exchequer Alistair Darling is due to deliver his budget today, with just a few weeks before the general election, the date of which is yet to be announced. A spokesman for the CBI stated that the government must avoid “damaging” tax rises and focus on spending cuts to narrow the record deficit,

As budget fever mounts, speculation is rife as to what Chancellor of the Exchequer Alistair Darling will reveal in his speech. Darling has repeatedly stated there will be no pre-election giveaways in the budget but he wants to encourage more investment in UK business after an 18-month recession.

It is expected that government departments which be called on to cut costs that will add some credibility to the U.K.’s deficit reduction plan and Yvette Cooper, the work and pensions secretary, has set the wheels in motion by announcing her department are plan to introduce savings of at least £500 million pounds by the 2012 / 2013 fiscal year.

What is for sure is that the Labour government will unveil their plans to establish a £2 billion "green" investment bank in the budget, designed to help Britain’s transformation to a low carbon economy. The green bank, designed to help finance projects such as railways, offshore wind power generation and eco-friendly waste management, will be partially funded by sales of government assets with the remaining money being drawn from the private sector.

Strike hit British Airways have come up with an estimate that the current three-day strike by the airline’s cabin crew will cost them around £7 million a day in lost earnings. However the airline hastened to point out that the industrial action was unlikely to have much impact on its earnings for the full-year. According to a company spokesman, around a third of flights to and from the UK’s main airports on Monday have so far been cancelled.

BA Heathrow suffered the biggest disruption on Monday, with 201 of the 443 flights on BA’s online schedule being cancelled.

Every cloud does have a silver lining and one of them appears to be that because of the recession, one in four children have reduced their spending. According to new research published this week t children’s attitudes to money have been strongly impacted by the recession with 80% of the children polled stated that they would prefer to save up to buy something rather than get into debt.

The latest financial results from fashion retailer Monsoon show an increase in profits for 2008/2009 eight times higher than the previous year. Over the year to August 29, 2009, the privately owned company showed a profit of taxes of £32.9 million, up from £3.9 million the previous year. Monsoon, who currently operate over 1,000 outlets, report strong sales at its overseas division. Over the next 12 months Monson plan to open another 140 stores.

Another fashion in the financial spotlight is New Look who has announced that they may resurrect their £1.7 billion flotation plans. The decision may come as soon as this week when the New Look board meets to consider whether market conditions have sufficiently improved. The fashion retailer shelved its planned IPO in February, blaming volatile markets. Meanwhile sales at the group are said to be ahead of expectations.

In a move which could raise as much as £400 million pounds Music recording giants EMI are reported to be considering plans to licence its music catalogue. Competitors in the industry would manage the music group’s catalogue, which includes music from The Beatles. If successful the licensing would enable EMI to meet their debt repayments and stave off an attempt by Citigroup, to take control of the company.

Sterling continues to fall ahead of this week’s budget and the fast-approaching general election due to be held in early May, and the prospects that it will be closely fought and may even result in a hung parliament.

The pound continues to be stuck around the $1.50 mark, closing at $1.5037 on Tuesday, while the Euro was on €1.1137.

As concern consists about debt levels whether the next government will be equipped to tackle challenges on public finances the pound looks likely to continue in the doldrums.

The FTSE 100 index closed on Tuesday up 23 points at 5,673.63.

On Wall Street, the Dow Jones was still on the rise, this time by 147 points to close on 10888.83 The NASDAQ also was on the rise up 42 points to 2415.24

According to Greece’s central bank the country’s economy is trapped in a "vicious circle" and is liable to contract more severely than government predictions. .

The Bank of Greece (BoG) said economic output in 2010 will fall by 2%, much higher than the Greek government’s prediction of between 1.2% and 1.7%.

BoG says the recession will be worse due to planned public spending cuts.

The report comes ahead of a European Union summit to discuss Greece’s economic crisis, as German resistance towards financial aid for Athens persists.

Athens has already come close to defaulting after misleading European partners about the scale of its financial problems, which last year saw its public sector deficit hit almost 13 per cent of gross domestic product

Meanwhile Germany’s coalition government is reportedly planning to establish a banking levy that will protect taxpayers from the costs of any future bank bail-outs. The German government was obliged to seriously deplete their treasury coffers to provide a €500 billion rescue package to shore up the banking system late in 2008.

