The Bank of England has announced that they are to inject a further £25 billion into the UK economy. The move is seen as an almost desperate bid to drag the economy reluctantly out its longest recession on record, after the announcement last week that the UK economy had shrank 0.4% in the third quarter. The BOE’s gesture extends the quantitative easing programme to a total of £200 billion, meaning 14% of UK’s gross domestic product (GDP). The £25 billion will be released over the next three months.

According to that perennial bearer of bad news, the International Monetary Fund (IMF), sweeping spending cuts and tax increases will be required across the industrialised world over the next decade in order to bring public finances under control following the economic crisis, 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.

As pressure mounts across the banking industry to cut costs, HSBC have announced that is to pay off another four per cent of their UK workforce The job cuts would affect around 1,700 HSBC staff involved in back-office functions, and would come into effect over the next 12 to 18 months, and would mostly be lost from regional centres in southern England

Marks and Spencer have stepped into new territory with the announcement that they will begin to market branded goods at their stores across the UK.

This will mean the unfamiliar site of such household brands as Kellogg’s and Coca-Cola, appearing on the M&S’ shelves alongside their own label products. M&S have reported profits of £306.7 million for the six months to September, down just a smidgeon (£1.1 million) from the same period in 2008.

Makers of Silver Spoon sugar, Associated British Foods have reported a 12 percent rise in full-year group revenue. Their shares gained 5.5 pence to close on 833.

Meanwhile, Europe’s third-biggest airline, British Airways Plc is staring in the face of a cabin-crew strike, which could happen before the end of the year. The Unite union representing flight attendants are preparing to vote on a walkout on December 14th. On that less than encouraging news, stock in BA dropped 1 percent to 179.9 pence.

U.K. confectionary giant Cadbury Plc is said to be setting an unrealistically high price as their starting point for merger talks with Kraft Foods Inc. Reports have it that Kraft is preparing another bid for Cadbury which will be put to investors within the next 10 days, and Kraft will probably make a hostile takeover bid if Cadbury’s management doesn’t support a tie-up The uncertainty in the air caused Cadbury’s stock to fall 0.3 percent to 770.5 pence.

Dutch parcel firm TNT, busily trying to cash in on the disruption caused by the UK’s postal strikes have lobbied the government to allow it to launch a door-to-door postal service to challenge the strike-hit Royal Mail. The group has been testing out its own door-to-door letter deliveries in several UK areas. A spokesman for the company said that UK business-to-business parcel volumes had increased about 10 per cent in the last couple weeks since the strikes began, but added that the rise had come too late to affect the third quarter numbers, which, in any event were higher than expected.

General Motors (GM) have sensationally cancelled their plans to sell a majority stake in its European car business Opel, including its UK brand Vauxhall to Canadian car parts firm Magna.

The US giant announced that their board had made the decision because of "an improving business environment for GM over the past few months", as well as marking the importance of Opel and Vauxhall to their overall global strategy. Unions in Germany said workers would begin walk-outs from Thursday in protest at GM’s decision and the German government, who had backed the sale of Opel, demanded that GM repayment of a 1.5 billion Euro, (£1.3 billion) loan. British unions were reported to be delighted with the news of GM’s rapid reversal, in the hope that the move will result in increased protection of Vauxhall jobs in the UK

The pound recovered from early losses against the dollar on Thursday after the Bank of England extended its asset purchase plan, but by less than forecast.

• Pound/US dollar 1.6606
• Pound/Euro 1.1162
• Pound/Japanese Yen 150.6643
• Pound/Swiss Franc 1.6881

The London equity market took a decided upturn as news of an extension to the Bank of England’s economic stimulus measures broke. At close of trading, the FTSE 100 was up to 5,125.64.

The FTSE 250 limped back above the 9,000 point mark to close on 9,020.40

US shares have risen strongly over the last 24 hours on the news that US business productivity has risen at its highest rate for six years. Official figures showed that productivity, as measured by output per hour of work, rose at an annual rate of 9.5% between July and September.

The data suggests that the increase in productivity may lead to an increase in demand for staff.

The US Dow Jones index continued to make serious bounds forward closing on Thursday on me recoveries from the last two days trading; up 61 points to 10005.96. The NASDAQ also climbed, reaching 2105.32.

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

Berkshire Hathaway have agreed to buy the remaining 77.4% of Burlington Northern Santa Fe (BNSF) that it does not already own for about $26 billion (£16 billion), with the deal to be financed with cash and stock. .

