Every cloud still appears to have a silver lining and the silver this time round will be coming from both the United States and Europe. UK fund managers are anticipating a wave of takeover activity as companies with some surplus cash sitting around might be looking to take advantage of the weak pound to snaps UN some bargains in acquiring smaller British firms.

Also expecting a windfall in the near future is the HM Revenue & Custom (HMRC). As a result of the unexpected success of their business payment support,

The sum of corporate tax rescheduled service has reached five billion pounds, with more than 160,000 UK businesses having negotiated a "time-to-pay" agreement, since the launch of the in late November 2008. Since that time, the Enterprise Finance Guarantee scheme has secured £862 million of loans for more than right thousand UK businesses.

Britain’s one-time tax on bank bonuses could bring in more than £2.5 billion ($3.7 billion) to the government’s coffers this financial year, which works out at almost three times the £550 million estimated by Chancellor of the Exchequer, Alistair Darling. Darling announced the fifty percent levy for bank bonuses over £25,000 pounds in December last year.

Darling is expected to unveil the Governments plans to use the extra funds for “small targeted measures” during his budget speech later this month.

The people of Iceland are preparing to organise a referendum, on which they will decide to repay the UK and the Netherlands governments, the money owed to them after the collapse of Icesave bank.

The UK and the Netherlands want reimbursement for the £3.4 billion (€3.8 billion) paid out in compensation to customers in 2008.

Talks between the three countries broke down on Friday without agreement.

The Icelandic government had hoped to avoid the vote by agreeing a new repayment plan before the weekend, with the country’s Prime Minister Johanna Sigurdardottir calling for further talks to take place before the referendum card is called.

The serious concerns that residents of the North East are having regarding the possibility that the steel processing plant run by Corus on Teesside will be closed are to be aired at a meeting in London this week. The meeting will be between the Government department who are handling the Corus file on behalf of the government, and a group of local politicians and potential investors. The group is thought to be interested in acquiring the Teesside Cast Products plant, which is due to close. The plant began lying off the first of 1,600 staff before the weekend. .

Redcar MP Vera Baird said a sale of TCP was “the best outcome we could have” and urged patience while a deal was put together.

With prices up by an average of 3.2 percent, February showed the strongest monthly growth in house prices since August 2007 in central London. Strongest risers were properties in the £5 million pound bracket, which exceeded even the prices of March 2008 when the market was as its precession peak. Elsewhere in the UK figures show a drop in the average house prices for the first time in months, Reasons given were the bad weather experienced in January, as well as an increase in number of properties hitting the market. The weakening pound may also account for the fact that almost half of the properties worth £2 million pounds or more have been snapped up by buyers from overseas during the last year,

Equity strategists believe a weakening pound will cause shares in London-listed companies to rise over the coming weeks. The feeling is that asset managers are rebalancing their UK portfolios and issuing new stock recommendations following sterling’s continued poor performance in the currency market. Strategists are apparently encouraging investors to take long positions in UK firms with ties to foreign markets, will steering clear of UK businesses who rely extensively on the domestic economy.

The Financial Services Authority (FSA) has granted a licence to Metro Bank, which will mean a whole new face on the UK high street, and within the coming months. Metro’s plans are to create a network of over 200 Greater London branches, offering a "superior service", with branches open seven days a week.

The continuing uncertainty around the pound has caused a lot of ups and downs over the last week. At close of trading on Friday the pound closed on $1.5056, as well as 1.1044 against the Euro.

The benchmark FTSE 100 Index jumped 72 points, to close for the weekend on 5,597.76.

The US Labor Department has today revealed that unemployment rate remained unchanged at 9.7% in February, lower than the 10% rate that was expected. According to figures issued by the Labor Department, there were just 36,000 job cuts last month, considerably less than the 50,000 analysts had predicted. Since the beginning of the financial downturn in December 2007, employment has fallen by 8.4 million, making for almost 15 million unemployed people in the US.

These figures conform to the Federal Reserve’s forecast unemployment rate. The rate is expected to remain at between 9.5% and 9.7% for all of 2010, and could ease to as low as 8.2% in 2011.

On Wall Street, the Dow Jones Industrial Average continues to thrive, closing for the weekend up 122.06 points to close on 10,566.2. The NASDAQ Composite was still climbing also, rising 34 points to close on 2,326.35

According to official figures from the US Commerce Department the US economy grew at a faster rate than previous estimates in the fourth quarter.

The economy grew by an annual 5.9% between the October and December period, an improvement on the 5.7% previously estimated.

For the whole of 2009, the GDP declined at of 2.4%, making for the largest full-year contraction since the 10.9% fall immediately after the end of World War Two.

A spokesman for the Swedish venture capitalists Investor, has announced their approval to buy half of defence group BAE System’s stake in Swedish defence firm Saab. The statement read that Investor’s acquisition of half of BAE’s 20.5 percent stake "clarified the ownership structure in Saab" in a climate where there had been "less alignment of interests and the emergence of some overlapping businesses" between the two aerospace firms.

financial

• Propser.com At 30 Million Lent (or darn close) YTD (since February) Just how much does Prosper.com make?  Since opening doors for...
• American Bailout: $1 Million A Day For 2,260 Years My fellow Americans, details are emerging for the second economic...
• Raleigh, NC, 1 of 10 Cities Primed for Real Estate Recovery One major NC city is among 10 cities that's primed...

Tags: Alistair Darling, BAE Systems, Banking, Currency, Dow Jones, Economy, Enterprise Finance Guarantee, Financial News, Financial Services Authority, FSA, FTSE, HM Revenue & Custom, HMRC, Icesave, Johanna Sigurdardottir, Money, Money Management, NASDAQ, Recession, Retail, Saab, Stocks and shares, Teesside Cast Products, UK Banks, UK business, UK Economy, UK government, UK Recession, US labor Department, Wall Street

Despite threats from major banking groups that they will move key staff abroad, the signs are that Alistair Darling has no intention of watering down his plans to levy a 50 percent super tax on bank bonuses. Apparently the Financial Services Authority (FSA) has already spoken to several smaller banks telling them that they will have to curb bonus payments if they do not do enough to increase their capital holdings with the FSA’s squeeze on bonus payments extending beyond the partially-nationalised Lloyds Banking Group and Royal Bank of Scotland. A recent poll has shown that while the general public are in favour of taxing bonuses, a large percentage feel that the bankers will find a way out of their noose Many feel that the recently announced banking bonus tax is unlikely to raise any significant funds for the UK government and is being used as more of a political pawn coming up to the impending general election.

