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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

financial

Related Websites

• I Re-Allocated And Re-Balanced My 401(k) Portfolio I logged into my 401(k) plan.  Ouch! It's been taking...
• Chrysler Seeks $224 Million for Plug-In Products The bankrupt Chrysler has submitted a proposal to the Department...
• StanChart and ANZ poised to split RBS Asian assets * FT.com Banks Standard Chartered and Australia’s ANZ are in advanced talks to...

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

Millions of members of the UK community of retirees are looking at the dim prospect of receiving a pension hike of less than ten pounds a month when the new rates kick-in in April 2010 The reason for the minimal increase is that UK inflation on which pension rises are calculated. Is considerably less than the minimum of 2.5%. government pledge to annually increase the state pension.

Instead, recently released figures from the Office for National Statistics show that UK retail prices index registered actually recorded a fall of 1.4% for the year ending September 2008. This means that both state and public sector pensions, both of which are calculated according to September inflation, will reach only the minimum figure of 2.5%.

A spokesman for the charity, Age Concern rushed to state that at £97.65 a week the basic state pension was seriously inadequate to guarantee the UK elderly a reasonable standard of living. Thy went on to insist that the current pension system is in need of urgent reform that will ensure older people can live off their pensions without having to apply for benefit top ups.

A monthly study has shown that living costs for pensioners are rising at a rate much higher than those for younger people, with the elderly spend a disproportionate amount on energy bills and food.

This daunting piece of news for UK retirees is only the latest in a line of unexpected pitfalls they will have to bear. Recent studies have shown that not only are many Britons are dramatically reshaping their retirement plans to match a new reality. A reality that depicts those who were due to retire in the near future, are putting off their retirement for as long as possible as the reality hits home that those who are retiring today will need to live off less than what represents half of the UK national average wage.

financial

Related Websites

• Verify your Retirement Account's Beneficiary The Supreme Court Has Spoken - Verify the beneficiary on...
• How Much Do I Need To Retire? The following post is from Todd Tresidder. Todd retired at...
• BCS football- Ranking the decade’s national champions [/caption] Where does Alabama rank among the national champions from...

Tags: Age Concern, British Economy, British Pound, Credit Crunch, Debt, Economy, Financial News, Government, Inflation, Interest Rates, Money, Money Management, Office for National Statistics, pensioners, Recession, Retail, retirees, Savings, state pensions, UK Economy, UK elderly, UK government, UK inflation

Government ministers will use this week’s Labour party conference to claim government action helped pull the country back from the economic abyss, while their Tory counterparts will as surely use their own conference next week to blame the government for the downturn’s depth.

According to the Confederation of British Industry (CBI) employers’ organisation, after the general election, public spending should be cut harder and faster than the government intends. The next government should aim to balance their books by 2015-16, which is two years earlier than the plan set out in this year’s Labour Party Budget. The feeling at the CBI is that while it was essential an incoming government laid out a “clear and credible” plan to get the budget back into balance, the organisation remains undecided whether the process of cutting spending should start next year, according to the opposition Conservative party’s proposals.

According to internal company data, Opel’s U.K. and Spanish car plants are more efficient than two of its three German factories. Figures for December show the Russelheim plant in Germany took almost 10 hours more to assemble a car than the Ellesmere Port factory in Britain and 14 hours more than in Zaragoza, Spain. These figures are likely be used by those demanding the European Commission “take a tough stand” on the sale of General Motors’s Opel unit to Magna International Inc. Job losses are expected to be heavier outside Germany under that proposal, which is being brokered by the German government.

The proposed UK government six pound telephone line tax due to be implemented by the end of 2010 has apparently raised some eyebrows in the business community. The proposal, aimed to partly fund the investment required for a new UK national broadband network. Has met with a surprising response from British business who claim that six pound per telephone line would prove insufficient and could hold back the UK broadband sector for some time to come. Government thinking is apparently that many consumers are already upset about the need to pay six pound every year, although they have no current access to broadband, and the government is trying to keep the cost per family down, but to what effect.