Mr. Buffett proudly stated that the deal was "an all-in wager on the economic future of the United States and underlines his confidence in a coming rebound in domestic growth.

Gold held its price at almost $1,100 an ounce after hitting a record high in the previous session while oil prices dipped and base metals edged lower

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Tags: Associated British Foods, Bank, Bank of England, Banking, Berkshire Hathaway, BOE, British Airways Plc, British Economy, British Pound, Burlington Northern Santa Fe, Cadbury Plc, Coca-Cola, Currency, Dow Jones, Economy, Financial News, FTSE, General Motors, GM, HSBC, IMF, International Monetary Fund, Kellogg's, Kraft, Magna, Marks and Spencer, Money, Money Markets, NASDAQ, Opel, Recession, Retail, Royal Mail, Silver Spoon, Stock Markets, Stocks and shares, TNT, UK Banks, UK Economy, UK government, UK Recession, Vauxhall, Warren Buffett

The International Monetary Fund (IMF) today gave another green light to the Bank of England (BOE) to print more money. Their agreement to allow the bank to accelerate its electronic money-creation programme came in the light of increased data that the benefits of "quantitative easing" were finally being felt in factories and high streets across the UK.

The IMF took advantage of figures issued denoting a bi-annual assessment of global financial conditions to warn that any sign of restraint of credit risked could effectively derail Britain’s economic recovery.

Currently, the central bank has increased its purchases of assets to £175 billion, and indications are that BOE governor Mervyn King is interested in increasing that figure to £200 billion. However King was outvoted by the majority of his colleagues on the Monetary Policy Committee (MPC), who preferred to stay with the lower figure, at least for the meantime.

As part of the bigger picture, the majority of UK based economists are of the common opinion that quantitative easing has helped to stabilise the British economy as well as reducing borrowing costs across the economy. Factors that have gone a long way in sparking off an albeit tentative recovery. Overall, commercial bank lending has remained lower than expected, although the general consensus is that quantative easing (QE) was not intended as a means to increase bank lending.

The IMF’s Global Financial Stability Report has emphasised that the UK was particularly vulnerable to credit constraints caused by the weakness of bank lending and by the need to finance the government’s rapidly rising deficit.

Over 2009 and 2010, the fund estimates the UK will have a funding gap totaling £430 billion, representing 15% of the country’s GDP. This figure is devastatingly higher than the 2.4% projected for the United States and the 3% for the Eurozone region.

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Tags: Bank of England, Banking, BOE, British Economy, Credit Crunch, Currency, economic recovery, Economy, Financial News, GDP, Global Financial Stability Report, IMF, Interest Rates, International Monetary Fund, Mervyn King, Monetary Policy Committee, Money, MPC, Recession, UK Banks, UK Economy, UK government, UK Recession

The dwindling supply of property and an improving market confidence have combined to boost the average UK house price, with the price climbing to £156,100 up 0.2% from August but remaining 5.6% below the level of September 2008. In August, the average house price bumped 0.1% from July and 6.7% from the year before. Questions still remain as to whether the recent surge in activity will continue, despite the talk of general improvement in property and equities.

According to the International Monetary Fund (IMF), the global economy has begun to expand again and financial conditions have improved significantly. However, in their most recent World Economic Outlook, the IMF has forecast that the pace of recovery is expected to be slow and unemployment is liable to remain at high levels for a long time. The IMF has cut their previously pessimistic forecast of the amount that banks are likely to lose in bad loans and investments. The revised total for the period between 2007 and 2010 is now $3.4 trillion, down from its previous estimate of $4 trillion. The reduction is attributed to the improved outlook for the global economy.

The squeeze on government finances will be so tight that outsourcing of catering services in the public sector is likely to rise sharply and that catering giant Compass are likely to benefit. A spokesman for the company forecast that mounting pressure on public bodies to cut spending has provided an opportunity for the industry to expand. Compass, the world’s largest industrial catering company have already enjoyed solid performances in its education, healthcare and defence divisions had helped to offset weakness in more discretionary sectors. In a recent trading update, the company announced that rising unemployment had hurt turnover at both their business and industry and sports and leisure divisions.

