After a nine-month run of steady increases, UK house prices were reported to have fallen in February, while the three-month rate registered a rise of 1.6 per cent. The three month property rise comparison chart was down from the 2 per cent increase seen in the three months to January as well as its peak of 3.7 per cent the three months to September 2009. According to the, prices fell by 1.0 per cent month on month in February,, although on a year on year level, house prices rose by 9.2 per cent against 8.6 per cent in January.

It now transpires that Britain’s escape from recession was stronger than previously thought in the final three months of last year, as the services sector bounced back.

According to the Office for National Statistics, the UK economy grew by 0.3% in the fourth quarter, rather than 0.1% as previously estimated, which marked the first time the economy had grown since the first quarter of 2008, when the UK’s deepest and longest postwar recession on record began.

City economists, who had predicted 0.2% growth, hastened to point out that the figures did not change the overall economic picture; with some of them even warning that the economy could even slip back into recession in the first three months of this year.

Before the weekend, the extent of the beating that the Lloyds Banking Group took through the acquisition of HBOS was revealed. The bank, who are partially owned by the UK public, revealed that no less than £30 billion had been set aside over the past two years to cover toxic debt hat Lloyds had inherited from the deal, with the bank indicating that they expect a further £12 billion of charges on HBOS loans this year, showing what a white elephant the bank had purchased for what then appeared to be a bargain price of £8 billion.

All these negative figures contributed to Lloyds announcing a worse-than-expected pre-tax loss of £6.3 billion for 2009. The figures make a somber contrast to those of Barclays and Royal Bank of Scotland who over the last ten days announced figures that beat market projections. Lloyds also came under a lot of stick over the issue of whether it had met lending targets agreed with the UK government.

Understandably shares in the bank fell heavily after having increased by 18 per cent in the previous nine days on what proved to be false optimism about its 2009 figures. In the event, Lloyd’s report of a series of unexpected bad debts for the fourth quarter sent their shares falling by 4.4 per cent to 52½ pence. Royal Bank of Scotland shares also faded 1.9 per cent to 37½ pence after analysts reduced their ratings which they claimed painted a too optimistic picture.

Financially troubled US insurer AIG are apparently on the brink of selling AIA, the US life group’s Asian business, to the UK’s largest insurer Prudential for about $35 billion in cash, shares and other securities The is deal expected to become official on Monday 1st March. The announcement will come after a weekend of talks, after which the AIG board decided to press ahead with the sale of AIA, one of the jewels in AIG’s crown, in preference to a planned partial listing of the unit. Under the terms supposedly being discussed, Prudential would pay about $25 billion in cash and the remaining $10 billion in shares and other securities for AIA. If the deal does go through, analysts prophesy that it would transfer would more than double the size of Prudential and mean that its business would be dominated by Asian sales and profits.

The UK’s oldest building society Chesham has agreed to merge with the Skipton Building Society, to create a mutual society with more than £15 billion. The merger brings to an end 165 years of high street presence for the society, although their name will continue to be used for the society’s existing share accounts and deposit accounts of assets. A spokesman for Chesham, who service over 20,000 members from their three branches, welcomed the merger, saying it would provide the security of being part of a larger group. In the past year Skipton Building Society, has seen annual profits increase to £63.5 million

According to a recent survey, the cost of car insurance jumped 12.7 percent in Britain in 2009 with the average quoted premium rising to £507 at the end of 2009 compared with £450 pounds a year earlier, The pace of the increase accelerated in the second half of the year, with prices rising by 6.3 percent in the final quarter alone. British car insurance prices have been held in check by stiff competition between providers, largely due to the spread of price comparison websites.

Write-offs at their troubled T-Mobile UK subsidiary helped to pushed Deutsche Telekom’s profits down by 77% in 2009, with profit slipping to €353 million from €1.5 billion in 2008, due to write-offs worth €2.3 billion on goodwill in T-Mobile. Deutsche Telekom and France Telecom have agreed to merge their UK mobile operations. They are awaiting regulatory approval for the deal, which will make the jointly-owned company the biggest UK mobile network operator with some 29.5 million subscribers.

Portsmouth Football Club have lost their battle to avoid entering administration as the Premier League side finally admitted defeat in their struggle to overcome a mountain of debt totalling £60 million, of which – g more than £12 million is owed to HM Revenue and Customs.

The process of administration automatically means that the club will be docked nine points by league bosses, making relegation almost certain and probably a welcome relief for the club’s supporters/ .

Portsmouth has already changed hands four times this season and has been at the bottom of the Premier League for most of it. .

On the foreign exchanges, the pound continued to fall . At close of trade Friday it was $1.5117, while standing at 1.1121 against the Euro.

As the markets closed for the weekend, the FTSE 100 was up 76.3 points, to 5,354.52. The rise erased most of the week’s trading losses, and made for a gain of 3.2 per cent for February.

