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.

financial

• TARP 18x: the Unknown Bailout that Requires a Supreme Court Ruling for Full Disclosure The gray zone between what people say they're doing and...
• TransUnion Reveals National Credit Card Debt on the Rise TransUnion.com, one of the three major credit bureaus, released the...
• Alaska Crab Jobs Drop, Maintains Place as Top Fishing State While Alaska does continue to hold its own as the...

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

In the first statement coming out of Labour election headquarters, current U.K. Business Secretary Peter Mandelson has put up an argument stating that the sitting government has the constitutional right for the “first go” in trying to remain in power when no party wins a majority in the House of Commons.

“The rules are, if it’s a hung parliament, it’s not the party with the largest number of seats that has the first go, it’s the sitting government,” Mandelson said. “After three terms in office, of course many people have turned away from the Labour Party but they haven’t embraced the Conservatives.” He added

According to a recent survey, manufacturing output and exports in the UK expanded at their fastest rate in 15 years. These findings meant that whichever party eventually wins the right to govern in the UK, are liable to inherit an economy already showing signs of recovery with manufacturing output growing by as much as two percent in the past three months. A growth level that suggests the manufacturing sector will make a significant contribution to second-quarter gross domestic product growth in the UK.

Recent figures also show that the next government are set to inherit a jobs market that, while currently still looking a little weak, looks is poised for recovery but still fragile. Unemployment stands at 2.5 million, or eight percent of the work force, far below the three million-plus predicted last year.

Channel 4 announced the public service broadcaster would boost the budget of its film division by a fifth this year to 10 million pounds. The decision returns Film 4’s budget to its 2007 level before the recession, and partly reflects a cautious confidence at the group. Chief executive David Abraham said the Digital Economy Act had also influenced the decision to increase investment in Film 4. The Act formally stated that as part of its public service remit, Channel 4 should make "high quality films" for cinema release in the UK.

Alliance Boots has replaced Marks & Spencer at the top of an annual ranking of UK companies by the strength of their corporate reputation. Boots, which enters the Reputation Institute’s UK Pulse Report for the first time, ranks first in the survey that measures corporate reputation among the general public. Other companies in the top 10 include Cadbury, Morrisons and Rolls Royce, with John Lewis Partnership, Debenhams, Sainsbury’s and Tesco among the top 20 places. In broadcasting, the BBC came ahead of ITV and BSkyB, and HSBC has become the top-ranked bank. Companies are selected by the organization based on revenue and visibility among the general public, but can decide whether or not to be included. There is no fee for inclusion.

Followers of Google’s UK-based email will now be able to have @gmail.com addresses, rather than @googlemail.com. The news comes after the search engine marketing giant won an arduous trademark battle with a British research company that had applied for the "gmail" name prior to Google launching its email service. After finally reaching a settlement, Google are now able to offer users that registered after 2005, a change to the shorter address of @gmail.com Google went on to use the @googlemail.com address for those that had registered after this time.

A spokesman for Google stated that the company was satisfied with the conclusion of the proceedings, saying:”We know how important email accounts are to users and we wanted to provide the best user experience possible. We engineered the infrastructure to enable users to switch their accounts to @gmail.com accounts should they choose, as well as directing all new users to set up @gmail.com accounts in the UK.”

Power and oil firm Essar Energy were left wishing that they had timed their entry onto the FTSE a little better than this week, after suffering the worst debut of a big London flotation since the early noughties. The group’s shares plummeted 7.2 percent to 389.5 pence on its first day of trading. The fall from the UK’s largest stock market listing in more than two years is the worst seen since HMV, the music retailer, dropped 7.5 percent in May 2002. Essar’s listing came on a challenging day for the markets, with the FTSE 100 index closing down 2.5 percent on the day

The Euro remains under heavy pressure, falling to below 1.27 against the dollar. The pound strengthened took a late slump against the dollar to 1.463 and at 1.550 against the Euro.

International rating agencies continue to voice concerns over the crisis of confidence which is spreading across Europe, with countries such as Portugal, Italy, Spain, Ireland and Britain looking unstable, as the public and politicians in Athens attempt come to terms with the harsh economic conditions which have come with the EEC and IMF bail-out. The European Commission has said it expects the Greek economy to shrink by 3% this year, amid continued market jitters over the country’s debt crisis.

Banking systems still face "very real, common threats" if doubts were raised about their governments’ abilities to pay debts.

Fears of another round of instability meant another volatile session for the FTSE 100 index, which saw it shed 80.9 points to close in 5261 as the UK also went to the polls, with the prospects of a hung Parliament looking very much a reality.

