Chancellor Alistair Darling, possibly with an eye to future job prospects, is expected to blow his own horn in the coming days, by claiming that the Labour government’s investment in jobs programmes are responsible for saving no less than £12 billion during the recession. Darling backed up his claims by stating that in the 2009 budget, the government’s prediction for unemployment was as high as 2.09 million by the end of 2009 and reaching close to 2.5 million in 2010. By the end of December of last year they had already revised, their estimates down to one and three quarters of a million by end 2009 and less than two million for 2010. The reduced number of benefit claimants, if maintained, will save £10 billion over the next five years according to the stressed Chancellor’s figures.

There is much speculation afoot that the UK government are about to introduce important legislation regarding the use of credit cards. The new legislation will prohibit credit card companies from using a method of calculating interest known as the "adverse order of payments method. The adverse order of payments is where credit card companies force customers to pay off the debts on their account holding the lowest rates of interest before higher interest rate debt is reduced. Figures show that currently there are close to ten million people in the UK holding credit card debts with multiple interest rates. The practice is said to cost credit card holders an average of around £250 pounds in the first year they hold the card.

Business Secretary Lord Mandelson has announced that the UK government will be offering a £270 million loan to GM designed to safeguard five thousand Vauxhall jobs in the UK. The money, which will go to Vauxhall’s parent company GM Europe, will guarantee production at the car maker’s plants in Luton and Ellesmere Port. According to a statement from Lord Mandelson, the outline deal followed "highly complex" talks between the Government and bosses in the US.

Lord Mandelson stressed in his statement: "I always said the Government would stand foursquare behind Vauxhall. With this announcement, we have kept our word." Unite boss Tony Woodley who represent the Vauxhall workers chipped in by saying that the loan is great news for British industry.

Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc improved on the increase in value of their U.S. bank shares. RBS soared 5 percent to 42.57 pence. U.S. banks yesterday closed at the highest since November 2008, led by Citigroup Inc. Lloyds climbed 3.4 percent to 58.47 pence. The bank is close to agreeing a joint venture to sell a number of the less than worthwhile assets assembled by HBOS.

BSkyB, the U.K.’s biggest pay-television provider, surged the most in almost eight months on a report that Rupert Murdoch’s News Corp. may bid for the shares that the y currently do not hold in the company. On the news BSkyB rose 5 percent to 598 pence, the biggest gain since July 30. News Corp, which already owns 39 percent of the pay-TV company, may be planning to pay 735 pence a share for the stake it doesn’t already own.

The Pound was still seen to be struggling again the main currencies, although the currency did rise slightly before the weekend. The pound was on $1.5183 while remaining almost on par with the Euro on €1.1033

As the markets closed for the weekend U.K. stocks gained, extending a second weekly increase for the benchmark FTSE 100 Index, largely on the back of increases in financial share values.

The FTSE 100 increased 0.2 percent to 5,625.65, bringing its weekly gain to 0.5 percent. The FTSE 100 has climbed to near the highest level since June 2008, lifted by optimism that the global economic recovery and higher earnings will support the 12-month rally in equities.

Former executives of the now defunct Lehman Brothers firm as well as the senior executives of their erstwhile auditor, Ernst & Young headed home for a weekend of self contemplation as they were severely censured in a recent report for some serious professional lapses that led to the firm’s collapse.

The report also went on to say that Lehman trading on knowing they were insolvent for a number of weeks before eventually declaring themselves bankrupt. Lehman’s bankruptcy is generally recognized as being the catalyst that sparked of the global financial meltdown. The collapse of the 158-year-old investment bank in September 2008 was the world’s largest bankruptcy at that time.

The report made for some heavy and disturbing reading, accusing the Lehman Brothers’ management of "actionable balance sheet manipulation" and using accounting tricks to hide debts. In their defence, Ernst & Young said that its last audit of Lehman was "fairly presented" according to accounting rules. As Lehman Brothers wobbled on the edge of collapse, a determined effort from Wall Street, the City of London, and the US and UK governments did all that they could to prevent the banks’ fearing the chain reaction that Lehman’s failure would set off around the globe.

Whether the long awaited report had an effect on Wall Street trading remains to be seen, but share trading was certainly restrained on Friday before the markets closed. The Dow Jones was up 12. 85 points to 10624.49 while the NASDAQ dropped less than a point to 2367.66

After weeks of crisis, it looks like the Eurozone region are on the verge of agreeing to support a multibillion-euro bailout for Greece as part of a package to shore up the Euro, the zone’s single currency.