According to revised figures, the US economy grew at an annual rate of 5.9% in the last quarter of 2009, higher than the first estimate of 5.7%.

According to economists, the rise was down to an increase in manufacturing output rather than stronger consumer spending; with the figures confirming that the world’s largest economy is moving rapidly away from recession.

On Friday, the Dow Jones Industrial Average continued to creep upwards, but at a much slower pace. It rose just 4.23 points to close on 10,325.26 while the NASDAQ Composite also rose by 4.04 points to close on 2,238.26

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Tags: AIG, Barclays, British Economy, British Pound, car insurance, Chesham, Dow Jones, Economics, Economy, Financial News, FTSE, HBos, Lloyds, Money, NASDAQ, Office for National Statistics, Property Prices, Recession, Royal Bank of Scotland, Skipton Building Society, Stocks and shares, T-Mobile, UK Banks, UK Economy, UK government, UK Recession

City minister Lord Myners, in a recent speech played down suggestions that Britain might follow in US President Barack Obama’s footsteps in introducing radical reforms to the UK banking system.

Myners stated that the UK had already taken sufficient measures to address the problems in its banking industry.

"President Obama came out with a solution to the idiosyncratic problems that he sees in the American banking system, based particularly around the investment banking" pointed out Milner "It’s worth remembering that proprietary trading, hedge funds, private equity, these were not at the heart of the difficulties that Northern Rock, or Royal Bank of Scotland or HBOS experienced." He summed up.

Alistair Darling, UK chancellor, was also reported to be against duplicating Obama’s moves to split commercial and investment banks.

Meanwhile U.K. Prime Minister Gordon Brown is expected to announce details of the release of £125 million pounds of venture capital aimed towards "low-carbon" businesses. The move is aimed to support his argument that the government should continue spending to bolster the UK economy.

The first slice of money from the Innovation Investment Fund will be released on Jan. 26th, according to an announcement on the prime minister’s official Web site.

“On Tuesday our new innovation investment fund will show our commitment to the industries and the technologies that will create the skilled jobs of the future,” Brown promised. “What is increasingly clear is that determined and active government can and does make a difference.” He continued

Public sector borrowing for December in the UK was lower than forecast,, However the government’s hopes of meeting its deficit target for the fiscal year still remain dependent on January’s tax receipts. However tax income for January, which is a key month for self-assessment, capital gains and corporation tax income, is expected to be down. This is due to reduced income and capital gains for 2008-09, when the UK economy was in the midst of recession. On a positive note UK financial analysts have pointed to the fact that recent receipts were stronger than predicted, with December’s income only 0.4 percent down on the previous year, favourable when compared with the average of 8.1 percent decline for 2009.

The Royal Bank of Scotland (RBS) plans to sell its U.S. trading business for $2 billion to JPMorgan could be in doubt following President Obama’s recent ban on banks trading on their own account. RBS has been urgently trying to complete the sale of their a 50 per cent stake in RBS Sempra Commodities, by the end of next week which would have been bound to create a much more positive view of their annual results due to be released by Feb. 25th. On the news of the positive standoff, RBS, saw their shares fall 0.64 pence to 34.68 pence

Northern Rock and the Post Office have announced cuts to their mortgage rates believed to be in response to Skipton Building Society’s shock increase to its standard variable rate, which rose from 3.5 per cent to 4.95 per cent. A spokesman for the Skipton quoted "exceptional circumstances" had forced them to renege on promises that their lending rate would not rise more than three per cent above the Bank of England base rate.

The first two British banks to come under state control are looking increasingly likely to be merged, in a controversial change of direction by the EU in Brussels. The EU is apparently on the verge of approving the state aid package that Bradford & Bingley received from British taxpayers, opening the door for their buy-to-let mortgage book to be merged with Northern Rock’s so-called ‘toxic bank’. The merger, which UK government officials have been working on for several months, comes in the wake of public pressure to remove some of Northern Rock’s taxpayer-funded benefits, including the customer savings guarantees held in the "good of non toxic "part of the bank.

British Airways has issued some fairly heavy threats to their cabin crew who are threatening strike action. If they do so they stand to lose some of the traditional perks of the job, and on a permanent basis. These include the ability to book standby flights for themselves and nominated friends or family at a 90% discount , as well as the standard of hotels that crew are put up in overnight while they are away would be substantially reduced.

The airline says a strike would have serious financial implications leaving them with no option but to cut staff benefits.

British Telecom, in a move to woo broadband customers from rival operators, has unveiled an aggressive pricing strategy. The fixed-line telephone company is to offer consumers high-speed broadband based on optical fibre for £20 pounds, eight pounds cheaper than a comparable service offered by Virgin Media. An executive at BT’s retail unit, announced that the company goal is to attract "customers to come back to BT for all their services." BT’s optical fibre broadband will be predominantly based in towns and cities, and is expected to be capable of servicing more than 40 percent of UK homes by mid-2012.

