In one of the classic understatements of the year so far, new finance minister George Osborne has just announced his findings that the British economy is in a dire state and there will be difficult times ahead. Osborne’s revelation came as the government sat down to take action on tackling the record budget deficit. Osborne took up the role of Chancellor after the center-right Conservatives joined with the center-left Liberal Democrats to form the country’s first coalition government for more than half a century, as the Labour Government wound up 13 years rule.

Britain has barely limped out of the worst recession since World War Two, and the new government is under pressure to show their pre-election promises to reduce spending and raise taxes to cut a budget deficit running at more than 11 percent of GDP were not hollow. The coalition already pledged to significantly accelerate the reduction of the deficit in the next five years, cutting £6 billion pounds ($8.75 billion) from non-frontline public services during the current financial year. George Osborne is expected to unveil his emergency Budget on June 22 as the new coalition Government attempts to overcome the appalling state of the economy inherited from Labour.

Meanwhile on the home front, news from the Council of Mortgage Lenders (CML) is that mortgage borrowing by house buyers is on the increase, with the number of loans made to home buyers rising by 25% between February and March, to reach 45,000. First-time buyer borrowing rebounded faster than that by existing home owners, according to CML who also went on to warn that mortgage rationing might continue indefinitely unless the new government helped lenders raise finance.

The latest news on the small business front has shown decrease in UK business insolvencies last month. On a year to year basis, it was shown that

the total number of insolvencies fell by 15.1% in April compared with the same month last year, 2,274 in April 2009 down to 1,818 in April 2010.

Businesses that fell into the medium sized category were found to have suffered the most in April. Companies employing between fifty to hundred workers being the most vulnerable.

In a move that may indicate a thawing of hostilities between internet giant Google and the printed media – particularly Rupert Murdoch’s News Corp, Eric Schmidt, chief executive of Google, announced that Google were holding talks with Murdoch and other newspaper proprietors regarding running subscription services for their online sites. Murdoch has repeatedly criticized Google for undermining newspapers by allowing internet users too much access to their valuable news content. Late last year Murdoch went far as threatening to sue Google for including headlines from News International in its search results. Staring from June, the Times and Sunday Times are set to erect a pay wall limiting access to their online news sites to paying customers. The papers will also withdraw their articles from Google’s search engine

With annual results due to be issued before the weekend, mobile phone company Vodafone are expected to announce a 150 percent increase in profits, with analysts expecting pre-tax profits of around £10.4 billion for the year to the end of March. Vodafone’s profits for 2009 were just £4.1 billion, largely due to one of impairment of £5.9 billion pounds of impairment charges.

Reports are that the Spanish bank Santander are believed to have emerged as likely winners of the tender to take over the 318 Williams & Glyn-branded Royal Bank of Scotland (RBS) branches across England and Wales. Santander has apparently outbid Virgin, Spanish rival BBVA and Blackstone, with only National Australian Bank’s Clydesdale Bank arm still in the running. RBS is expected to make around £2 billion pounds from the successful completion of the sale.

Meanwhile credit card firm American Express has reportedly become the latest contender to enter into bidding for the payment processing arm of Royal Bank of Scotland. The partially state owned bank has been forced to sell of this division under European Commission rules governing state aid. The move by American Express, which has joined forces with private equity house Permira to table a bid in the £2.5 billion pound auction for RBS’s Global Merchant Services division, has been welcomed by RBS. Previously the bank had stated concerns over stand alone private equity buyers having sufficient experience to manage the business. With experience of processing payments of millions of customers in 130 countries, American Express could fit the bill and help RBS in their drive to expand in emerging markets,

Property development and investment giant, British Land, appears likely to take over the mantle as being the largest company in the field in the UK, leaving their bigger rival, Land Securities in their wake, when both companies announce full year results this week. British Land is expected to reveal that its net value of assets has increased by more than 20 percent over the past year to 490 pence a share, while Land Securities will announce that their shares have risen 16 percent increase in its net asset value over 690 pence a share.

