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

• Portfolio Allocation: Keep It Simple My investments are well diversified. I'm invested in foreign and...
• Paprika Since its launch in 2008 Paprika has become an on...
• Dormeo.cz getFlashHtml('120x600_DM_Comfort', 120, 600, 'http://www.lduhtrp.net/flash-4322874-10883898?clickTag=http://www.kqzyfj.com/click-4322874-10883898', '', 'http://www.ftjcfx.com/image-4322874-10883898', 'http://www.kqzyfj.com/click-4322874-10883898') About Us Who...

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

Recent research has show that close to 50 million pounds was paid out shareholders in the form of dividends, in many cases just a few days before the end of the tax year on April 6. Experts believe that many UK companies are employing this tactic as a means to help some of their big-income employees who are also shareholders to avoid the rise in the rate of income tax. If this is the case, it could cost the Treasury as much as £85 million pounds. Analysts estimate that the main "offenders" are directors in small to medium sized companies who want to minimise the effect of the soon to be effective 50 percent tax rate, due to their greater flexibility over returns.

A rise in UK retail sales, albeit a minor one has been reported for March by the Office for National Statistics (ONS) According to the ONS, retail sales volumes during the month grew by 0.4% from February, which is less than the 0.6% analysts had expected. Sales improved in February after a very poor January, report with retail sales being hard hit by the icy weather.

Overall, sales volumes during the first quarter of 2010 were reported to be down 1.7% from the equivalent quarter of last year.

Royal Bank of Scotland (RBS) has announced a series of proposals to toughen performance targets in its executive pay scheme. The announcement from RBS chairman Philip Hampton signals a key trigger point for RBS’s long-term incentive plan, which is to be revised upwards. Under the existing incentive plan bank executives gain a significant proportion of performance-linked rewards when the bank’s share price hits 50 pence. RBS shares are currently well over the fifty pence mark.

HSBC are reports to be on the look out for bankers to help them direct any industry-wide bank levy into government-sponsored venture capital agencies. The bank has toured Europe seeking support from colleagues in the industry for their plan to alter the terms of the ongoing debate about bank regulation. HSBC proposals include varying the capital buffers banks are required to hold, dependant on economic conditions. The bank’s argument is that banks need to hold higher capital in good times to absorb losses when conditions decline.

In an effort to strengthen confidence in its brand before a proposed launch onto the UK high street, the Bank of Ireland (BoI) that would have a spate and UK based board of directors. The UK move would also see BoI, which has operated in the UK in a partnership with Post Office since 2004, being regulated by the Financial Services Authority. Although the group has operated in the UK in various formats since the mid nineteen seventies, till now their operations have always been overseen by the Irish Financial Regulator, with customers protected through Ireland’s deposit guarantee scheme. In the meantime BoI have announced plans to raise £2.9 billion through a rights issue and private placing, in order to finance the expansion and meet its capital needs. The bank is in need to aid its recovery from the financial crisis due to the crash in the Eire economy which has been one of hardest hit, but has now emerged from what was one of Europe’s worst recessions. Irish lenders were particularly hit hard by the housing market crash, which saw billions of Euros-worth of home loans go bad.

UK Coal, Britain’s largest coal mining company, has announced 2009 losses of almost £130 million in what it describes as “an extremely challenging year for the group”.

Total demand fell to 7 million tonnes from 7.9 million in 2008, while the Group’s financial results revealed a pre-tax loss of £129.1 million, compared to a minor loss (£15.6 million) the previous year.

A spokesman for UK Coal commented that while the financial results for 2009 were poor, new contracts and developments to their property portfolio look set to help boost profitability in 2010, with the Group planning to disposal of land for agricultural use expected to help reduce its debt.

As the largest producer of coal in the country, last year UK Coal mined 15% of the total amount of coal burned in the UK.

For the third time in six months mobile phone retailer Carphone Warehouse have raised their full-year profit forecast.

A company spokesman has no predicted that they expect net profits for the year to the end of March to be around the £47 million mark, considerably more than the £40 million to £45 million predicted at the beginning of the year.

Strong growth due to the joint venture with US group Best Buy, cost cutting and strong sales of smart-phones were said to be the principal factors behind the profit growth.

Uncertainty regarding the Euro pushed Sterling up against the dollar while the Euro fell. The pound closed on $1.5263 and €1.580

On the FTSE, stocks plunged at the fasted rate for one day for five months after the economies of both Greece and Portugal were downgraded spurring concern that these heavily in debt European nations are moving closer to default. The index sank 150.33 to 5,603.52, its biggest drop since late November 2009.

Greece has become the first eurozone member to have its debt downgraded to junk level, while Portugal’s debt was also lowered on fears of "contagion", adding to the markets’ rout and a fall in the euro. The German government immediately came out with a statement that it would not "let Greece fall", and there were signs that an aid package could be increased.

Profits at oil giant BP have more than doubled from a year ago on the back of rising oil prices.

Profit for January to March was £3.6 billion, ($5.6 billion) compared with the around £1.45 for the first quarter of 2009 – a 135% rise.

The profit figure is also up on the profit made in the last three months of 2009.

BP has benefited from rising global oil prices, which averaged $76 a barrel in the first three months of 2010, compared to an average of $41 a barrel a year ago.

On the news of Greece’s possible default, shares on Wall Street fell sharply. The Dow Jones dropped 213.04 points to 10991, 99 while NASDAQ fell 51.48 points to 2471.47.

Car giant Ford has reported net income of $2.1 billion for the first three months of 2010, its highest quarterly profit for six years, and cancels out a a loss of $1.43 billion for the same period in 2009.

A spokesman for the company said the result was down to a recovering economy, which meant people were again beginning to buy expensive, one-off items.

Ford also predicted that it will remain in profit every quarter this year.

financial

• More News From India Today was Kite Flying Day in Ahmedabad city in Gujarat...
• The US Open Series is Well On Its Way The Indianapolis Tennis Championships tipped off the six week long...
• Mozilo Gets Off Easy Angelo Mozilo, former CEO of CountryWide Financial was fined $67.5...

Tags: Bank, Bank of Ireland, Banking, BP, British Economy, Carphone Warehouse, Dow Jones, Economy, Employment, Financial News, Ford, FTSE, HSBC, income tax, Irish Financial Regulator, Money, NASDAQ, Office for National Statistics, Post Office, Retail, Royal Bank of Scotland, Stocks and shares, Tax, UK Banks, UK Coal, UK Economy, UK government, UK Recession

Under threat of the first nationwide strike by signalmen in 16 years, Network Rail announced on Friday night that it would meet next week at conciliation service Acas to discuss two separate disputes with the Rail, Maritime and Transport Union (RMT) and the TSSA, which represents managerial grades. The RMT is already threatening to strike over a proposed restructure of Network Rail’s maintenance operations which could lead to the loss of up to 1,500 jobs. However there are also worries over potential strike action by signalers in several areas of the country. The Acas talks will take place on either Monday or Tuesday.

In the air, British Airways have announced that their contingency plans for the first day of a three-day cabin crew strike have gone "extremely well".

A spokesman for BA said that according to their program, more than 65% of passengers would reach their destinations, with 1,157 staff working and some canceled flights reinstated. However the Unite union, representing the striking crew members has speculated that only a third of BA’s normal flights took off, with 125 out of its 250 planes grounded.

Another four-day strike is planned for 27 March in the pay and conditions row.