According to BSkyB their High Definition marketing campaign was a Christmas marketing hit will full details due to be revealed in their forthcoming half year results due to be released this week. The results are expected to show that capitalising on the stay at home ethos typical of a recession was a shrewd move, with Sky offering a free HD box for customers who signed up for their film channels. City analysts are expecting the company to produce strong results, with turnover up by an estimated £2.8 billion, and a customer base up by around 300,000 new HD subscribers.

The fast food chain McDonalds are looking to create 5,000 new jobs in the UK in 2010 after seeing an 11 percent rise in sales over 2009. McDonalds currently operate close to 1200 outlets in the UK. The new jobs would come from the opening of up to 15 new branches in 2010 and the extension of opening hours in existing outlets. The UK jobs being created would take McDonald’s workforce to 85,000 in this country. A spokesman for the company announced that McDonald’s had increased UK like-for-like sales by 30 percent over the last four years.

Triumph, the UK motorcycle maker have announced an amazing upsurge in interest in their product with new bike sales for Triumph were up 26 per cent in 2009, at 7,450. This means that the company outperformed industry leader, the Japanese Kawasaki company for the first time since the early 1980s. Triumph has now captured 13 per cent of the British market and in the past year witnessed their global market share rise from 3.3 per cent to 4.4 per cent. Turnover in 2009 increased seven per cent to £304 million.

Sterling fell slightly against the dollar and the Europe before the weekend. The pound closed at 1.6118 against the dollar, with the Euro being traded at 1.1404

Shares in the FTSE 100 recovered some of their earlier falls closing on

Friday down by 0.6% at 5,302.99, Fears that the US President’s sweeping reforms would affect UK banks were seeing to recede.

In the US stock markets tumbled for a second consecutive day, over continued concern over President Obama’s plan to revamp the US banking industry.

The Dow Jones plunged by 216 points, to close at 10172.98, while the NASDAQ fell by 60 points, to finish at 2205.29.

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Tags: Alistair Darling, Bank of England, Barack Obama, Bradford & Bingley, British airways, British Telecom, BskyB, Dow Jones, FTSE, Gordon Brown, HBos, Innovation Investment Fund, JPMorgan, Kawasaki, Lord Myners, McDonalds, NASDAQ, Northern Rock, Post Office, RBS Sempra Commodities, Royal Bank of Scotland, Skipton Building Society, UK Economy, UK government, Virgin Media

The Office of Fair Trading (OFT) has lost its legal battle over bank charges with banks following the shock announcement by the Supreme Court on Wednesday. While the ruling effectively scuppers any chance of reclaiming fees in the foreseeable future it does clear the way for new rules to be drawn up that would limit charges. The Treasury did however stress that if lower bank charges could not be achieved voluntarily then it would consider passing legislation. The OFT’s four-year campaign and two-year legal case to win refunds for those overcharged by their banks after falling into an unauthorized overdraft fallen at the last hurdle. The Supreme Court, in a move that stunned campaigners, went against earlier findings by the High Court and Court of Appeal and decided the OFT did not have the right to assess the charges for fairness in the case

The good news from the U.K. economy is that it shrank in the third quarter less than previously estimated. It is now estimated that gross domestic product probably fell 0.3 percent from the second quarter, which less than the 0.4 percent drop is reported on Oct. 23, The Office for National Statistics will release its second estimate before the weekend.

More than £60 billion was secretly lent by the Bank of England to prevent Royal Bank of Scotland and Halifax Bank of Scotland from failing at the height of the financial crisis last year. In evidence to the Treasury Select Committee, the Bank revealed yesterday that such a catastrophe was averted when it decided "in exceptional circumstances" to act in its traditional role as lender of last resort and extended Emergency Liquidity Assistance (ELA) to RBS and HBOS. Meanwhile U.K. Chancellor of the Exchequer Alistair Darling Wednesday defended authorities’ secret provision of emergency assistance to Royal Bank of Scotland Group PLC and HBOS during the height of last year’s financial crisis. In a written ministerial statement to parliament, Mr. Darling said any disclosure of the loan at the time would have "seriously" jeopardized financial stability and "the risk to public resources was low" given the quality of the collateral received by the Bank.

Trading on the London Stock Exchange (LSE) was halted for three and a half hours earlier because of technical difficulties.

The LSE said it had been affected by connectivity issues, and at 1033 GMT had placed all orders for shares into an "auction call period".

This allowed traders to put orders to buy or sell shares into the system, ready for when trading restarted.

Normal trading was then able to resume from 1400 GMT.

Big banks will be obliged to disclose how many of their UK employees are paid more than £1 million, if City banker Sir David Walker has his way. Sir David is expected to announce that half of the bonuses paid to bank employees should be deferred for three to five years.

Travelers who book holidays on the internet could receive more financial protection if things go wrong, under plans in a European review.