US mortgage giant Freddie Mac announced a loss of $8 billion (£5.3 billion) for the first three months of 2010. Reports from the company hint that they are liable to ask for a further $10.6 billion in state aid. The firm has made a number of federal cash requests since it was taken over by regulators in September 2008, whilst stating that as the US housing market has not yet fully recovered they would continue to be in need of continued government funding. If the latest request is granted, it will bring the total cost of the Freddie Mac rescue to $61.3 billion.

Stock exchange bosses and regulators were last night scrambling to explain the cause of a plunge in the Dow Jones Industrial Average, which took the index down by the largest number of points in its history, setting off a short term panic in an already fragile financial market.

A little over an hour before the close of trading in New York. The result was a period of unprecedented chaos that also dragged in currency and credit markets. At 2.20 pm, EPT the Dow stood at 10,460, already down 400 points, when it suddenly tumbled 600 points with the space of just seven minutes to 9,869, a drop of 9.2 per cent, the largest points fall ever.

The Dow snapped back but continued to swing wildly until the close of trading, when it settled at 10,520.32, down 347.80 points on the day, a fall of 3.2 per cent. The NASDAQ also closed down 82.65 points to 2319.64.

US productivity grew at a better-than -expected annual rate of 3.6% in the first quarter of 2010, while a separate report showed that applications for jobless benefits dropped for a third week in a row.

The US economy has been growing since last summer, but firms have been reluctant to take workers back on, instead pushing smaller workforces to produce more, which has increased productivity – measured as the amount of output per hour of work.

Carmaker BMW has reported a return to profit compared with a year earlier and given an upbeat forecast for sales in the coming year.

The group reported a net profit of €324 million (£277 million) for the first quarter of 2010, compared to a loss of €150 million for the comparative period last year. Turnover was up 8% to €12.4 billion with the company reporting a 100% increase in sales in China as it did a year earlier

financial

• Facebook Hacked or Not? - 100 Million User Profiles on Public Site Recently in the media, there has been a big “commotion”...
• Attraction Marketing: Are You Magnetically Challenged? Attraction Marketing - What Came First The Chicken Or The...
• Introduction to Mortgages pt 4 of 5 This is part four in a five part series on...

Tags: Alliance Boots, Banking, BBC, BMW, British Economy, British Pound, BskyB, Cadbury, Channel 4, Conservatives, Credit Crunch, Currency, David Abraham, Debenhams, Digital Economy Act, Dow Jones, Economics, Economy, election, Employment, Essar Energy, Film 4, Financial News, Freddie Mac, FTSE, Google, Government, HMV, House of Commons, HSBC, ITV, John Lewis Partnership, Labour party, Marks & Spencer, Money, Money Markets, Morrisons, NASDAQ, Peter Mandelson, Recession, Retail, Rolls-Royce, Sainsburys, Stock Markets, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, Unemployment

Airports in the U.K. and northern Europe shut down as a cloud of volcanic ash swept south from an eruption in Iceland, disrupting travel for thousands of people booked on flights with British Airways Plc and other carriers. According to flight-control organization National Air Traffic Services, U.K. airspace will continue to be closed till the dust and ash disperses into the atmosphere. Norway and Sweden also shut airports and north-German terminals will also block departures and landings, as the ash threatens to stall jet engines and affect the quality of air in plane cabins. The problem comes after a volcano under Iceland’s Eyjafjallajökull glacier erupted for the second time in four weeks, with certain people claiming it might not have been an accident.

A recent report has shown that in March UK Consumer Confidence fell by the highest level since July 2008. The fall in confidence was largely attributed to the upcoming general election set to take place on May 6, and its uncertain outcome with the possibility of a hung parliament looming.

Job vacancies in London’s financial services industry more than doubled in the first quarter from under 5,000 to more than 11,000, when compared to the first quarter of 2009. Research has forecast the recovery would continue its momentum this year with a 26 percent rise on vacancies from the previous year. The report also showed rising salaries for City job candidates secure with a shortage of suitable candidates pushing salaries up. The picture outside of London is less optimistic where the financial jobs market was reported as being "sluggish"

The future of Arsenal Football Club remains unclear after U.S. billionaire Stan Kroenke, the club’s largest stakeholder, reportedly made a surprise move to acquire the St Louis Rams, an American football team. It was expected earlier this week that it emerged that after Arsenal’s fourth largest shareholder Lady Nina Bracewell-Smith had appointed Blackstone to find a buyer for her 15.9 percent share holding in Arsenal, Kroenke holds an almost 30% percent stake would make a move to take over the club. However, analysts have predicted that, at least for the time being, Kroenke is unlikely to make the bid as he will be short of the necessary capital to pursue both deals.