According to a recent survey from the Bank of England , British consumer spending looks likely to falter in the coming months, as around a quarter of UK households admit that they have switched their fiscal emphasis to saving more, because of growing uncertainty about the long term economic outlook for the country. In addition, the survey shows an increasing proportion of households who were having trouble keeping up to p date with bills and loan repayments has fallen slightly in 2009, in spite of the economic downturn

This little snippet of optimistic news was tempered by the announcement that the rate of inflation has risen to 1.9% in November from 1.5% in October, with the principal cause being the rising cost of petrol. Prices at the pumps rose by 2.9 pence to 108.3 pence a liter in November, compared with a record 9.3 pence fall to 95.2 pence this month last year.

The Office for National Statistics predicted that the consumer prices index (CPI), is expected to rise to 3% or more early next year when the temporary VAT cut is reversed and prices across the board will take a significant increase.

On the same somber note, predictions are that the recovery in the U.K. housing market recovery is liable to come to an end in 2010 as the supply of second hand homes on the market will increase.

Average asking prices are expected to, at best, stand still next year after rising about 2 percent in 2009. Property prices have fallen 2.2 percent this month alone to an average of £220,000 and look likely to drop again in January. What can keep property prices stable is that if the banks show “more forbearance” to consumers who are late on mortgage payments, which after the general election seems increasingly unlikely.

Strike threatened British Airways have announced that they are exploring "all options" to help it cope with the impact of the planned 12-day strike by cabin crew, to be held over the traditionally active Christmas period. Currently up to one million passengers are facing the real e prospect of having their journeys canceled as a result of the strike action by Unite members.

Cabin crew voted nine to one in favor of strikes from 22 December over job cuts and staffing level with BA insisting that they will not climb down on its decision to reduce cabin crew numbers, which is at the heart of the dispute.

Also showing that now is the season for warnings are US food giant Kraft Foods, who have warned Cadbury’s shareholders that they are "taking a risk" if they continue to support Cadbury as a standalone company. They have rushed to claim that their proposed takeover of Cadbury would deliver cost savings and deliver "substantially more value" to Cadbury’s shareholders.

Cadbury has consistently urged shareholders to reject Kraft’s hostile bid, tempting them with the prospect of rival bids, promised dividends and stronger growth. Roger Carr, Cadbury chairman has announced that both Hershey and Italy’s Ferrero had both indicated they were contemplating bids, adding serious negotiations would only start if a compelling and fully-financed offer emerged.

A seasonal rise in DIY sales has given B&Q a recent boost but not enough to prevent owner Kingfisher from issuing a warning that economic and political uncertainty will have an effect on the company in 2010.

Kingfisher shares were lifted by news its UK and Ireland sales were up 4.4% in sales in the third quarter, pushing retail profit up by almost 27%, with a 6.3% improvement in sales at B&Q. with sales of big-ticket items such as kitchens and electrical appliances jumping by 27%.

On the FTSE 100, it was reported that Advent International is offering to buy the Royal Bank of Scotland Group Plc s’ Global Merchant Services unit in a deal worth £3 billion pounds. The news caused their stock to rise 2.5 percent, to 30.56 pence.

The public transport company National Express Group Plc is to mount a £360 million pound rights issue after the Cosmen family agreed to the deal, the issue is designed to reduce company debt after a slump in rail revenue. Share values declined 1.1 percent, to 182.3 pence.

PartyGaming Plc, the online-gambling brand is reported to be in merger talks with Austria’s Bwin Interactive Gaming AG. On the news, their shares rose 2.1 percent to 256.5 pence.

Operators of the Premier Inn budget-hotel chain, Whitbread Plc are scheduled to publish a trading statement. In anticipation of positive news, shares in the company rose 3.1 percent, to close on 1,330 pence.

Vodafone Group Plc has announced plans to sell their 4.39 percent indirect holding in India’s Bharti Airtel Ltd. Shares in the World’s largest mobile phone company rose 0.4 percent, to 141.55 pence.

Standard Chartered Plc, the U.K. bank that gets most of its profit in emerging markets, rallied 4.3 percent. London Stock Exchange Group Plc, whose largest shareholder is Borse Dubai Ltd., jumped 9.9 percent. Lonmin Plc, the world’s third-biggest platinum producer, led gains in mining shares.

Sterling gained ground against the dollar and Euro in sluggish mid week trading.

• Pound/US dollar 1.6259
• Pound/Euro 1.1188

The FTSE 100 Index rose 17.2 points to close on 5,261.57. The index has shown a 50 percent recovery since March and looks to be heading for its biggest annual gain since 1997.

U.K. stocks climbed, led by financial shares, after Abu Dhabi provided $10 billion to avert a default by Dubai’s Nakheel PJSC. The FTSE 100 Index rose 23.77 points to 5,285. 77

US President Barack Obama speaking after a meeting, described as "candid" with executives of some of America’s top banks, announced that he has told bankers to increase loans to small and medium-size businesses.

He went on to add that US banks had received extraordinary assistance and demanded they show extraordinary commitment to rebuild the US economy.

The meeting with executives from Goldman Sachs, JP Morgan Chase and Citigroup, among others, came after the president said he had not run for office to help out "a bunch of fat cat bankers on Wall Street".

On close of trading, the Dow Jones Industrial Average had dropped just nine points to 10,462.66 while the NASDAQ raised a little to close on 2,209.82.

US bank Well Fargo has announced that they are to re pay back £15 billion emergency funding it received under the Troubled Asset Relief Program (Tarp). Following hot on the heels of a similar one by Citigroup, Wells Fargo are the last leading institution to repay Tarp funding, marking a key step towards recovery for the US financial system.

financial

• Bank of America to Buy Merrill Lynch Photo Credit: geishaboy500 Just saw this on ABCNEWS.com before I...
• Is it Unethical to Invest in Diseases that Can Be Treated, But Never Cured? As someone who spent most of their career working in...
• H&R Block Opening Accounts for Refund Anticipation Loans KANSAS CITY, Mo. - H&R Block Inc. (NYSE: HRB) announced...