On the other side of the World, in Dubai, bank officials await anticipation of the severely troubled Dubai World company presenting their long-waited proposals on how they intend to restructure $26 billion of toxic debt.

The Dubai stock market has surged 11% this month on speculation a proposal is imminent.

Crude oil prices managed to rebound from early weakness to settle at around $81.25 a barrel.

Analysts at the Centre for Global Energy Studies said that global oil demand was on the path to full recovery but upward pressure on prices would be limited due to supply side changes.

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Tags: Alistair Darling, BA Heathrow, Bank, Bank of England, Bank of Greece, Banking, British airways, British Economy, Budget, CBI, Centre for Global Energy Studies, Citigroup, Confederation of British Industry, Dow Jones, Dubai World, economic recovery, Economics, Economy, EMI, Employment, Financial News, FTSE, green bank, Money, Money Management, Money Markets, Monsoon, NASDAQ, New Look, Recession, Retail, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Wall Street, Yvette Cooper

U.K. Prime Minister Gordon Brown said Monday that his government has identified billions of pounds in additional efficiency savings in the public sector to help pare the country’s record deficit. Mr. Brown said the government can deliver £12 billion ($19.7 billion) in efficiency savings over the next four years, an increase on the target £9 billion that the Treasury had identified in April. Brown’s announcement comes ahead of Wednesday’s Pre-Budget Report, which will map out some measures to cut the budget deficit. Among the measures that have been considered is a tax on bankers’ bonuses and even on the banks themselves. However the issue of a windfall tax on banks or bonuses presents Brown and Chancellor Darling with a serious dilemma as they leave no stone unturned to raise cash without damaging the economy’s return to growth. Eroding banks’ profits to raise fiscal income might weaken these institutions just as the government is trying to provide increased more capital behind them to cover lending to Britain’s credit-starved companies.

Manufacturing output in the UK between September and October was unchanged against expectations for a 0.4 per cent increase. UK house prices rose 1.4 per cent month on month in November – stronger than forecast. The two pieces of news appeared to cancel each other out and sterling and gilts seemed little affected.

U.K. Chancellor of the Exchequer Alistair Darling is expected on Wednesday to announce a cut in taxes on the use of electric vehicles as company cars as part of efforts to present an environmentally friendly pre-budget report. A U.K. treasury spokesman predicted that from 2012, companies and employees would be exempted from paying taxes on company cars if they were electric vehicles.

Shares in UK government majority owned Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, dropped after Chancellor of the Exchequer Alistair Darling refused to rule out a tax on excessive bonus payments. Royal Bank of Scotland retreated 4.7 percent to 33 pence and Lloyds Banking tumbled 4.1 percent to 53.69 pence.

Andrew Bailey, executive director for banking services at the BOE, has stated the bank’s fears that U.K. consumers are hoarding cash due to their lack of confidence in the banking system. Another factor that strengthens the banks theories are the negligible interest that they would earn even if they did invest their money with a financial institution. In a speech made in Washington D.C., Bailey highlighted the ironic connection between the declining need for cash in everyday life and the sharply increasing demand for banknotes during the financial crisis and ensuing recession.

According to a recent report issued by the Engineering Employers Federation, U.K. factory production will begin growing again next year as exports rebound, Production is expected to grow 0.9 percent in 2010 after it had shrunk by 10.4 percent in 2009. The report went on to add that increasing signals point to the fact that the U.K. is emerging from the longest recession on record. The British Chambers of Commerce pointed out that although the recovery has started the Bank of England will probably be required to maintain its bond purchase plan at £200 billion pounds ($331 billion) while it assesses the strength of signs of a rebound.

Shares in travel companies are on the rise, with the Thomas Cook Group and TUI Travel leading the way. Thomas Cook, Europe’s second-biggest tour operator, jumped 1.9 percent to 221.2 pence, while TUI Travel, Europe’s largest tour operator, rose 1.5 percent to 250.5 pence.

Shares in the U.K. waste recycling company Shanks Group Plc surged forward 43 percent to 128.5 pence after the company revealed that they had received a possible bid offer from an unidentified private equity group. Washington-based private equity firm Carlyle Group, have been reported to be in talks to buy the British waste-disposal company Shanks for about £535 million ($875 million) for some time.