Despite huge resistance, Germany, who were against the bailout, have bowed to pressure from fellow members of the 16 strong Eurozone members who expect to draw up the rescue package in the early days of this week. At the same time, the Eurozone members, at Germany’s behest, will introduce new legislation to enforce greater fiscal discipline among its members.

According to a senior European commission official, the Euro member states have agreed to provide a series of loans or loan guarantees to Greece in the likely event that Athens finds itself unable to refinance its soaring debt and requests help from the EU. Speculation has it that the initial aid to Greece could reach as high as €25 billion (£22.6 billion), with estimates that the total extent of Greece’s financial problems could see them needing up to €55 billion in loans by the end of 2010. Despite the fact that Germany were the most reluctant to come to the rescue of a fiscal delinquent in the current crisis, they have played the pivotal role in organising the rescue package, in their role as the EU’s traditional paymaster,

According to a report by the International Energy Agency (IEA),

China’s demand for oil jumped by an "astonishing" 28% in January compared with the January 2009. The IEA went on to point out that added that the estimated global demand for oil in 2010 would be driven by rising demand from emerging markets, with half of all growth coming from Asia while demand in developed countries is likely to fall by 0.3%.

The IEA has increased its global oil demand forecast for 2010 by 1.8% to 86.6 million barrels a day.

Oil prices were above $83 a barrel on Friday, the highest in two months.

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Tags: Alistair Darling, Bank of England, Banking, British Economy, British Pound, BskyB, Citigroup Inc, Dow Jones, Economics, Economy, Ernst & Young, Financial News, FTSE, GM Europe, HBos, International Energy Agency, Labour government, Lehman Brothers, Lloyds Banking Group Plc, Lord Mandelson, Money, Money Management, NASDAQ, News Corp, Oil prices, Recession, Royal Bank of Scotland Group Plc, Rupert Murdoch, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Vauxhall, Wall Street

Mervyn King, governor of the Bank of England (BOE) has taken an about turn on his previous forecasts for economic growth in the UK in the coming two years, He tampers his newly found optimism with forecasts that any recovery in the UK economy will be both slow and unstable, largely because of the slow rate of industrial output which has been endemic since early 2008. King was quoted as saying that "Britain was facing a prolonged period of balance sheet adjustment” as households, businesses and government understandably rein in spending to levels they can afford. The BOE in its most recent quarterly inflation report has forecast growth rates of 2.1 per cent for 2010 and 4 per cent for 2011, making for a major upward revision from their own forecasts in August, of 1.9 per cent and 3 per cent for 2010 and 2011 respectively. The bank’s forecasts are also much higher than the outlook of private sector economists and even the UK Treasury’s predictions. Mervyn King.

Presenting the Bank’s latest quarterly inflation report, King predicted that the UK economy has "only just started" along its road to economic recovery, and lending by commercial banks would "probably remain weak over the next three years". The governor also predicted during his speech that inflation may "rise sharply over the next few months", triggered by VAT returning to 17.5% on 1 January 2010 as well as the effects of ever increasing fuel costs.

According to data from the Office for National Statistics, unemployment in the UK rose at its slowest rate for 18 months. Yet another signal that the UK economy may finally be on the verge of returning to growth in the fourth quarter of 2009. The level of employment in the UK is recorded through a complicated series of measures. Figures from the ILO (International Labour Organisation) showed that the number of people without a job, rose by 30,000 in the three months to September, bringing the total unemployed to 2.461 million, which was the smallest rise recorded since the second quarter of 2008. Unemployment levels in the UK now stand at 7.8%, which is 0.2% lower than most economic forecasts.

Lloyds Banking Group has announced that they plan increase the amount of fresh capital that they intend to raise by £1.5 billion, from £21 billion to £22.5 billion. The increase came in response to demands by the bank’s bondholders for a larger allocation of the contingent convertible instruments (CoCos). The news of the interested in CoCos was especially encouraging for the US Federal Reserve who is reportedly in talks with Wall Street executives over whether US financial groups should also use this method to raise capital. In the case of the Lloyds CoCos, they would be convertible if their equity strength falls from its current level of 8.6 per cent to below 5 per cent.

British Airways (BA) has announced that they are in advanced talks with and Spanish airline Iberia over some form of merger. Both companies are expected to hold separate board meetings at the earliest opportunity to discuss final details of the merger

In an official statement, representatives of BA hastened to point out that the meetings would consider the potential transaction, and that firm decisions had yet to been taken, and there were no guarantees that a deal would take place. Iberia has leaked that the deal under discussion would give it 45% and BA 55% of a new merged company. The firms have considered a tie-up for a number of years, and held talks on the issue in July 2008. BA chief executive Willie Walsh has previously said that a merger would help both firms in the current economic climate. Reports of the imminent merger sent British Airways shares higher, climbing 7.5 percent to 215 pence.