Tags: Alastair Darling, B&Q, Bank, bank bonuses, Banking, Barack Obama, Bharti Airtel Ltd, British airways, British Economy, British Pound, Bwin Interactive Gaming AG, Cadburys, Citigroup, Credit Crunch, Currency, Dow Jones, Economics, Economy, Financial News, Financial Services Authority, FTSE, Global Merchant Services, Goldman Sachs, JP Morgan Chase, Kingfisher, Kraft Foods, Lloyds Banking Group, London Stock Exchange Group Plc, Money, Money Markets, Mortgage, NASDAQ, National Express Group Plc, Office for National Statistics, PartyGaming Plc, Premier Inn, Recession, Royal Bank of Scotland, Standard Chartered Plc, Stock Markets, Stocks and shares, Strike, Troubled Asset Relief Program, UK Banks, UK Economy, UK government, UK Recession, VAT, Vodafone Group Plc, Wall Street, Well Fargo, Whitbread Plc

Key figures in the UK banking world announced their dismay and subsequent anger after Alistair Darling confirmed plans for his 50 per cent "supertax" on banks’ bonus pools. The reaction from one leading UK going as far as went as far as describing the measure as an "assault on the prudent and the profitable". Bob Diamond, the president of Barclays continued to voice his displeasure by implying that that bankers and institutions were "mobile and they might desert London’s financial centre. The one-off tax will be imposed on banks rather than individuals, and will also apply to building societies

Similar moves to tax bonuses on bankers are also being considered by both Germany and France, with the German banks even considering the imposition of self-discipline on pay while France is in favor of matching the U.K.’s planned one-off tax on bank bonuses, and is likely to slap such a levy on bonuses to be paid out in 2010 for the past year.

According to a report released last week, London could be pushed into third place as a global financial centre by Shanghai within the next ten years.

Global business leaders apparently are becoming increasingly convinced that the West is facing accelerated competition from the East, with more than 90% of company owners and managers in Shanghai and Mumbai are confident in their economic outlook for 2010, compared to 22% of business leaders in London and 35% in New York.

Meanwhile to add to the U.K.’s banking system’s woes, comes the news that the Financial Services Authority intend strengthening their rules governing the amount as well as the quality of capital that banks in the U.K. need to hold against potential losses as part of an effort to implement changes to European Union rules. Their proposals are expected to result in a £33 billion, or 5%, increase in the total amount of capital held by banks, with the bulk of this required to be held by the start of 2011.

On the FTSE before the weekend, shares in Barclays Plc , climbed 4.6 percent, to 290.75 pence, possibly on news that the bank is about to eliminate around 150 jobs from its retail and commercial banking operations in India. With the news that British Airways Plc have decided to retain p full ownership of its OpenSkies subsidiary, their shares rose 1.1 percent, to close on 202.3 pence.

The U.K.’s largest CD retailer HMV Group Plc posted a loss after tax of £17.8 million in the six months period ending Oct. 24, an improvement on the loss of £19.8 million pounds in the year-earlier period. Despite the relatively positive news their stock dropped 0.2 percent to 106.6 pence.

Independent News & Media Plc, publisher of The Independent Newspaper is looking to reduce their holding in APN News & Media Ltd. One the news their shares advanced 0.2 cent to 10 cents.

As the Cadbury takeover sage continues, news that rift has opened up between Hershey’s management and the Hershey Trust over whether to trump Kraft’s hostile bid for the company. The Trust, a philanthropic body that controls Hershey, is pressing the management to go ahead with an offer while the board argues that a bid financed by extra debt could put the company’s investment grade rating at risk. Cadbury chief executive Todd Stitzer has let it be known that he considers Hershey a better cultural fit than Kraft. On Monday morning, Cadbury is expected to make a formal rejection of that Kraft offer but is unlikely to make any official statements regarding their talks with Hershey, as a formal bid has yet to table. However the company is expected to release an interim update of their trading figures.

Sterling lost ground against the dollar before the markets closed for the weekend whilst rising slightly against the Euro.

• Pound/US dollar 1.6221
• Pound/Euro 1.1081

The FTSE 100 Index rose 17.2 points to close on 5,261.57. The index has shown a 50 percent recovery since March and looks to be heading for its biggest annual gain since 1997.

The US House of Representatives has approved the most sweeping changes to the country’s financial sector since the Great Depression of the 1930s. The 223 to 202 vote is a victory for President Obama who has made financial reform one of his main goals. The bill aims to create a new agency to monitor consumer banking transactions and give the government powers to break up companies that threaten the economy. The US Senate will have to pass the bill before the president can sign it. The legislation would give regulators the power to dismantle the companies in a way which ensures shareholders and unsecured creditors, not taxpayers, bear the losses. It also hopes to strengthen the powers of the Securities and Exchange Commission to detect irregularities that could provide an early warning of fraudulent investment schemes. Plans to regulate the vast $600 trillion market in products called derivatives are also included.

On close of trading Friday, the Dow Jones Industrial Average had risen 186 points to 10,471.5 and the NASDAQ was also up around twenty points to 2,190.31

Kenneth Feinberg, the White House "pay czar" has extended limits on the pay of executives at four US firms who were given government bailout money.

Under the restrictions, employees will not be able to earn more than $500,000 (£307,770) per year.

The companies involved are Citigroup, AIG, General Motors and GMAC, with the rule applying to the 26th to 100th highest paid staff. The top 25 at each firm had their pay limited in October. Free of any such pay restrictions are the

Bank of America who succeeded in repaying their "bailout "money as recently as this week, while Chrysler and Chrysler Financial were exempted because total pay for their second-tier executives is already under the magic $500,000 barrier.

financial

• FT.com / Deutsche Bank borrowing Heatons from Merrill / BofA Merrill lost 12 senior bankers specialising in financial institutions to...
• Bank of America Joins the Club of Shareholder Abusers This week Bank of America announced that it was cutting...
• Community Banks Still Providing Top Interest Rates Back in early September (before the really bad economic news...