Consumers who make up their own packages of flights, hotels and car rentals on one website or partner sites could get more protection.

Currently, only those who have booked specific package deals have rights to cancel or refunds if operators go bust. A review will consider help for passengers if airlines collapse.

Spanish investor Jorge Cosmen, the largest stockholder is reported to have boosted his stake in National Express Group Plc, the U.K. bus and rail company three times in as many days. The investor, a company board member, has spent 5.8 million pounds ($9.6 million) snapping up shares since Nov. 20. The third purchase, announced today by National Express, brings his family’s holding to 20 percent. Cosmen, who opposed National Express, wants the London-based company to refinance debt and reevaluate strategy before any rights issue, is apparently yet to decide whether to oppose the stock sale in a Nov. 27 shareholders’ vote.

The pound retreated slightly against the dollar, Swiss franc and the yen, while rising against the Euro.

• Pound/US dollar 1.6506
• Pound/Euro 1.10997
• Pound/Japanese Yen 142.3998
• Pound/Swiss Franc 1.6556

After trading resumed on the FTSE, the 100 went on to finish the day at 5,194, which was 130 points down on Tuesday’s closing price, while the FTSE 250 rose dropped 200 points to close on 8,880.52. Falls on the FTSE were also felt across Europe, as concerns about the wider impact of state-owned investment company Dubai World asking for a six-month delay on repaying its debts grew.

The US dollar has hit a 14-year low against the Japanese yen with low interest rates in the US making the greenback less attractive to investors.

The dollar slipped to 86.5 yen, its lowest level since July 1995.

The US has indicated it is unconcerned about the dollar’s slide, and will not intervene to strengthen it.

Many traders are swapping dollar holdings for gold as a safer investment in the current uncertain economic climate.

The price of gold is currently at a record high of $1,194.5 an ounce

The Dow Jones average was looking stronger rising 53 points to 10464.5 The NASDAQ also rose thirteen points to finish up on 2176.05

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Tags: Alastair Darling, Bank, Bank Charges, Bank of England, Banking, British Economy, British Pound, Currency, Dow Jones, Dubai World, Economics, Economy, ELA, Emergency Liquidity Assistance, Employment, Financial News, FTSE, Gold, Halifax Bank, HBos, Interest Rates, Jorge Cosmen, legal battle, London Stock Exchange, Money, Money Markets, NASDAQ, National Express Group Plc, Office of Fair Trading, OFT, Overdraft, Overdraft Charges, RBS, Retail, Royal Bank of Scotland, Sir David Walker, Stock Markets, Stocks and shares, Supreme Court, Treasury Select Committee, UK Banks, UK Economy, UK government, UK Recession

Lloyds Banking Group is to cut 5,000 more jobs by the end of next year as it continues to reduce overlap following its merger with HBOS last year.

While almost half of these posts are among staff, 2,600 permanent jobs would be lost. The union Unite accused the bank of "corporate arrogance" and short-termism following the announcement, which will mean that Lloyds will have cut 15,000 jobs this year.

Japan’s second- largest carmaker Honda Motor Co have announced that they will be widening job cuts at its UK factory in Swindon, due to a major fall in demand in Europe as the end of government stimulus programs draws close.

According to a company spokesman, Honda plans to expand their voluntary early retirement plan, which succeeded in reducing the number of workers at the factory by 1,300 last December, although the spokesman declined to say how many additional jobs would be cut. The plant, which builds the CR-V and Civic models for the European market, saw production plunge by 75 percent to 400,000 units in the year until end September 2009.

A rapid recovery in UK commercial property values conditions could see the sector turn positive this year. The recovery comes after the deepest slump on record that looks like leading to an almost boom like situation according to forecasts. Real estate values are set to overturn most of the losses suffered in the first half as booming investor demand has taken prices back to near peak levels in some sectors.

As was widely expected, Cadbury have rejected the formal bid from Kraft on Monday, going as far as to describe the US food group’s offer as “derisory”. Roger Carr, Cadbury’s chairman, declared the formal offer “worse than the proposal the board has previously rejected” as it made no attempt to improve the terms of its original offer of two months ago. In the meantime Kraft’s share price has fallen steadily since their offer in early September, reducing the value of the bid from 745 pence a share to 717. Cadbury’s shares closed up 3 pence to 761 on the FTSE, while Kraft’s shares fell 31 cents in New York in midday trading to $26.47. However, Kraft have not rules out making an increased offer during the formal takeover offer period, which could last up to three months as analysts predict that the company may wait until towards the end of the offer period before making a final offer.

Company management at Sainsburys will be feeling the pressure as recent figures show that the supermarket group sales were expanding at the lowest rate of the UKs "big four " supermarkets. Sainsbury’s sales were shown to have risen by 4.7 percent in the 12 weeks to October 31, making for the lowest turnover expansion, less than the 5.6 percent recorded by Tesco, with Asda and Morrisons leading the way.