Telford Homes have announced that their performance for the year to April will be ahead of expectations. The Essex-focused residential property developer benefited from demand for housing close to the site of the London 2012 Olympics, with increased demand for homes in the Stratford area in particular. Sales have been boosted by foreign buyers with a company spokesman stating that the Games had "put Stratford on the map". The area around Stratford is undergoing multi-billion pound regeneration as well as the creation of a rail link to continental Europe.

Aim-listed technology company Bglobal, has won regulatory approval for its new Smart 1 product. The product will use mobile phone technology to convert traditional energy meters into "smart meters" without disrupting the power supply. A spokesman from Bglobal said the technology marked "a big step forward for smart meters", with the company also signing a marketing deal with mobile operator Orange. On the news, shares in Bglobal closed up two pence at 44.25 pence.

The three largest UK mobile phone operators — Vodafone, O2 and Orange have confirmed their appointments to market Apple’s iPad in Britain. However, they will have to put their marketing plans on hold as Apple has been forced to delay the worldwide launch due to unprecedented home demand. The three companies will offer competing monthly pricing plans for customers who want to surf the web using 3G mobile broadband services with both pre-pay and contract deals are expected to be offered.

Plans to create 3,500 jobs over the coming three years have been announced by the InterContinental Hotels Group. The jobs will be created as part of expansion plans, which will see the hotel company open 36 new hotels in the UK. Globally, expansion of the hotel company will see more than 100,000 jobs created during the same timeframe, as it opens 1,400 hotels. A spokesman for the InterContinental Hotels Group announced that a UK government commitment to support and promote the tourism industry would encourage InterContinental to create even more jobs.

After a performance that beat analysts’ full-year forecasts, high street retailer JD Sports Fashion have announced plans to increase their final dividend by 65 percent. A spokesman for JD Sports Fashion went on to announce that the company was considering further European acquisitions. Christmas trading helped to boost pre-tax profits 61 percent from £38.2 million to £61.4 million pounds, while turnover rose 15 percent to £769.8 million pounds. JD Sports increased its dividend from 8.9 pence to 14.7 pence. On the news, shares closed down 10.5 pence at 723 pence, coming after a rise of 13 percent in the last week.

The British Pound continued to rise higher after press reports that the Conservative Party have increased their chances of winning an outright majority in the upcoming general election, largely be promising to reduce the UK financial deficit.

The pound continues its slow recovery, closing at $1.5429, while rising e against the Euro at 1.1387.

The FTSE 100 continued its topsy turvey ride this week, rising 64 points to 5825.51

In the US, Ben Bernanke chairman of the US Federal Reserve has continued with his predictions that the US still faces "difficult choices" in cutting the country’s deficit, adding that weakness in the construction sector was still weighing on the economy. Bernanke’s cautious comments came despite data showing a 1.6% increase in March retail sales.

The Dow Jones Industrial Average continues its rise, up 112 points to 11.144.57 while the NASDAQ Composite also rose a massive 50 points to close on 2,515.69

Larger than expected first quarter profits of $3.3 billion (£2.1 billion), for the first quarter have been reported by Wall Street banker, JP Morgan Chase. The Wall Street firm’s net income was up 55% compared with a year ago, and unchanged on the previous quarter.

JP Morgan is the first major bank to report first-quarter results. On the news, their shares rose 3.4% to $47.40

China’s economy grew at an annualised rate of 11.9% in the first quarter of the year, which experts predict could lead to a revaluation of the yuan.

The growth figure was slightly higher than expected, while consumer price inflation was surprisingly low at 2.2%.

Internet giant Google has reported a 37% rise in first-quarter net profit, beating analysts’ expectations.

Profit for the three months to March came in at $1.96 billion (£1.26 billion) compared with the $1.42 billion for the same period last year

Turnover for the period climbed 23% to $6.78 billion, driven by an increase in online spending by advertisers. Google also announced that they taken on nearly 800 employees in the quarter, its biggest increase in staff for two years. Google’s total number of employees worldwide currently stands at 20,621.

financial

• Mortgage Home Possessions Continue to Rise The last two quarters of 2008 have seen a steady...
• Housing Update Interesting update on some markets from the Real Estate Journal....
• Is Billionaire the New Millionaire? It seems that everywhere I look, it's not enough to...

Tags: Apple iPad, Arsenal Football Club, Banking, Ben Bernanke, Bglobal, British Airways Plc, British Economy, cloud of volcanic ash, Dow Jones, Economics, Economy, Employment, Eyjafjallajökull glacier, Financial News, FTSE, Google, InterContinental Hotels Group, JD Sports, JP Morgan Chase, Lady Nina Bracewell-Smith, London 2012 Olympics, Money, Money Markets, NASDAQ, National Air Traffic Services, O2, Orange, Recession, Retail, Smart 1, St Louis Rams, Stan Kroenke, Telford Homes, UK Banks, UK Economy, UK government, UK Recession, Vodafone, Wall Street

In an interview held over the weekend, chancellor of the Exchequer Alistair Darling predicted that should the Labour Party be re-elected in this year’s anticipated elections they will be prepared to tightly rein in spending and curb Government borrowing. The treasury chief warned that the UK has little option but reduce the massive budget deficit entailing making the toughest public spending cuts seen in 20 years.