UK-based domestic insurance group HomeServe has sold its loss-making emergency repair services unit for £11 million. HomeServe Emergency Services (HES) was acquired by Midlands-based LDC, the private equity arm of Lloyds Banking Group. The division posted a loss for the first half of this year, and HomeServe was reportedly keen to sell it off, reducing its valuation by £97 million to make the sale. HES, who employ 2,400 people at offices in Norwich, Nottingham, and Beverley, is made up of three trading businesses, including HomeServe Glass and Locks, who provide and emergency glazing and locksmith service; HomeServe, Chem-Dry, who provide emergency restoration of water damage and accidental damage; and HomeServe Content Services, who have developed a software designed to assist insurance firms validate contents insurance claims.

The FTSE 100 registered its sharpest gain in three weeks on Monday, as it jumped 83.50 points to close on 5,165.70 The FTSE 250 reversed most of last week’s fall, up 108.96 points to 9169.40.

The pound continued to enjoy mixed fortunes against the major currencies.

• • Pound/US dollar 1.5879
• • Pound/Euro 1.10867
• • Pound/Japanese Yen 142.4182
• • Pound/Swiss Franc 1.64

Photocopier giant Xerox, already the world’s biggest supplier of digital printer and document management services, has unveiled a takeover deal which takes it into the fields of data management and technology outsourcing. The company is buying fellow US firm Affiliated Computer Services (ACS) in a cash and shares deal worth £4 billion.

Wall Street on Monday recorded its biggest daily gain for over a month after merger deals lifted investor confidence. The Dow Jones Industrial Average was up 124.17 points to 9,789.36. The NASDAQ jumped 39.82 to close on 2130.74. Last week, Wall Street suffered its biggest weekly loss since July after disappointing data on durable goods and housing sales.

Germany equities led European bourses higher on Monday aided by a particularly strong performance from the German utility sector, after Chancellor Angela Merkel’s Christian Democratic Union and her Free Democratic allies gained a majority in parliament on Sunday.

In a move designed to ease the impact of the global economic crisis on central and Eastern Europe, the European Bank for Reconstruction and Development has appealed for an increase of 50 per cent in working capital.

The multilateral bank, controlled by some 60 governments, including European Union members, the US and Japan, is asking for an extra £9 billion (€10 billion,) necessary to expand their lending capabilities as well as compensating for a sharp decline in private capital flow, especially into the cash strapped former communist countries.

The bank’s move highlights the bank’s concerns that the region’s difficulties may be forgotten as world leaders grapple with the effects of the global crisis.

The yen rose to a seven-month high versus the dollar as Japan’s new government reiterated its opposition to intervening to stem a currency’s gain and the Federal Reserve pledged to keep interest rates low. Japan’s yen advanced 1.8 percent this week to 89.64 per dollar, from 91.29 on September the 18th at one point touching 89.51 yen, the strongest level for almost nine months.

financialsrc

Related Websites

• Census Pre-Notice: Government Waste At Its Finest. Did you get a "About one week from now, you...
• 53 Pounds in 9 weeks... 4.5 Pounds this Week Wow... back on track!  After 2 weeks of relatively small...
• Weakon 180: Intro to the Fed, Part I Over the next few days we will look into the...

Tags: Affiliated Computer Services, Banking, Brighton conference, British Economy, British Pound, Confederation of British Industry, Currency, Dow Jones, Economy, European Bank for Reconstruction and Development, Financial News, FTSE, General Motors, Gordon Brown, Government, HomeServe, HomeServe Emergency Services, Labour Party Budget, Magna International Inc, Money Markets, NASDAQ, Opel, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Wall Street, Xerox

History is in the making as for the first time ever, the Government and Bank of England all but control the UK banking sector.

Until now, the powers that be have set the Bank of England interest rate, but banks and building societies have had the option of whether to follow or not.

Tomorrow, Bank of England governor Mervyn King has a chance to write his place in the history books by taking the interest rate to the lowest ever since the bank opened for trading 314 years ago.

The monetary committee he chairs has four options:

·     Leave the rate as it is at 3%

·     Cut the rate by less than 1%, for instance by 0.25% or 0.5%

·     Cut the rate by 1% to 2% – a rate last seen in 1951

·     Cut the rate by more than 1% to enter a historic new era. 

For the first time, the Bank of England governor knows his actions will not be undermined by speculators in the banks because the Government now calls the shots in several of the UK’s biggest banks after bailing them out with billions of pounds of taxpayer’s cash.

The odds are a 1% cut as the bank was looking to cut the rate by up to 2.5% last month according to minutes of their meeting.