Unofficial reports have it that Orange UK sold more than 30,000 iPhones on launch day. Orange is the second carrier to offer the iPhone in the UK behind O2, while Vodafone has announced plans to begin offering the handset early in 2010, as well as the iPhone, Orange UK have also launched a so-called business homescreen for the soon to be launched Samsung Omnia Pro B7330. The Omnia Pro is reputed to be a smartphone based on a different concept from the iPhone, featuring Windows Mobile 6.5 and a full QWERTY keypad. Orange’s new homescreen provide quick access to email, voicemail, contacts, calendar and so on, “ensuring vital business applications are right at their employees’ finger tips”. The Samsung Omnia Pro B7330 will be soon available through Orange, coming as the carrier’s first “business WM6.5 device,” targeted at medium and large business customers.

For more information about The Samsung Omnia Pro B7330 Visit Compare-Mobile.co.uk

Sterling lost ground on Tuesday after a ratings agency said the UK was the major economy most at risk of losing its AAA credit rating , Since then the pound has weakened in value over the last two days against all the major currencies.

• Pound/US dollar 1.6719
• Pound/Euro 1.1161
• Pound/Japanese Yen 149.468
• Pound/Swiss Franc 1.6852

The FTSE 100 has rallied strongly since the beginning of the week up 86 points to 5,230.55. The FTSE 250 also rose 38.3 points to 9,120.96. London equities principally made progress on Monday, largely thanks to strong trading in insurance stocks.

As US carmaker General Motors (GM) were seen to be making efforts to calm the waves after their surprise decision last week to retain ownership of their European plants, a spokesman for the company has forecast that Opel and Vauxhall will retain consider independence as well as receiving considerable financial support . The US carmaker has announced that that they will provide a “reasonable and sizeable” portion of the restructuring costs for Opel and Vauxhall, rather than seek 100 percent government aid. GM have forecast that they will need €3 billion ($4.5 billion) to restructure the Opel and Vauxhall operations and intend to raise at least partial funding from interested European governments.

The Dow Jones has made some major steps forward since the weekend, up 243 points to 10246.97, closing at the highest level since October 2008.

The NASDAQ also jumped, reaching 2151.08.

US software company Adobe Systems has announced that it is to cut almost 10% of its workforce, a total of 680 jobs. Adobe Systems best known for Photoshop, Flash and Acrobat, said the cuts were necessary to cut costs.

Gold extended its record-breaking run above the $1,100 mark on Monday while crude oil raised more than $2 a barrel as markets made a strong start to the new trading week. Gold hit a record at $1,110.85 a troy ounce, a rise of 26.5 per cent this year, before easing back to $1,107.00, up 1.1 per cent on the day as analysts digested the implications of India’s decision last week to buy half of the gold the International Monetary Fund has put up for sale.

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Tags: Acrobat, Adobe, Adobe Systems, ASDA, Banking, British Economy, Cadbury, Currency, Dow Jones, Economy, Employment, Financial News, Flash, FTSE, General Motors, GM, Gold, HBos, Honda Motor Co, International Monetary Fund, iPhone, Kraft, Lloyds, Lloyds Banking Group, Money, Money Markets, Morrisons, NASDAQ, O2, Oil, Omnia Pro, Opel, Orange UK, Photoshop, property values, Recession, Retail, Roger Carr, Sainsburys, Samsung Omnia Pro B7330, smartphone, Stock Markets, Stocks and shares, Tesco, UK Banks, UK commercial property, UK Economy, UK government, UK Recession, Vauxhall, Vodafone

As had been widely predicted, the UK Monetary Policy Committee has chosen to hold interest rates at 0.5 percent as well as continuing with the existing programme of buying £175 billion of assets. The Bank of England will have to decide in November whether to continue expanding its programme of money creation and asset purchases.

Two of Britain’s biggest banks, Lloyds Banking Group and Royal Bank of Scotland face what could be a crucial month for them. Their future will be laid bare as they hear around the end of the month what Neelie Kroes, the EU Competition Commissioner, has decided exactly what concessions Lloyds must make as it integrates HBOS as well as ruling on the amount of state aid that Lloyds and RBS have received and what actions to take regarding the aid. Shares in RBS closed yesterday at 49.65 pence, down on the 50.5 pence value when the government acquired its 70 per cent stake. Shares in Lloyds closed on 95.66 pence, a poor performance compared with the value of 122.6 pence that the shares were sitting on when the UK government acquired the shares.

Financial services firms showed the first signs of recovery in the last three months, after almost two years of falling business volumes and profitability, according to a recent survey. Business volumes across the financial sector have grown for the first time in two years, although the survey showed that levels of business were still considered to be well below normal. Firms are more optimistic about the overall business situation compared with three months ago, but they remain worried that a lack of demand will hamper business expansion in the coming months.