Within the next few days Chancellor Alistair Darling is expected to endorse plans for a global tax on certain financial institutions. These are institutions that are likely to pose a "systemic risk" by being dependent on government insurance schemes to stay afloat. Darling us expected to use the budget announcement to detail his backing of the proposals, with his key recommendations being that government revenue raised should go to national governments rather than an insurance scheme, which he believes would encourage banks to take more risk on lending and expansion. Darling’s views are similar to those expressed recently by Dominique Strauss-Khan head of the International Monetary Fund (IMF), who encouraged Europe to establish a system of orderly bankruptcy for cross border banks which would be less dependent on insurance schemes to fund bailouts.

In a recent survey conducted by Small Business Britain Entrepreneurs it was revealed that 40 per cent of small and medium, sized business enterprises (SMEs) would like to see a fall in employers’ national insurance contributions. In addition over 45 per cent would like to see banks to offer better rates to smaller firms. All in all they have called for Chancellor Alistair Darling’s budget to support small and medium-sized businesses, while at the same time, according to an unrelated survey small and medium-sized businesses are reported to be gaining increased confidence that the UK’s economic recovery looks likely to continue. The HSBC’s Global Small Business Confidence Monitor has reported that over three-quarters of SMEs now expected steady or increasing growth over the next six months

On the downside, the recent severe spell of weather has reportedly caused losses of around £7 billion pounds to SMEs. A survey showed that nearly two-fifths of those taking part stating that the harshest winter in decades had forced them temporarily cease operations, whilst more than forty percent said that weather conditions had cause some form of disruption to their business. Just less than a quarter of the firms surveyed announced that had not been affected by the severe weather in January.

Recent figures published today by the Society of Motor Manufacturers and Traders (SMMT) revealed that UK car production in February increased by almost two thirds against the same month in 2009, representing the fourth consecutive month that output has seen a year-on-year increase.

The SMMT announced that close to 100,000 cars came off the production line in February, with the majority going for export. In addition, around 10,226 commercial vehicles were also produced in February. A spokesman for the SMMT said the scrappage scheme continues to boost demand and production. The ‘cash for bangers scheme is due to expire at the end of this month with the SMMT predicting that the industry will be affected by the scheme drawing to a close.

Clothing retailer Next are expected to announce in their full year results due out on Wednesday that it has beaten many of its high street rivals. Pre-tax profits are predicted to have risen by £66 million pounds to £635 million pounds. Other companies due to release their results this week include supermarket giant Sainsbury, with their fourth-quarter trading figures due out on Thursday.

The pound continues to fall sharply against the dollar and the Euro, with the fall not being helped by a Bank of England (BOE) policymaker predicting that the UK could yet fall back into recession. On that piece of optimistic news the pound fell against the dollar, to $1.503. The pound fell against the Euro to 1.100. The prediction of the chance of double-dip recession taking place came from a BOE Monetary Policy Committee member Andrew Sentance.

On the FTSE, Banks were the biggest risers, with Barclays, Royal Bank of Scotland and Lloyds Banking Group all on the up.

Partially state owned, Lloyds announced a return to profitability in 2010 after two years of heavy losses. Their recovery was helped by lower than expected bad debts and tight cost controls. On the news shares in Lloyds Banking Group s rose sharply after the bank announced that they had succeeded in reserving losses of £6.3 billion ($9.5 billion) in 2009

Energy shares were also on a high with BP and Royal Dutch Shell both among the early risers.

Meanwhile the FTSE was continuing to rose, aided by news that Lloyds Banking Group said it would return to profitability in 2010

The FTSE 100 index finished for the weekend at 5,650.13, after hitting a 21-month closing peak on Wednesday.

On Wall Street before the weekend close, the Dow Jones was still on the rise, this time by 83 points to close on 10741.98. The NASDAQ took a little dip, after enjoying a good week. It fell four points to 2374.41.

financial

• Consumer Price Index Suprises Wilson HTM Senior Analyst Peter McManus gives his take on...
• Dave Ramsey Confuses me A week ago I wrote Dave Ramsey Scares me, for...
• Surprises at Indian Wells The singles' winners at the BNP Paribas Open at Indian...

Tags: Acas, Alistair Darling, Bank, Bank of England, Banking, Barclays, British airways, British Economy, Dow Jones, Economy, Employment, Financial News, FTSE, Global Small Business Confidence Monitor, HSBC, International Monetary Fund, Lloyds Banking Group, Maritime and Transport Union, Monetary Policy Committee, NASDAQ, national insurance, Network Rail, Recession, Retail, Royal Bank of Scotland, Royal Dutch Shell, Sainsbury, Small Business Britain Entrepreneurs, Society of Motor Manufacturers and Traders, UK Economy, UK government, Wall Street

According to a recent statement from the Office for National Statistics, the state of public finances in the UK, are even worse than that of Greece. The latest figures on government borrowing show that in January there was a net shortfall of £4.3 billion, which is much higher than even the most pessimistic of forecasts. January is traditionally the month where a healthy balance of payments is the norm. If the trend continues, the UK will be looking at a deficit of £180 billion for 2010, equivalent to 12.8 per cent of GDP, which will even beat Greece into second place in the "whose going skint fastest" race.

The reasons given for the UK’s poor performance included considerably reduced earnings in the financial sector as well as general weaknesses in the economy. These factors combined to push cash receipts down by 9 per cent overall compared with last year tax, while public spending was up by 15 per cent up in January, driven higher by the rise in unemployment benefits.

The only positive piece of news coming out of the report was that the total national debt carried by Britain remains lower than Greece as well as the fellow financially challenged European countries, Portugal, Italy, Ireland, and Spain.

HSBC have announced a 24 per cent fall in profits for 2009. Their profits fell to £4.65 billion ($7.1 billion) with the main factor being increased loan impairment charges, which largely cancelled out the bank’s strong investment banking performance. Undeterred, HSBC have announced that they would be paying out a total of £4.6 billion in pay and bonuses to staff at their profit earning investment banking division. HSBC shares fell almost 6 per cent to 679 pence on the news.

After months of speculation, retailer to the upper echelons Liberty, have finally confirmed their plans for the sale and leaseback of their landmark mock-Tudor flagship store situated on Great Marlborough Street in London’s West End. The company, which was founded in 1876, and are partially owned by the MWB Group, announced that they had issued instructions to put the building up for sale, and it is expected to fetch around £40 million. A few of the London based property owners are believed to be interested in acquiring the property for lease back to Liberty, but are likely to face strong competition from overseas. A spokesman for Liberty announced that that turnover for the store in 2009 had jumped by 16 per cent.

Despite winning the Carling Cup Final at the weekend, all is not well at Manchester United, but not on the playing field, instead in the boardroom.

The problem is that United, owned by the Glazer family, are running a very high level of debt, some £716.5 million, a fact that has caused much discomfort and loads of speculation among their huge band of supporters. So much so that a group of city financiers, under the title the "Red Knights" have met to discuss the feasibility of setting up what will be a possible hostile takeover of the club. An immediate response from the Glazers was that Manchester United is not for sale."

However, it may not be that easy, as United’s owners are facing a two-pronged attack over their control of the club with the Manchester United Supporters’ Trust (Must) running a campaign to bring about a change of ownership, which might even involve fans boycotting the clubs matches, and with a 76,000 seater stadium to fill, that may well be too bitter a pill for the Glazers to absorb.