Despite a recent increase in sales, men’s formal wear retailer Moss Bros failed to prevent first-half losses, that increased by more than 35 percent. Moss Bros., who also own the Hugo Boss brand, were encouraged by increased sales over the last two months, after they had fallen by 2.6 per cent in the six months to the end of July. First-half revenue dipped from £61.1 million to £60.8 million while the company’s pre-tax loss widened from £2.2 million to £3 million.

It appears that with the completion of a debt-for-equity swap with its lender HSBC, high street camera retailing chain, Jessops, have succeeded in staving off insolvency The agreement, which will protect 2,000 jobs in Jessop’s 115 stores in the UK and Ireland, will see investors share a one-off payment of £100,000, equating to five per cent of their current estimated market value. Jessops arrived at the understanding with HSBC after some of its agreements coming in to the Christmas trading period were cast into doubt by the lack of certainty over its future.

The FTSE 100 closed down 25.82 points at 5,133.9, wrapping up the third quarter having risen by 21 percent, making for the largest quarterly gain in its history. Meanwhile the FTSE 250 fell back 62.21 points to 9,153.76 on the day’s trading. During the third quarter, the FTSE 250 has also risen, this time by more than 18 percent.

The pound was still steadily rising against the major currencies on yesterday’s trading. Sterling advanced against the dollar, rising to $1.6015 after an above-forecast jump in September UK consumer confidence.

• Pound/US dollar 1.6015
• Pound/Euro 1.10996
• Pound/Japanese Yen 143.953
• Pound/Swiss Franc 1.666

The Dow Jones Industrial Average continued to weaken on Wednesday’s trading, dropping 29.92 points to close on 9,712.28. The NASDAQ remained stable, dropping just 7.19 points to 2122.42.

As the effects of the recession continue to be felt, the unemployment rate across the Eurozone has again risen. The seasonally adjusted rate for August rose to 9.6%, compared with 9.5% in the previous month according to official figures recently released, with the number of jobseekers in the Eurozone reaching 15.2 million. Economists insist that unemployment rates are liable to increase, despite the fact that most of the economies in the region are moving out of the recession.

Crude oil prices rose by more than $1 a barrel ahead of the latest US inventories data while gold regained the $1,000 level and base metals staged a broad advance as sentiment towards commodity markets found support from renewed dollar weakness.

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Tags: Banking, British Economy, British Pound, catering company, Crude oil, Currency, defence, Dow Jones, Economics, Economy, education, Eurozone, Financial News, FTSE, healthcare, HSBC, Hugo Boss, IMF, International Monetary Fund, Jessops, Money, Moss Bros, NASDAQ, Property Prices, Recession, UK Banks, UK Economy, UK Recession, World Economic Outlook

Contrary to recent forecasts, the International Monetary Fund (IMF), never known for their optimistic approach to the current financial downturn, have cast serious doubts on the Treasury’s hopes of recovering the money spent bailing out UK banks.

A recent report issued by the IMF has stated that recovery rates for past financial crises were just 55% in advanced countries and as low as 15% in emerging economies.

If the statistics are to be applied to the current situation, then half of the money Gordon Brown committed to rescuing the City may never be recovered. However because of the severity of the current crisis, with bank guarantees equivalent to more than a third of gross domestic product having being issued, even 50% may prove to be an optimistic forecast.

Following the start of the crisis in the global financial sector in 2007, the UK banking sector absorbed losses on loans and securities of around £110 billion by the end of 2008 and raised or arranged around £120 billion of new capital by the middle of 2009. Estimates of further losses of around £130 billion from the loan books and securities portfolios of rated UK financial institutions are expected. Meanwhile it has been reported that negative outlook for credit conditions in the UK banking sector will continue for at least the next 12 – 18 months. Expectations are that the sustained weakness of the economic environment in the UK will continue to feed a situation where loan arrears will continue to grow, both in the consumer and business sectors.

The world’s largest mining group BHP Billiton has predicted that global steel demand is liable to double over the next 15 years as the economic “upswing” already being felt in China would be followed by a rebound in growth from developed nations in 2010.

A spokesman for BHP said that China’s recovery has been stronger than expected and there was little sign that their momentum had stalled during the financial downturn of the last 12-18 months.

China is BHP’s most important customer accounting for 20 per cent of it’s around £30 billion in sales in 2008-09.

The UK’s FTSE 100 index also achieved its highest close for almost a year, rising 22 points to close at 5124.3 while the FTSE 250 rose on Wednesday by 52.60 points to 9305.24.