According to rankings published today by the World Economic Forum (WEF) London now wears the mantle of being the world’s leading financial centre having wrested New York from its traditional first place The WEF’s highly respected and influential Financial Development Report, which ranks 55 global financial centres said that London was in first place, a result that surprised many, especially the UK capital’s leading European rivals, in France and Germany, who have fallen out of the top 10 altogether

According to a recent survey, consumer morale in the UK has risen to its highest level since April 2008. In general, the UK public were reported to be at their most regarding the future than at any time since way back in 2005. The Nationwide Consumer Confidence Index rose to 71 in September from an upwardly revised 65 in August reflecting an improvement in Britons’ sentiment about their present circumstances, future prospects and willingness to spend. Another guide, the Nationwide Expectations index, which gauges public sentiment regarding the economy, jobs as well as personal own finances in a six months period ,also rose, to 106 in September from 97 in August,, This was the highest level that the index had reached since December 2005.

A spokesman for Jaguar/ Land Rover announced on Wednesday that that the company succeeded in securing a £175 million loan from the State Bank of India and were on track to receive their planned total of £500 million of new financing facilities for 2009. The car company, owned by India’s Tata Motors said it had “been making significant progress” in raising new loans despite its current loss making situation. In addition to the £175 million loan from India, the company has also added a £56 million export financing facility with ABC International Bank. Tata’s ability to line up new financing for their luxury brands is vital as they seek to curtail their losses, as well as reduce costs and revive sales.

The FTSE 100 continued to rise, this time by 16.74 points to close on 5154.64. The FTSE 250 is strengthening in leaps and bounds, closing up a further 147.09 points to close for the day on 9,373.44.

The pound continued its minor recovery against the leading currencies, creeping slightly over the $1.60 mark.

• Pound/US dollar 1.6073
• Pound/Euro 1.10875
• Pound/Japanese Yen 142.0389
• Pound/Swiss Franc 1.6489

The Dow Jones index came back strongly on yesterday’s trading, closing up 61.29 points to 9786.87, down 5.67 points. The NASDAQ index also continued its steady rise, up 13.6 points to close on 2,123.93.

Jeans maker Levi Strauss has reported a 41% drop in profits after seeing lower sales and currency fluctuations. The San Francisco-based firm saw its net income for the third quarter fall to £25 million ($41 million) on turnover down 6% to around £700 million, with sales falling in both in the US and across Europe.

The European Union has intervened by pledging that any job cuts and factory closures at either Opel and Vauxhall factories will not influenced by levels of state aid given to Magna, who are in the process of buying the firm. The UK, Spain, Poland and Belgium governments have stated their concerns that the planned takeover of GM’s Opel will favour German factories and jobs as the German government have offered Opel’s would-be buyer Magna a £4 billion (€4.5 billion) loan. Recent reports have suggested that if the deal goes through, Magna plan around 25% of their 45,000 workforce in Europe

Asian central banks, worried about the effect of the weak dollar on their export industries, are believed to have intervened in the global currency markets in an attempt to slow the slide of the US currency. According to foreign currency traders, central banks in South Korea, Taiwan, the Philippines and Thailand have been buying the US currency; the falling dollar has become a problem for many countries as signs of economic recovery begin to emerge, with traders rapidly switching from the traditionally "safe" US dollar to other currencies. The dollar fell to a 14-month low against a basket of currencies on Thursday and analysts now believe that if other economic forces have not intervened till now, they soon will.

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Tags: ABC International Bank, Bank, Bank of England, Banking, BOE, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economy, EU Competition Commissioner, Financial Development Report, Financial News, FTSE, GM, HBos, Jaguar, Land Rover, Levi Strauss, Lloyds Banking Group, Magna, Money, Money Markets, NASDAQ, Nationwide Consumer Confidence Index, Neelie Kroes, Opel, Recession, Retail, Royal Bank of Scotland, State Bank of India, Stock Markets, Stocks and shares, Tata Motors, UK Banks, UK Economy, UK government, UK Monetary Policy Committee, UK Recession, Vauxhall, WEF, World Economic Forum

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

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

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

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

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

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

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

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

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

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

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

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

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

In spite of various and long ranging attempts to steer clear of it, Lloyds Banking Group now appear likely to participate in the government sponsored insurance scheme to freeze their toxic assets

Despite the fact that Lloyds signed up for the insurance scheme way back in March, giving itself the option of freezing £260 billion of toxic assets, mostly taken on when it acquired mortgage lender HBOS, the bank has made no serious attempts to participate in the scheme. It would mean that up to £20 billion would be freed for fresh lending but in turn would allowed the UK taxpayer to own close to thirds of the bank. When the deal was first signed in March, shares in stood at 36 pence per share, and yesterday they were almost three times that amount.