The fact that the British general election appears to be getting closer and is now expected in May is having a very negative effect on Sterling. The currency took another pounding on foreign exchange markets, with the possibility that the election may bring of a hung parliament looking an increasing possibility. The uncertainty has caused the pound to drop nearly four cents, reaching a low of $1.4984 at one point before rallying to close $1.5056. The pound also closed at 1.1044 against the Euro.

On the FTSE 100 supermarket chain Tesco were among the FTSE 100’s top performers as America’s second-richest man Warren Buffett raised his stake in the company. Share values rose by 3.2 per cent to 433 pence, after Mr Buffett announced to his Berkshire Hathaway shareholders that their holding had increased to 3 per cent. Berkshire Hathaway has been gradually raising their stockholding in Tesco since 2006 when the retailer announced their plans to enter the US market. Since making their first stock purchase, the American conglomerate is believed to have become Tesco’s sixth largest shareholder.

As the markets closed for the day, the FTSE 100 was up 134 points to 5,484.06.

According to Lawrence Summers, head of the White House National Economic Council, the impact of Barack Obama’s $800 billion fiscal stimulus is yet to be fully felt, and its impact will increasingly be sensed over the coming months. Summers has praised the fiscal stimulus as being an enormous achievement and the many projects that the stimulus funded throughout the country are running exactly as planned.

On Wall Street, the Dow Jones Industrial Average continued to creep upwards. It rose 80 points to close on 10,405.98 while the NASDAQ Composite jumped by 42 points to close on 2,280.79.

According to date from the Bureau for Economic Policy Analysis (BEPA), global trade in goods has continued its rapid recovery from its huge fall in 2009, when the recession was at its peak. Data from BEPA also indicate that the world trading system suffered very little permanent damage to global trade has been done to by the financial crisis. The bureau’s composite index reported that the volume of goods trade worldwide rose at 4.8 per cent in December, making for the most rapid monthly increase in December for any year in its 19-year history, with three monthly index, traditionally less volatile, also rising by a record rate in the fourth quarter of last year, finishing six percent higher than third quarter.

On the other side of the World, things are looking better. So much better that for the fourth time since October, Australia’s central bank has seen fit to raise their interest rates, as it seeks to cool its growing economy.

The increase, from 3.75%, to 4% was widely expected by economists.

Australia was not only the only major economy to avoid recession, but also the first to raise interest rates from half century lows as the economic crisis eased. Australia’s ability to avoid the worst of the global turndown was partially attributed to increased demand for its commodities from China.

However Australia’s boom times may be slowing down with the news that China’s manufacturing activity shrunk a little in February. However economists rushed to point out that while China’s recovery faced some flat periods, it was expected that industrial activity would continue to grow in the coming months.

After the massive earthquake that struck Chile, copper prices jumped more than five per cent on early trading on Monday. Chile is the world’s largest producer of the red metal, and the earthquake has severely disrupted mining operations in the country, consequently triggering a spree of panic buying in the major commodity centres.

financial

• Breakwater Cove Marina Phone: 831.373.7857 Radio Frequency: The marina monitors both Channels 16...
• Council tours businesses           By Chris Fell - MP...
• Perth Mint Suspends Orders For Gold Bullion As a follow-up to my previous 2 posts on gold,...

Tags: Bank, Banking, Barack Obama, British Economy, British Pound, Bureau for Economic Policy Analysis, Carling Cup Final, Credit Crunch, Dow Jones, Economics, Economy, Financial News, FTSE, Glazer family, HSBC, Lawrence Summers, Manchester United, Money, Money Management, Money Markets, MWB Group, NASDAQ, Office for National Statistics, Stocks and shares, Tesco, UK Economy, UK government, UK Recession, Wall Street, Warren Buffett, White House National Economic Council

According to a leading economist the UK should be classed with Greece and Spain, as countries carrying severe debt problems Not in agreement and understandably so are the UK Treasury sources who rebuked the suggestions that the UK was gradually becoming one of the poor relations of Europe by confirming that all of the three major credit-rating agencies had reaffirmed the UK’s triple A credit status.

Meanwhile Chancellor of the Exchequer Alistair Darling is the man faced with balancing the demands of investors and rating companies who fear that Britain’s top-level credit rating could be at risk, with the hopes of the UK public as well as some of his colleagues for an easing of taxation in the coming budget. Darling has already put the dampers on a lot of people’s hopes that this year’s budget will not be too populist, in a move to win votes for the general election that is due to follow a few months later

“People in the U.K. will want the budget to be realistic,” Darling was quoted as saying. “No one is looking for giveaways; that’s not the mood.” He summed up. Darling said voters realize the need to reduce Britain’s record budget deficit having already vowed to more than halve the £176 billion-pound deficit by 2014 starting next year.

Britain’s budget shortfall, which the Treasury estimates at about 12 percent of gross domestic product this year, is the biggest among the Group of 20 nations.

Dividends paid out shareholders by UK companies were honed back by to the tune of £10 billion in 2009, according to recent research.

Total dividends paid out by British listed companies amounted to £56.9 billion last year, down 15 per cent on 2008. The figures would have been considerably worse for investors if it not had been for the contribution of just five leading UK companies, with almost fifty percent of all dividends paid out coming from them. The e British business heroes were by BP, Shell, HSBC, Vodafone and GlaxoSmithKline. A sign of the shifting sands in the UK trading picture is that as recently as 2007, these companies accounted for 35 percent of the total dividend payout.

All the UK banks combined cut their dividends by half, adding up to around £6 billion less in dividends than in 2008. Performing particularly poorly was the high-street sector whose dividend payouts fell by 62 per cent.

At the recent meeting of the Group of Seven finance ministers’ tacit agreement was reached to draw up as set of common rules designed to force banks to pay for possible failures similar to the current one, which led to taxpayers being forced to take on trillions of dollars in liabilities.

The ministers said the world’s most advanced economies should adopt common rules as long as other major countries also agree. Apparently the G-7 is moving closer to an agreement on a bank insurance levy, one of a range of options proposed by the U.K. in November.

Already Sweden has taken the first step forward by creating a fund financed by their banks to help safeguard its financial system. In terms of the agreement, Swedish banks are required to make annual payments to the fund. The Swedish government injected 15 billion kronor (£1.2 billion) into the fund when it was set up, as well adding funds that had previously held in Sweden’s deposit guarantee fund.

According to government estimates, interest from the funds deposited by banks and on the money in the fund means it will swell to 150 billion kronor, or 2.5 percent of Sweden’s gross domestic product, by 2023.

U.K. stocks rose for first time in four days, led by a rebound in mining companies. The FTSE 100 Index increased 50.2 points to 5,111.84 at close of business in London.

The pound dropped to its lowest level in more than eight months against the dollar as growing concerns over the UK’s fiscal situation began to weigh on the currency. Sterling closed at 1.5701 and at 1.1388 against the Euro. The Euro has lost a lot of its attractions recently and was down to an eight-month low of 1.3583 against the dollar.

On Wall Street things were looking up. The Dow Jones Industrial Average finished up 74 points at 10058.64. The NASDAQ gained 15 points to close on 2,150.87.

Honda has added close to half a million cars to its existing global safety recall list. The problem this time is over airbag inflation problems mostly affecting cars sold in North America, with others Japan, Mexico, Taiwan and Australia due for recall. There was also further bad news for e Japanese carmakers Toyota after they were forced to recalled nearly half a million hybrid cars over faulty brakes, and millions of other models will need to be brought back to dealerships worldwide, suffering from accelerator and floor mat problems.