Tags: AIG, Alastair Darling, Bank, Bank of America, Banking, Barclays Plc, Bob Diamond, British Airways Plc, British Economy, British Pound, Cadbury, Citigroup, Currency, Dow Jones, Economics, Economy, Financial News, Financial Services Authority, FTSE, General Motors, GMAC, Hershey Trust, HMV Group Plc, Independent News & Media Plc, Kraft Foods, Money, Money Markets, NASDAQ, OpenSkies, Recession, Stock Markets, Stocks and shares, supertax, UK Banking, UK Banks, UK Economy, UK Recession

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.

financial

• The Two Personal Finance Lessons We Should Learn from the Demise of U.S. Investment Banks Lehman Brothers Faces the Hard Truth Lehman Brothers has been...
• History of Top 10 Banks of the United States [/caption] The year 2009 was not a very promising one...
• Is the IRS Getting Smarter or is The IRS Attacking the Wealthy Yet Again? Last year, I wrote that it was inevitable that Estate...

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

In the Queen’s speech to be made today, Gordon Brown is expected to emphasize the need for fiscal discipline as the UK seeks to extricate itself from the current financial downturn, and catch up with the rest of the major global economies who have already done so. At the heart of his message will be a very strong hint to ministers to accept budget cuts. What he will be implying is that it is important for the Labour party to show unity and credibility on public spending ahead of the forthcoming election battle with the Tories. The prime minister’s package will feature a fiscal responsibility bill, that will confine to law Brown’s programme significantly reduce Britain’s £175 billion deficit by 2014 and cast it into history by 2018.

Meanwhile the people who are generally regarded as being responsible for the UKs financial quandary, the bankers, are beginning to bleat a little at the prospect of having their bonuses cut by the Financial Services Authority (FSA) This time the banker’s plight is being supported by no less than a former banker, Sir George Mathewson who acted as chairman of Royal Bank of Scotland. Sir George complained that any moves to cancel any pay deals which appear to reward undue risk-taking would interfere with the rule of law.

But Sir George said he feared

According to the Office of National Statistics, UK inflation has jumped to an annual figure of 1.5%, largely driven up by a sharp annual rise in the cost of petrol and a huge jump in the prices of second-hand cars. Economists were not taken by surprise by the increase in the consumer prices index (CPI, which they expected to rise by between 1.4% and 1.5% for October. The incredible 14% rise in second-hand car prices was one of the driving forces behind the inflation rise.

ITV have confirmed that Archie Norman, the former chief executive of supermarket group Asda, will be taking over the role of chairman in their company. Former Tory MP Norman’s appointment brings to an end a seven-month search to find a replacement for outgoing chairman Michael Grade,

Archie Norman comes to the ITV with an impressive track record, having being credited with the turnaround of Asda in the 1990s. He will face no less of a daunting challenge at ITV, where increased competition and difficult trading conditions has caused a major downturn in advertising revenue.

Chocolate makers Hershey and Ferrero are said to considering a joint bid for Cadbury that could be welcomed by the UK confectionery manufacturer as they fight to fend off the hostile takeover by Kraft Foods. Discussions between the two sides have been reported to be at the “very preliminary" stage. Apparently Hershey executives have been more aggressive about pursuing a deal; however no offer has been made. The talks are the strongest sign that a possible rival bid to Kraft’s $16.7 billion offer is in the offing. Kraft’s initial bid was rejected by Cadbury as being “derisory”.

Sterling increased against the major currencies on trading since the weekend

• Pound/US dollar 1.6793
• Pound/Euro 1.1283
• Pound/Japanese Yen 149.9328
• Pound/Swiss Franc 1.706

World stocks continue to gain ground as optimism regarding the global economic recovery continuing. UK shares have again reached and broken their 14-month high.

In the UK, the FTSE share values improved as commodities and especially gold touched a new record on the general positive mood.

The UK’s benchmark FTSE 100 index closed up 1.6%, or 86.29, to 5,345.93. The FTSE 250 also rose, up 28 points to 9,401.15.

US Commerce Department figures have shown that retail sales rose by more than expected in October, largely due to the resurgent car market, Sales rose by 1.4%, offsetting September’s 1.5% fall was revised with both months’ figures were dominated by the impact of car sales.

If car sales are taken out of the equation, retail sales rose by just 0.2% in October.

Federal Reserve chairman Ben Bernanke has revealed that the US central bank was monitoring currency markets "closely" and will conduct policy in a way that will "help ensure that the dollar is strong". In one of his rare public comments on the state of the dollar, Bernanke predicted that currency’s recovery would begin to gain momentum despite "headwinds" from credit and unemployment, while inflation was likely to remain "subdued". However the dollar, after a brief upturn, continued to retreat against other major currencies. Bernanke also added that the Fed still expected to keep rates near zero for an "extended period", hastening to add that his statement was, not a commitment.

In the US, all the trading indexes were seen to be advancing at lightning pace.

The Dow Jones industrial average gained 1.3%

Or 52.30 points to 10437.42. The NASDAQ continues to move forward, up 43 points 2203.78

US car giant GM recovery continues. This week the company announced that they will begin returning their US government loans earlier than expected.

The first payment of $1.2 billion will be made in December, and the company predicts that the loans could fully repaid 2011, four years earlier than expected. The news comes as GM reported a third quarter net loss of $1.2 billion. GM currently has debts of $6.7 billion to the US government, $1.4 billion to the Canadian government and 400 million Euros to the German government, which the company received in support of GM’s European subsidiary Opel.

US billionaire Warren Buffett’s investment firm have increased their stakes in the Nestle and Exxon Mobil companies. .

The news has created a strong buzz among investors as stock picks by Buffett always create interest, as the 70 year old super entrepreneur is considered to be one of the world’s shrewdest investors.

Recent figures released by the Japanese government have shown that the country’s economy has grown for a second successive quarter.

The world’s second largest economy grew by 1.2% in the third quarter, much faster than economists had predicted. Analysts have hastened to predict that say overall growth is likely to remain sluggish for the foreseeable future.

financial

• Supreme Court Holds Off From Setting New Precedent, For Now [/caption] Friday was an extremely busy day and things did...
• China tops U.S. as largest auto market in ’09 [/caption] Beijing total vehicle sales hit 13.6 million — a...
• US Economy: Slower Recovery Than First Reported Today the US Commerce Department released solid figures for the...