Darling’s comments signaled a change in direction or a possible split in Labour’s election strategy as until recently Gordon Brown’s has pinned the bulk of his preliminary electoral campaign and its possible success on the need to support economic recovery, instead of reducing the country’s current £178-billion-pound deficit. The International Monetary Fund has forecast that the UK’s GDP deficit will peak this year at 13.2 percent.

To the chagrin of many, city bankers look likely to suffer minimal impact from the bonus super tax imposed on them by the government last month.

Most banks who were available for comment hinted they are preparing to absorb if not all at least part of the cost of 50 per cent tax by inflating their bonus pools, and are prepared to run the risk of irritating the government and even their own shareholders in order to keep their staff happy. The banks are unofficially conceding that dividends are likely to be hit by their capitulation, and they are already under pressure as regulators have pressurized banks to increase their capital holdings, which will have a consequent effect on their profit margins.

Meanwhile, the Association of British Insurers (ABI) has written a letter to the remuneration committee chairmen of the UK’s top 350 companies warning boards against paying big bonuses and keeping directors safe from tax increases. ABI are concerned that investors will lose out amid fears that banks will absorb the supertax on bonuses at the expense of dividends. Last year was marked by a number of cases of shareholders rebelling against companies’ plans.

With Christmas trading a fading memory, it has been reported that city analysts are taking a close look at Tesco and attempting to determine how much the extra £100 million pounds’ worth of loyalty vouchers given to customers affected their Christmas trading. Fears are that by Tesco’s inflating their Clubcard loyalty scheme they could have "artificially" inflated their UK sales figures for the period, with estimates that the extra vouchers could have added around 1.5% the supermarket chain’s UK turnover for the Christmas , which is due to be released on Tuesday.

The Crown Estate, owner of the UK’s coastal seabeds, have granted development rights to energy companies that will herald the largest wind energy project ever seen in the world.

The announcement has the potential to see an additional 32 GigaWatts (GW) of clean electricity feeding into the UK grid, on top of 8 GW from previous rounds. 32 GW will mean enough offshore wind energy to supply nearly all the homes in the UK, with projection that investment in UK offshore wind overall could be worth £75 billion and support up to 70,000 jobs by the year 2020.

A total of nine development zones, with a capacity of just over 25 GW, have been allocated to Ten European Companies following a competitive tender.

Plans are currently under approval by the UK Government to construct what will be the fastest railway in Europe. The multi billion pound project would see trains travelling from London to the West Midlands at 250 mph from a new station to be constructed in the capital.

Construction is scheduled to begin in 2017, and the first trains should toll out of London 2025, carrying more than a thousand passengers at a time. The project is expected to cost as much as £60 billion.

Taking a short term view, the UK is currently investigating a variety of options on how to deal with increasing stocks of swine flu vaccines, with the British public showing a lack of interest in taking advantage of the free injection. The department of health is looking at either renegotiating existing contracts with the drug companies, such as GlaxoSmithKline and Baxter International to reduce the consignments. Other last attractive options are to sell the vaccines on to other countries or simply give them away. France and Germany also intend to cancel millions of doses of the H1N1 vaccines because of oversupply.

All of the five UK mobile networks are now reported to be in talks with Google over plans to market their new Nexus One mobile phone. Vodafone are the first operator to officially announce that had sealed a deal to offer the device, while no official launch date has been set as yet. The remaining four UK mobile phone operators. While it is expected that the big four will be providing support and service for the Nexus One, Google will be marketing their new baby exclusively online.

A little reminder that the internet doesn’t yet rule all of the World came with the news that UK greeting cards company Clinton have reported a rise in sales of 3.5 percent on last year for the weeks approaching Christmas, with like-for-like sales in the 22 weeks to Jan. 2 rising. However this upturn in sales appeared to be a drop in the ocean as the company continues to experience difficult trading conditions and has closed 12 of their stores in the last six months.

The pound stuttered slightly above the dollar in pre-weekend trading, while sliding backwards against the Euro.

• Dollar 1.6025
• Euro 1.1116

As brokers set off home for the weekend in their snow ploughs and sleds, the FTSE 100 edged just 7.52 points higher to 5,534.24. For the week the index was up 2.4 per cent, making for the third straight weekly gain.