Coming back down to earth with a thump will be British Airways who are widely expected to report losses of more than £600 million pounds when they reports their results on Friday. It is expected that results for the 12 months to the end of March will mark the airline’s worst ever financial performance, over a period in which it suffered from the effects of recession, strikes and bad weather. There are suggestions from senior staff that the company will not be able to survive any further blows. Analysts attending the shareholder’s conference will be keen to hear how chief executive Willie Walsh intends to explain the losses as well as the company’s ongoing dispute with cabin crews.

Pharmaceutical retailer and wholesaler Alliance Boots are expected to join the one billion pounds club on Monday. Alliance Boots, who returned to private ownership in 2007, are expected to announce a trading profit over the one billion pound by exceeding the 11.6 percent growth in 2009, when their profit was £953 million. By passing the one billion pound profit barrier Alliance Boots will become only the third retailer to do so in the history of UK retailing.

The euro has plummeted against the US dollar, falling below $1.22 for the first time since April 2006. The eurozone’s single currency fell more than 1.7% in afternoon trading in New York, to $1.216, before rallying.

The decline came after Germany announced plans to ban naked short-selling of shares from midnight local time on Tuesday. The single currency dropped by more than 2% against the yen on the news. Forex traders fear that the austerity measures being put in place in many eurozone countries will hit growth.

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Tags: Alliance Boots, American Express, Bank, Banking, BBVA, Blackstone, British airways, British Economy, British Land, Clydesdale, Council of Mortgage Lenders, Currency, Economics, Economy, Eric Schmidt, Financial News, George Osborne, Google, Government, Land Securities, Money, Money Management, Mortgages, News Corp, Recession, Retail, Royal Bank of Scotland, Santander, UK Banks, UK Economy, UK government, UK Recession, Vodafone, Willie Walsh

Leader of the Conservative party David Cameron was finally accepted as the UK Prime Minister late on Tuesday after his party and the Liberal Democrats (the Lib-Dems) agreed on a five-year deal to form the UK’s first coalition government since the Second World War, on the promise of forming a “strong and stable government”. Lib-Dem leader Nick Clegg was confirmed as deputy PM while George Osborne will become Chancellor of the Exchequer. After winding up five days of political negotiations, Cameron pledged that the new government’s number one priority will be to tackle the UK’s £163 billion budget deficit., As Gordon Brown announced his resignation, Messrs. Cameron and Clegg declared that they had struck their remarkable political bargain to provide strong and stable government at a moment of crisis. A nation awaits with bated breath for the outcome

Meanwhile its has been announced that the number of UK unemployed rose by 53,000 to 2.51 million during the three months to March According to official figures issued by the Office for National Statistics the level of unemployment total is now since December 1994. On the positive front, the total number of people claiming unemployment benefit fell in April by 27,100 to just over 1.5 million, leaving the unemployment.

Data released on Tuesday by the Financial Services Authority revealed that banks and building societies had to deal with more than two million complaints between July and December 2009, as a waiver that had allowed them to defer claims relating to high penalty charges was lifted. The figure was more than double than processed in the first half of the year. The steep increase was mainly a result of the backlog of complaints relating to unauthorised bank charges. Complaints were put on hold for over two years as the Office of Fair Trading (OFT) entered a battle with a number of big banks to obtain a final ruling on the legality of the high level of charges imposed on customers who exceeded their overdraft limit. The waiver was lifted in December when the case was resolved, with banks winning a surprise victory over the OFT. Banks are estimated to have made more than £2.6 billion a year from unauthorised overdraft charges and might have faced claims of more than £1 billion if had they lost the case.

Blame for the "financial and economic crisis" in the UK has been attributed by the Organisation for Economic Cooperation and Development (OECD). To private sector wages tumbling further behind inflation more than in any other industrialised territory, excluding Mexico, Turkey and Iceland Research by OECD the Paris-based think tank revealed the gross average wage in Britain rose by 0.5 percent to £33,745, which is calculated to be the equivalent to a 1.6 percent fall after factoring in inflation. The OECD went on to warn that low-salaried workers were also more vulnerable to losing their jobs.