Tags: Archie Norman, ASDA, bankers, Banking, Ben Bernanke, British Economy, British Pound, budget cuts, Cadbury, Currency, Dow Jones, economic recovery, Economy, Employment, Exxon Mobil, Federal Reserve, Ferrero, financial downturn, Financial News, Financial Services Authority, FSA, FTSE, GM, Gordon Brown, Hershey, Interest Rates, ITV, Kraft Foods, Labour party, Michael Grade, Money, Money Markets, NASDAQ, Office of National Statistics, Opel, Recession, Retail, Royal Bank of Scotland, Sir George Mathewson, Stock Markets, Stocks and shares, The Queen’s speech, UK Banks, UK Economy, UK government, UK inflation, UK Recession, US Commerce Department, Wall Street, Warren Buffett

The planned merger, between British Airways and Spanish carrier Iberia Lineas Aereas de Espana SA, which is expected to get regulatory backing and be concluded by the end of next year, will create the world’s third largest airline.

According to Willie Walsh, British Airways (BA) chief executive the planned merger with Iberia is "great news for British Airways, our customers and our shareholders". His comments came after British Airways Plc agreed to the $7 billion merger ending more than a year of talks on a tie-up, largely aimed at fighting a slump in travel and closing the gap with competitors.

Under the all-share deal, British Airways investors will own about 55 percent of the business. The merger due to be completed by late 2010 is still subject to cancellation by Iberia if BA fails to resolve their pressing pension deficit issues.

UK engineering firm Rolls-Royce have announced that they have been awarded contracts to produce aircraft engines to the value of £1.2 billion, The engines will be used to power Airbus planes for Air China and Ethiopian Airlines. Rolls Royce made the announcement the first day of the Dubai Airshow on Sunday. The engines are scheduled to be delivered in stages from 2011 to 2017.

According to representatives from one of the UK’s most powerful unions, Unite, the leading banks have still to absorb the reasons behind the current credit crisis, and continue to set unrealistic sales targets for their staff in order for them to earn their salaries. Instead they continue to apply pressure

On staff to promote financial products, often to those who can ill afford them.

The union says that legislation forcing banks to pay theory staff higher basic salaries and placing less emphasis on bonuses should be implemented. The new breed of British bank should instead focus on high standards of customer service and pay fair wages for all staff. The British government will announce legislation next week giving regulators the power to stop bankers from pocketing big bonuses that could destabilize the financial system, a newspaper reported Saturday. Treasury chief Alistair Darling told the Sunday Telegraph that the new Financial Services Bill will allow financial watchdogs to cancel pay packages that reward undue risk-taking. The bill is due to be announced Wednesday as part of the Queen’s Speech, in which the government lays out its plans for the next session of Parliament.

Darling was quoted as saying that the legislation would give the Financial Services Authority the power to cancel contracts that breach a banking remuneration code agreed by the Group of 20 nations earlier this year. The regulator could fine banks that fail to comply.

Liberty International, the U.K.’s biggest shopping-center owner, added 3.9 percent to 504 pence. British Land, the U.K.’s second-largest real estate investment trust, rallied 2.8 percent to 498.2 pence. Land Securities Group Plc, the largest real estate investment trust, added 2.3 percent to 726.5 pence.

Investment Property Databank Ltd. today said the average value of U.K. stores, offices and warehouses rose 1.9 percent in October, a third month of gains, and the steepest advance since December 2005.

The total return for commercial real estate, which measures the change in capital values and rental income, rose by 2.5 percent in October.

U.K. supermarkets are getting a record amount of sales from promotions as they attempt to lure shoppers before the holiday season. At big supermarkets, 35 percent of sales by value are on promotion, compared with 26 percent a year ago. This year’s level is a record high

Recent figures released show a continued improvement in recruitment activity in October, within the UK financial services sector. Job offers in the month increased by approximately 4%, which is accredited to a significant increase in recruitment activity by stock brokers. On the downside, investment banks are reported to be reducing their intake of new people.

Sterling retreated on Friday before the strengthening dollar, gaining only against the Yen.

• Pound/US dollar 1.6668
• Pound/Euro 1.1201
• Pound/Japanese Yen 149.3497
• Pound/Swiss Franc 1.6883

The FTSE closed at a 14-month high, aided by gains in property shares. At end of trading Friday the guide was up 20 points to 5,296.55. The FTSE 250 also rose, up 83 points to 9,373.74.

It is now official- The French and German economies, the Eurozone’s two largest, are out of recession.

Figures recently release show that both economies show both grew between July and September, Germany by 0.7% and France by 0.3%. However, both the French and German economies grew by less than analysts had expected.

Lagging behind is the UK, still apparently bogged down in their longest economic contraction since World War II.

Recent figures show that the US trade deficit unexpectedly widened by the largest amount in 10 years in September.

The trade gap, the difference between US imports and exports, grew 18.2% to $36.5 billion (£21.9 billion) from August.

Imports or the same period rose by 5.8%, the strongest increase since 1993, providing yet another indication that consumer spending is recovering.

The Dow Jones made a late rally on Friday, closing for the weekend up 52.30 points to 10280.22. The NASDAQ was seen to be holding its own, up just three points 2160.96.

Hewlett-Packard has announced that they are to acquire the 3Com company for $2.7 billion. A spokesman for HP projected that the acquisition will give HP an added edge in the data centre networking sector. The deal will give HP capabilities in a number of areas in which the company was lacking, he said. Both 3Com and HP have been strong in the small and mid-size business networking space, However analysts predict that the addition of 3Com to their stable will create for HP an enterprise data switch portfolio to better compete with main rivals, Cisco.

Leaders of the 21 nation Asia-Pacific Economic Co-operation group(Apec) who are meeting have gathered in Singapore for the annual meeting of the have proclaimed that Asia is leading the world out of recession. Their claims may be backed by the announcement last month from the International Monetary Fund (IMF) that the Asian economy is expected to grow by 2.75% in 2009 and 5.75% in 2010. These projections compare very well with the flat to negative growth in the US and Western Europe. Statistics which can be seen to reflect the shifting balance of power between the US and Asia.

