As the dust finally begins to settle on what has been the UK’s toughest recession since World War Two, facts and figures show that the epi-center of London chic survived and possibly even prospered while High Street shopping not only in Britain but around the World took a major dive.

According to a recent comprehensive survey of the world’s top shopping areas, London’s most expensive shopping streets have not only withstood the economic downturn better than almost all other rivals, but have emerged form it in very good shape.

Some of the highly exclusive retail stores situated in New Bond Street were happily absorbing rental increase of around 7 per cent in the year ending June 2008, one of the worst years in shopping history. At the same time sharp decreases in rental income were reported on many of the other famous centres of shopping for the privileged, with no less than New York’s Fifth Avenue featuring pretty high up on the list.

Property consultants speak in hallowed tones of the continued attraction of the West End of London for local and international shoppers. An attraction that made sure that rents remained resilient despite weakness in the rest of the UK.

In general, UK’s high street property income has witnessed a decline of 2.4 per cent during the year ending June. 2009

Despite the downturn in the economy and the retail sector in general, London’s West End continues to perform well and rental outlets remain almost impossible to find in such famous shopping institutions as Oxford Street, Regent Street and New Bond Street.

During the last six months, several internationally recognized retailers have opened their doors in Central London, among them the Sting, Pull and Bear, Missoni, Anthropologie, Kronometry and True Religion.

Despite London’s rises to supremacy as a key shopping centre for the rich and famous, Fifth Avenue remains the world’s most expensive street, where retailers can expect to pay an annual £1,000 per sq ft per year. Paris’s Avenue des Champs-Elysées remains Europe’s most expensive retail address, while Hong Kong’s Causeway Bay the most expensive in the Asia Pacific region.

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Tags: Anthropologie, Avenue des Champs-Elys, British Economy, British Pound, Causeway Bay, Credit Crunch, Economic Downturn, Economics, Economy, Fifth Avenue, Financial News, Global Credit Crisis, High Street shopping, Kronometry, Missoni, Money, New Bond Street, Oxford Street, Pull and Bear, Recession, Regent Street, Retail, Sting, True Religion, UK Banks, UK Economy, UK Recession, West End

The Bank of England have announced that they will be holding interest rates firm for the sixth consecutive month, at a record low of 0.5%.

The bank also announced that their quantitative easing program is not to be expanded, remaining at £175 billion.

The ownership saga at National Express seems to be drawing to a close, after the company reached an agreement to allow a consortium comprising its largest shareholder to examine its books. The next step is likely to be a £765 million takeover of the group, which operates both bus and rail networks in the UK. The successful bidders are a consortium headed by Spain’s Cosmen family, who already own 18.5 per cent of the group, private equity firm CVC Capital Group and Stagecoach who operate a similar facility in the UK. The consortium has apparently raised their cash offer to 500 pence per share from 450 pence, which had been magnanimously rejected by the board.

Shareholders in Cadbury are apparently not being coy, and are pressing Kraft to raise their takeover bid for the UK confectionery group and as soon as possible.

Reports have it that some of Cadbury’s principal shareholders are anxious to see the deal go through, as they are afraid to see any takeover become a long drawn out issue. A spokesman for one of Cadbury’s largest shareholders expressed their fears by saying: “The longer Kraft dithers, the more chance of a counter-bidder appearing on the scene."

On the FTSE, the U.K.’s third-largest oil and natural gas company, BG Group Plc, saw their share value rise by 3.8 percent after announcing that the Guara oil field, of which they hold 30 percent, has been found to contain between one to two billion barrels of oil.

Stock in the Hilton Food Group Plc climbed two percent, to 192.5 pence in anticipation of positive half year results. The U.K. meat-packer works with most leading supermarket chains including Tesco Plc. Home Retail Group Plc, owners of the Argos store chain is also scheduled to release their second quarter trading statement. The stock rose 0.6 percent, to 329.7 pence in anticipation of promising results. Not looking quite so promising was the outlook for Kesa Electricals Plc who owns the Comet appliance stores group. Their stock fell 0.9 percent to 151.6 pence pre-release of their first-quarter interim management statement

The FTSE 100 index failed to maintain its above 5,000 points status on a flat days trading on Thursday. The index closed down 16.62 points at 4,987.68

The FTSE 250’s rise was checked yesterday, with the index falling 11.34 points to close on 9,125.71

The pound rose against the Euro for the first time in almost a week, as well as continuing to improve against the dollar, and the other major currencies.