All in the entire financial well being of UK consumers was seen to deteriorate during the first quarter of 2010, following four successive quarters of relative improvement. A spokesperson for the body behind the index explained that the downward trend has been largely due to lower levels of earnings growth and the negative impact of higher levels of inflation on real disposable income. In addition, economic activity remains relatively subdued and there has been only a very slight improvement in the labour market.

UK Households have been helped during the last few months by some recovery in house prices and relatively strong equity market performance, but the prospect of cuts in public spending and increases in taxation following the election are expected to add further to the pressures facing households.

More evidence of a lack of confidence among UK consumers was an announcement from the British Retail Consortium (BRC) of a sharp fall in UK retail sales for the month of April.

According to the BRC, the total value of sales fell by 0.2% in April on an annual basis, while the like-for-like drop was 2.3%, making for the steepest fall since December 2008.

Again, the downturn could be attributed to uncertainty which surrounded the general election as well as the timing of Easter.

Broadband provider TalkTalk Telecom have announced their plans to target rapid customer growth in 2010, after it successfully boosted its new customer base by 144,000 in the final quarter of its year to March. In its first trading update since demerging from Carphone, TalkTalk credited their customer growth to the firm’s appeal as a straightforward broadband service provider and to the success of high-profile campaigns. However TalkTalk has ruled out the likelihood of rivaling Virgin Media and BT by buildings its own fibre optic cable to. Meanwhile, British Sky Broadcasting and Virgin Media have been seeking to encourage more new customers through bundling telecom and TV services.

A new company that has been formed after the T-Mobile and Orange’s UK merger has been named Everything Everywhere.

In a statement issued on Tuesday Deutsche Telekom and France Telecom, announced the name, along with a plan to launch a "new assault" on the UK business market. Orange and T-Mobile will retain their distinct brands, with their own shops, campaigns, pricing and service centres.

The Orange and T-Mobile brands have 713 high street stores between them. Orange is the larger brand of the two, with 17.3 million customers to T-Mobile’s 13 million. Orange also brings with it 863,000 fixed-line broadband customers.

Doubts about the strategy of both British Airways and the Unite union began to emerge as the two sides squared up for the three weeks of strikes the airline’s cabin crew have threatened from next Tuesday.

Industry analysts began to state their doubts and fears about the length of the threatened stoppages, and concern about how long it would take to restore relations between management and staff. Strong backing was given to Mr Walsh’s determination to lower costs permanently at the loss-making airline, although none wished to be publicly identified. But it is clear that both the BA chief and his counterparts at Unite are about to enter the most difficult phase of a dispute that has lasted more than a year

There were signs of a growing Eurozone backlash arising against the outgoing (and incoming) UK government for refusing to take part in the eurozone’s €750bn rescue plan. So strong was the reaction that a senior French policymaker was heard to suggest that it may cause Europe to think hard about coming to the UK’s help in a sterling crisis.

Analysts pointed to a “crack in the sign of strong unity in Brussels as, with astonishing insensitivity for the dramatic situation, Britain coolly declared that the crisis was a problem for the Eurozone, as if the crisis would make a point of avoiding the UK.” In the wake of the eurozone rescue deal, there is a view in government circles that speculators might turn their attentions to sterling,

Meanwhile a warning has emerged among some leading global financial experts that that the European debt crisis posed the biggest threat to the US economy, despite some recent relatively upbeat assessment of the US financial recovery.

Gold on Wednesday traded near record prices amid investor concerns that the massive rescue plan for indebted eurozone states will hit currencies. Gold prices hit record highs in Europe amid volatile financial markets. Spot gold in London surged to above $1,230 a troy ounce, exceeding the record set in December last year. Gold prices in euro terms also hit a fresh all-time high of €969 an ounce in late London trading, up almost 26% since the start of the year.