Share in telecoms operator BT Group, rose 3.7 per cent to 147 pence after they announced that they will be raising their full-year revenue outlook and dividend forecast for 2009. Thanks to a series of cost cutting measures including cutting back on 15,000 jobs, BT increased their second-quarter earnings to more than £900 million. The positive outlook for BT came as they announced along with their second quarter results that they are to raise their total cost-savings target for 2009/2010 from £1 billion to £1.5 billion.

The world’s largest owner of shopping malls Westfield Group have announced that retail sales in October at their UK centres in the U.K. have risen at the fastest pace in seven years, amounting to 3.7 percent in the three months. The company also reported that the number of stores closing in their centers has also fallen since steadily since the second quarter.

According to a recent statement, Westfield’s London shopping complex, which opened at the height of the global financial crisis last year, has attracted some 20 million visitors and has signed more than 15 new tenants.

Sterling continued to lose ground on Thursday trading falling against all the major currencies, with the notable exception of the Japanese yen.

• Pound/US dollar 1.6553
• Pound/Euro 1.1136
• Pound/Japanese Yen 150.0166
• Pound/Swiss Franc 1.6842

The FTSE 100 continues to gain strength, up 46 points to 5,276.55. The FTSE 250 also rose, up 175 points to 9,295.92.

In the US, fears continued to be voiced that, "the ‘real’ economy, as opposed to the financial one is still struggling to recover" and that if the government withdrew its stimulus spending measures, the economy could take some major steps backwards. The Dow Jones indexes erratic behaviour over the last few weeks as well as an already depressed job market seems to indicate the fact.

Meanwhile US Treasury secretary Tim Geithner, continue to voice his belief in the importance of a strong dollar, His statement came as the dollar dropped to its 15-month low. The continuing weakness of the World’s staple currency has led to some concern over the future of the dollar in its traditional role in the global economy. According to Geithner, the United States bears a special responsibility for trying to make sure that their global policies will sustain investors in the currency.

His words of comfort helped Wall Street very little, as the Dow Jones lost some of its earlier gains of this week, down 19 points to 10227.92. The NASDAQ made a minor increase, up six points 2157.17.

Warnings continue to come from the International Energy Agency (IEA) that the recent rises in oil prices "risks derailing the recovery" if they continue, whilst. Pointing out that demand for the "black gold" itself would slow down if price rises continue in 2010. The price of oil is now around $79 dollars a barrel, representing a rise of 77% so far this year. The IEA "in their monthly report, pointed their finger at China who they say are driving up demand, causing them to revised upwardly revise their forecasts. Overall the organisation predicts a 1.6% increase in demand for oil, up to 86.2 million barrels a day.

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Tags: BA, Bank, Bank of England, Banking, BOE, British airways, British Economy, BT Group, CoCos, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, FTSE, Iberia, IEA, International Energy Agency, International Labour Organisation, Lloyds, Lloyds Banking Group, Lloyds CoCos, Mervyn King, Money, Money Markets, NASDAQ, Office for National Statistics, Recession, Retail, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US Federal Reserve, US Treasury, Wall Street, Westfield Group, Willie Walsh

One of the good things that have come out of the global economic downturn is the unparalleled fall in greenhouse gas emissions. A recent study sponsored by the International Energy Agency (IEA) has stated that the recession has in fact provided a “unique opportunity” to move the world away from high-carbon growth,

In this first major study of the impact of the recession on climate change, the IEA found that CO2 emissions from burning fossil fuels had undergone “a significant decline” in 2009, more than in any year since the late nineteen sixties. The decrease well exceeds the drop in greenhouse gas emissions that occurred after the 1981 recession.

Whilst falling industrial output is largely responsible for the plunge in CO2, there are other factors that have played a role, including the shelving of many plans for new coal-fired power stations owing to falling demand and lack of financing.

Rights issue speculation led Severn Trent lower on Monday Severn, Britain’s second-largest water company, lost 1.8 per cent to 993 pence. Severn has been widely rumoured to be looking at a fund-raising after July’s tougher than expected draft pricing review from Ofwat, the industry regulator. Severn’s options look likely to include a dividend cut and a rights issue to raise around £400 million. No decision is expected before November; when Ofwat is due to give its final determination.