The pound, after taking a beating over the last few days, made a minor recovery yesterday.

• Pound/US dollar 1.6509
• Pound/Euro 1.1202
• Pound/Japanese Yen 150.504
• Pound/Swiss Franc 1.7031

Shares on Wall Street continued upwards thanks to better-than-expected industrial production data.

The Dow Jones Industrial Average closed up 107.5 points at 9,791.71, which makes for an 11-month high. It has now risen for eight of the past nine days. The NASDAQ also moved on up, this time is thirty points to 2133.15.

US consumer prices rose in August from July but analysts said the risks of inflation in the economy remained low. The Consumer Price Index rose 0.4% last month having been flat in July.

The Organisation for Economic Co-operation and Development (OECD) have predicted that the global recession could eventually cost the jobs of 25 million people, despite recent signs that economies of its 30 member countries may be starting to recover.

Fifteen million jobs have been lost so far, and according to the OECD up to 10 million more could go by the end of 2010.

The unemployment rate across the 30 most industrialised nations in the OECD was 8.5% for July 2009, the highest since World War II, having risen from an all-time low of 5.6% at the end of 2007.

Gold extended its push beyond the $1,000 mark on Wednesday, closing in on the record price set last March as bullion was boosted by renewed dollar weakness and concerns about the outlook for inflation.

Gold traded at $1,015 a troy ounce in London, after settling at the end of Tuesday’s session in New York at $1,005.90, its highest ever closing price.

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Tags: Bank, Banking, BHP Billiton, British Economy, British Pound, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, Gordon Brown, IMF, International Monetary Fund, Money, Money Markets, NASDAQ, OECD, Organisation for Economic Co-operation and Development, Retail, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Unemployment, Wall Street

Prime Minister Gordon Brown has given his tacit approval without officially endorsing Lord Turner, chairman of the Financial Services Authority recent statements that the banking sector was "bloated and needs to be cut down to size." Brown, in a recent interview, did however pledge to take tough action to clamp down on excessive remuneration for bankers.

The prime minister explained that his policy for the future would be that remuneration and especially bonuses should be based on long term profits success not short-term speculative gains. Also those banks should have the framework installed that would allow them to recover bankers’ bonuses if performance and profits suffered in later years. He also suggested that regulators should be able to impose higher capital requirements on financial institutions.

U.K. Chancellor of the Exchequer Alistair Darling has strongly suggested to his counterparts in European governments to grant the International Monetary Fund (IMF) an increase in the funding previously pledged in order to provide increased support for the countries that have been hardest hit by the global financial crisis.

Four days before Darling is due to host a meeting in London for the Group of 20 financial ministers, Darling urged the 27 European Union nations to provide the IMF with $75 billion on top of the $100 billion previously committed.

Workers employed by the UK branch of Fujitsu Ltd. have decided to take strike action to oppose proposals made by the company to place a final-salary pension plan in mothballs as well as freeze pay, according to Unite trade union official representing the employees.

A spokesperson for Unite revealed that 87 percent of their members at the company voted for strike action, while 96 percent were also prepared to consider a less severe form of industrial action.

Fujitsu, Japan’s largest computer-services provider, employing 12,500 people in the UK, announced plans to cut as many as 1,200 jobs in the U.K. because of “lower than anticipated revenues

There was no action on the FTSE yesterday, due to the August bank holiday

Sterling made a minor recovery against the dollar, but continued to struggle against the Euro

• Pound/US dollar 1.628
• Pound/Euro 1.1351
• Pound/Japanese Yen 151.6273
• Pound/Swiss Franc 1.7232

On Wall Street, markets struggled largely due to uncertainty in the Chinese stock market, that fell by 5% on the day.. The Dow Jones Industrial Average fell 47.92 to close on 9496.28 while the NASDAQ Composite index dropped 19.71 points to close on 2,009.06

Entertainment giant Walt Disney announced that that they are to take over Marvel Entertainment and with it some of 5,000 Marvel characters, including Spider-Man and the X-Men.

In a shares and cash deal valued at £2.5 billion, Marvel shareholders will get $30 per share in cash plus 0.745 Disney shares for every Marvel share owned.

The boards of Disney and Marvel have both approved the deal, which now needs the backing of Marvel shareholders and competition authorities.

The annual rate of inflation for August in the Eurozone registered negative for the third consecutive month.