• Pound/US dollar 1.669
• Pound/Euro 1.1426
• Pound/Japanese Yen 152.8564
• Pound/Swiss Franc 1.7312

The Dow Jones Industrial Average continued to rise, up 70.29 points to 9617.51 while the NASDAQ Composite also rose by 20.31 points to close on 2080.7.

General Motors (GM) have finally reached a decision regarding the European based Opel and Vauxhall plants. As expected the successful bidder is the Canadian car parts manufacturer Magna

German Chancellor Angela Merkel was reported to be "very pleased" about GMs decision, especially as Magna, who are Russia’s Sberbank, has made it obvious that all four German plants will remain open.

However the long term future of Vauxhall and its 5,500 UK workers still remains uncertain.

Oil prices have risen above $72 a barrel following Opec’s decision not to change the amount of oil being produced by its members.

US light sweet crude rose 85 cents to $72.16 in Asian trading, as the euro continued to gain ground against the US dollar in currency markets.

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Tags: Angela Merkel, Argos, Bank, Bank of England, Banking, BG Group Plc, British Economy, British Pound, Cadbury, Currency, CVC Capital Group, Dow Jones, Economy, Employment, Financial News, FTSE, General Motors, Global Credit Crisis, Guara oil field, Hilton Food Group Plc, Interest Rates, Kesa Electricals Plc, Kraft, Magna, Money Markets, NASDAQ, National Express, Opel, Recession, Sberbank, Stagecoach, Stock Markets, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, Vauxhall

The Financial Services Authority has banned Royal Bank of Scotland from making repayments on bonds worth £920 million pounds next month. They are doing so as a result of concerns that the partly nationalised bank is too reliant on billions of pounds of taxpayer’s money to remain afloat. RBS is in advanced talks with the European Commission (EC) to decide the nature of fiscal restraints to be imposed on the bank in return for its government funding. Among other measures, the EC is likely to force the bank to cut its share in the small-business banking market.

The British Chambers of Commerce (BCC) has predicted that the UK economy should bounce back next year. They did hasten to add that the risk of the economy relapsing still remains high. The BCC announced in a recent statement that they expect the economy to grow 1.1% in 2010, almost double their previous forecast of 0.6% made as recently as June. According the report, unemployment will peak at around 3 million, fewer than the 3.2 million forecast previously.

At a weekend meeting of the G20 in London, finance ministers representing the world’s most powerful economies have reached agreement on a series of measures designed to regulate the global banking system.

The ministers are interested in implementing a system that will reward long-term performance rather than short-term risk-taking among the global banking community, without reaching agreement on specific limits on the amounts individual bankers get paid.

Britain, the US and Canada were reported to be against the proposal, which is due for further discussion at the summit of G20 leaders in Pittsburgh, Pennsylvania later this month.

The UK economy should bounce back next year but the risk of a relapse remains high, a business group has warned.

The British Chambers of Commerce expects the economy to grow 1.1% in 2010, almost double its previous forecast of 0.6% made in June.

It says unemployment will peak at just above 3 million, fewer than the 3.2 million forecast previously.

However, it said that sustaining the recovery would prove challenging given the UK’s debt burden.

Vodafone and O2 have both tabled bids of about £3.5 billion to buy T-Mobile UK from owner Deutsche Telecom, with a successful bid from either firm liable to make them the largest mobile phone operator in the UK.

High street retail chain, Wilkinsons have succeeded in filling a large part of the vacuum left when Woolworths closed their doors towards the end of 2008. The company reported annual sales up by 6.2 percent to 1.4 billion pounds in the year to the end of January, a record for the family-owned group. Wilkinsons have announced their plans for expansion, in which they will open 15 new outlets by 2009, as they drive to reach a target of at least 500 outlets by 2012.

The U.K.’s largest recruitment company Hays Plc retreated 3.7 percent to 96.1 pence on the announcement that their full-year profit had declined by 44 percent due to reduced hiring in the recession.

The U.K. developer of software for William Hill Plc’s Web-gambling site Playtech Ltd announced a 38% increase on pre-tax profits. Their shares rose in value by 13.25 pence to 346 on the news.

Shares in Premier Farnell Plc the U.K. electronic and industrial products distributor dropped 7.2 percent to 151.3 pence after they reported earnings and turnover and profit that fell behind analysts’ estimates.

The FTSE 100 index ended a further 54.95 points higher at 4,851.70. The index has now risen by 38 percent from its six-year low in early March, on hopes that the worst of the global recession is behind us in the UK.