The British Government has announced that they will grant a £10 million loan to Indian car maker Tata Motors to finance the electric car manufacturing project in the UK.

The loan, which will be part of a scheme backing low carbon technology in the motor industry, will support a £25 million pound investment by Tata Motors in its West Midlands base.

In July, Tata Motors had threatened to scrap plans to build electric cars in the UK if it did not receive the £10 million pound loan.

Tata almost said ta-ta to officials from Mandelson’s Business Department after being told that they needed more time to find out if the venture will be considered for the loan, taking the total waiting time to six months.

In a £50 million deal, the UK Atomic Energy Authority agreed to sell their wholly-owned commercial subsidiary UKAEA Ltd. to the defence and energy support services firm Babcock International.

UKAEA oversees nuclear clean-up work at three sites in Britain as well as providing consultancy services worldwide, Lord Mandelson said; “The sale will allow the company, as part of Babcock International, to continue its development and take advantage of new opportunities in the nuclear industry.”

UKAEA, which has been playing an active role in nuclear energy since for close to fifty years, has an annual-turnover worth around £32 million and employs more than 200 people.

Marks and Spencer was among the few companies to shine on the Footsie yesterday, in anticipation of positive second-quarter figures to be released next week. The high street retail chain was up 1.6 per cent to 374 ½ pence.

Slipping into reverse was the van hire group Northgate, whose shares dropped 2.1 per cent to 27 pence after the company admitted that they had made an “internal administrative error”, which meant that that their debt burden was £32 million more than previously reported.

The UK’s FTSE 100 index made its first reverse for a few days, down 38.53 points to close at 5,134.36.

Meanwhile the FTSE 250 continued to reverse last week’s gains, down yesterday by a further 86.28 points to close on 9,220.65

The pound continued to lose value against the main currencies on Monday’s trading with the notable exception of the Japanese Yen, where markets were closed for a public holiday.

• Pound/US dollar 1.6245
• Pound/Euro 1.1038
• Pound/Japanese Yen 149.188
• Pound/Swiss Franc 1.6721

The Dow Jones Industrial Average took a minor spin backwards after the weekend, down 41.34 points to 9,778.86. The NASDAQ continued to consolidate, up 5.18 points to 2138.04.

Computer giant Dell is buying IT services provider and fellow Texan firm Perot Systems for £2.4 billion ($3.9 billion)

Dell announced that the takeover, which it hopes to conclude between November and January, will help to provide a wider range of services to its customers.

The all-cash deal will see Perot shareholders receive $30 per share, making a 68% premium on the company’s closing share price on Friday.

Perot is owned by billionaire Ross Perot who twice ran as an independent candidate for the US presidency.

Oil prices have fallen by almost $3 on fears that energy demand may not be as strong as once thought.

The price of US crude was down to less than $70 a barrel. The price reduction confirms the findings of a report issued by the Centre for Global Energy Studies forecasting that there was unlikely to be a sustained rise in prices until the global financial recovery was well established.

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Tags: atmosphere, Babcock International, British Economy, British government, British Pound, climate change, CO2 emissions, coal-fired power stations, Credit Crunch, Currency, Dell, Dow Jones, Economy, emissions, Financial News, FTSE, Global Energy Studies, greenhouse gas, high-carbon, IEA, International Energy Agency, Lord Mandelson, Marks and Spencer, Money, Money Markets, Northgate, nuclear energy, Ofwat, Perot Systems, Recession, Severn Trent, Tata Motors, UK Atomic Energy Authority, UK Economy, UK government, UKAEA Ltd

After an inquiry found they had taken unreasonably large rewards from the now bankrupt car maker MG Rover Group Ltd, UK Business Secretary Peter Mandelson is seeking a ban on the investors involved in the collapse from running other companies

A recently released 800-page government-commissioned report into the demise of MG Rover, who went belly up in 2005 with debts amounting to £1.3 billion states that directors of Phoenix Venture Holdings, Peter Beale, John Edwards, Nick Stephenson, John Towers and Kevin Howe had drawn a combined 42 million pounds in pay and benefits over five years.

About 6,000 people lost their jobs when the car maker collapsed.

Lord Mandelson, business secretary, has also announced his confidence that following the sale of General Motors’ European business to Magna International, a Canadian car-parts supplier, and Russia’s Sberbank jobs were safe at Vauxhall’s plants in the UK. GM’s decision to sell Opel to the Canadian and Russian partnership ended months of uncertainty over the fate of the car maker.

