There are those political cynics that claim that when Tony Blair stood down three years ago, he was well aware of the financial train wreck waiting his natural successor Gordon Brown around the next bend. And the same people might well now be saying that Gordon and his well known cohort Alasdair can’t wait to hand over the keys of numbers ten and eleven Downing Street to anyone who will take them

Because who ever gets the keys will also inherit a financial deficit of around £150 billion. The only way to live with, never mind reduce such a deficit, is to make yourself highly unpopular, both with the people who voted for you and against you. Political analysts now predict that whoever wins the election are looking for a comparably short term stay in power, unless some kind of unprecedented financial miracle occurs. We live in hope.

A recent survey taken over 1,400 companies, still suggests that small firms remain reluctant to go to banks requesting funding. Of the companies surveyed, it was discovered that less than twenty percent of respondents applied for new credit in February and March, with only half being successful., Sixteen percent of the companies surveyed who were holding bank loans said their cost had risen in February and March.

Operators of the South-eastern franchise, Britain’s first high-speed rail service, the Go-Ahead Group will be eligible receive a continuation of the government subsidy they have received for the next four years. The continuation has been granted due to the non-completion of expected property developments around Stratford and Ebbsfleet stations, after the group won the tender in 2005. Although Go-Ahead reported an increase in passenger traffic and turnover of eight percent in the first three months of the year, they are reporting profit growth of at least ten percent for the same period.

Recent figures released by the British Franchise Association (BFA) show that, despite the recession, the franchise industry in the UK has grown in 2009. The sector’s revenue increased by £400 million pounds to £11.8 billion in 2009, with the number of franchise systems active in the UK increasing by seven form 835 to 842 . The number of employees working for franchise based operations, according to the BFA figures fell by 2,000 during 2009 to 465,000 including both full-time and part-time workers. On average, it was reported that franchises reduced the number of full-time staff, while hiring more part-time staff in 2009.

Sales of Apple’s iPhone has helped mobile phone operator Orange return to growth with revenue increasing by almost six percent to €1.3 billion since it began selling the smart phone device last November. Orange, the first UK operator to break Apple’s exclusivity deal with O2, have reported that in the last six month sit has won 220,000 new contract customers the company, owned by France Telecom has begun an integration process with T-Mobile which will make them the biggest mobile phone operator in the UK.

Arts and craft retailer HobbyCraft announce the sale of the company private equity firm Bridgepoint in a management buyout for a figure in excess of £100 million, stating that intense competition among other interested parties pushed up the price from its initial level of £75 million with profits forecasted to have increased for the recently completed financial year HobbyCraft’s most recent accounts show a 42 percent increase in earnings to £7.5 million for the year ending February 2009. Bridgepoint’s plans for HobbyCraft are to open up to an additional 100 stores over the next five years.

Shares in High Street banking giant Barclays have fallen 6.4% despite a considerable increase in pre-tax profits for the first three months of 2010.

Barclays announced profits for the first quarter of £1.82 billion, up 47% on the same period of last year. Most of the profits came from their investment banking arm Barclays Capital, although analysts expected that the division would earn more. On the news before the weekend, Barclays earned the dubious award of being the biggest faller on the FTSE 100 index, down 23 pence to 338 pence.

Uncertainty regarding the Euro pushed Sterling up against the dollar while the Euro fell again. The pound closed on $1.5309 and €1.509

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 200 points to 5,553. 29, its biggest drop for six months

The US economy grew at an annualised rate of 3.2% in the first three months of the year, down from the previous quarter. The reason for the slower growth was attributed to reduced government spending and a fall in exports. According to figures issues by the Commerce Department economy grew at a rate of 5.6% in the final quarter of 2009, with the continued recovery in the economy founded on strong personal consumption.

Before the weekend, shares on Wall Street made a minor recovery after falling sharply on Thursday. The Dow Jones closed up seventeen points to 11008.61 while NASDAQ fell 10 points to 2461.47.

Greek Prime Minister George Papandreou has warned the country to be prepared for a new round of austerity measures. The news comes as the European Union (EU) meet to trash out details of an emergency plan to help tackle Greece’s crippling debt.

The findings of the negotiations between Greece, the International Monetary Fund (IMF) and the EU were expected to be announced on Sunday, with a . new series of cuts and tax rises expected to be demanded of Greece.

The Greek government have pressed to have the loan deal completed by the 19th May to avoid a devastating debt default. Eurozone members and the IMF have agreed a €110 billion (£95 billion) three-year bail-out package to rescue Greece’s embattled economy. The EU will provide €80 billion in funding with the rest will come from the International Monetary Fund (IMF). Before the funds can be released, the loan must first be approved by each of the fifteen 15 Eurozone members.