In the US official figures have shown the unemployment rate holding steady at 10% despite the fact that employers unexpectedly cut 85,000 jobs in December. The US Labor Department had initially estimated that 11,000 jobs were cut in November, but now says that the economy had in fact added 4,000 jobs.

Since the recession began in 2007, 7.2 million jobs have been lost in the US, with 4.2 million of them in 2009 alone.

The Dow Jones Industrial Average closed for the weekend still on the up, eleven points to 10,618 while the NASDAQ also jumped 17 points to close on 2,3170.71.

General Motors (GM) reluctantly advised that they have begun "winding down" process for Saab, whilst continuing efforts to find a buyer for their Swedish car-making subsidiary.

GM intends to organize an "orderly" winding down at Saab, which they expects to take several months. The US group also confirmed that they are continuing to evaluate the several proposals they had received to acquire Saab, including the one from Formula One boss Bernie Ecclestone.

With the news that the exports had risen by 17.7% in December, China now claims to have overtaken Germany to become the world’s largest exporter.

December’s remarkable rise ends a 13-month decline in trade as a result of the global downturn.

Total Chinese exports for 2009 were £7.5 trillion, which marked a downturn in foreign of 13.9%, as the global economic downturn led to a fall in demand.

financial

• Interesting Facts about 3 Rare Irish Coins All countries have been using coin and paper currency for...
• Home Wind Turbine Study Reveals Shocking Truth According to a UK home wind turbine study, turbines are...
• Twas the Night Before Christmas 2009 [/caption]Quite a few years ago, one of my friends unknowingly...

Tags: Alastair Darling, Association of British Insurers, Bank, Banking, Baxter International, Bernie Ecclestone, British Economy, British Pound, budget cuts, Clinton Cards, Currency, Dow Jones, Economy, Financial News, FTSE, GDP, General Motors, GlaxoSmithKline, Google, Gordon Brown, H1N1, International Monetary Fund, Labour party, Money, Money Markets, NASDAQ, Nexus One, Recession, Retail, Saab, Stock Markets, Stocks and shares, super tax, swine flu, Tesco, The Crown Estate, UK Banks, UK Economy, UK government, UK Recession, US labor Department, Vodafone

UK public opinion is reported to be swinging the way of large scale cuts in the public service sector, according to recent reports. The sector, costing taxpayer’s record amounts of money each year. Is now employing more people than ever before. Unions who represent public sector employees are anticipating having a have a fight on their hands, if as expected, the Conservative party wins the next election and inherits an economy still struggling to pull itself out of recession.

According to statistics issued by the Office for National Statistics before the weekend, business investment in the UK fell 0.6% sequentially in the third quarter, significantly less than the 3% initially estimated. British private and public sector manufacturing investment has reportedly fallen 9.4% since the second quarter and by almost 30 % since the third quarter of 2008.

According to a recent report by the Bank of England the “probability of default by U.K. real estate companies has increased significantly” as households continue to face a weakening labor market paired with tightening credit conditions.

Amid concerns that the government’s 50% banking bonus tax could seriously damage future business levels, stock markets around the world have been focusing upon the city of London investment markets. The UK government went as far as issuing a report, released on Friday, clarifying who is liable to fall under the scope of the banking tax.

With reports in circulation that UK banks, and especially those whose activities are centered on in London continue to consider their position regarding the banking bonus tax, which has been mooted as a one-off charge, is making people in the banking world a little hot under the collar.

The Confederation of British Industry (CBI) has raised its 2010 economic growth forecast, whilst predicting that the Bank of England may place their bond-purchase plan on hold as soon as February as policy makers prepare to raise interest rates.

The CBI also predict that gross domestic product in the UK will increase 1.2 percent in 2010 after contracting 4.5 percent in 2009, up from their previously forecast expansion of 0.9 percent. The group also predicts the bank will raise the benchmark interest rate from 0.5 percent in the second quarter to reach 2 percent by the end of the year.

The recovery will be aided by companies rebuilding stocks to meet a rebound in world growth and as exporters benefit from a weaker pound, down almost a quarter since the start of 2007, making British goods cheaper to buy abroad.

Google, smart boys that they are, succeeded in not paying a penny in corporation tax on the £1.6 billion advertising revenues that it earned in Britain in 2008. The company, which enjoys an estimated 90% market share of UK internet searches, last year, used a cross-border network of subsidiary companies to keep the taxman at bay. Their smoothly interwoven international corporate structure enabled Google to avoid paying what could otherwise have been a corporation tax bill in the UK of as much as £450 million, according to recently filed accounts for subsidiary company Google UK Limited. The accounts show none of the search engine’s advertising revenues from British customers were accounted for in the business, despite operations in London and Manchester While much of the costs linked to the running of Google’s British operations are recognised for tax purposes in the UK. Revenues from customers in Britain, however, are diverted to another Google company in Ireland, where the corporation tax rate is between 10% and 25%, while UK corporation tax is levied at between 28 and 30%

The British Pound has begun to recover and bounced back to a high of 1.6251 on Friday following the rise in risk appetite. Analysts predict that Sterling may continue to recover as a recent Bank of England Financial Stability report said the U.K. financial system has become “significantly more stable”. This was credited to the unprecedented steps taken on by the government.