Sterling lost ground on Tuesday as disappointing economic data and concerns over the UK government’s pre-Budget report weighed on the currency,

• Pound/US dollar 1.6292
• Pound/Euro 1.1040

London equities continued to weaken on Tuesday, with renewed concern about the financial problems in Dubai. Banks especially were hard while talks continued between Dubai World and the creditors to restructure debt at the holding company. It is expected that a group of banks, including the Royal Bank of Scotland, Standard Chartered, HSBC, Lloyds Banking Group as well as two from the United Arab Emirates (UAE) will form a steering committee to be appointed to represent creditors. At the end of the day’s trading, the FTSE 100 had tumbled 1.5 per cent to close on 5,230.5,

According to Federal Reserve Chairman Ben Bernanke the US economy is improving, although it is still too early to say that the recovery will last.

Unemployment could stay "elevated", although inflation is likely to remain subdued, while interest rates were likely to stay low for "an extended period",

Following Bernanke’s comments, the dollar lost a lot of the recent gains it had made against the euro.

On close of trading, the Dow Jones Industrial Average had dropped 104.82 points to 10,285.292 and the NASDAQ was also down 19,65 points to to 2,169.96

President Obama has said that money not spent under the £425 billion ($700 billion) US bank bail-out package could be used to cut the US deficit and boost jobs. The cost of the "Troubled Asset Relief Program" (Tarp) had turned out to be "much cheaper than expected". Reports say the cost of the Tarp will be £120 billion below the Treasury estimate. Back in August, the Obama administration had estimated that the rescue package would be £200 billion.

Crude oil dropped for a fourth day, trading below $75 a barrel, as the dollar gained amid speculation the U.S. Federal Reserve will start raising interest rates.

The China Association of Automobile Manufacturers announced that Chinese car sales and production both exceeded 12 million between January and November, with expectations that car sales and output will to top 13 million for the full year.

Production of new cars has never topped the 10 million cars in one year mark in the past with state incentives having boosted car sales. The Chinese government has reiterated their plans to continue economic stimulus measures into 2010, Despite the downturn and falling sales at most global car makers, demand for cars in China continues to boom.

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Tags: Alastair Darling, Asset Relief Program, Bank, Banking, Ben Bernanke, British Economy, British Pound, Chancellor of the Exchequer, Credit Crunch, Crude oil, Currency, Dow Jones, Dubai World, Economics, Economy, Employment, Engineering Employers Federation, Financial News, Gordon Brown, HSBC, Lloyds Banking Group Plc, Money, Money Markets, NASDAQ, pre-Budget report, Recession, Royal Bank of Scotland Group Plc, Shanks Group Plc, Standard Chartered, Stock Markets, Stocks and shares, Thomas Cook Group, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US economy

According to Thomas Huertas, the banking director at the U.K.’s Financial Services Authority, London’s role as the European Union (EU) equivalent to Hong Kong as a self-regulating financial center, is drawing to a close.

The group of 27 European states that comprise the EU plans to centralize oversight of markets in the wake of the global financial crisis, with proposals for new regulators for the banking, securities and insurance industries, Huertas said. Evidence of a continental European sway away from London was provided by recent statements from Michel Prada, former chairman of French market regulator "the Autorite des Marches Financiers", who said that while continental Europeans “admire the City,” the also felt high levels of jealousy and irritation towards it.

About 10 percent of jobs in Britain’s financial services industry could be cut, equivalent to over 110,000 jobs. An official from one of the UK’s leading union Unite has announced estimates that 38,000 jobs had gone this year at banks and other financial firms it represents and that was set to rise substantially.

The financial services industry employs between 1.1 million and 1.3 million people. Part-nationalised banks Royal Bank of Scotland and Lloyds Banking Group have cut thousands of jobs, and planned restructurings at the two banks are likely to affect about 25,000 employees,

Dubai World began negotiations to restructure about $26 billion in debt and said the remainder of its $59 billion of liabilities is on “a stable financial footing. Dubai World began talks with banks; easing concern a delay in debt payments will hurt U.K. lenders.