This makes economic sense as inflation is falling and dropping the rate frees up cash for businesses making loan repayments and homeowners with mortgages – both moves stimulate spending that is so badly needed to shift the country out of recession.

Retailers are falling like dominoes in the high street with manufacturing and construction in dire straits.

Cutting the interest is the single act that will promote a ‘feel good’ factor in the economy and put more money in people’s pockets rather than the paltry cut in VAT.

---

For More information on specific Banks use these links

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

Related Websites

• Virginia Governor Rolls Back Non-Discrimination Protections For Gay State Workers [/caption] Gay and lesbian state workers in Virginia are no...
• Stashing Your Cash If you want to access your money quickly, where do...
• Saving Money in Five Minutes Flat Are you saving your money for a rainy day, but...

Tags: Bank of England, Government, Inflation, Interest Rates, Mervyn King, UK interest rates

During these most extraordinarily difficult of times, more and more people are turning to their local churches, synagogues and mosques for help and advice in getting through the problems that we all face to some degree. Religious institutions from all faiths are reporting an upsurge in the number of people asking for help and guidance with financial issues. So what does the bible tell us about the current situation?

We are told that following 7 fat years, there will be 7 lean, referring to the cyclical nature of economics and prosperity…even in biblical times. The advice was to store up grain from the fat years to feed cattle during the lean so that, over the entire economic cycle, the biblical farmers wouldn’t suffer too much. This sounds like very sensible advice to me. So have we learned from 2000 years of boom and bust? Eh….no.

Unfortunately, our own government must have missed school the day that old currently apt piece of advice was talked about in class. They totally forgot to store up enough grain during the fat years to get us through the lean ones. What did they do instead? They spent it. The golden rule of borrowing no more than 40% of National Income now lies in ruins as Ernst and Young expect this figure to rise to near over 90% in 2009/10, saddling us all with more and more debt at the time that tax revenues are falling and disposable income is being pressured from all sides.

The upshot is that the rules to protect during a slowdown are basically thrown out the window as soon as the slow down arrives. Now, it looks like we will have a sustained lean period…but then the Old Testament was pretty heavy on punishment. It’s time to pay the piper for the good times.

Related Websites

• Tips For Budgeting When You Are Self-Employed. I have been self-employed for almost 4 years now, and...
• Tips To Survive The Credit Crunch Today's article is written by guest blogger Trisha Wagner. Does...
• Evaluating Your Insurance Needs during Open Enrollment Time When I think of winter and the holiday season, I...

Tags: Economics, Ernst and Young, Financial Issues, Government, National Income

My heart really does go out to anyone who is about to retire at this time. What a horrible position they are in. Not only has the value of their investment pool lost about 40% of its value over the last year, if it’s been invested in equities, but interest rates are forecast to come down even further, hurting their annuity payments if they have a private pension plan. But that’s really only the start…the real pain could yet lie ahead.

Since it is expensive to protect against a high level of inflation in an annuity, the retiree faces a difficult choice. Do I take the maximum income now from my annuity now and hope that inflation comes down as the government and industry say it will, or do I plan for inflation to creep up faster and faster as I draw the income from my annuity? This is such a tough choice at even the best of times since the variables are unknown, but the current economic situation makes this balancing act even tougher.

For those who do not wish to make this choice right now with so much financial uncertainty, the current rules many force them into the decision. If you are approaching your 75th birthday and have yet to vest a pension pot, the law as it stands today says you must do it before your birthday. This forces otherwise prudent savers into taking these decisions at exactly the worst time. So not only must they take the decision, they have no idea if the government’s huge spending plans will ramp up inflation after the commodity and GDP growth cooling period has ended and the prevailing force in the inflationary world becomes the money supply, which is currently being expanded massively.

Thank heavens I’m only 38…because I would have no idea which way to turn if this type of decision was forced onto me…and I’m a highly qualified pension’s adviser!

Related Websites

• Proposed Changes To The Canada Pension Plan (CPP) Back in May, The Department of Finance announced some proposed...
• What Is An Individual Pension Plan (IPP)? An Individual Pension Plan is a type of defined benefit...
• Check the Health of Your Company Pension Plan If you are one of the dwindling number of employees...

Tags: Current Economic Situation, Government, Interest Rates, Investment, Pension, Private Pension