General Motors’ (GM) Opel unit has announced their plans to will invest 11 billion Euros (£9.7 billion) in introducing new product ranges over the next five years. Opel’s investment plan to breaking even within two years, a move that will entail cutting 8,300 jobs across Europe as well as the closure of at least one company plant in Antwerp, Belgium. Opel are trying to persuade

European governments to provide them with billions of Euros in loans to help the company’s plan to return to profitability.

India has announced that its economy is looking at growth levels by 7.2% in the year to the end of March. Government stimulus measures helped to maintain strong growth during the global downturn, but attention is now turning towards cooling rising prices, raising the chance that state support could soon be withdrawn. Many financial analysts also expect the government to raise interest rates earlier than expected. Strong growth in manufacturing in India is helping to compensate for falling agricultural output.

Oil prices rose and base metals moved higher as commodity markets managed a partial recovery after a sharp sell-off in the previous week US crude oil prices traded above the $71 a barrel.

financial

• Stricker and Kelly win Shark Shootout The 2009 Shark Shootout, held at the Tiburón Golf Club...
• Facebook CFO Gideon Yu resigns Facebook's finance chief, Gideon Yu, is leaving the fast-growing social-networking...
• The Truth About Market Volatility Earning Season is always volatile to stock prices. Traders jerk...

Tags: Alistair Darling, Bank, Banking, BP, British Economy, Credit Crunch, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, G-7, General Motors, GlaxoSmithKline, Honda, HSBC, Money, Money Markets, NASDAQ, Recession, Retail, Shell, Stock Markets, Toyota, UK Banks, UK Economy, UK government, UK Recession, UK treasury, Vodafone, Wall Street

According to a recent report by the Centre for Economics and Business Research (CEBR) UK house prices are liable to rise by about a fifth in the next four years. The forces that will push property prices up are increased lending levels by the banks and interest rates remaining at a low level.

Home values will rise 6.5 percent in 2010 and will have gained around 20 percent by the end of 2013, according to CEBR radically altering their forecast of October 2009, which house prices would increase by only 2.6 percent this year.

CEBR’s announcement strengthens reports from the Nationwide Building Society that showed house prices have begun rising again after the economy returned to growth. However their optimism was dashed by news that potential UK house buyers could soon face a chronic shortage of credit that will see mortgages ‘rationed’.

According to the Council of Mortgage Lenders (COML) as government schemes to keep mortgage lending afloat are due to dry up in 2014, their fears that a funding gap to the tune of £300 billion will open up. COML predicted in their recent report that the UK is at risk of a chronic under-supply of credit, bringing with it the rationing of mortgages for customers that will continue for many years. Before the financial crisis, the funding gap, meaning the difference between what banks took in savers’ deposits and what they lent out, was always covered by the wholesale market in mortgage debt.

As a result of lower oil and gas prices, oil giant BP have reported a 45% drop in annual profit Its replacement cost profit for 2009 was £8.75 billion, compared with £15.39 billion in 2008. The company said that its oil and gas production increased more than 4% in 2009 and its reserves had grown for the 17th year in a row. Profits during the final three months of 2009 were up 33% from the same period a year ago.

However, the fourth quarter results fell short of analysts’ expectations, causing BP shares to fall more than 4% in early trading.

Shares in Northumbrian Water surged 12 percent after press reports that the Ontario Teachers’ Pension Plan may bid £1.7 billion ($2.7 billion) for the company. The water utilities market in the UK is liable to benefit if the speculation on Northumbrian Water is confirmed as it will establish a higher trading range for the other water stocks. On the news, Northumbrian Water rose by 12 percent to close on 289 pence. The Ontario pension fund already owns 27 percent of the U.K. water company and wants to buy the remaining stake.

Severn Trent caught the wave and added 4 percent to 1,170 pence while United Utilities gained 2.8 percent to 551.5 pence.

South Korea’s National Pension Service, the world’s fifth biggest pension fund, will next week take a 12 per cent stake in Gatwick airport, stressing that investment in Britain will play a significant role in quadrupling its international exposure. The NPS, which is aiming to expand its overall portfolio, came to the attention of Britain’s financial community last year when it bought the headquarters of HSBC in Canary Wharf for £773 million. Gatwick airport was sold late last year to Global Infrastructure Partners, an infrastructure fund backed by Credit Suisse and General Electric, for £1.51 billion.

The longest running saga in recent UK takeover history drew to a happy close as US firm Kraft Foods sealed their takeover of Cadbury after shareholders in the UK chocolate maker voted in favour of the deal.

Cadbury said it had received valid acceptances of the offer from investors representing 71.7% of the firm. Kraft chief executive Irene Rosenfeld celebrated the takeover by announcing: "I warmly welcome Cadbury employees into the Kraft Foods family." Despite the warm welcome, Cadbury employees staged protests in London calling for government support to guarantee jobs

Budget airline Ryanair has raised its full-year profit forecast as passenger numbers continue to rise. The company announced that it said it expects full-year net profits of about 275 million Euros, whilst reporting a 10.9 million Euro; (£9.5 million) loss in fourth quarter of 2009, a considerable improvement on the 101.5 million Euro losses for the same period in 2008.

Ryanair said the result had been helped by a 37% fall in fuel costs and passenger numbers increased by 14%, which had offset a 12% drop in fares.

Europe’s second- largest tobacco company Imperial Tobacco Group Plc have announced a “good start” to the year with business “in line” with company expectations, despite the weak economic climate. Despite the news, their shares declined 1.2 percent, to 2,002 pence. The Royal Bank of Scotland Group Plc are to allow its top performing employees to convert a large portion of bonuses given in shares into cash within 12 weeks of receiving them, according to a letter sent to investors yesterday. On the day RBS shares rose 7.9 percent, to 34.86 pence.

The pound closed down at 1.5977 against the dollar, while the Euro traded at 1.1438

The FTSE 100 dropped 4.1 percent in January as the U.S. government called for limits on risk-taking by banks and China moved to restrict lending and cool economic growth. The gauge is still 49 percent higher than in March after governments and central banks around the world sought to encourage growth by maintaining low interest rates and committing more than $12 trillion to stimulate the economy.

The benchmark FTSE 100 Index added 35.9 points to reach 5,283.31 at the close of trading in London.

US President Barack Obama has announced a $3.8 trillion (£2.4 trillion) budget plan for 2011, which includes increased spending for job creation, but cuts in other areas.

He also forecast the US deficit would rise to a record $1.56 trillion this year.

He scrapped plans to send astronauts back to the Moon and will seek to save $250 billion by capping a range of domestic spending programmes for three years.

Congress must approve the budget for the financial year starting on 1 October for it to take effect.

Mr Obama blamed the huge deficit on the decisions of President George W Bush, previous Congresses and his administration’s moves to prevent an economic collapse.

Stocks continued to extend gains after reports showing the U.S. manufacturing sector expanded more than forecast. The Institute for Supply Management’s factory index showed U.S. manufacturing expanded in January at the fastest pace since August 2004, spearheading the recovery from the worst recession since the nineteen-thirties.

On the news, the Dow Jones rose sharply, to close on 10284.91, while the NASDAQ rose 38 points, to finish on 2185.32

Gold lost some of the previous day’s sharp gains, dropping 0.1 per cent to $1,105. Oil rose 0.5 per cent to $74.81 a barrel.

financial

• The Vanguard REIT Index Fund (VGSIX) Did Its Job, Despite The Crash It's no secret the recent bear market was brought on...
• Sometimes Saving Hurts! Declining Interest Rates Shouldn't Lead to Rate Chasing This post was inspired by a post titled, “FNBO Direct...
• Money Merge Account Analysis Pt 8 If you have not yet done so, please read part...