• Dollar 1.6152
• Euro 1.1262

Things were pretty brisk on the FTSE 100 approaching the weekend, with

nursing homes group Care UK drawing a lot of attention. The company has been reportedly been considering whether to accept a £275 million pound bid from Bridgepoint which will take them private. Care that runs 60 nursing homes, GP practices and NHS walk-in centres in the UK saw their shares rise 10.5 pence to 430.5 pence on Friday.

Overall U.K. stocks were on a minor downward spiral, with banks leading the way. Lloyds Banking Group Plc and Barclays Plc were are ever leading the way, as the European Central Bank (ECB) increased their estimate of the value of write downs by 13 percent. Lloyds, the 43 percent government-owned bank, lost 4.7 percent to 48.7 pence, to its lowest since July. Barclays, the U.K.’s second biggest bank, slid 3.5 percent to 264.25 pence.

Ryanair surged 5.8 percent to 3.282 Euros after the carrier said it will generate surplus cash for shareholders between 2012 and 2015 after they had suspended their talks with Boeing regarding future aircraft acquisitions.

Also on the up was Aggreko Plc, the world’s biggest provider of mobile power-supply gear. Their shares rallied 7.9 percent after announcing that trading in the fourth quarter was better than it estimated.

The benchmark FTSE 100 Index dropped 20.8, or 0.4 percent, to 5,196.81. The FTSE 100 fell 1.2 percent this week. The gauge has still rebounded 48 percent since March and is heading for its biggest annual gain since 1997 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy.

On close of trading, the Dow Jones Industrial Average was up to 10, 328.61 while the NASDAQ was stable on 2,211.69

GM says it has failed to sell its Swedish car brand Saab and will begin "an orderly wind-down of Saab operations".

GM had been in talks with the Dutch specialty car maker Spyker over a sale. Talks with Sweden’s Koenigsegg also fell through earlier this year.

GM has been trying to sell Saab as part of its turnaround plans since January. Dutch luxury car maker Spyker has submitted a new offer to General Motors (GM) for its Swedish car brand Saab.

Spyker has submitted a new 11-point proposal to GM, addressing the issues that ended talks.

financial

• October 1929 Wall Street Crash Claud Cockburn, writing for the “Times of London” from New-York,...
• Do Businesses Dislike Credit Card Fees... Or Paying Taxes? A guest post by fellow Personal Finance Blogger, Mike -...
• Top 10 Canadian Dividend-Paying Multinationals When you think about multinational companies, Canada probably isn't the...

Tags: Aggreko Plc, Bank, Bank of England, Banking, Barclays Plc, Bridgepoint, British Economy, British Pound, Care UK, CBI, Confederation of British Industry, Credit Crunch, Currency, Dow Jones, Economics, Economy, European Central Bank, Financial News, FTSE, General Motors, Google, Koenigsegg, Lloyds Banking Group Plc, Money, Money Markets, NASDAQ, NHS, Office for National Statistics, Recession, Ryanair, Saab, Spyker, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession

It appears likely that the UK government will not agree to underwrite the Lloyds Banking Group’s proposed rights issue. This development, if it transpires, could potentially stall the partially state-owned bank’s efforts to raise sufficient capital to allow them not to participate in the government backed toxic asset insurance programme. In the long term, the government is expected to participate in the planned rights issue, although chancellor Alistair Darling, chancellor is keeping tight lipped on the subject, for the meantime. Analysts have predicted that Darling would not be interested the government would not be willing to underwrite the rights issue, so as not to be seen to be making a commitment to buy any shares that remained unsold. However the feeling in the markets is that Darling and co has to be seen to be backing the issue, in order not to send out a negative impression

Britain’s largest pub owner Punch Taverns, have announced a £406 million annual loss, largely attributed to the writing down the value of its recession-hit property portfolio by 11 per cent. A spokesman for the company also stated that trading was not showing significant signs of improvement for the first seven weeks of its new financial year, a fact that should have a negative effect on the company’s future. On the announcement., shares in Punch plummeted by 16.6 per cent to close at 96.65p.Punch owns more than 7,500 pubs, that are principally leased to semi-independent publicans who are obliged to buy all their beers through Punch as well as paying them rent.