Prices in the 16-nation bloc have fallen by 0.2% in the past year, according to statistic issued by Eurostat , exacerbated by a record 0.7% fall in July.

Inflation in the eurozone has been dragged down by lower energy and food prices and by falling demand from both companies and households.

The Indian economy has grown by a remarkable 6.1% in the second three months of 2009, in comparison with the same period of last year, results that were marginally higher than predicted.

Although growth has slowed from last year, India’s economy is still expanding faster than most other countries.

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Tags: Alistair Darling, Banking, British Economy, British Pound, Dow Jones, Economy, Eurozone, Financial News, Financial Services Authority, FTSE, Fujitsu, Gordon Brown, IMF, International Monetary Fund, Lord Turner, Marvel Entertainment, Money Markets, NASDAQ, Recession, Spider-Man, UK government, Wall Street, Walt Disney, X-Men

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Signs are beginning across the Atlantic that consumers are beginning resurrect the practice of borrowing their way out of trouble. A recent surge in consumer debt defaults in the US could well spread to the UK, according to a recent report issued by the International Monetary Fund (IMF).

The IMF have forecasted that of the almost £1.5 billion of credit card debt currently held in the UK, around seven percent of that, or around £100 million may need to be written off. Confirmation of the sad facts is expected to be released next week when UK banks begin reporting their first-half results. Some of them have already warned that a sharp increase in credit card debts will need to be taken into account.

House prices in the U.K. continue to solidify, expected to hold their value for a third consecutive month in July. While the credit squeeze and the recession continues to prevent the property market from improving the average cost of a home in England and Wales was stable at £155,600 pounds, which was still almost eight percent lower than in July 2008.

The National Express takeover saga continues. The company announced that they are liable reject the Cosmen family takeover bid, which only values the group at around £500 million.

It is expected when National Express present their interim results towards the end of the week, they will explain to their shareholders that their desire to remain independent, and become profitable through cutting costs and reducing their debt burdens. Steps that should make the company far more attractive for takeover in the future. ,

Two potential suitors for National Express have been turned away as they have offered around 325 pence per share, while National Express are looking for 400 pence, giving the company a value of around £620 million.

The Cosmen family are National Express’s largest single shareholder, with an 18.5 per cent holding, and Jorge Cosmen is its deputy chairman. Shares in the company have risen since Friday when the Cosmen family in partnership with CVC confirmed their interest.

It was carnival time on the FTSE as the market equaled its record of eleven consecutive positive session

Among the best performers was Lloyds Banking Group who added 6.9 per cent to close on 88.33 pence. Analysts expect shares in Lloyds to reach as high as 100 pence in anticipation of the bank’s half year results to be announced on Wednesday.

The FTSE 100 index closed up by only 9.52 points to 4586.13, taking e index’s gains over the past 11 sessions to 10.6 per cent which is a new record, beating the 7.1 per cent in 1997.

Meanwhile the FTSE 250 recorded its first reverse for a while down 61.58 points to 7,876.86

The pound gained a little ground on Monday against the leading currencies.

Pound/US dollar 1.6464

Pound/Euro 1.1573

Pound/Japanese Yen 156.5371

Pound/Swiss Franc 1.7634

Chairman of the US central bank Ben Bernanke rushed to defend the US bail-out plan of which he was among the principal architects. Bernanke admitted that his fears that the UK were heading into a second Great Depression had helped him to decide to back the stimulus plan which has so far cost the US taxpayer around $700 billion. Bernanke went on to point out that the bailout had widely benefitted the US economy and that no one should be surprised if further capital might be required to prop up the system.

Seemingly unfazed, the Dow Jones continued its steady rise, up by 15.27 points to 9108.51. The NASDAQ made a small gain, up a mere 1.93 points to close on 1967.89.

Recent reports have revealed that the annual rate of new home sales in the United States has risen by more than ten percent in June, further signs that the property sector is over the worst.

The US Department of Commerce announced that sales of new properties have hit a seasonally-adjusted annual rate of 384,000 in June, against 346,000 in May.

Whilst June’s figures were the strongest seen since November 2008, the average sale was down 5.8% from May and 12% lower than a year ago at $206,200 (£125,000),

On Monday Commodities made a strong start to trading, continuing last week’s gains. Prices of European crude rose beyond the $70-a-barrel mark while base metals staged a broad advance, led by copper that

jumped to its highest level in almost 10 months in the London, New York and Shanghai markets. The commodities are always an excellent barometer to gauge the extent of the global economic recovery.