Tags: Banking, Barack Obama, British Economy, Cadbury, Centre for Economics and Business Research, Council of Mortgage Lenders, Credit Suisse, Dow Jones, Economy, Employment, Financial News, FTSE, Gatwick Airport, General Electric, George W. Bush, Global Infrastructure Partners, HSBC, Imperial Tobacco Group Plc, Kraft Foods, Money, NASDAQ, Nationwide Building Society, Northumbrian Water, Oil, Ontario Teachers’ Pension Plan, Property Prices, Recession, Retail, Royal Bank of Scotland, Ryanair, Severn Trent, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession

Darling blames the financial sector for the UK’s delayed return to growth.

Chancellor of the Exchequer Alistair Darling has said in a recent interview that the U.K.’s economic recovery is being retarded by the country’s large financial services sector. “I am not surprised that it has taken time for the economy to return to growth,” Darling was quoted as saying. “What is holding us back is the fact that we have a large financial-services sector, which has affected what we produce.”

British Sky Broadcasting Group Plc,(BSB) the U.K.’s biggest pay-television provider, has announced a 3.4 percent increase in first-half operating profit as increased pay-TV and broadband subscribers boosted sales. Earnings for BSB in the six months to Dec. 31 2009 were £401 million ($651 million) up from £388 million in 2008. Turnover rose 10 percent to £2.87 billion for 2009.

Soft drinks and squashes producer Britvic have reported strong first-quarter sales growth, whilst striking a more cautious note about second-quarter trading, partly because of the extremely cold weather conditions experienced across Europe in December and January. Britvic, whose brands include Tango and Robinsons, reported sales of £242.7 million for the 12 weeks to December 20, an increase of 11 per cent on the same period in 2008.

Richard Branson’s financial-services un Virgin Money Holdings U.K. Ltd., it, named former Lloyds TSB Chief Executive Officer Brian Pitman as chairman as it seeks to build a new retail banking group. Financial analysts have credited Pitman with transforming Lloyds TSB into Britain’s most profitable lender before his departure in 2001.

No sooner had the press conference to announce the launch of the new Apple iPad than mobile phone operators in the UK were preparing to open talks with the company regarding the provision of third generation (3G) internet services to the new device when it hits the UK shores. Industry sources said that O2, 3, Vodafone, Orange and T-Mobile are preparing to meet Apple "in the next week" Apple is expected to ship the Wi-Fi only versions of the iPod to the UK in March, while the 3G versions will go on sale in the US "and selected countries" in April. Apple chief executive Steve Jobs announced during the launch on Wednesday that the priority was to secure agreements with international operators for 3G, with deals expected by the end of July.

On the money markets, the euro dropped to a five-month low against the pound on Thursday as concerns mounted over the finances of Greece and other Eurozone countries. The pound closed at 1.6129 against the dollar, with the Euro being traded at 1.1541

UK banks fell sharply at the end of trading, retreating from earlier gains. Lloyds Banking Group fell 0.2 per cent at 51.83 pence, HSBC dropped 0.5 at 660 pence, Royal Bank of Scotland lost 1.3 per cent to 33.29 pence and Standard Chartered was down 2.6 per cent at 1432 pence.

The FTSE 100 fell 71.7 points, or 1.4 per cent, to 5,145.74, with Wall Street’s weak start also being a factor.

The year 2009 gas witnessed the biggest decline in air passenger traffic in the post-war era, according to figures released by the International Air Transport Association (IATA).

"In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen," according to a spokesman for the organisation. Passenger traffic dropped by 3.5% from a year earlier, while freight traffic fell 10.1% as the downturn hit demand. However, figures for December showed a rise in traffic of 1.6% on a year ago.

Chairman of the US Congress financial services committee, Barney Frank, has argued that the dramatic proposals unveiled by the administration last week to clamp down on banks could be incorporated into legislation could be enacted into law within months.

On Frank’s prediction, the Dow Jones fell by 135 points, to close on Thursday at 10120.46, while the NASDAQ lost 31 points, to finish on 2179.0.

The US Commerce Department have confirmed that December sales of new homes have fallen, and for the second month in a row.

Sales fell by 7.6% to 342,000 homes, down from a revised rate of 370,000 in November. Analysts had expected new home sales to increase in December.

The number of new homes sold in 2009 was 374,000, 23% fewer than in 2008 and the lowest number sold in a year on record.

The Federal Reserve left interest rates unchanged at their range of between zero and 0.25%, as the US central bank repeated its vow to keep rates exceptionally low for an extended period. Interest rates have remained at their current low range since December 2008.

Ford has posted an annual profit for the first time in four years.

The carmaker made a $2.7 billion (£1.7 billion) profit in 2009, a dramatic improvement on their loss of almost $15 billion in 2008. A spokesman said that Ford expects to remain in profit for 2010.

The company made an $868 million profit for the third quarter of 2009, a dramatic improvement on the $6 billion loss it made for the same period the previous year. Ford attributed their return to profitability to cutting costs and reducing debt levels.

Thanks largely to "exceptional demand" for Windows 7, computer software giant Microsoft has reported a 60% jump in profit for the three months to 31 December 2009. Net profit for the quarter was $6.66 billion (£4.13 billion), up from the $4.18 billion for the same period a year earlier. Microsoft also reported turnover for the quarter of $19.2 billion, comfortably beating analysts’ forecasts.

French President Nicolas Sarkozy has called for a fundamental rethink of capitalism in the aftermath of the financial crisis.

His comments came as bankers and regulators clashed over proposals to break up banks that threaten the whole financial system.

Mr Sarkozy said he wished to restore a "moral dimension" to free trade.

France has supported forcing banks to hold more capital and curbing bonus payments in global negotiations over the past year on how to reform the system to prevent future crises.

Samsung Electronics have overtaken Hewlett-Packard (HP) to become the world’s largest technology company in terms of company turnover. Samsung have reported full-year sales of $117.8 billion which overtook HP’s sales of $114.6 billion in 2009. With a sales forecast at $127 billion, Samsung are expected to surpass its US rival again this year, with HP expected to achieve "only" $120 billion in sales.

In energy markets, crude oil prices consolidated ahead of the latest US weekly inventories data, with prices averaging around $74 a barrel. US crude stocks were expected to have risen 1.4 million barrels last week, according to a recent poll of analysts, with demand from US refineries remaining weak.

financial

• High Yield CDs (FDIC Insured) For March, 2010. table { border: 1px solid lightgrey; } td { border-left:...
• Default Rate: It's Not Just If a Loan Defaults, But When I had a very interesting email exchange with RGF.  (I...
• New Loan Funded — Working Capital Loan for Post Production Company — $21,000 at 18.50% — B Credit — DTI 59% A new loan funded (Working Capital Loan for Post Production...