Magna has already made a commitment to the German government not to shut any of its four factories there, however t there is still unease and uncertainty among Britain’s trade unions that either the Luton or Ellesmere Port plant, might be slated for closure by Magna. Without giving any specific reason why, Lord Mandelson, in a statement issued before the weekend. Said he was satisfied with the deal and that the immediate uncertainty about GM’s future in Europe has been removed.

The star of the show on the FTSE Friday was the rail maintenance group, Jarvis, whose shares jumped to their highest level in more than a year after the company reported an “extremely preliminary” takeover inquiry.

Their stock, which has been stuck below the 15 pence since a profits warning way back in November 2007 wiped 75 per cent off its value, has increased in value by close to 70 percent from 17 pence to 24 pence with two days of trading after the company released a statement to the markets on the approach

Analysts speculated that that any of the other companies involved the rail maintenance sector might be interested in the company, with others suggesting that an overseas buyer might also be a candidate.

The UK’s fourth-biggest supermarket group WM Morrison warned of lower sales growth on the back of more moderate rises in food prices, as it lifted profits and raised its interim dividend by 35 per cent.

Morrisons, who increased their underlying profits by 22 per cent, also announced that they are embarking on an expansion drive containing its fresh food shop within a shop concept, as it seeks expansion.

A spokesman for the company did warn that a natural reduction in comparative growth rates was liable to be caused by easing food price inflation, along with strong like-for-like sales growth. Shares in the group dropped by 0.8 pence to 283.7 pence.

As the market continued to digest news it was under investigation by the Serious Fraud Office and Office of Fair Trading over allegations of anti-competitive business practices, shares in Sports Direct International dropped 0.9 per cent to 107.9 pence.

The FTSE 100 index made it back over the 5,000 points, rising. 23.79 points to close at 5,011.47

The FTSE 250 rose again on Friday, up 82.18 points to close for the weekend to close on 9,207.89

The pound rose against the dollar yet took a minor tumble against the Euro on Friday’s trading, as well as the other major currencies.

• Pound/US dollar 1.616
• Pound/Euro 1.1433
• Pound/Japanese Yen 150.5651
• Pound/Swiss Franc 1.7281

According to a recent declaration by Treasury secretary Tim Geithner, the US is starting to pare back its emergency support for banks and financial markets, stating that the US financial system was no longer in need of extensive government prop-ups.

Almost a year since the collapse of Lehman Brothers, which triggered a financial panic that tipped the world into a deep recession, Geithner has announced that the time had come to ease the US economy from crisis to recovery mode.

Pointing to the evidence of a return to partial stability in global financial markets, Mr. Geithner announced that the US would allow their $2,500 billion guarantee for industry to expire as scheduled this month.

The Dow Jones Industrial Average faltered by just a little on Friday down 12.07 points to 9695.44 while the NASDAQ Composite rose by 0.2 points to close on 2080.9.

Fast-falling corporate inventories meant Japanese gross domestic product grew more slowly in the second quarter of this year than was initially forecast, according to government data released on Friday, but analysts stated that the world’s second largest economy’s recovery remained on track.

In the three months to June, GDP expanded 0.6 per cent quarter-on-quarter on a seasonally adjusted basis, revised data issued by the cabinet showed, down from the 0.9 per cent growth initially estimated last month.

Global oil consumption will contract less than previously feared this year and grow strongly in 2010, according to the International Energy Agency (IEA) the developed countries’ energy watchdog, another of the signs of optimism for the economic welfare of the World popping up on a regular basis these days.

The IEA now expect global oil demand to drop 1. 9 million barrels a day for 2009, less than the 2.3 million forecasts as recently as last month, making for the third revision since May, when the organisation forecast a contraction of 2.6 million barrels per day. .

Gold reached $1,011.55 a troy ounce on Friday, just 1.9 per cent below the record $1,030.80 reached in March 2008.

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Tags: British Economy, British Pound, Dow Jones, Economy, Employment, Financial News, FTSE, GDP, General Motors, International Energy Agency, John Edwards, John Towers, Kevin Howe, Lehman Brothers, Lord Mandelson, Magna International, MG Rover, Money Markets, Morrisons, NASDAQ, Nick Stephenson, Office of Fair Trading, Peter Beale, Peter Mandelson, Phoenix Four, Phoenix Venture Holdings, Recession, Retail, Serious Fraud Office, Sports Direct, Stock Markets, Tim Geithner, UK Banks, UK Economy, UK government, UK Recession, US economy, WM Morrison