Chelsea Building Society has confirmed it is in advanced merger discussions with its Bradford-based larger rival Yorkshire Building Society.

It said the talks are part of a detailed review of its activities, financial position and corporate structure, which includes looking at the benefits of a possible merger. However the group, which is the UK’s fourth largest building society, stressed that it remained well-funded and had strong liquidity. Yorkshire Building Society is already the UK’s second biggest society, and a tie-up with the Chelsea would create an organization with more than £35 billion of assets, 178 branches and 2.7 million members. Cheltenham-based Chelsea said the merger would boost its capital position by around £100 million. Both the societies said the deal would only go ahead if it produced mutual benefits.

According to a survey of leading UK mortgage lenders, Home owners are choosing to make bigger repayments on home loans instead of increasing spending. This news, whilst pleasing to most, will come as a blow to attempts to drive economic recovery through consumer demand. A rising household saving rate means the Bank of England must instead look to exports to fuel growth. A spokesman for the Lloyds banking group which includes Bank of Scotland, Cheltenham and Gloucester, Birmingham Midshires, Lloyds TSB and Halifax, confirmed that the percentage of customers making regular overpayment on their mortgages has doubled compared to last year. With the average monthly overpayment within the group being around £350 pounds.

BSkyB has been named as Britain’s most admired company by City experts. The media giant, owner of Sky News is the youngest company ever to win Management Today’s top award.

Tesco came in at number two, with its chief executive Sir Terry Leahy retaining his most admired leader crown. BSkyB topped its sector in every one of the nine criteria decided upon and rated by industry peers and City analysts as well as winning the ‘quality of goods and services’, ‘quality of marketing’ and ‘capacity to innovate’ overall awards.

Online retail sales are expected to rise 14 percent to £5 billion this month, According to a recent study, almost three quarters of Britons will do more than half of their Christmas shopping on the Internet,.

A leading industry body specialising in global e-retail, forecast that Monday, December 7 would be the busiest online shopping day this year, with spending reaching £350 million. The survey also states that around 90 percent of consumers plan to buy at least some of their Christmas presents online this year.

The pound retreated strongly against the dollar and the Euro whilst rising against the Yen.

• Pound/US dollar 1.6528
• Pound/Euro 1.10975
• Pound/Japanese Yen 145.6191
• Pound/Swiss Franc 1.6537

The FTSE 100 has rebounded 51 percent from its low on March 3 amid government stimulus programs and record low- interest rates. The gauge fell 3.3 percent from Nov. 25 till the end of trading Thursday as Dubai World’s move to delay debt payments risked triggering the biggest sovereign default since 2001. The FTSE 100 closed on Thursday on 5313.00.

According to a recent survey, the US private sector job cuts narrowed in November for the eighth consecutive month, with less than 170,000 jobs being lost last month, 26,000 fewer than in October. The US services sector shed 81,000 jobs in November, up slightly on October, with fewer jobs being lost in the manufacturing sector. According to a spokesman for the Obama administration, since the beginning of the £473 billion jobs stimulus package, passed in February, it has saved or created more than one million jobs across the US. According to the latest US Labour Department figures, the unemployment rate in the US rose to 10.2% in October, and its highest rate since April 1983. Since the recession began in the US in December 2007, the number of unemployed has risen by 8.2 million, while the jobless rate has risen from 4.9%.

The Dow Jones index closed down 86.53 points, on 10,366.15 points, while the NASDAQ remained steady on 2173.14.

Bank of America has announced plans to repay the £27 billion US government bailout it received during the credit crisis of 2008 as well as after the purchase of Merrill Lynch earlier this year.

The move is designed to allow Bank of America to free itself from government restrictions, including executive pay limits that were a stipulation of granting the funds. The bank reported a $1 billion net loss for the three months from July to September, worse than had been expected, especially when compared to a net profit of around £2 billion in the previous quarter and around £1 billion in the same period of 2008.