Shares in National Express plunged more than 30 per cent on Friday after the Spanish-led consortium bidding for the bus and rail operator withdrew its £765m takeover offer. The Cosmen family, who already own an 18.5 per cent stake in National Express, along with the private equity firm CVC, had been due to make a formal offer.

The rise in UK unemployment slowed in the three months to August, showing signs that the job losses may be slowing down as the economy continues to show signs of recovery. The number of people out of work rose 88,000 to 2.47 million, compared with the previous three months, while the unemployment rate remained unchanged at 7.9 per cent of the total UK workforce. This figure contrasts well with 9.8 per cent in the US and the 9.1 per cent average in the European Union member countries.

The Pound continued it steady improvement against the major currencies.

• Pound/US dollar 1.6332
• Pound/Euro 1.10956
• Pound/Japanese Yen 149.048
• Pound/Swiss Franc 1.665

Two of the major Wall Street banks have announced profits for the third quarter that was above market analyst’s expectations.

Goldman Sachs’ announced profits for the period of £1.96billion, four times what they earned for the same period in 2008.

Profits for the Citigroup also grew. However their potential profits were of were dented by the poor results of their high street banking operation, reaching only £65 million for the quarter.

US stock markets hit fresh 2009 highs on Wednesday, with the Dow Jones Industrial Average reclaiming the 10,000 mark, after a smaller-than-expected decline in retail sales and strong earnings at a leading bank.

Financial, industrial and materials stocks boosted the market while the telecoms sector was a laggard.

The Dow Jones index continued to consolidate itself above the 10,000 points standard, up 47.08 points to 10062.94 while the Nasdaq Composite index rose 1.5 per cent to 2,172.2

Internet super –power Google has reported its highest quarterly profit, providing further indications that the online advertising market is in a healthy situation. Google reported a £1billion net profit for the third quarter, a rise of 27% for the same period in 2008.

Also on the up are US computer hardware giant IBM, who reported profits for the same period of around £2 billion, an improvement of 14% on last year.

US crude prices reached their highest levels for the year while gold extended its record-breaking run, passing the $75-a-barrel mark at one point during the day’s trading. This news came after analysts predicted that crude prices appeared ready to ready to increase after remaining consistent for the last six months. Forecasts are that demands for leading up to Christmas, will push oil prices up.

Meanwhile the price of gold reached a record $1,070.40 ounce later slipping back to $1,069.

financial

• Have We Hit Bottom? Just as recessions are only determined after the fact, so...
• Using Your Credit Card Costs You! As a nation we've become addicted to convenience, and few...
• Snow Valley Ski Area, Running Springs, CA Snow Valley Ski Area is located in: Running Springs, CA...

Tags: Alastair Darling, Banking, British Economy, British Pound, Citigroup, Cosmen family, Credit Crunch, Currency, CVC, Dow Jones, Economy, Employment, Financial News, Gold, Goldman Sachs, Google, IBM, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, National Express, Punch Taverns, Recession, Retail, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, UK unemployment, US stock market, Wall Street

According to a series of reports, the number of people in the UK who spend their time scouring the internet for “discount vouchers” has grown by close to 50% within the last year. This seems to be part of a global trend with since l. Google reporting an increase of two thirds in searches “discount vouchers” in the year up to December 2008.

With the recession at its fiercest, consumers are embracing this internet based phenomenon, that experts expect will remain long after the economic recovery. The use of on-line discount vouchers to save money on retail, food and other purchases is here to stay.

Reports conform that about 70 per cent of middle class consumers are reported to have taken advantage of money-off vouchers during the last six months, which translates to around 20 million adults in the UK.

The number of websites catering to the discount voucher trend has mushroomed during the past year, with on-line retailers paying commission on sales through the coupons, generally a few per cent of the final sale price.

Most of the forward thinking companies, who have successfully marketed the internet voucher concept, are not so inclined to attribute their success to the financial downturn that has hit the UK especially hard in the last 12 to 18 months. They hasten to point out that during the last few months, when signs of a recovery have been growing fast; demands for vouchers have been growing as well as the rates of conversions to sales.

• Grand Slam Tournaments in Tennis Should you happen to be a tennis lover, then you...
• Retire in a Foreign Country - Panama Many baby boomers are intrigued by the possibility of retiring...
• Keeping In Touch is Expensive, but Getting Cheaper Have you ever stopped to consider how much money you're...

Tags: British Economy, Credit Crunch, discount vouchers, Economy, Financial News, Google, internet, Money, Money Management, Online discount vouchers, Recession, UK Economy, UK Recession, vouchers, websites

The last two years have been tough for UK retailers, especially those whose economic survival is based around them being on the High Street. An excess of selling space as well as having to cope with spiraling costs have had a serious negative impact on the retail industry and forecasts are that a number of well known retail chains could go out of business.