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Tags: Bank, Bank of England, Banking, Ben Bernanke, British Economy, British Pound, Cosmen, Credit Card, credit card debt, Credit Crunch, Currency, Debt, Dow Jones, Economics, Economy, Financial News, FTSE, House Prices, IMF, International Monetary Fund, Lloyds Banking Group, Money, Money Management, Money Markets, Mortgage, Mortgages, NASDAQ, National Express, property market, Recession, UK Recession

As the global economy rewrites the history books the unlikely scenario laid out above may well become a reality in the not too distant future. Following in the footsteps of the record profit making Tesco group, that well known British institution, Boots the chemist have also announced that they are considering a move into the personal banking sector. The company, who operate 2,600 stores throughout the UK see the recent financial instability and subsequent public disillusionment with the traditional banks as an opportunity to carve themselves out a niche in the latest generation of high street banks that are about to spring up after the UK economy regroups itself. And who can boast a cleaner image than Boots?

The eagerly anticipated list of the UK’s super wealthy has just been announced and there are some less than happy faces around this year. The UK’s wealthiest man, steel magnate Lakshmi Niwas Mittal is a lot less better off than he was last year. To be exact, 23.5 billion pounds less well off. Overall, the figures show that the ultra-rich are now 155 billion pounds in total less well off than one year ago, and the number of UK billionaires now number 43 from 75 this time last year. Sad but true.

Not before time some might say, but at a recent of the World Bank and the International Monetary Fund (IMF) held in Washington, finance ministers from around the World have announced that urgent reforms of banking systems in developed countries is long overdue and should be implemented at short notice to hasten global economic recovery.

A sign that this refreshing thinking has yet to hit the corridors of that Royal Bank of Scotland Group PLC (RBS) is they news that bank officials have yet to respond to an official request by the Treasury Committee for information on pay and bonuses at the bank..

They were not the only bank to receive such a request and also not the only one of the state controlled banks to ignore it.

As the stock exchange closed for the weekend the FTSE 250 index closed at 7,369.75 up 180 points, while the FTSE 100 finished the session up 137.6 points, higher at 4,156 on Friday

Sterling fell slightly against the dollar and rose against the Euro as well as the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.462

Pound/Euro 1.104

Pound/Japanese Yen 140.49

Pound/Swiss Franc 1.6671

Wall Street shares enjoyed a fair days trading before the markets closed for the weekend.

The Dow Jones Average rose 119.23 points to close at 8076, 3. Nasdaq continued its steady climb of late up 42.08 points to 1694.29

The market may have been buoyed by the news that Ford’s results for the first quarter of 2009 were better than expected, and will allow them to refrain from accepting government aid, unlike two of Ford’s biggest rivals, General Motors and Chrysler, who have taken billions of dollars in US government aid yet still face bankruptcy

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Tags: Bank, Bank of England, Boots, British Economy, IMF, Lakshmi Niwas Mittal, Royal Bank of Scotland, Tesco, UK Banks

The International Monetary Fund (IMF) is on the verge of issuing some updated figures on losses made by banks during the current financial meltdown. Their updated forecast that banks losses could reach as high as £2.75 trillion resulting in damage to the global financial network that could take years to repair.

Was it only one year ago that the IMF announced their estimations of total losses from the credit crunch would reach a staggering one trillion dollars? It is now fairly obvious that this figure was totally realistic, and globally banks will need almost three trillion dollars, with the UK economy accounting for a mere $400 million dollars of that, leaving Britain holding the highest per capita deficit in the World.

On the high street, it was reported that in March UK retail prices for the first time in nearly 50 years have fallen below the zero mark, according to a report issued by the Office of National Statistics. In a sign that increasing deflationary pressures were beginning to hit the economy, the retail price index fell to minus 0.4 per cent during the month.

Yesterday on the Stock Exchange, share prices inched slightly lower, largely due to losses made by banks and insurance companies.

Insurance giant, Prudential were on the block, with their shares dropping 4.5% (45 pence to 363) in value

Other insurance firms shared a similar or often less drastic fate, with Aviva shares down 7.5 %,( 18 pence to 253) and Old Mutual shares declined by 5.5%. (3 pence to 56)

Banks also had a bad day with Lloyds Banking Group dropping the furthest, down by 9.1 percent to (9 pence to 95), and while Royal Bank of Scotland fell by 5.9 percent (1.8 pence to 30.6). Barclays shed 4.8 percent of their share value (10 pence to 199).