Gold prices were receding before the weekend, after rising above the $1,100 mark in the previous session. On the other hand crude oil prices were steadying after dropping more than $2 a barrel, which analysts interpreted as being because of fears of reduced US demand.

financial

• AIG $180 b down the tube | Reuters American International Group Inc AIG.N, the insurer rescued by a...
• How Financial Planners SHOULD Act Due to my position at work, I get a ton...
• Roundup for week of 19 August 2007: Prestige Edition Here are some posts of interest with blogs from the...

Tags: 3Com, Alistair Darling, Apec, Asia-Pacific Economic Co-operation group, BA merger, Bank, Banking, British airways, British Economy, British government, British Land, British Pound, Cisco, Credit Crunch, Crude oil, Currency, Dow Jones, Economics, Economy, Employment, Financial News, Financial Services Authority, Financial Services Bill, FTSE, Gold, Hewlett-Packard, HP, Iberia, Iberia Lineas Aereas de Espana SA, International Monetary Fund, Investment Property Databank Ltd, Land Securities Group Plc, Liberty International, Money, Money Markets, NASDAQ, Queen's Speech, Recession, Retail, Rolls-Royce, Stock Markets, Stocks and shares, UK Economy, UK government, UK Recession, Unite, Willie Walsh

The announcements that Royal Bank of Scotland (RBS) and Lloyds Banking Group are to sell off hundreds of branches has added a smile to the face of.

Alistair Darling as well as the European Commission, who had insisted that the banks sell off some of their branches. In a recent statement, the chancellor confirmed his opinion that the sales, were in the "best interest" of the wider UK banking sector.

Lloyds will dispose of more than 600 branches over the next four years, while RBS will sell 318 of their high street outlets. The Spanish banking group, Santander will be allowed to bid for Royal Bank of Scotland’s branches when they are put up for sale. Under competition rules agreed between London and Brussels, Santander will be eligible to bid for some of the branches as the currently hold less than 8 per cent of the UK small business lending market. Meanwhile, Sir Richard Branson is reported to be interested in moving into the world of high street banking as his Virgin Money group has applied to the Financial Services Authority (FSA) for a banking licence.

There are even some contentious rumors around that no less a company than PayPal might find them on the UK high street. Reports have it that PayPal already have an EU banking license, granted to them in May 2007, so why not a place for the outsiders!

Britain’s fourth-biggest supermarket group, WM Morrison have sent a message to their major suppliers that they will be looking for increased support for their increased and more aggressive promotion campaigns, The campaigns are aimed to increase their market share in what has become an increasingly competitive market. Morrison’s move comes as the prices of basic food stuffs begin to drop.

Europe’s biggest low-cost airline Ryanair announced on Monday that it is considering slowing down its rapid expansion program, and instead break with tradition by distributing cash earmarked to buy new aircraft to their shareholders instead. The company raised the possibility of the strategic shift while announcing a 46 per cent rise in second-quarter profits. The company has kept its full-year profit forecast steady, although they expect that figures for the third and fourth quarters will be less than rosy.

Sterling continued to weaken against the dollar, whilst rising slightly against the Euro and holding its own against the rest of the major currencies.

• Pound/US dollar 1.6398
• Pound/Euro 1.1168
• Pound/Japanese Yen 148.3102
• Pound/Swiss Franc 1.6874

The FTSE spent time under the 5,000-point mark on Tuesday with banking stocks taking the biggest toll. At close of trading, the FTSE 100 was seen to be holding its own on 5,037.2.

The FTSE 250 continues to suffer from a consistent run of heavy losses, falling more than 15% of its peal of 10,000 just a few weeks ago. At close of trading yesterday it was sitting on 8,756.68.

Troubled US commercial lender CIT Group, filed for bankruptcy on Sunday after attempts at a restructuring or bail-out failed. In a statement, CIT, who have been a key figure on the American banking scene for more than a century, announced that they had requested that the court quickly confirm its prepackaged bankruptcy plan. The plan, which has broad support from its debt holders, and in particular from Carl Icahn its billionaire investor. Icahn has agreed to provide a $1 billion line of credit, allowing the company to remain confident that they would be able to emerge from bankruptcy by the end of the year.

The US Dow Jones index made some recoveries from the last two days trading; up 61 points to 9,774.1 The NASDAQ were also fairly stable, reaching 2047.46.

The market was taken by surprise by the announcement of a swing to profitability by the auto manufacturing giant Ford. The company posted its first quarterly profit in more than a year, thanks to the implementation of cost-cutting and the government’s “cash-for-clunkers” rebates helped produce earnings of nearly $billion, or 29 cents a share, during the third quarter. Shares in Ford closed up 8.3 per cent at $7.58.

Australia’s economy continues to be the rising star of the global economies, so much so that it central bank has increased its interest rate for the second consecutive month, up a quarter percent to 3.5%. The Australian economy is the only one in the developed world to expand in the first half of 2009, with the continent largely managing to steer clear of recession, only entering into negative growth for the last quarter of 2008. The bank’s confidence was justifiably increased by the release last week of the lowest inflation figures in Australia for 10 years.

The price of gold price hit a fresh record high on Tuesday as India agreed to buy 200 tonnes of bullion from the International Monetary Fund. The move caused traders to speculate that there would be further purchases by the emerging economies. India’s purchase valued at around $6.7 billion, accounts for half of the IMF’s expected disposal of gold and signals a growing appetite among developing countries’ central banks for bullion in the wake of the global economic and financial crisis, coming after China had revealed earlier in the year that it had quietly almost doubled its gold reserves to become the world’s fifth-biggest holder.

financial

• Creating a Plan for Guaranteed Retirement Income Regular readers of this blog may recall that I have...
• EarthTalk: How To Calculate Your Carbon Footprint. EarthTalk is a weekly installment from E/The Environmental Magazine. Dear...
• Poor Money Choices Ruined My Parents' Life [Below is a guest post from my wife. I had...