Meanwhile the FTSE 250 rose again on Friday, up 141.05 points to close on 8,745.85.

The pound rose against the dollar, yen and Swiss franc, yet continued to falter against the Euro.

• Pound/US dollar 1.6398
• Pound/Euro 1.1449
• Pound/Japanese Yen 152.6881
• Pound/Swiss Franc 1.7361

The number of US workers claiming unemployment benefits has fallen last week but continued to be a cause for concern, with fears that unemployment figures will remain high even after the US moves out of recession.

New jobless claims fell by 4,000 to 570,000; however the number of workers continuing to claim unemployment benefits rose by 92,000 to 6.23 million.

Wall Street on Friday saw the markets continuing to rise, with the Dow Jones Industrial Average up 99.66 points to close on 9441.27 while the NASDAQ Composite index hurdled the 2,000 mark yet again, closing for the weekend on 2018.78.

The European Central Bank (ECB) remain cautious on the state of economy in the 16 nation Eurozone, forecasting that growth would be very gradual and is capable of being thrown into reverse again.

Evidence of the ECB’s continued wariness, was the news that they had left their main interest rate unchanged for the fourth consecutive month at 1 per cent, which is a record low.

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Tags: Bank, Banking, British Chambers of Commerce, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economy, Employment, European Central Bank, European Commission, Financial News, Financial Services Authority, FSA, FTSE, Global Credit Crisis, Money Markets, NASDAQ, O2, Playtech Ltd, Premier Farnell Plc, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, T-Mobile, UK Banks, UK Economy, UK government, UK Recession, Unemployment, Vodafone, Wall Street, Wilkinsons, William Hill, Woolworths

The news released on Friday that the U.K. economy had contracted less than was previously estimated in the second quarter raised a few eyebrows. Recoveries in the manufacturing, auto services industries as well as increased and government spending helped mitigate the biggest slump in business investment for close to a quarter of a century.

In truth, the Gross domestic product still fell, but by less than 0.7 percent, which was 0.1 percent less than estimated, according to a review issued by the Office for National Statistics. The review also stated that the economy had shrunk by 5.5 percent for the twelve month period, the highest since records began in 1955.

It was also revealed on Friday that UK business investment has fallen by more than ten percent in the second quarter of 2009, and by 18 percent annually, which again is the largest fall in its category since 1966. Both of these less than inspiring sets of statistics are playing a major part in forcing the pound down to its lowest level for the last two months.

The Icelandic parliament has voted in favour of compensating the governments of the UK and the Netherlands more than £3 billion for those who lost money in the Icelandic online bank Icesave

The so-called Icesave bill will reimburse funds paid by the governments to compensate the 400,000 savers who lost their savings when its owner Landsbanki collapsed last year.

The bill has not met with a lot of enthusiasm by the Icelandic people, who fear that their government’s unprecedented attack of conscience might bankrupt their nation.

The deal, agreed way back in June, t was only passed after an amendment was agreed that set various limits to the payments.

Rises in mining and financial stocks helped push the FTSE 100 to its second successive monthly gain. Among the day’s most prominent risers was Lloyds Banking Group up 6.3 per cent to 111 pence. The continuing possibility that the bank will increase its share capital, by reducing its exposure to the government’s Asset Protection Scheme has pushed shares in the bank up by close to 10 percent this week.

Shares in InterContinental Hotels rose 0.5 per cent to 764 pence, driven by reports that an Emirates investment group was interested in its small portfolio of luxury hotels.

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Tags: Asset Protection Scheme, Banking, British Economy, Credit Crunch, Economy, Financial News, FTSE, Global Credit Crisis, Icesave, Investment, Landsbanki, Lloyds Banking Group, Money Management, Money Markets, Office for National Statistics, Recession, Stock Markets, UK Banks, UK business, UK Economy, UK government, UK Recession

For a bank that succeeded in breaking the UK record for corporate losses within a financial year, you would think that the Royal Bank of Scotland Group (RBS) would keep a low profile when it comes to making financial predictions. But not the RBS. And the prediction that they have come up with is nothing less than controversial, as well appearing to be far away from what actually appears to be happening on the UK street.

It appears that a recent survey ordered by the RBS, and paid for by the UK taxpayer, predicts that U.K. house prices will plunge by a further 12.7 percent before reaching rock bottom.

UK properties, which have already plummeted in value by 15 percent since the global economy collapsed in October 2007, to an average of around £220,000, will fall a further £20,000 if RBS’s survey is to be taken seriously.