Tags: 3, Alastair Darling, Apple iPad, Bank, Banking, Barney Frank, Brian Pitman, British Economy, British Sky Broadcasting Group Plc, Britvic, Economics, Economy, Federal Reserve, Financial News, Ford, Hewlett-Packard, HSBC, Interest Rates, International Air Transport Association, iPod, Lloyds TSB, Microsoft, Money, NASDAQ, Nicolas Sarkozy, O2, Orange, Recession, Richard Branson, Royal Bank of Scotland, Samsung Electronics, T-Mobile, UK Banks, UK Economy, UK Recession, US Commerce Department, US Congress, Virgin Money Holdings U.K. Ltd, Vodafone, Windows 7

U.S. President Barack Obama has celebrated his first year in office by showing a more brittle side to his personality, and in recent statements has been particularly vehement in his comments regarding the US banking system. Obama has stated his intention to raise legislation that would force around 50 banks, insurance companies and large broker-dealers to pay a tax of 0.15 percent on all of their U.S. assets, less their capital and deposits. Falling into that category will be the Royal Bank of Scotland (RBS), Barclays Banks and HSBC who, if the legislation is passed, could be forced to pay more than $10 billion to the U.S. government over the next 10 years. Analysts have already calculated that HSBC could be forced to pay around $3.8 billion dollars and Barclays could face a total bill of around $5.6 billion dollars over ten years. While the RBS will only be paying out around one and half billion dollars, they appear to be already in the process of raising capital to meet the bill, when it comes. They have announced that the Grosvenor House hotel, , is to be put up for sale by the part-nationalised RBS and proceeds for the sale is expected to raise between £600 and £700 million as part of RBS’s unwinding of its property portfolio. The Grosvenor House hotel, which has previously hosted events such as the CBI annual dinner, could be on the market as early as this month.

Meanwhile the Bank of England (BOE) are still feeling the effects of their quantitative easing programme, with the news of the loss of £3.6 billion s on its purchases of government bonds, whilst projecting that capital losses from the purchase, so far of £192 billion pounds in gilts would be £8 billion if these were sold today. The reason for the shortfall is the steep drop in government bond prices as a result of the strengthening economic recovery felt the past month. On the upside, losses will be offset by £4.4 billion pounds, which is the interest payment the BOE has received from the securities.

Construction companies made up more than 20 percent of UK business failures in 2009, a recent survey has disclosed. While the number of companies involved in the construction sector that closed their doors in 2009,

decreased slightly from 2008, there were still 683 who fell into administration during 2009, compared with 716 in 2008. The fourth quarter of 2009 saw a 17 percent decline in construction administrations according to Deloitte with 129 compared with 155 in the third quarter.

Shares in Premier Foods have fallen by more than ten percent after the food manufacturer announced that full-year pre-tax profits would be lower than expected, at around £165 million pounds for the financial year to February 16. Total sales increased by 1.5 percent during the fourth-quarter with sales of the company’s branded goods increasing to around £1.7 billion, making up to two thirds of the total turnover for 2009, compared with 61 percent the previous year.

The bus operator FirstGroup has reported a drop in turnover of around 20 percent for the company’s U.S. Greyhound operation during the first half of their financial year. A little ray of sunshine was that revenue for the third quarter was only down by 11.4 percent and passenger revenue for the group’s UK bus business grew by 0.7 percent during the three months to December 31. On the upside, FirstGroup announced that they remain on course to achieve earnings targets for the year and that trading, was in line with management expectations.

The European electrical groups DSGi, who own and operate the Currys and PC World chains in the UK, have announced trading figures that are in excess of most City analyst’s projections. Group sales rose by eight percent during the 12 weeks to January 9, much higher figure than the three percent expected by most analysts, with the reason attributed to an upturn in consumer sales.

Home Retail Group (HRG) have also updated their predictions for its full-year profits, which they now expect to be around £20 million higher than the £265 million initially forecast, following a four percent improvement in sales at HRG’s DIY chain Homebase.

One of Cadbury’s major shareholders has indicated that US food giant Kraft will have to increase their hostile takeover offer if it wishes to win support.

Legal & General Investment Management, which owns 5% of Cadbury shares, said Kraft’s current offer did not meet "the long term value" of the UK firm. Legal & General’s comments come ahead of Tuesday’s eagerly anticipated deadline for Kraft to increase its offer to Cadbury shareholders.

Reports continue to gather strength that Hershey is also planning a rival bid for Cadbury which may be announced as early as this week. The current state of affairs is that Kraft is currently offering £10.5 billion or 761 pence per Cadbury share, which was rejected by the chocolate-maker’s shareholders. .

Kraft’s current bid is worth less than Cadbury’s share price which closed on Friday at 793.5 pence.

British Telecom (BT) announced their intentions to enter a price war with Sky over the price charged for fans to watch premium sports events on TV, including football and cricket.

The telecoms firm is awaiting the outcome of an Ofcom probe, which will be known in March, examining whether Sky must drop the wholesale price it charges rivals for content.

BT Vision has leaked their intentions to charge about £15 a month for Sky Sports 1, about £10 cheaper than Sky currently charges. A spokesman for BT projected that there would be benefits to the viewing public for choosing BT as they would be getting more choice

Vodafone UK has launched a new online business centre, bringing information and insight on its full range of capabilities in mobile, fixed and unified communications together in one place. The site, www.vodafone.co.uk. Has been designed to make it even easier for private and business customers to find the information they need and the solutions that best suit them. Meanwhile Vodafone (has become the third mobile phone operator in Britain to begin to market the Apple iPhone in the UK. Results are encouraging with a total of 50,000 units delivered on the first day of sales. Until recently, Vodafone had been disallowed from marketing the premier smartphone due to exclusivity rights brokered between Apple and O2.

Vodafone is now the fourth company in the U.K. to carry the iPhone, following O2, Orange and Tesco. While O2 once enjoyed a two-year exclusive deal with Apple to offer the iPhone in the U.K., that exclusivity ended last year and Orange and Tesco began offering the Apple smartphone in November and December, respectively.

Orange sold 30,000 iPhones on its first day of its launch in November 2009 while Tesco has not disclosed any sales figures.

Also enjoying some good trading on the back of the iPhone launch is the Carphone Warehouse. Their trading update for the last quarter of 2009 is expected to show a four percent increase in the number of phone connections compared to the same period in 2008. Sales of the most expensive products, such as the Apple iPhone and BlackBerry, are believed to contribute considerably to sales and profits, while the company’s fixed-line division TalkTalk is reported to have added 46,000 new subscribers during the last three months of last year.

The pound improved a little against the dollar before the weekend, closing at 1.6301, while the Euro being traded at 1.321

The FTSE 100 Index dropped 43 points before closing on Friday finishing on 5,455.37.

Wall Street bank JP Morgan Chase has reported profits of $3.3 billion (£2 billion) for the last three months of 2009, compared with profits of $702 million for the same period in 2008, which was the height of the financial crisis. Total profits for the bank for year were $11.7 billion, with investment banking providing the bulk of the profit.

The Dow Jones Industrial Average took a tumble before closing on Friday down 81 points to 10,609.65. The NASDAQ Composite was also down. 23 points to close on 2287.99

financial

• Flexible Spending Account Deadlines: Use it or Lose it! Recently, we looked at 5 ways you can still increase...
• What is The Holy Spirit? What is The Holy Spirit: While many Christians understand the...
• The Easiest $100 I Ever Made On Sunday, HP had a firesale on their TouchPad tablets....