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Tags: Autorite des Marches Financiers, Bank, Bank of America, Bank of England, Banking, Birmingham Midshires, British Economy, British Pound, BskyB, Chelsea, Chelsea Building Society, Cheltenham and Gloucester, Currency, Dow Jones, Dubai World, Economics, Economy, Financial News, Financial Services Authority, FTSE, Halifax, Lloyds Banking Group, Lloyds TSB, Michel Prada, Money, Money Markets, NASDAQ, Recession, Royal Bank of Scotland, Sir Terry Leahy, Stock Markets, Stocks and shares, Tesco, Thomas Huertas, UK Banks, UK Economy, UK government, UK Recession, Yorkshire Building Society

The Treasury is looking at introducing tougher requirements on bankers’ pay disclosure than those proposed last week by Sir David Walker.

Alistair Darling, the chancellor, announced a formal consultation exercise on Monday on whether legislation should go further than the Walker review, which proposed that banks should disclose the numbers of employees earning above £1 million.

Treasury officials said there was a case for greater disclosure, for example starting at £750,000 and having narrower bands.

The news came as the chairman of the Financial Reporting Council; Sir David Hogg signalled that his review of broader corporate governance at UK listed companies, published on Tuesday, would be more far-reaching than Sir David’s recommendations on bank boards.

U.K. house prices rose for a fourth month in November as the shortage of homes for sale sustained the property market, according to industry sources.

The average cost of a home in England and Wales climbed 0.2 percent from October to 156,700 pounds, meaning that prices are down 11 percent from the 2007 peak. While U.K. mortgage data due today may show loan approvals at the highest level in 19 months in October, rising unemployment may curb house price increases next year. According to Bank of England Governor Mervyn King, the economy’s recovery from the longest recession on record isn’t “particularly strong.”

Dubai World, the investment company whose $59 billion of liabilities caused stock markets across the World some anxiety will ask all creditors for a “standstill” agreement as it negotiates to extend maturities according to Dubai’s Department of Finance. Reports are that the plan will not be acceptable to most investors and would be considered a default. Dubai, the second-biggest of seven states that make up the United Arab Emirates (UAE)., and its state-owned companies borrowed $80 billion to fund an economic boom and diversify its economy. The global credit crisis and a decline in property prices hurt companies like Dubai World as they struggled to raise loans and forced the emirate to turn for help to Abu Dhabi, UAE capital who hold 8 percent of the world’s oil reserves.

Barclays Bank will book a gain close to £1 billion more than expected on the sale of its asset management arm to BlackRock thanks to a 62 per cent rise in the US fund manager’s shares since the deal was struck. The UK bank on Tuesday completed the £9.1 billion sale of Barclays Global Investors (BGI) to BlackRock, which becomes the world’s biggest asset manager with more than $3,000 billion .Barclays has taken a 19.9 per cent stake in BlackRock as part of the cash-and-shares deal. The sale price was £6.2 billion higher than the value of BGI in the accounts of Barclays, and £900 million more than estimated when the deal was agreed in June.

Thomas Cook will refinance their £1.65 billion loan facilities by next summer but has no plans to use a rights issue, according to a leading company representative. The tour operator’s current facilities are due to expire in May 2011. The company has predicted that 2010 would be a tough trading year, and the refinancing plans were announced as Thomas Cook revealed that net debt had more than doubled from £292 million in 2008 to £675 million. Explanations were that the additional debt had come from completing its share buy-back programme, acquisitions and the need for increased working capital arising from late holiday bookings.

British Airways Plc has announced that they are to conduct a series of feasibility studies and tests to see if their planes can run on bio-fuels. The airline will run the trials in conjunction with Rolls-Royce. On that piece of good news for the environment, shares in BA shares gained 0.6 pence percent, to 193.8, while Rolls-Royce rose 0.9 pence to 476.4.

Cadbury Plc Chief Executive Officer’s Todd Stitzer has signaled his support for a possible bid by U.S. candy maker Hershey Co. in preference to the hostile bid from Kraft. Meanwhile JPMorgan Chase & Co. and Bank of America Corp. are being lined up to provide Hershey a further $7 billion in finance. Cadbury’s shares later advanced 3 pence to 806.

Drinks manufacturer C&C saw its share price jump almost 9 per cent yesterday on the back of an announcement that it is to acquire the British cider assets of Constellation Brands owners of the Gaymer Cider Company, the UK’s second largest cider manufacturer, for £45 million.