It goes without saying that the RBS survey contradicts just about every report and survey commissioned during the last quarter, as well as physical evidence showing that the number of mortgage applications is on the increase, as the UK economy slowly but surely pulls itself out of the worst financial downturn the country has seen since World War Two.

According to the Nationwide Building Society, property prices rose for a third consecutive month in July to a fourteen month high, while the highly objective and respected Royal Institution of Chartered Surveyors announced earlier this month that prices will actually increase this year.

In the U.S., where the subprime mortgage collapse actually sparked the global recession, the housing market is already on the increase, with sales of existing homes jumping 7.2 percent in July, to the highest level since August 2007, according to the National Association of Realtors.

The question still remains: Who do you believe?

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Tags: British Pound, Credit Crunch, Economy, Financial News, Global Credit Crisis, Money, Mortgage, Mortgages, National Association of Realtors, Nationwide Building Society, Property Prices, RBS, Recession, Royal Bank of Scotland, Royal Institution of Chartered Surveyors, subprime, U.K. house prices, UK Banks, UK Recession, UK taxpayer

The British pound continues to fall sharply against the dollar as foreign exchange traders predict that the UK economy will continue to lag behind that of the US and the 16-nation Eurozone.

UK short-term bond yields have hit all-time lows as analysts begin to predict that the Bank of England may go as far as to introduce negative interest rates on its deposits in an attempt to encourage lending to the wider economy.

On that piece of stunning news, Two-year gilt yields, which have an inverse relationship with price, fell to 0.83 per cent – the lowest level since records began. Commercial banks have begun to transfer cash deposits at the Bank of England into gilts. Mervyn King, governor of the BoE has strongly hinted that he is considering charging banks for holding deposits at the central bank because he fears the quantitative easing initiative is being undermined by commercial bank’s lake of desire to circulate money into the economy through increased lending.

According to information issued by the Office for National Statistics (ONS) one in six UK families have at least one unemployed, making for the highest rate since 1999. The number of households where at least one person is unemployed reached 3.3 million in the second quarter of 2009, a rise of almost a quarter of a million from the previous year, with the north-east of England being the hardest hit.

Lord Mandelson has once again displayed his desire to put the UK taxpayer’s money where his mouth is, by announcing that he is willing to invest heavily to ensure commit taxpayers’ money to, in exchange the long-term survival of Vauxhall, about to be sold off by General Motors, the American car group who are in liquidation.

The Business Secretary has again reiterated his pledge of financial help, around £500 million to any one of the three parties interested in buying the UK branch, and save its 5,500 jobs.

The minister is insistent that the party that receives taxpayer funds will be the one that produces a business plan protecting most of the Vauxhall workforce for the long term.

On the FTSE yesterday, it was reported that the U.K.’s mortgage lender, Lloyds Banking Group Plc may have no option but to write off £500 million on loans made to Admiral Taverns Ltd. The news did not inspire the market and their stock fell 0.1 percent, to 107.8 pence.

The FTSE 100 had a flat day’s trading, falling 26.22 points to 4,890.58, while the FTSE 250 took a sudden reverse, dropping 77.60 points to close on 8,783.21

Sterling continued to weaken on Wednesday’s trading, on reports that it was being hindered by poor financial results in the UK.

• Pound/US dollar 1.6228
• Pound/Euro 1.1391
• Pound/Japanese Yen 151.8732
• Pound/Swiss Franc 1.7324

In the US, the latest indications that the state of the world’s largest economy is growing increasingly positive came with the news that sales of durable goods and new home sales both soared last month, Durable goods orders were lifted by the popularity of the government’s "cash for clunkers" car scrappage scheme, helping US car orders to rise 0.9%, in July.

At the same time, the annual rate of sales of new US homes rose 9.6% last month, the biggest rise in sales of new houses since September last year.

On Wall Street, markets drifted from the morning’s highs during the afternoon, with the Dow Jones Industrial Average and the NASDAQ Composite index both gaining a further 0.3 per cent to 9,539.29 and 2,024.23, respectively.

The Bank of Japan announced on Wednesday that the volume of their exports rose by 2.3 per cent in July from June as stronger demand from Asia and replenishment of inventories boosted manufacturers.