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Tags: Bank, Bank Charges, Banking, British airways, British Economy, British Retail Consortium, British Sky Broadcasting, Carphone Warehouse, Conservative, David Cameron, Economics, Economy, Employment, Financial News, Financial Services Authority, George Osborne, Gold, Liberal Democrats, Money, Nick Clegg, Office of Fair Trading, Orange, Overdraft Charges, T-Mobile, TalkTalk, UK Banks, UK consumers, UK Economy, UK government, UK Recession, unemployed, Virgin Media

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

For the first time in many a long while, Prime Minister Gordon Brown has been drawn to admit that he would have no option but to make some public spending cuts, and that they would be both considerable and imminent.

Brown, addressing a meeting of trade unionists announced that the government would have no option but to “cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets”. He went on to admit that a new pay austerity for the UK was on its way, hinting strongly that “realistic” public sector pay settlements were a must.

The Prime Minister’s comments were made at a meeting to the Trade Unions Council (TUC) held in Liverpool were obviously designed to pre-empt the forthcoming pre-Budget report due to be released in the autumn. The report will set out Labour’s plans for priority public spending and any cuts. Full details of departmental spending from 2011 are not expected to be included.

The suggestion that there me be public spending cuts is certainly radical, as Brown has steadfastly refused to admit the need for cuts in any form till now,

Not slow to take political advantage of Brown’s apparent turnaround was shadow chancellor George Osborne, who described the PM’s statement a “complete capitulation”.

The prime minister claimed the recession had thrown up some fairly major challenges and on each occasion the government had made the right choice: whether propping up the banks or cutting taxes to boost the economy.

Chancellor Alasdair Darling is expected to use the pre-Budget report to try to identify net cuts to accelerate the government’s plan to halve the deficit to 5.5 per cent by 2014. Never slow to criticise, Bank of England governor Mervyn King, says that the deficit cuts will be too timid.

Summing up his speech in Liverpool, Brown admitted that Britain was only just on the road to recovery – and conditions were “fragile”. He defended his governments over the last year by stating that they had rescued the banking system, saved up to half a million jobs and taken specific actions to help not business and home owners.

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Tags: Bank, Banking, British Economy, British Pound, Budget, Credit Crunch, Economics, Economy, Financial News, George Osborne, Gordon Brown, Money, pre-Budget report, Prime Minister, Recession, spending cuts, Tax, Trade Unions Council, TUC, UK Banks, UK Economy, UK government, UK Recession

Chairman of the Financial Services Authority (FSA) Lord Turner revealed during a recent interview that in order to prevent excessive bonus payments he consider imposing a tax on banks.

The FSA chairman also stated that the financial services sector had "grown beyond a socially reasonable size". Lord Turner did hasten to add however that it was not the role of the FSA to set out any new government policy and that taxation was a matter for the Treasury.

In the past, the FSA have been the subject of criticism regarding their regulations on bonuses. Lord Turner is apparently concerned about the return to “business as usual” syndrome in the banking sector, suggesting that new taxes may be necessary to curb excessive profits and pay in the financial sector.

Meanwhile, newly recruited bankers at the Royal Bank of Scotland are liable to be feeling the pinch when pension time comes around. They are set to become the guinea pigs of a pension’s cutbacks scheme proposed by the U.K. bank. The scheme will be based on a lower-bonus, higher-base-salary recruitment environment in the City of London.

According to a recent poll, UK business leaders are more upbeat about the prospects of economic recovery than at any time since the recession began,

the survey of leading businessmen found that 38% see signs of recovery in their sector, up from 33% last month and the highest figure since the "green shoots" index was launched.

The bad news for hard pressed PM Gordon Brown was that the survey found only 18% of business leaders are confident in his ability, while 19% were impressed by Chancellor Alistair Darling’s efforts to date. Tory leader David Cameron got the thumbs up from 53% of the participants with shadow chancellor George Osborne polling 41%.

A group of distressed debt investors, which bought debt claims against the Yorkshire power station, have exercised an option to take control of one of Britain’s biggest coal-fired plants, at Eggborough, one of EDF Energy’s power stations which could eventually be sold on for up to £1 billion.

Japanese computer maker Fujitsu Ltd. said Wednesday it plans to axe 1,200 jobs in its British IT services unit because of lower than expected revenues.