The transaction is expected to be completed by mid-January 2010, and will broaden C&C’s existing cider offering beyond Bulmers and Magners to include brands such as Blackthorn, Olde English as well as Gaymers.

Under the terms of the deal C&C will also acquire a cider production facility in Shepton Mallet, Somerset, and a distribution warehouse in Bristol. As well as strengthening its position in the UK cider market, the acquisition is expected to shift C&C’s focus away from on-trade sales towards the faster-growing off-trade distribution channel.

On the Foreign Currency exchanges, the Pound rose against the dollar, yen and Swiss Franc whilst falling slightly against the Euro,

• Pound/US dollar 1.6605
• Pound/Euro 1.1002
• Pound/Japanese Yen 144.5284
• Pound/Swiss Franc 1.6589

Fears of a further fall in share value on the FTSE 100 were dispelled as shares continued to recover, closing in Wednesday on 5312.77, up 67 points from the weekend.

US shares headed higher on Tuesday after a flurry of economic data pointed to a rebound in the economy Better reports on construction and housing suggested there was something to look forward to.

The housing figures, from the National Association of Realtors, provided the best hopes for growth, showing sales agreements 3.7% up on the month and 32% higher than this time last year.

The Dow Jones index closed up 126.66 points, or 1.2%, on Tuesday to reach 10,471.50 points, while the NASDAQ also rose, closing the day on 2175.8.

Australia’s central bank lifted interest rates for a third consecutive month on Tuesday amid signs that inflationary pressures were building in an economy expected to return to “trend” growth of 3.25 per cent next year. The 25 basis point rise to 3.75 per cent matches increases in the last two months and is part of the Reserve Bank of Australia’s strategy of weaning the economy off historically low interest rates. The benchmark rate fell to a 49-year low of 3 per cent earlier this year.

The continuing weakness of the US dollar has pushed up demand for gold to another record level. Gold struck £722.69 an ounce on the London Bullion Market, after striking historic peaks over recent weeks. The dollar index fell 0.8% against a number of currencies as early fears regarding the Dubai debt crisis continued to wane across international markets. Demand for gold has been fueled by moves by central banks to diversify assets.

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Chancellor Alistair Darling will say in his pre-Budget report that the economy performed worse in 2009 than he first predicted, Treasury sources have said.

Darling is expected to say that the UK economy shrank by 4.75% this year – more than the 3.5% originally forecast in the Budget in March.

The adjustment follows the economy’s unexpectedly poor performance in the first three months of the year. The chancellor looks likely to stick to 2010 forecasts of growth between 1-1.5%, despite the emergence of Dubai’s financial problems which now raises fresh fears that UK banks could face more write-downs on bad debts, and chimes with warnings earlier this week from the International Monetary Fund, who said that global banks had only worked through half their toxic assets since the banking crisis broke two years ago. Investors had been hoping the British financial sector had worked through much its toxic debt, which included exposure to America’s sub-prime mortgage market.

Despite this week’s setbacks, economic analysts continue to predict that the UK economy should emerge from recession by the end of the year, with the Northern Ireland and Scotland facing a more challenging recovery. The prediction came as revised gross domestic product (GDP) figures showed the UK recession was shallower than previously thought between July and September. Revised estimates from the Office for National Statistics (ONS) showed a 0.3% fall in UK output in the third quarter, compared with the 0.4% slide originally stated. While UK business confidence surveys on the "mainland" bear out signs of recovery, Northern Ireland business activity continued to fall in October, albeit at the slowest rate since the start of 2008. The reasons apparently are local margins remaining under pressure, is that the manufacturing sector in the province is still reporting a lack of demand and heavy competition in difficult markets. The combination of these factors looks like meaning Northern Ireland will likely lag the UK recovery. Scotland’s growth will continue to lag behind the rest of the UK’s, according to a leading economic think tank. Similar sources also announced that they had observed some "disturbing weaknesses" in the Scottish economy and predicted growth of -4.9% this year and 0.7% in 2010. Job cuts are expected to continue, with the unemployment rate reaching as high as 8% in 2010. The only prescription for growth for both Northern Ireland and Scotland would be to switch to a more export-led economy, exploiting global markets

Jaguar Land Rover had seen its sales rise 23% in the second quarter after its new models were well-received.