The data suggest that Japan may enjoy another quarter of respectable economic growth from July to September, after last week’s report that output rose at an annualized rate of 3.7 per cent in the April-June quarter

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Tags: Admiral Taverns Ltd, Bank of England, Bank of Japan, Banking, British Economy, British Pound, cash for clunkers, Dow Jones, Durable goods, Economy, Financial News, FTSE, General Motors, Global Credit Crisis, Lloyds, Loans, Lord Mandelson, Mervyn King, Money, Money Markets, NASDAQ, Office for National Statistics, Recession, Sterling, Stock Markets, UK Banks, UK Economy, UK Recession, Vauxhall, Wall Street

How many hints do we need before the penny drops and the UK public can finally reach the conclusion that the recession is finally over? The latest one comes from the Institute of Chartered Accountants who in a report released last week announced that confidence among business professionals has surged form a negative status to a positive one. Based on their findings, the institute predicts the UK economy will grow by 0.5% in the third quarter of 2009, a reverse on the 0.8% negative growth that the UK economy recorded during the second quarter of the year.

UK building societies continue to be under scrutiny, with the news that possibly five of the largest could be amalgamating over the next couple of years. The number of building societies reporting losses for 2008 is reportedly causing concern in Whitehall, and the latest annual review of performance released shows that since the summer of 2008, seven mergers have already taken place, out of framework of 59 building societies.

Seven months after the U.K. government made a commitment to offer up to £2 billion of loan guarantees for car makers and their suppliers, agreements have yet to be signed. According to the Department for Business, Innovation and Skills, car makers and suppliers, the aid was offered as car sales collapsed during the recession, declining for 14 consecutive months through June.

The Thames Valley property market, once regarded as the UK’s equivalent to Silicon Valley, look to be heading for their lowest rental incomes on record, as the recession continues to hammer the technology industries.

On the FTSE yesterday rising metals prices pushed mining stocks. Kazakhmys led the sector, gaining 5.8 per cent to 980 pence, while compatriot ENRC was up 5.3 per cent to 896½ pence.

Punch Taverns added 4.1 per cent to 107½ pence on strong volume in anticipation a positive trading update due to be released this morning. Analysts announced that they expect trading in the company to have stabilised and that profit pressures are on the wane.

The FTSE 100 was up 0.9 per cent, rising 45.34 points to 4,896.23 for its highest close since early October.

Moving forward at the speed of an express train, the FTSE 250 increased by a further 1.76 % or 153.06 points to close on 8,831.89

Currency markets continued to remain stable on Monday’s trading

• Pound/US dollar 1.6409
• Pound/Euro 1.1481
• Pound/Japanese Yen 154.7475
• Pound/Swiss Franc 1.7419

US stocks slowed down after four sessions of gains on Monday after a warning over future bank losses saw the markets erase early gains.

The NASDAQ Composite index closed down a mere 2.92 points at 2,017.98, while the Dow Jones Industrial Average found fractional gains to 9,509.28

On Friday General Motors eventually postponed their much awaited decision on whether Canada’s Magna International would be the winning bidder for its Opel brand.

Magna, the world’s third largest auto parts manufacturer, in conjunction with the Savings Bank of the Russian Federation, who trade under the title Sberbank, had submitted a joint bid in July to acquire a 55 percent stake in Opel, the troubled financially strapped group’s European division. Brussels-based financial investor RHJ International is the rival bidder.

At their meeting Friday, GM’s board of directors failed to come to a decision whether to accept the winning bid by the Canadian auto company and the Russian bank.

This week French banks announced their intention to lead the way in offering to reinforce rules ¬governing the payment and disclosure of bonuses to their officials. In meetings with Nicolas Sarkozy, president, and Christine Lagarde, the finance minister, bank officials announced the concessions, which will strengthen a code on pay agreed by French banks in February, Designed to curb excessive risk-taking. The announcement, will be undoubtedly be used to bolster France’s position at the forthcoming G20 meeting to be held in Pittsburgh next month.

Oil prices have risen to 10-month highs on fresh signs that the global economic recovery is gathering pace.

US light crude ended Monday up 48 cents to $74.37 a barrel, while London’s Brent crude advanced seven cents to finish at $74.26

The rise came after official figures showed that new industrial orders in the 16 nations that use the Euro rose more than expected in June.

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Tags: Banking, British Economy, British Pound, Christine Lagarde, Currency, Department for Business Innovation and Skills, Economy, ENRC, Finance, Financial News, FTSE, G20, General Motors, Global Credit Crisis, GM, Institute of Chartered Accountants, Kazakhmys, Magna, Money, Money Markets, NASDAQ, Nicolas Sarkozy, Opel, Punch Taverns, Recession, Savings Bank of the Russian Federation, Silicon Valley, Stock Markets, U.K. government, UK Banks, UK Economy, UK Recession, US stocks

There were some glum faces yesterday at the Office for National Statistics on the announcement that consumer price inflation remained unchanged in July at 1.8 per cent in July, after forecasts that it would drop sharply for the month to 1.5 per cent.