Fujitsu, who employs around 12,500 workers in the UK, explained that the cuts were necessary to ensure the company remained competitive during the current downturn.

Following the 2005 restructuring of British Energy, creditors have the right to take ownership of the plant in March 2010 with the option only being exercisable till the end of this month.

Shares in the world’s largest advertising company WPP Plc fell 1.4 percent, to 512.5 pence after the company reported a 48 percent drop in first-half profit to £108.4 million blaming the pounds rise against the dollar and increased finance costs.

The FTSE 100 moved lower on Thursday following a weaker opening on Wall Street, falling 21.23 points to finish the day on 4,869.35, while the FTSE 250 continued to reverse, dropping a further 81.88 points to close on 8,701.33

As short-term UK government bond yields fell to record lows, Sterling dropped to a six-week low against the dollar and a 10-week low against the Euro.

• Pound/US dollar 1.6239
• Pound/Euro 1.1351
• Pound/Japanese Yen 151.8974
• Pound/Swiss Franc 1.7173

On Wall Street, markets continued to drift, with the Dow Jones Industrial Average closing up 23.5 points while the NASDAQ lost 3.55 points to close on 2,020.88.

Angela Merkel, German chancellor, has thrown her considerable (political) weight behind calls from French president Nicolas Sarkozy for tougher international curbs on bankers’ bonuses, in anticipation of next month’s G20 summit to be held in Pittsburgh, USA.

Ms Merkel, who said large bonuses encouraged excessive risk-taking, will meet Mr. Sarkozy to discuss the French plans, which Mr. Sarkozy presented to bankers on Tuesday. Plans that include deferring at least half of a year’s bonus and paying it over the three subsequent years, subject to performance criteria

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Tags: Alistair Darling, Banking, British Economy, British Energy, Currency, David Cameron, Economy, Employment, Financial News, Financial Services Authority, FSA, FTSE, Fujitsu, George Osborne, Gordon Brown, Lord Turner, Money Markets, NASDAQ, Nicolas Sarkozy, Recession, Royal Bank of Scotland, Stock Markets, UK Banks, UK business, UK Economy, UK Recession, Wall Street

Based on the assumption that a new broom will always sweep clean, and the UK financial system is certainly in need of a very large broom, comes the announcement from Shadow Chancellor” George Osborne, who is also active as financial spokesman for the Conservative Party, that the first steps that they would take if and probably when the Conservatives get into power is to dismantle Britain’s system of financial regulation that proved to be highly unsuccessful and return power to the Bank of England, which they claim would avoid a repeat of the current banking crisis.

The Financial Services Authority was established only ten years ago by Gordon Brown when he was UK Chancellor of the Exchequer to act as supervisory role in handling the affairs of the major banks, building societies as well as other major UK financial institutions. It would be a brave man indeed who would say that the FSA covered them in glory during this period, and it would be understandable that David Cameron and George Osborne would like to see the Authority dispatched to the history books.

What Cameron and Osborne would like to see is a return to overall authority of the UK financial system by the "old lady of Threadneedle Street" otherwise known as the Bank of England? Bank Governor, Mervin King is reportedly acting a little coy on the suggestion, but the general impression is that he would be as pleased as anyone to see the FSA disappear of into the sunset.

According to a brief manifesto presented by Messrs. Cameron and Osborne at a Press Conference on Sunday, in addition to the BOE, a Consumer Protection Agency would be formed with the role of handling some of the day to day problems in establishing the new framework.

The Conservatives hope that a new and more powerful central bank would be more capable of monitoring the health of the financial system, as well as setting capital requirements and leverage limits for the banks, and prevent the risk taking, profit hunting and bonus scalping policies of the past that brought the UK banking system to its knees. Only time will tell.

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Tags: Bank of England, British Economy, Chancellor of the Exchequer, Conservative party, Conservatives, Credit Crunch, Financial Services Authority, FSA, George Osborne, Gordon Brown, Money, Recession, UK Banks, UK financial, UK Recession