Premium drinks producer Diageo, the name behind the Guinness and Johnnie Walker brands, celebrated with a 1.2 per cent price hike (10 pence to 793) after analysts raised their price target.

To indicate that all is not lost for the British Empire, luxury goods manufacturer Burberry Group announced a 21% increase in second-half sales to 663 million pounds. Reasons for this dramatic upturn were put down to increased demand for outerwear and luggage, largely fuel by weak sterling abroad.

The FTSE 100 closed down 3.4 points, at 3,987.46, while the FTSE 250 index also dropped by 28 points to close on 6,987.25

Sterling fell slightly against the dollar and the Euro and rose slightly against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4634

Pound/Euro 1.1315

Pound/Japanese Yen 144.03

Pound/Swiss Franc 1.7111

U.S. stocks turned higher after starting weakly on Monday. The Dow Jones Average rose by 127.83 to close at 7969.56. Nasdaq crept up a little, 35.64 points to 1643.85

Constantly basking in the shadow of Google, search engine operators, Yahoo announced that their profits had fallen sharply in the first three months of 2009, with the obvious reason that the recession prompted advertisers to cut back on spending.

Yahoo did report a profit of £80.4million in the first quarter of 2009; however it was down by 78% from the same period a year ago.

Revenue had also contracted by 13% to around one billion pounds for the period, causing the company to announce their intention to their workforce by 5% (between 600 and 700 jobs) as part of cost cutting exercise.

Oil prices were reported to have weakened on Tuesday, while base metal share values stuttered as the recent uncertainty about the actual state of health of the global banking system gained ground.

In Asia, Japan reported its first annual trade deficit in 28 years, with exports having dropped by more than £4.8billion for the first quarter of 2009. .

Total exports were down by 16% in the year to March and around half of what they had been for the same period in 2008. Reasons stated was that demand for Japanese cars and electronics in the United States and Europe has plummeted by 45.6% due to current global economic woes.

The news came in conjunction with the Japanese Government’s announcement that they are to issue an extra 10,800billion Yen ($110bn) of government bonds in 2009 in an effort to tackle the county worst recession since after World War Two.

The bonds are expected to fund the bulk of the government’s $154bn stimulus plan, bringing its expected total new issuance for the fiscal year nth to a record 44,100 billion Yen , up 33 percent on last year

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Tags: Alastair Darling, Bank, Bank of England, Banking, British Economy, Credit Crunch, Gordon Brown, IMF, International Monetary Fund, UK Banks, UK Recession

Why is the dollar strengthening with the huge bailouts that Bernanke and Paulson, both stunned rabbits in this credit tsunami, have fought so hard for? The answer lies in the flight to safety of US treasuries as emerging economies, until recently thought to be safe from the credit crunch, feel the effects the growing storm.

A stampede into dollars has lifted the world’s reserve currency to a two-year high versus the euro and a five-year high on the pound. The dollar is up some 18 percent since July on a trade-weighted basis against a basket of currencies.

But….and this is a big but…there is some unwelcomed side effect to the strength of the USD. The first is that the earnings season we are in is expected to bring about a whole raft of companies reporting that the currency is hurting exports which will be reflected in 4^th quarter results. This is likely to trigger a chain reaction of analyst’s downgrades and send stock markets down even further as investors are trapped in yet another wave of forced liquidation.

Not only that, but the USD should be a virtual basket case right now as the US teeters on the brink of actual bankruptcy…a direction first highlighted by the Comptroller of Currencies at the IMF in 2003 when he openly said that the US should be bankrupted by its huge twin deficits within 10 years…deficits that have deteriorated markedly since then.

So when all the safe haven money flows out of the USD like an unstoppable tide once people understand that the USD, as is, is unsustainable in the long term, the collapse could be nothing short of earth shattering. Make no mistake, the dollar strength is short lived and will reverse, probably violently…but many currencies will topple before then as the flow of capital knocks over currencies like dominoes, before landing back on Asian shores. Once that happens, it will signal the biggest economic boom ever seen in the region…and we will all bow before our new masters.

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Tags: Bernanke and Paulson, Comptroller, Currencies, Dollars, IMF, Liquidation, Stock Markets, USD