Hopes were that after the Bank of England had extended its quantitative easing programme by £50 billion taking it up to £175 billion, that inflation figures would react accordingly. The fact that they didn’t points to signs that the recession is deeper than analysts have been calling till now. During the last 16 months inflation has proved higher than analysts predicted on no less than 12 occasions.

The Building Societies Association (BSA), the body appointed to represent Britain’s mutually-owned lenders, has issued a complaint to Europe’s anti-trust regulator. The complaint is regarding a planned restructuring of state-owned bank Northern Rock, that the organization claims would distort competition in the mortgage market.

BSA has requested from the European Commission to ensure that Northern Rock be made to pay financial penalties if the proposed overhaul goes ahead.

The Commission is due to deliver its verdict in the autumn, with a negative verdict liable to cause a major setback in the British government’s efforts to restore Northern Rock to financial health and sell it back into private ownership

Spiralling costs seems to be hitting home everywhere, with the news that the cost of running the Houses of Parliament has reached almost half a billion pounds in 2008-9 being another example. The costs of operating the UK seat of government is proving to be an increasingly expensive pastime, with costs up

more than £12 million from 2008 arriving at close to £400 million, a sum that includes salaries, allowances and pensions for MPs and their administrative staff. One the upside, the costs of maintaining the House of Lords dropped by almost a third from £152.5 million to £106.5 million. There must be a message there, somewhere.

The news that the Royal Bank of Scotland Group PLC is close to putting its asset management business up for sale, will be good news for most, but not for those who bank at Coutts, the private bank owned by RBS, renowned as an adviser to the Queen, that will be included in the package and may well fall into foreign hands.

On the FTSE, shares in African Minerals, the iron ore mining company, managed by Regal Petroleum founder Frank Timis, rose 1.6 per cent to 312 pence on news that the company had embarked on takeover talks with Eurasian Natural Resources Corporation (ENRC).

Shares in the Sierra Leone-based group have risen 13-fold this year amid speculation of interest from several parties including ENRC.

In the retail sector Tesco’s shares were the weakest, falling 0.5 per cent to 363 pence after industry data for July showed a poorer month.

Credit checking agency Experian inched 0.4 per cent higher to 517 ½ pence after suggestions from the US Federal Reserve that lending supply was improving.

The FTSE 100 made up for most of yesterday’s reverses rising 40.77 points to close on 4685.78. The FTSE 250 recovered after a major collapse on Monday, rising 80.39 points to close on 8,354.48

According the BOE Governor Mervyn King the pound’s biggest five-month rally in 24 years may be stuttering to an end, largely due to the Bank’s flooding the U.K. economy with newly printed cash.

Sterling soared in value by 23.5 percent from March 10 to Aug. 5 on speculation U.K. assets would rise as the worst financial crisis in six decades eased. The rally appeared to be petering out and the pound has slumped 2.6 percent since Aug. 5 to last week’s $1.6543 close. However on Tuesday, the pound improved a little on figures showing inflation proving far more resistant to recession than economists had expected.

• Pound/US dollar 1.6353
• Pound/Euro 1.169
• Pound/Japanese Yen 156.3554
• Pound/Swiss Franc 1.777

In the US, news that construction starts of new homes had fallen in July, after three straight months of increases caused no little construction.

The number of new properties sold for last month fell 1% to an annual rate of 581,000.

US wholesale prices also recorded an unexpectedly large fall last month, down 0.9% from June, and by 6.8% from July 2008.

The Dow Jones Industrial Average recovered part of the previous day’s losses rising 82.6 points t to close on 9217.94. The NASDAQ moved up 25.08 points to close on 1955.92.

The ongoing weak demand for personal computers and printer ink has seen Hewlett-Packard (HP) Revenue fell by 2% to $27.5 billion, not encouraging but better than Wall Street estimates.

Like most technology firms, HP has suffered in the global downturn as consumers trim their spending.

Meanwhile that perennial optimist the International Monetary Fund (IMF) has woken up to remind us that the world has indeed begun to recover from recession, adding that the process will not be simple.