Owner Tata Motors said new products such as the upgraded Range Rover, Range Rover Sport and Discovery 4 had had successful launches.

Although Jaguar Land Rover made a net loss of £60 million in the July-September quarter, it was much less than the £240 million loss it made a year earlier.

India’s Tata Motors made a net profit of £2.8 million in the third quarter of, 2008, compared with a loss of £127,000 for the same period last year.

Borders U.K., the bookstore chain once owned by U.S.- based Borders Group Inc., has called in administrators after failing to find a buyer for its stores. A total of 1,150 employees are affected, according to the statement.

“All stores currently remain open for business as normal whilst the administrators undertake a review of the company’s affairs and seek a purchaser for all or some of the company’s stores in which there has already been interest,” Philip Duffy, principal administrator announced in a statement.

U.K. media have reported that HMV Group Plc’s Waterstone’s books chain is considering buying some of the stores. A spokesman for HMV declined to comment on this when contacted by Bloomberg News earlier.

The steep advertising downturn pushed U.K. publisher Daily Mail & General Trust PLC’s into a net loss for its full fiscal year, as management focused on cutting costs and its £1.05 billion ($1.76 billion) debt pile, but the company said there are signs that trading conditions are improving.

Daily Mail, which publishes the Daily Mail and its sister Sunday paper and the Metro free-sheet, posted a net loss of £303.4 million for the 12 months ended Oct. 4, compared to zero net profit a year earlier.

According to brokers, Thursday’s activity on the FTSE was very similar to when Lehman Brothers collapsed, warning that Dubai’s problems could be the catalyst for the market to fall further. RBS, which is 70 per owned by the UK taxpayer, fell 7.8 per cent, wiping off £1.73 billion of its market value. Barclays lost 8 per cent, cutting its capitalisation by £2.65 billion. HSBC fell 4.8 per cent losing £6.2 billion of its value and Lloyds Banking Group lost 5.6 per cent, wiping off £1.5 billion.

All in all around £44 billion was wiped off London’s biggest companies amid growing fears the UK financial sector could be heavily exposed to Dubai World, the state-owned conglomerate which yesterday asked for a standstill on its £36 billion debt pile. The FTSE 100 tumbled 170.68 points or more than 3 per cent to 5194.1 in its biggest one-day percentage fall since the market plunged to six-year lows in March. Encouragingly enough, the exchange recovered well on Friday, closing on 5245.73.

The pound declined against the dollar after a drop in stocks across the world prompted investors to sell U.K. assets and on speculation the government will downgrade its forecast for the economy. Sterling slipped to the weakest level since Nov. 3 against the U.S. currency as the MSCI World Index declined for a second day after Dubai’s attempt to reschedule its debt continued to rattle investors.

• Pound/US dollar 1.6553
• Pound/Euro 1.10996
• Pound/Japanese Yen 142.7188
• Pound/Swiss Franc 1.6565

US shares have fallen on worries about Dubai’s debt problems, with the Dow Jones ending down 154 points, or 1.5%, at 10,309.92, in a shorter trading day.

It was the first chance for markets in the US to react to news that state-owned Dubai World had asked for more time to repay its debts.

US markets were closed for a holiday on Thursday when other world markets suffered steep losses.

The Dow Jones average dropped 154.58 points on Friday’s trading to close on 10309.92 The NASDAQ lost 37.61 points to close on 2138.44

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Tags: Alastair Darling, Bank, Banking, Barclays, Borders Group Inc, British Economy, British Pound, Daily Mail, Discovery 4, Dow Jones, Dubai World, Economy, Financial News, FTSE, General Trust PLC, HMV Group Plc, International Monetary Fund, Jaguar Land Rover, Lehman Brothers, Lloyds Banking Group, Money, MSCI World Index, NASDAQ, Office for National Statistics, Philip Duffy, pre-Budget report, Range Rover, Range Rover Sport, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, Tata Motors, UK Banks, UK Economy, UK government, UK Recession, Waterstone's