At their meeting on Thursday, European Union leaders are expected to urge sanctions for banks that pay excessive bonuses. Ahead of the meeting, UK Prime Minister Gordon Brown has insisted that there was broad backing for bonus restrictions. The EU leaders are likely to urge the Group of 20 (G20) richest nations to maintain their stimulus spending as signs of global recovery grow stronger. Many EU countries blamed excessive bonus taking as a principal cause of the crisis and are seeking to regulate how bonuses are paid at banks in the future.

Vodafone are seeking to assure their investors that they stand to benefit from the recent plans of UK mobile phone businesses of France Telecom and Deutsche Telekom to merge. If the merger does take place, Vodafone once the market leader in the UK, faces falling down the ladder to become the third largest British mobile operator. Currently Vodafone is the second largest UK network operator, behind Telefonica’s O2 subsidiary. Orange UK and T-Mobile UK are respectively the third and fourth largest UK mobile phone operators, but would become the market leader after the proposed merger. On the announcement, stock in Vodafone rose 0.2 percent, to 139.5 pence.

On the FTSE yesterday HSBC provided the foundation for the climb for a fifth straight day of gains. Shares in the bank’s shares gained 2.5 per cent to 717 pence amid growing optimism about its household consumer credit division, now renamed HSBC Finance.

Europe’s largest home-improvement retailer Kingfisher Plc are due to report their interim trading results. In anticipation, their stock rose 1.9 percent to 205.5 pence.

Stuart Rose, chairman and chief executive officer of the Marks & Spencer Group has dismissed the suggestion that his plan to remain as chairman of the company after the hiring of a new CEO was deterring candidates for the job. After that matter was put to rest, stock in M&S climbed 1.7 percent, to 373.8 pence.

Meanwhile Britain’s second-largest clothing retailer Next Plc announced pre-tax profits for the six months through the end of July profit had increased by 6.9 percent to reach £185.5 million pounds. Despite the fact, their stocks fell 1.2 percent, to 1,699 pence.

The UK’s FTSE 100 index continued to climb, rising 39.82 points to close at 5163.95 while the FTSE 250 rose on Thursday by a further 58.84 points to finish the day on 9364.08.

The pound, after making a minor recovery yesterday, fell back against the main currencies yesterday.

• Pound/US dollar 1.6443
• Pound/Euro 1.1155
• Pound/Japanese Yen 149.8274
• Pound/Swiss Franc 1.6914

The Dow Jones Industrial Average adjusted downwards but only slightly on Thursday trading, downing 7.79 points at 9,783.02. The NASDAQ also fell, but just a little, 6.4 points to 2126.75.

The European plane maker Airbus has raised its forecast for new aircraft demand over the next 20 years.

It predicted global demand for 25,000 new aircraft across the industry between 2009 and 2029, up from the 24,262 it forecast for 2007 to 2027.

Airbus have also said that passenger numbers would fall by 2% this year but rise 4.6% next year going on to add that that demand for aircraft would be susceptible to economic upturns and downturns.

Their principal rival the Boeing Company predicted in June that 29,000 new planes would be ordered between 2009 and 2029.

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Tags: Airbus, Bank, Banking, Boeing, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, FTSE, Gordon Brown, HBos, HSBC, Insurance, Kingfisher Plc, Lloyds, Lloyds Banking Group, Marks & Spencer, Money, Money Markets, NASDAQ, Next Plc, O2, Orange UK, Recession, Stock Markets, Stocks and shares, T-Mobile UK, UK Banks, UK Economy, UK government, UK Recession, Vodafone

Bank shares on the slide after HBOS revealed bad debts on lending have risen to £1.7bn in the 11 months to the end of November.

The figures could worsen, as they were £1.2bn in September and just £700m in June.

“In light of the worsening economic climate, trends in retail impairment charges are likely to come under further pressure,” HBOS warned.

HBoS shareholders are due to vote today on the merger with Lloyds TSB – and the result looks like a foregone conclusion to go with Government brokered deal.

The shares fell 10% at 78.7p ahead of the meeting in Birmingham.

Lloyds TSB shares also fell by more than 9% to 143.3p.

Royal Bank of Scotland, 58% owned by the state, has dropped 11% to 58.8p.

Barclays, which has turned down government help and raised money from the Middle East instead, is down almost 7% at 150.4p.

Credit card firms and the Government have agreed new consumer safeguards.

The Government had threatened to refer the credit card industry to the Office for Fair Trading if it did not agree to a new code of conduct.

Over the past year, most credit card firms have increased rates despite sharp reductions in the Bank of England base rate.

Cardholders now face an average interest rate of 17.7% on credit cards – more than eight times higher than the base rate – up from 16.6% last year.

The FTSE closed 31 points up last night, climbing 4367 to 4388.

In the US the DOW was down 185 points overnight at 8565, from opening at 8750. Wall Street reacted to the gloom that the Bank of America is laying off up to 35,000 staff, and, the US Senate has failed to reach a bailout deal for the motor industry.