Recent statistics show that retail sales per square foot have fallen to around £355 pounds in 2009, down ten percent from their 2007 peak.
Encouraged by the seemingly never ending spending boom, the retail industry added more than 50 million square feet of selling space over the past decade.

The UK’s largest private company Ineos is set to announce on Thursday that it has secured vital agreement from creditors to reset the terms of its $10.3 billion debt burden.
Ineos, one of the world’s biggest chemicals companies, have been in long-running talks with hundreds of creditors about securing additional breathing space under the terms of its debt, after an unprecedented fall in demand and limited market visibility that began last year.

The success or failure of Ineos’s negotiations will be closely observed by a number of other companies in a similar situation who need time as they struggle against the downturn and require to renegotiate large and complex debt structures, involving a variety of different investors,.

The sale of Gatwick, the second-largest UK airport, by Spain’s Ferrovial has been hit by the apparent withdrawal of the last bidder from the contest.

The bidder, a consortium led by Manchester Airport Group and Borealis, the Canadian infrastructure fund, have apparently refused to raise its final bid to meet Ferrovial’s asking price of about £1.4 billion, leaving a gap of at least £100 million to the price being sought by BAA, the UK airports group that is the UK subsidiary of Ferrovial.

Global Infrastructure Partners, pulled out of the bidding in May, when its bid of about £1.36 billion was rejected by Ferrovial. Both groups apparently are interested in acquiring Gatwick, regarded as being one of the most attractive airport assets on the world market. However both now are increasingly reluctant to meet the target price set by BAA, possibly due to recent deterioration in the airport’s traffic performance.

London equity markets fought their way higher, building on the gains of the previous three sessions, although yesterday’s rise was less dramatic, up just 15.38 points to 4361.84. On the other hand, the FTSE 250 stuttered on Thursday after a few days of steady increases. On the day it fell 18, 22 points to close on 7,554.11

Sterling lost ground on Thursday against all the major European currencies.

Pound/US dollar 1.6392
Pound/Euro 1.16
Pound/Japanese Yen 153.6779
Pound/Swiss Franc 1.7618

Stateside, JPMorgan Chase became the second major US bank to report a major profit upsurge for the second quarter. Net profit totalled $2.72 billion (£1.6 billion), making for an increase of 36% on the same period last year. Revenues at the company rose 41% to a record $27.7 billion, impressive but still less than the $3.44 billion that rival Goldman Sachs reported.

The prospect of a bankruptcy and not profits is hanging over the US mid-market lender CIT as hopes of rescue plan led by the government were becoming increasingly remote. A spokesman for CIT announced “There is no appreciable likelihood of additional government support being provided over the near term,” CIT has battled a liquidity crisis and will be required to pay $1 billion of debt that matures next month

On Wall Street, the Dow Jones continued to rise, on the day by 95.61 points to 8711. 82 while the NASDAQ maintained a similar pace, closing up 22.13 points to 1885.03.

Internet search engine Google has seen better-than-expected quarterly results even as revenue growth slowed following the economic downturn.

Google reported net income reach $1.48 billion (£900 million) in the second quarter, compared to $1.25 billion for the previous year. Revenue rose by three percent for the period at $5.52 billion with more than half of that figure emanating from outside the US shores. Analysts reacted broadly positively to the company’s results, particularly their marked decrease in running costs.

China’s economy grew at an annual rate of 7.9% in the second quarter, an increase from 6.1% in the first quarter, thanks to the Chinese government’s substantial stimulus package.

The country’s rapid economic expansion is certainly bucking the global economic trend while most nations in the West continue to experience recession. Expectations in Beijing are that China will achieve 8% growth for 2009, compared to a predicted contraction of between 1% and 1.5% in the US. However, the Chinese government hastened to warn that significant economic challenges have to be overcome for them to achieve their goal.

Russia’s economy shrank 10.1 per cent in the first half of this year, a spokesman for the finance ministry announced this week, its worst decline since the early 1990s.
The credit crunch, falling commodity prices and a gradual devaluation of the state currency, the ruble, have combined to decimate a decade years of rapid economic growth. There are some positive signs however that the pace of economic decline is slowing as industrial production contracted at its slowest pace in six months.

• Ford Has Hybrid Electric Cars in Works Recently, Ford automotive submitted to congress a business plan of...
• A More Expensive Alternative To Gas [& How To Profit From It] The Miami Herald reports that Washington has embraced an alternative...
• $300 Billion Tax Dollars Uncollected Last Year What will it be this year?  According to the IRS,...

Tags: British Airways Plc, Economics, Economy, Financial News, Google, Ineos, Money Markets, Retail, Stock Markets, UK Credit Cards