Tags: Alistair Darling, Bank, Banking, British Economy, British Pound, Bullion, Carl Icahn, cash for clunkers, CIT Group, Credit Crunch, Currency, Dow Jones, Economics, Economy, EU banking license, European Commission, Financial News, Financial Services Authority, Ford, FSA, FTSE, Gold, Government, Interest Rates, International Monetary Fund, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, Paypal, RBS, Recession, Retail, Royal Bank of Scotland, Ryanair, Santander, Savings, Sir Richard Branson, Stock Markets, Stocks and shares, UK banking sector, UK Banks, UK Economy, UK government, UK Recession, Virgin, Virgin Money group, WM Morrison

Pension funds in the western world have made am almost one trillion pound ($1.5 trillion) recovery in the first half of 2009. Whilst commendable, this figure represents less than a third of what these funds have lost in market value last year. These figures were released by the Organisation for Economic Co-operation and Development (OECD) who have been tracking the progress of pension funds since the outset of the global economic turndown. According to the OECD who is based in Paris, the recovery in pension fund performance has continued through September 30, 2009, on the back of strong equity returns. However it will take some time before the losses that occurred during 2008 are fully recouped. Most pension funds staged a partial recovery in the first half of 2009, generating investment returns of 3.5 percent in nominal terms. Membership of OECD is made up from mostly financially developed industrialized economies

The cost of car insurance appears to be dramatically on the rise, according to a recent survey from the Automobile Association (AA) in the third quarter of 2009, insuring a car rose at its fastest pace in 15 years, driven by a spate of rising personal injury claims and exacerbated by fraud. Statistics issued by the AA show that the average quoted premium for comprehensive motor cover rose 5.6 percent to £821 pounds during the three months to September 30, and by 14 percent from 2008.

As news filters through to the market that Virgin Money has applied for a banking license through the FSA (Financial Services Authority) it now appears more than likely that Virgin Money will make an offer for part or all of the Northern Rock business, with many analysts claiming that an informal agreement has already been struck with the UK government, and all that is required is tie up a few loose ends before the deal can be officially announced. Speculation in banking circles point to the fact that the UK government will need to request a high asking price for Northern Rock. Any sale at a "knock down" price is bound to infuriate taxpayers whose money was used to keep the Rock from sinking. On the other hand, Branson’s company is not liable to pay an inflated price for the bank. This could lead to an impasse that could see the operation stay with the UK government for the foreseeable future. Analysts state that selling Northern Rock would be in the best interests of both the government and UK taxpayers, but only in the medium to longer term. With an election looming, questions remain whether Gordon Brown’s government could allow themselves such a luxury.

Discount retailer, Matalan is reputed to be weighing up a £1.5 billion offer, after a number of companies expressed their interest in acquiring the business which remains privately owned. Among the parties interested are private equity group CVC. Matalan were taken private by John Hargreaves, their founder and controlling more than three years ago with indications having it that Hargreaves is neither interested in entering into an auction to sell his company or at any price.

The employee owned department store chain John Lewis, has seen online sales of its clothing range, take tremendous steps forwards since the company re- launched their updated website last month. With the launch came the release of a wide range of new fashion brands exclusive to the company. A leading executive from John Lewis Direct announced the company’s satisfaction with results achieved till now, that far surpassed their predictions. In general, sales of clothing online from the company were about three times higher than last year.

Mobile phone company Orange are due to begin marketing the iPhone to UK customers in Early November, a move that is bound to mark strong competition with O2 as the Xmas run up gets under way. Orange’s announcement last month that it had become the first UK network breaks O2’s exclusive hold on marketing the iPhone device, caused shock waves in the industry. The iPhone is expected to be launched by Orange on 10 November, just one day after O2’s two-year exclusive contract with Apple ends. Carphone Warehouse, which was the only independent retailer able to stock the iPhone when O2 had it to itself, is also expected to sell the phone on behalf of Orange. The iPhone is seen as the best touchscreen phone in the market, and has won a clutch of industry awards.

In the money markets, Sterling was back on a rise against the leading currencies with the notable exception of the Swiss franc.

• Pound/US dollar 1.6322
• Pound/Euro 1.10979
• Pound/Japanese Yen 150.2587
• Pound/Swiss Franc 1.6629

The FTSE 100 suffered a late reaction to the news that the UK economy was still in recession, falling 50.83 points to close on 5191.74 on Monday. The FTSE 250 was also down by 137.55 points to 9186.10.

The world’s largest construction equipment maker Caterpillar, has announced their intention to permanently cut 2,500 jobs in the US. The news was a contradiction to predictions that economic recovery was on its way for the construction industry in general and Caterpillar in particular, with the company undertaking to reinstate 550 workers that they had previously laid off. During the downturn, Caterpillar has cut about 34,000 jobs globally.

On Wall Street, the Dow Jones also continued to decline, down a further 104.22 points to 9867.96. At the same time, the NASDAQ Composite index appeared to be on a never ending but steady decline, yesterday down a further 12.62 points to close on 2141.85

financial

• Personal Retirement Plan Investment Options Good financial management consists of two different distinct facets, the...
• Two Unrelated Topics About Banks So today I have two small posts bunched into one. ...
• Vanguard CEO Discusses Poor Performance of Index Funds During Last Decade Vanguard's CEO, Bill McNabb, gave a CNBC interview yesterday discussing...

Tags: AA, Automobile Association, Bank, Banking, British Economy, British Pound, car insurance, Caterpillar, Currency, CVC, Dow Jones, Economics, Economy, Employment, Financial News, Financial Services Authority, FSA, FTSE, Gordon Brown, iPhone, John Hargreaves, John Lewis, Matalan, Mobile phone, Money, Money Markets, NASDAQ, Northern Rock, O2, OECD, Orange, Organisation for Economic Co-operation and Development, Pensions, Recession, Retail, Stock Markets, UK Banks, UK Economy, UK government, UK Recession, Virgin Money, Wall Street

Governor of the Bank of England, Mervyn King, , in a landmark speech made on Tuesday night, reiterated his calls for the UK banks to be split into two separate entities, one handling utility and the other financing risk capital ventures. He emphasized his argument by stating that “a delusion” to think tougher regulation would prevent a future financial crisis that would be no less severe than the current one. His remarks strengthened the certainty that the economic crisis has prompted the UK government as well as countries across the world to re-evaluate their financial regulatory frameworks

King’s call for a break-up of banks comes from an ever-increasing theory that the UK banks had considered themselves to big to fail , and has made the Governor less than popular with the key figures in the move for domestic and international banking reform.