The Office of Fair Trading (OFT) has lost its legal battle over bank charges with banks following the shock announcement by the Supreme Court on Wednesday. While the ruling effectively scuppers any chance of reclaiming fees in the foreseeable future it does clear the way for new rules to be drawn up that would limit charges. The Treasury did however stress that if lower bank charges could not be achieved voluntarily then it would consider passing legislation. The OFT’s four-year campaign and two-year legal case to win refunds for those overcharged by their banks after falling into an unauthorized overdraft fallen at the last hurdle. The Supreme Court, in a move that stunned campaigners, went against earlier findings by the High Court and Court of Appeal and decided the OFT did not have the right to assess the charges for fairness in the case

The good news from the U.K. economy is that it shrank in the third quarter less than previously estimated. It is now estimated that gross domestic product probably fell 0.3 percent from the second quarter, which less than the 0.4 percent drop is reported on Oct. 23, The Office for National Statistics will release its second estimate before the weekend.

More than £60 billion was secretly lent by the Bank of England to prevent Royal Bank of Scotland and Halifax Bank of Scotland from failing at the height of the financial crisis last year. In evidence to the Treasury Select Committee, the Bank revealed yesterday that such a catastrophe was averted when it decided "in exceptional circumstances" to act in its traditional role as lender of last resort and extended Emergency Liquidity Assistance (ELA) to RBS and HBOS. Meanwhile U.K. Chancellor of the Exchequer Alistair Darling Wednesday defended authorities’ secret provision of emergency assistance to Royal Bank of Scotland Group PLC and HBOS during the height of last year’s financial crisis. In a written ministerial statement to parliament, Mr. Darling said any disclosure of the loan at the time would have "seriously" jeopardized financial stability and "the risk to public resources was low" given the quality of the collateral received by the Bank.

Trading on the London Stock Exchange (LSE) was halted for three and a half hours earlier because of technical difficulties.

The LSE said it had been affected by connectivity issues, and at 1033 GMT had placed all orders for shares into an "auction call period".

This allowed traders to put orders to buy or sell shares into the system, ready for when trading restarted.

Normal trading was then able to resume from 1400 GMT.

Big banks will be obliged to disclose how many of their UK employees are paid more than £1 million, if City banker Sir David Walker has his way. Sir David is expected to announce that half of the bonuses paid to bank employees should be deferred for three to five years.

Travelers who book holidays on the internet could receive more financial protection if things go wrong, under plans in a European review.

Consumers who make up their own packages of flights, hotels and car rentals on one website or partner sites could get more protection.

Currently, only those who have booked specific package deals have rights to cancel or refunds if operators go bust. A review will consider help for passengers if airlines collapse.

Spanish investor Jorge Cosmen, the largest stockholder is reported to have boosted his stake in National Express Group Plc, the U.K. bus and rail company three times in as many days. The investor, a company board member, has spent 5.8 million pounds ($9.6 million) snapping up shares since Nov. 20. The third purchase, announced today by National Express, brings his family’s holding to 20 percent. Cosmen, who opposed National Express, wants the London-based company to refinance debt and reevaluate strategy before any rights issue, is apparently yet to decide whether to oppose the stock sale in a Nov. 27 shareholders’ vote.

The pound retreated slightly against the dollar, Swiss franc and the yen, while rising against the Euro.

• Pound/US dollar 1.6506
• Pound/Euro 1.10997
• Pound/Japanese Yen 142.3998
• Pound/Swiss Franc 1.6556

After trading resumed on the FTSE, the 100 went on to finish the day at 5,194, which was 130 points down on Tuesday’s closing price, while the FTSE 250 rose dropped 200 points to close on 8,880.52. Falls on the FTSE were also felt across Europe, as concerns about the wider impact of state-owned investment company Dubai World asking for a six-month delay on repaying its debts grew.

The US dollar has hit a 14-year low against the Japanese yen with low interest rates in the US making the greenback less attractive to investors.

The dollar slipped to 86.5 yen, its lowest level since July 1995.

The US has indicated it is unconcerned about the dollar’s slide, and will not intervene to strengthen it.

Many traders are swapping dollar holdings for gold as a safer investment in the current uncertain economic climate.

The price of gold is currently at a record high of $1,194.5 an ounce

The Dow Jones average was looking stronger rising 53 points to 10464.5 The NASDAQ also rose thirteen points to finish up on 2176.05

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