Tags: Apple iPhone, Bank of England, Banking, Barack Obama, Barclays Banks, BlackBerry, British Economy, British Telecom, BT Vision, Cadbury, Carphone Warehouse, Currys, Deloitte, Dow Jones, DSGi, Economy, Employment, Financial News, FirstGroup, Grosvenor House hotel, Home Retail Group, Homebase, HSBC, JP Morgan Chase, Kraft, Legal & General, Money, NASDAQ, O2, Ofcom, Orange, PC World, Premier Foods, Recession, Retail, Royal Bank of Scotland, Sky, Stock Markets, Stocks and shares, Tesco, UK Banks, UK business, UK Economy, UK government, UK Recession, Vodafone UK, Wall Street

U.K. Prime Minister Gordon Brown said Monday that his government has identified billions of pounds in additional efficiency savings in the public sector to help pare the country’s record deficit. Mr. Brown said the government can deliver £12 billion ($19.7 billion) in efficiency savings over the next four years, an increase on the target £9 billion that the Treasury had identified in April. Brown’s announcement comes ahead of Wednesday’s Pre-Budget Report, which will map out some measures to cut the budget deficit. Among the measures that have been considered is a tax on bankers’ bonuses and even on the banks themselves. However the issue of a windfall tax on banks or bonuses presents Brown and Chancellor Darling with a serious dilemma as they leave no stone unturned to raise cash without damaging the economy’s return to growth. Eroding banks’ profits to raise fiscal income might weaken these institutions just as the government is trying to provide increased more capital behind them to cover lending to Britain’s credit-starved companies.

Manufacturing output in the UK between September and October was unchanged against expectations for a 0.4 per cent increase. UK house prices rose 1.4 per cent month on month in November – stronger than forecast. The two pieces of news appeared to cancel each other out and sterling and gilts seemed little affected.

U.K. Chancellor of the Exchequer Alistair Darling is expected on Wednesday to announce a cut in taxes on the use of electric vehicles as company cars as part of efforts to present an environmentally friendly pre-budget report. A U.K. treasury spokesman predicted that from 2012, companies and employees would be exempted from paying taxes on company cars if they were electric vehicles.

Shares in UK government majority owned Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, dropped after Chancellor of the Exchequer Alistair Darling refused to rule out a tax on excessive bonus payments. Royal Bank of Scotland retreated 4.7 percent to 33 pence and Lloyds Banking tumbled 4.1 percent to 53.69 pence.

Andrew Bailey, executive director for banking services at the BOE, has stated the bank’s fears that U.K. consumers are hoarding cash due to their lack of confidence in the banking system. Another factor that strengthens the banks theories are the negligible interest that they would earn even if they did invest their money with a financial institution. In a speech made in Washington D.C., Bailey highlighted the ironic connection between the declining need for cash in everyday life and the sharply increasing demand for banknotes during the financial crisis and ensuing recession.

According to a recent report issued by the Engineering Employers Federation, U.K. factory production will begin growing again next year as exports rebound, Production is expected to grow 0.9 percent in 2010 after it had shrunk by 10.4 percent in 2009. The report went on to add that increasing signals point to the fact that the U.K. is emerging from the longest recession on record. The British Chambers of Commerce pointed out that although the recovery has started the Bank of England will probably be required to maintain its bond purchase plan at £200 billion pounds ($331 billion) while it assesses the strength of signs of a rebound.

Shares in travel companies are on the rise, with the Thomas Cook Group and TUI Travel leading the way. Thomas Cook, Europe’s second-biggest tour operator, jumped 1.9 percent to 221.2 pence, while TUI Travel, Europe’s largest tour operator, rose 1.5 percent to 250.5 pence.

Shares in the U.K. waste recycling company Shanks Group Plc surged forward 43 percent to 128.5 pence after the company revealed that they had received a possible bid offer from an unidentified private equity group. Washington-based private equity firm Carlyle Group, have been reported to be in talks to buy the British waste-disposal company Shanks for about £535 million ($875 million) for some time.

Sterling lost ground on Tuesday as disappointing economic data and concerns over the UK government’s pre-Budget report weighed on the currency,

• Pound/US dollar 1.6292
• Pound/Euro 1.1040

London equities continued to weaken on Tuesday, with renewed concern about the financial problems in Dubai. Banks especially were hard while talks continued between Dubai World and the creditors to restructure debt at the holding company. It is expected that a group of banks, including the Royal Bank of Scotland, Standard Chartered, HSBC, Lloyds Banking Group as well as two from the United Arab Emirates (UAE) will form a steering committee to be appointed to represent creditors. At the end of the day’s trading, the FTSE 100 had tumbled 1.5 per cent to close on 5,230.5,

According to Federal Reserve Chairman Ben Bernanke the US economy is improving, although it is still too early to say that the recovery will last.

Unemployment could stay "elevated", although inflation is likely to remain subdued, while interest rates were likely to stay low for "an extended period",

Following Bernanke’s comments, the dollar lost a lot of the recent gains it had made against the euro.

On close of trading, the Dow Jones Industrial Average had dropped 104.82 points to 10,285.292 and the NASDAQ was also down 19,65 points to to 2,169.96

President Obama has said that money not spent under the £425 billion ($700 billion) US bank bail-out package could be used to cut the US deficit and boost jobs. The cost of the "Troubled Asset Relief Program" (Tarp) had turned out to be "much cheaper than expected". Reports say the cost of the Tarp will be £120 billion below the Treasury estimate. Back in August, the Obama administration had estimated that the rescue package would be £200 billion.

Crude oil dropped for a fourth day, trading below $75 a barrel, as the dollar gained amid speculation the U.S. Federal Reserve will start raising interest rates.

The China Association of Automobile Manufacturers announced that Chinese car sales and production both exceeded 12 million between January and November, with expectations that car sales and output will to top 13 million for the full year.

Production of new cars has never topped the 10 million cars in one year mark in the past with state incentives having boosted car sales. The Chinese government has reiterated their plans to continue economic stimulus measures into 2010, Despite the downturn and falling sales at most global car makers, demand for cars in China continues to boom.

financial

• Mutual Fund Companies Often Make Better Investments Than The Funds They Manage It may seem unfair, but over the past 20 years...
• Leave Your Retirement Accounts Alone (AGAIN!) All the way back in September of 2008 I wrote...
• The Forex Market: The Largest Financial Market In The World Technology has changed the world we live in. Every industry...

Tags: Alastair Darling, Asset Relief Program, Bank, Banking, Ben Bernanke, British Economy, British Pound, Chancellor of the Exchequer, Credit Crunch, Crude oil, Currency, Dow Jones, Dubai World, Economics, Economy, Employment, Engineering Employers Federation, Financial News, Gordon Brown, HSBC, Lloyds Banking Group Plc, Money, Money Markets, NASDAQ, pre-Budget report, Recession, Royal Bank of Scotland Group Plc, Shanks Group Plc, Standard Chartered, Stock Markets, Stocks and shares, Thomas Cook Group, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US economy

Sweeping spending cuts and tax increases will be required across the industrialized world over the next decade to bring public finances under control following the economic crisis, the International Monetary Fund warned on Tuesday. The IMF projected that on current trends, even assuming some discretionary fiscal tightening next year, government debt in the advanced G20 economies would reach 118 per cent of gross domestic product in 2014.

The Fund warned against assuming that current low borrowing rates for these nations in the bond market would prevail forever, releasing research suggesting that the projected increase in government debt would result in a roughly 2 percentage point increase in government bond yields.