The Treasury and the Financial Services Authority have consistently rejected the theory of splitting up the banks whilst internationally, the proposals of the Group of 20 have been principally aimed at increasing both the quantity and quality of the banks’ working capital to ensure that the future of banking would be more stable.

In his speech, King raised a few eyebrows by his use of Churchill a style oratory, the speech was delivered at a meeting held in Edinburgh, intended to highlight and discuss the burden banks had placed on taxpayers. The Governor used the theme of one Churchill’s most famous speeches to deliver the message “Never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.”

financial

• New Loan Funded — Finance for an ESTABLISHED Business — $25,000 at 24% — B Credit — DTI 1392557% A new loan funded (Finance for an ESTABLISHED Business – $25,000...
• Renting Vs Buying: How To Live Beyond Your Means! The debate over renting versus owning isn't dead. According to...
• Beaver Mountain, Logan, UT Beaver Mountain is located in: Logan, UT Phone: (435) 753-0921...

Tags: Bank, Bank of England, Banking, British Economy, British Pound, capital venture, Credit Crunch, Currency, Economics, Economy, Financial News, Financial Services Authority, financing risk, Mervyn King, Money, Money Management, Recession, Taxpayers, Treasury, UK Banks, UK Economy, UK government, UK Recession

Chancellor Alistair Darling has recommended a pay freeze for 40,000 senior public servants in 2010/11. Darling has written to salary review bodies calling on them to freeze the pay of top level civil servants, such as judges, senior NHS managers as well as General Practitioners. It is expected that public spending priorities and cuts will be announced in this autumn’s pre-Budget report, as the chancellor revealed he would soon be calling ministers into the Treasury for “very robust” discussions.

If the Financial Services Authority (FSA) get their way UK banks and investment firms would have to increase their holdings of cash and government bonds by £110 billion as well as reducing their reliance on short-term funding by as much as 20 per cent in the first year. This series of tough liquidity standards put forward by the FSA on Monday shows a radical firming up of liquidity requirements than in previous years. In total banks and investment firms could be required to increase their holdings of easily redeemable assets by a total of £370 billion as well as reducing their reliance on short-term funding by 80 per cent from current levels

Chief executive of the HSBC bank, Michael Geoghegan, is less convinced than many others that the global financial recovery is well under way. He has in fact taken the standpoint that a second downturn is bound to happen in the coming months. In preparation, Geoghegan plans to freeze any expansion plans for the bank till the situation becomes clearer. Speaking after HSBC announced a shake-up of its governance 10 days ago, Mr. Geoghegan is now responsible for strategic issues that previously lay with the bank’s chairman, Stephen Green.

Taking a more conservative stance on salaries are the Lloyds Banking Group, who are reportedly in the early stages of reviewing pay packages for its top executives. Lloyds, who got themselves into hot water when they rescued struggling lender HBOS last year, pledged to review remuneration after the government backed takeover. The bank did issue a statement over the weekend that no decisions had yet been made on salaries and the bank was more focused on a number of other and more pressing issues, particularly whether they will enter the government’s asset protection scheme.

According to market analysts, many British retailers are facing a worse Christmas than last year, when 15 major chains failed, rising unemployment and fragile consumer confidence would result in many companies, many of them struggling to survive until the holiday season entering formal insolvency proceedings within a year. Market information shows that 125 retail companies encountered critical trading and cash problems in September, up 37 percent from August. Outdoor goods retailer Blacks Leisure showed how difficult it is to survive in the UK high street, by announcing plans to shut down 89 of their loss making stores as well as cutting jobs as part of an emergency recovery plan.

Bucking the retail trend is the department store chain TJ Hughes, who has based their success in specialising in discounted branded goods. The company has reported a 30 percent increase in underlying profits in the year to the end of January. Hughes, who operates in 50 locations across England, Scotland and Wales, announced pre-tax earnings that rose to £9.2 million. Since June 2008, TJ Hughes has undergone aggressive expansion and a 51st store is expected to open soon

The FTSE 100 limped back over the 5,000 points mark, rising 35.63 points to close on 5024.33. The FTSE 250 made its usual early in the week recovery rising 82.57 points to close on 8982.53.

The pound continued to find it difficult to rise above the $1.60 mark, while falling behind against the remaining principal currencies.

• Pound/US dollar 1.597
• Pound/Euro 1.10863
• Pound/Japanese Yen 142.4066
• Pound/Swiss Franc 1.6421

A recent survey has shown the US services industry rising in September for the first time in a year. The services sector accounts for 80% of the US economy. Simultaneously, separate data released showed that the US jobs market also strengthened last month for the first time since January 2008. The data boosted US markets with the Dow Jones index and NASDAQ both rising

The Dow Jones index rose by 112.08 points at 9,599.75. The NASDAQ index rose by 20.04 points to finish the day’s trading on 2,068.15.

Hundreds of farmers have protested to European Union (EU) agriculture ministers at a meeting held in Brussels to discuss low milk prices. The urgently convened meeting came as a result weeks of protests across Europe, with farmers dumping milk stocks and withholding supplies at what they see as being sold at uneconomic prices. To the farmer’s considerable chagrin, the only decision reached at the meeting was to create a panel of experts to examine at the dairy sector. Recently prices of milk and dairy products have fallen sharply in Europe as supply exceeds demand.

financial

• Mortgage Home Possessions Continue to Rise The last two quarters of 2008 have seen a steady...
• Defining the new YES Bank Finally, the cat is out of the bag. Yes Bank albeit a little late or cautious, has decided to step into the Institutional market. It will be asking investors to pick up a $250m QIP stake to shore up its...
• ICICI Bank has lost its mandate ICICI Bank Q1 net up 21 pct | Financial Services, Reuters...

Tags: Alistair Darling, Banking, Blacks Leisure, British Economy, British Pound, British retailers, Credit Crunch, Currency, Dow Jones, Economy, European Union, farmers, Financial News, Financial Services Authority, FSA, FTSE, HBos, HSBC, Lloyds Banking Group, Michael Geoghegan, Money, Money Markets, NASDAQ, NHS, pre-Budget report, Recession, Stock Markets, Stocks and shares, TJ Hughes, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US economy