A chief economist for the IMF warned that the recession had "left deep scars, which will affect both supply and demand for many years to come"

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Tags: Bank of England, Banking, British Economy, British government, British Pound, BSA, Building Societies Association, Coutts, Credit Crunch, Currency, Dow Jones, Economics, Economy, Eurasian Natural Resources Corporation, European Commission, Experian, Financial News, FTSE, Global Credit Crisis, Hewlett-Packard, House of Lords, Houses of Parliament, HP, IMF, Inflation, International Monetary Fund, Mervyn King, Money, Money Markets, mortgage market, Mortgages, NASDAQ, Northern Rock, Office for National Statistics, RBS, Recession, Retail, Royal Bank of Scotland, Stock Markets, Stocks and shares, Tesco, Tesco's, UK Banks, UK Economy, UK government, UK Recession, US Federal Reserve, Wall Street

U.K. home sellers lowered asking prices in August by the most in eight months as banks continued their credit squeeze.

The average cost of a home fell 2.2 percent to around £225,000 after gaining 0.6 percent in July. Prices in London dropped 3.8 percent, while in the East Midlands the asking price by sellers fell by the highest level, averaging 9 percent.

The number of new homes on the market was reported to be almost half of what they were before the financial crisis began. ,

Further evidence that the traditional UK high street banks catering manly to the private individual is about to be come scarcer over the coming years was provided in a recently published report. The reports points out that the major British banking groups are considering closing down a third of their branches in a drive to reduce cost and restore profitability. During the recession, retail banks lost money in droves as the public drew in their belts and in future retail banks will not be able enjoy profits personal loans and overdraft that they did during the so called “ boom years”..

Despite all the hooing and hahing on the subject, bonuses for the top directors of major UK companies remained at an unacceptably high level in 2008, showing that the trend is far away from disappearing, despite the country still being in the depths of a recession, and companies that succeed in making profits still reducing their dividends. A recent report showed that some of Britain’s largest companies were still voting to pay their senior executives around half of the bonuses they were receiving before the financial downturn began, around two years ago. A fact that has not been well received by company investors.

Bradford & Bingley plc has released its interim financial report, covering the first six months of the year and the figures are less than inspiring.

The company made pre-tax losses of £160 million, and bucking the UK trend they were substantially worse than the same period in 2008, when the bank succeeded in only losing £26.7 million.

As the financial crisis hit its peak late last year, Bradford & Bingley was nationalised, and has since been sold of to Spanish banking giant Banco Santander.

British Sky Broadcasting has expressed their “serious concerns” regarding the recent actions of the Project Canvas trust. Project Canvas is behind the plan to establish an internet-connected successor to Freeview, the free-to-air digital TV service that will compete with Sky.

Since February, the Trust has been conducting an assessment to ascertain whether Canvas, comprising the partnership of BBC with ITV, BT and Five, is doing justice to UK licence fee payers. Canvas was intended to be the blue-print for assessing and progressing on-demand video from the PC to the television. The introduction of a smarter set-top box would strengthen the competition from free-to-air broadcasting for pay-TV operators such as Sky and Virgin Media.

Trading was slow in the city with the only rising star being GlaxoSmithKline who gained 0.8 per cent to close on 1167½ pence after analysts advised investors to buy shares in anticipation of the news that the company’s long awaited cervical cancer vaccine is likely to win US regulatory approval early next month.

Also in the news were the world’s largest water company Veolia Environment SA who were rumoured to be selling £500 million-pound stake in its U.K. water business to either the Blackstone Group LP or the Goldman Sachs. On the news, Veolia shares fell 2.5 percent to 22.74 pence.

The FTSE 100 continued to indicate that profit taking was rife, dropping 68.96, points to close on 4645.01. The FTSE 250 collapsed by 2.84 percent on the day, meaning a 241.74 point fall to close on 8,274.09.

Sterling had another mixed day on pre-weekend trading yesterday’s markets, falling against the major currencies, apart from the Japanese Yen.

• Pound/US dollar 1.6386
• Pound/Euro 1.1606
• Pound/Japanese Yen 155.4618
• Pound/Swiss Franc 1.7624

US stocks suffered their worst day since the beginning of July on Monday after the global share sell-off caused the market to fall. Concerns over the health of the US consumer were at the forefront of investors’ minds after last week’s weak retail sales and consumer confidence figures. .

The Dow Jones Industrial Average plummeted 186.06 points on an edgy market to close on 9135.34 with the NASDAQ faring little better down 54.68 points to close on 1930.84. .

Japan’s economy grew by 0.9% in the April-to-June quarter meaning that the country has joined the fast growing list of industrialised nations to come out of recession.