HSBC is to shed another 4 per cent of its UK workforce as pressure mounts across the banking industry to cut costs. The global bank said it would cut about 1,700 jobs in back-office functions, affecting mainly collections and credit card operations, in the next 12 to 18 months. The jobs would mostly be lost from regional centres in southern England. It also aims to add 400 to 500 jobs in Birmingham in that time. HSBC had previously announced the loss of 1,200 jobs in March and 500 in December last year. Of these, the bank said it had redeployed some 500 staff and would hope to redeploy a similar proportion from the latest round of job cuts.

Legal & General (LGIM) sought to defend itself against the idea of a break-up of its businesses as it reported its lowest level of quarterly sales figures for at least seven quarters on Tuesday.

The life and pensions said that keeping its annuity, protection and asset management businesses under one roof brought valuable “synergies” across all three.

Tim Breedon, chief executive, said that about 30 per cent of its new business either came from cross-selling or was business the company would not have won if it did not have all three elements.

Mr Breedon highlighted stronger-than-expected cash flow at the group and the performance of LGIM, the group’s asset management arm, which attracted net inflows of £12.2 bn ($20bn) over the first nine months, outstripping the £11.1 bn seen at M&G, Prudential’s asset management arm.

Marks and Spencer has confirmed it will start selling branded goods at its stores across the UK.

It will mean 400 household brands, such as Kellogg’s and Coca-Cola, will be sold alongside M&S’ own products in areas such laundry, beer and pet food.

The decision comes after successful trials in stores in the north-east and south-east of England.

The announcement came as M&S reported profits of £306.7 million for the six months to September.

The figure was little-changed on the profit of £307.8 million made in the same period last year.

Associated British Foods (ABF LN): The maker of Silver Spoon sugar reported a 12 percent rise in full-year group revenue. The company also said it’s cautious about the outlook for the U.K. consumer. The shares gained 5.5 pence, or 0.7 percent, to 833.

Aviva Plc (AV/ LN): The U.K. insurer raised 1.02 billion euros ($1.5 billion) selling stock in its Dutch insurance unit Delta Lloyd NV, pricing the shares near the low end of its forecast range after insurance companies slumped.

The U.K.’s biggest insurer by market value sold 63.5 million Delta Lloyd shares at 16 euros each. Aviva had sought 15.50 euros to 19 euros a share. Delta Lloyd will begin trading today in Amsterdam.

The shares rose 5.5 pence, or 1.4 percent, to 389.1.

British Airways Plc (BAY LN): Europe’s third-biggest carrier may face its first cabin-crew strike since 1997 before the end of the year as the union representing flight attendants at Europe’s third-largest airline prepares to vote on a walkout.

Members of the Unite union will meet on Dec. 14, by which time union leaders aim to have the results of a strike vote. The stock dropped 1.9 pence, or 1 percent to 179.9.

GlaxoSmithKline Plc (GSK LN): The U.K.’s largest drugmaker received a letter from Connecticut Attorney General Richard Blumenthal saying he was investigating allegations of price gouging, according to a faxed statement. The shares fell 3 pence, or 0.2 percent, to 1,247.

Cadbury Plc (CBRY LN): The U.K. confectioner is targeting an “unrealistic” price as a starting point for talks about a merger with Kraft Foods Inc., the Sunday Telegraph said, citing people it didn’t name. Kraft will probably make a hostile takeover bid if Cadbury’s management doesn’t support a tie-up. Reports have it that Kraft is preparing another bid for Cadbury which will be put to investors within the next 10 days. The newspaper did not say where it obtained the information. The stock fell 2.5 pence, or 0.3 percent, to 770.5.

DUTCH parcel firm TNT, which is trying to cash in on the disruption caused by the UK’s postal strikes, yesterday posted better-than-expected quarterly results due to cost-cutting and highlighted signs of revival in its business parcels arm. TNT, which has lobbied the government to allow it to launch a door-to-door postal service to challenge the strike-hit Royal Mail, said third quarter profits dipped 14.4 per cent to €179m (£162m), although margins recovered to nearly match last year’s levels. The group uses the Royal Mail for the so-called “final mile” of its British postal network, but has been trialling its own door-to-door letter deliveries in several areas including Merseyside, using orange-clad postmen. TNT said UK business-to-business parcel volumes had increased about 10 per cent in the few couple weeks since the strikes by the Communication Workers Union kicked in, but a spokesman said the rise had come too late to affect the third quarter numbers.

General Motors (GM) has cancelled plans to sell a majority stake in its European car business Opel, including its UK brand Vauxhall.

The US giant said in a statement that its board had made the decision because of "an improving business environment for GM over the past few months".

GM had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna.

It added that it would now be seeking aid for Opel from the German government and other European states. GM added that it had also come to its decision because of the importance of Opel and Vauxhall to its global strategy. General Motors (GM) has confirmed that it plans to cut 10,000 jobs across its European car unit Opel, which includes the Vauxhall brand in the UK. The announcement comes a day after GM said it was cancelling its deal to sell Opel to Canadian car parts firm Magna. Unions in Germany said workers would begin walk-outs from Thursday in protest at GM’s decision.

The German government, which had backed the sale of Opel, demanded GM repayment of a 1.5bn euro ($2.2bn; £1.3bn) loan.

The pound fell for a second day against the dollar and snapped a five-day gain versus the euro on speculation that forced asset sales by banks may weaken the country’s financial institutions.

Billionaire Warren Buffett’s investment firm is to take control of the second-biggest US railroad, in what is said to be his biggest deal yet.

Berkshire Hathaway agreed to buy the 77.4% of Burlington Northern Santa Fe (BNSF) it does not already own for about $26bn (£16bn) in cash and stock.

BNSF is the biggest US hauler of products such as corn and coal.

Mr Buffett said that the deal was "an all-in wager on the economic future of the United States". Including past investment and the assumption of $10bn of BNSF debt, the deal is valued at $44bn. Warren Buffett on Tuesday struck the biggest deal of his life with the $26.6bn purchase of Burlington Northern Santa Fe, one of the largest US railroad operators, in what the billionaire investor called an “all-in wager” on America’s economic future. The cash-and-shares deal by Mr Buffett’s Berkshire Hathaway, which already has a 22.6 per cent stake in BNSF, caps a long search by the legendary investor for an “elephant” deal to deploy his vast cash pile. The takeover deepens Mr Buffett’s exposure to the US-focused old-economy sectors that have long been the backbone of his empire alongside financial services, and underlines his confidence in a rebound in domestic growth

financial

• Hindsight View: How HP Could Have Succeeded With the TouchPad I realize you are probably little bored about articles on...
• Choose the Right Replacement Furnace Filter What kind of replacement furnace filter to buy isn't something...
• Federal and State Estimated Quarterly Tax Payments are Due! On Wednesday, I did a quick estimate of my taxes...

Tags: Associated British Foods, Attorney General, Aviva PLC, Bank, Bank of England, Berkshire Hathaway, BNSF, British Airways Plc, British Economy, Burlington Northern Santa Fe, Cadbury Plc, Coca-Cola, Credit Crunch, Delta Lloyd, Economics, Economy, Employment, Financial News, General Motors, GlaxoSmithKline Plc, GM, HSBC, International Monetary Fund, Kellogg's, Kraft Foods Inc, Legal & General, LGIM, M&G, M&S, Marks and Spencer, Money, Opel, Prudential, Recession, Retail, Richard Blumenthal, Royal Mail, Silver Spoon, Sunday Telegraph, Tim Breedon, TNT, UK Banks, UK Economy, UK government, UK Recession, Unite, Vauxhall, Warren Buffett