Sterling hit a record low against the euro of 89.39 pence and fell slightly against to $1.4886 against the dollar.

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

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Tags: Bank, Bank of Scotland, Barclays, Credit Card, HBos

The new banking goliath rising from the ashes of Lloyds TSB and HBoS is ready to axe up to 40,000 jobs and 600 branches in a cost cutting strategy.

The Lloyds Banking Group – the new name for the super bank – will face pressure to shrink its balance sheet, lift capital ratios and resume dividends after the merger that is expected to proceed on Friday.

The government-brokered deal to create Britain’s second biggest bank has been attacked as anti-competitive and angered investors on both sides, especially HBOS supporters in Scotland.

A Competition Appeals Tribunal hearing in London rejected claims that Lord Mandelson, the Business Secretary, had acted improperly in supporting Lloyds TSB’s takeover of HBOS were rejected yesterday.

A decision from the tribunal is expected today.

Despite the hearing 96 % of Lloyds investors voted for the merger and HBOS warned the only alternative was nationalisation.

For once, the retail sector had some good news, revealing that Monday was the biggest online shopping day this year, with sales up 14% on the same day last year to £320 million.

John Lewis announced that sales in the week ending Saturday 6 December also saw an all time record for online weekly sales. The previous record, set last year in the week ending Saturday 15 December, was beaten by £500,000 driven by demand in gifts, Christmas decorations, furnishing accessories, home electronics and toys – with Biscuit the Dog proving a particular hit.

The leading department store group has also identified a significant improvement in in-store trading over the course of the last seven days, with sales up 20% week-on-week indicating that Christmas shopping on the high street is moving up a gear.

Woolworth’s administrators, Deloitte, have agreed to sell 50 stores to frozen food retailer Iceland.

Separate deals are in place to sell a further 350 stores to a range of supermarkets and discount stores.

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

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Tags: HBos, John Lewis, Lloyds Banking Group, Lloyds TSB, Lord Mandelson, Woolworths

Actor Sean Connery is backing a legal challenge to the Lloyds TSB and HBoS bank merger.

The Competition Appeal Tribunal will today consider whether the government was right to bypass competition concerns in allowing HBOS to be rescued.

A group of businessman, investors and customers make up the Merger Action Group (MAG) is fighting the merger.

HBOS is confident the ruling, due on Tuesday, will approve the deal.

“It is time that people stopped using HBOS as a plaything,” said HBOS spokesman Shane O’Riordain. “We’re confident the appeal will be unsuccessful and we would then ask this self-appointed group to withdraw.”

MAG feels allowing Lloyds TSB to buy HBOS is bad for Scotland’s economy. Their stand has won support from Sean Connery, who has sent them a personal message agreeing he does not believe the merger is in the best interest of HBoS or the Scottish economy.

MAG says Business Secretary Lord Mandelson’s decision to allow the deal to go ahead was based on legislation that was not in place at the time the merger was announced.

The legal process has been fast-tracked to ensure there will be a ruling before the HBOS shareholders vote on the deal on December 12.

“We have been greatly encouraged by the backing we have received from such a cross-section of the Scottish public from employees and customers of HBOS, to leading businessmen and politicians,” said MAG spokesman Malcolm Fraser.

HSBC plans to increase cash available for UK mortgages by 20% to £15 billion in 2009. The bank hopes the move will increase its share of the UK mortgage market from 4% to 5%, an HSBC spokesman said.

HSBC will pass on the full 1% cut to borrowers.

Other mortgage lenders have announced their plans to pass on last week’s 1% rate cut by the Bank of England.

Lloyds TSB, Cheltenham & Gloucester, will bring their mortgage rate by 1%

Halifax will reduce main rates by just 0.25% but has announced tracker customers will benefit from a full 1% reduction.

Nationwide building society’s main rate will go down by 0.69% to 4% from January 1.

Abbey is reviewing rates, which currently stand at 5.44%. Tracker customers will have their rates cut by 1% from the start of January.

Royal Bank of Scotland and NatWest will reduce their main mortgage rate by 0.75% to 4.44. RBS said borrowers with a tracker or One Account mortgage would benefit from the full 1% cut.

Barclays will cut rates at the Woolwich lending arm by 1.15%. Tracker mortgage customers will benefit from the full 1% cut.

Bradford & Bingley will reduce rates by 0.75% to 4.84%.

The FTSE finished 239 points down on the week – starting at 4288 and closing on Friday at 4049.

The DOW dropped 192 points in the week – opening on Monday at 8827 and closing Friday at 8635.

The Pound also weakened against the US dollar and the Euro over the week – moving from $1.54 against the dollar to $1.47 and 1.21 Euros to 1.15 Euros.

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

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Tags: Bank Merger, HBos, HSBC, LloydsTSB, Lord Mandelson, Merger Action Group, Scottish Economy, Sean Connery