The rise has been attributed to the Japanese Government’s huge stimulus package. The test for the Japanese economy will come when their stimulus package will come to an end and the economy will require standing alone.

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Tags: Banking, Bradford & Bingley, British Economy, British Sky Broadcasting, Credit Crunch, Dow Jones, Economy, Financial News, FTSE, GlaxoSmithKline, Global Credit Crisis, Goldman Sachs, Money, Money Markets, Mortgages, NASDAQ, Project Canvas, Property Prices, Recession, Santander, UK Banks, UK Banks, UK Recession, Veolia Environment SA, Virgin Media

One of the most painful aspects of the long drawn out economic slump is the effects that it has had on UK tax revenues. In June, Britain reported its highest budget deficit for a month for sixteen years, a massive 13 billion pounds, which was an increase of almost 50% from the same month in 2008.

To support these shortfalls, the Treasury has no option but to borrow, and this they have been doing, and in some style. In the first quarter of the UK financial year, which started in April, public sector borrowing reached £41.2 billion, the highest quarterly figure since records began in 1946.

China Investment Corp, (CIC) China’s sovereign wealth fund has acquired 1.1 per cent of the Diageo drinks group for £221million, which makes the fund the UK-based groups’ ninth-largest investor. Shares in Diageo were up 2.4 per cent to 906p after the announcement

CIC manages $200 billion of the country’s $2,132bn held in foreign exchange reserves also holds a 0.5 per cent stake in Tesco, Britain’s largest retailer.

Domino’s Pizza reported a double-digit increase in sales and profits for the six months to the end of June and raised its interim dividend by almost a third.

Continuing to be one of the few consumer-facing companies to defy the recession, the Domino’s Pizza chain, the UK’s largest pizza delivery service with more than 500 outlets, said it expected to beat full-year profit forecasts thanks to unrelenting demand for their takeaways. Domino’s Pizza U.K. & Ireland advanced 7.2 percent to 235.25 pence.

On the FTSE U.K. pub owner and brewer of Old Speckled Hen ale Greene King Plc, added 3.1 percent to close on 432.75 pence.

Food retailers were also among the rising stars shares in Wm Morrison Supermarkets up 8.2 per cent to 274pence after the announcement that they expected full-year profit to exceed current guidance as it reported strong volume growth over the first half.

Sainsbury also added 3.1 per cent to 326p, while Tesco climbed 1.4 per cent to 375p.

The retail sector showed mixed results with fashion retailer Next despite raising their profit forecast for the first half, retained a cautious outlook. On the news shares in Next fell by 1.6 per cent to 1618 pence.

Shares in the Home Retail Group, owners of Argos and Homebase, gained 1.3 per cent to close on 293 pence

London equity markets overcame an early bout of profit taking on Tuesday to extend their winning run to seven sessions.

The benchmark FTSE 100 was up 38 points to 4,481.17, while the FTSE 250 gained 75.95 points to 7,742.58.

The pound lost ground on Tuesday as concerns grew over the health of the UK government’s finances.

• Pound/US dollar 1.6422
• Pound/Euro 1.1578
• Pound/Japanese Yen 153.8127
• Pound/Swiss Franc 1.7553

Testifying before the House Financial Committee in his twice-yearly report on monetary policy, chairman of the US Federal Reserve, Ben Bernanke announced that US interest rates are likely to remain "exceptionally low" for some time. He went on to explain that low interest rates and a stimulus plan had buoyed the economy.

US stocks lost some of its Monday’s impressive gains on Tuesday, after rising during the morning, but then falling back as Ben Bernanke, addressed Congress about the future of US Federal Reserve policy.

On Wall Street , the Dow Jones continued its steady rise, rising 45.05 points to 8893.2 while the NASDAQ rose 3.55 points to 1912.84.

Sharply falling tax revenues are also beginning to have their effects across the US. Of the 50 states45 reported budget shortfalls and overall tax collections dropped by 11.7 per cent, the largest fall on record.

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Tags: Argos, Bank, Banking, Ben Bernanke, Britain, British Economy, British Pound, China Investment Corp, Credit Crunch, Diageo, Domino's Pizza, Dow Jones, Economics, Economy, Financial News, FTSE, Global Credit Crisis, Greene King Plc, Homebase, House Financial Committee, Money, Money Management, Money Markets, Morrison Supermarkets, NASDAQ, Old Speckled Hen, Recession, Sainsbury, Tax, tax revenue, Tesco, Treasury, US Federal Reserve, Wall Street