Official figures relating to the Spain’s unemployment rate show that there are 4.6 million people out of work in the country at the end of March, taking the unemployment levels in the country to 20% for the first time since 1997,

Spain’s jobless rate is the highest in the Eurozone. With the European Union (EU) figures showed that the eurozone unemployment rate remained unchanged at a 10% level in March

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Tags: Bank, Bank of England, Banking, Barclays, Bridgepoint, British Economy, British Franchise Association, British Pound, Dow Jones, Downing Street, Economics, Economy, election, Employment, Eurozone, Financial News, France Telecom, FTSE, George Papandreou, Go-Ahead Group, Gordon Brown, HobbyCraft, International Monetary Fund, iPhone, Money, Money Management, Money Markets, NASDAQ, Orange, Stock Markets, Stocks and shares, T-Mobile, Tony Blair, UK Economy, UK government, UK Recession

Financial analysts fear that Britain could be among the countries that could follow Greece into a financial crisis. The uncertainty comes after Dominique Strauss-Kahn’s head of the International Monetary Fund (IMF) warned of economic "contagion" spreading across Europe.

The IMF urged politicians to finalise a bail-out for the debt-laden Mediterranean country, saying that every day lost in resolving the problems risked spreading the impact "far away".

Strauss-Kahn’s comments came amid growing evidence of Europe’s mounting fiscal problems after Spain’s debt was downgraded following in the footsteps of Portugal as well as Greece.

Late Thursday Germany was holding out for more economic reforms from Greece before agreeing to an unprecedented multi-billion euro bail-out plan.

UK house prices increased by 1% month-on-month in April, according to the latest house price index.

Property experts pointed out that April’s figures did receive an additional boost from the fact that April was one of the weaker months of 2009. However with property values beginning to increase from May last year, it will be difficult to maintain this rate of growth in the coming months.

On the commercial property front, it appears that the appeal of London’s robust shopping demand continues attract the leading for international retail chains to the city. A recent survey has revealed how 58 percent of international retail brands have opened outlets not just in London but throughout the UK, spurred by strong consumer demand.

Preliminary assessments have revealed that the European air transport sector swallowed as much as €2.5 billion in losses from disruption caused by Iceland’s volcanic eruption. The loss assessment conducted by the European Commission could well be the model that an industry bailout will be based on. Some of the airlines affected have argued that flawed computer models used by member states were partially responsible for grounding planes, even when the airlines insisted that was safe for them to resume their services. A spokesman for the UK Department for Transport stated that while the "UK cannot unilaterally provide new aid to affected companies it continues "to explore options" with the Commission. Meanwhile, budget airline EasyJet have cautioned that governments should be prevented from providing aid to "ailing national carriers" who might use the financial damage caused by the volcanic disruption as a pretext for a bailout.

Royal Dutch Shell today announced a 49% surge in first quarter profits as the energy giant joined rival BP in benefiting from higher oil prices.

The Anglo-Dutch group reported earnings of £3.2 billion ($4.9 billion) for the first three months of the year – a day after BP posted a profit of £3.6 billion for the same period. The company’s chief executive explained that rising energy prices and an improved operational performance meant Shell’s profits were sharply higher than the $1.18 billion in the final quarter of 2009.

Shell’s performance has lagged behind BP as it has been forced invest heavily in finding new sources of oil and gas at a time when refining margins are under pressure due to global overcapacity and economic weakness.

Today’s results are back to the levels of the first quarter of 2009, when crude prices averaged just over $41 dollars a barrel, while the figure today stands at an average of $76 dollars a barrel.

Imperial Tobacco has reported a 15 percent rise in profits for the first half of their financial year. The increase comes through an increase in demand in some of their key European markets for cheaper roll-your-own tobacco. From factory-made cigarettes Bristol-based Imperial Tobacco, whose brands include Lambert & Butler and Davidoff reported a pre-tax profit of £974 million for the six months to March 31, on turnover up eight percent at £13.4 billion.

Sterling continues to grow in strength against the dollar closing on $1.5351, whilst falling back slightly against the troubled Euro on €1.155

There was a positive mood on the stock exchange on Thursday, with U.K. stocks mostly on the up. Among the most active were Unilever, the world’s second-largest food and detergent company, whose shares advanced by 3.2 percent. After BSkyB the U.K.’s biggest pay-television provider reported an increase in third-quarter profit their shares rose by the most in more than a year. Also shares in AstraZeneca, the U.K.’s second-largest drug-maker, advanced by 2.3 percent.

The FTSE 100 rose 30.89 points to 5,617.8. The market appears to be rebounding from two days of losses prompted by the downgrading the credit ratings of Greece, Portugal and Spain.

Stateside, the Federal Reserve have conformed their pledge to keep interest rates low for an “extended period”, while offering a slightly more upbeat assessment of the US economy. The Fed’s open market committee reiterated that its main interest rate would remain at its target range of 0-0.25 per cent. The figure has stood at this level since December 2008.

Analysts point out that the financial recovery appears to be gathering steam in the US in recent months, with most economic indicators in line or ahead of previous expectations. However, pressure on policymakers to start raising interest rates has not risen accordingly, with inflation remaining in control.

On Wall Street, the Dow Jones made a recovery from early week falls, closing up 122.05 points to 11167.32, while the NASDAQ rose 40.19 points to 2511.92

It appears that American consumers have re-discovered the joys of shopping, with retail sales stronger than forecast. The US housing market, meanwhile, has shown fresh signs of a rebound, with home prices increasing on an annual basis for the first time in three years in February,

In the computer hardware world, the news is that Palm, one of the leading pioneer in the smart phone business, are to acquired by US computer giant Hewlett-Packard (HP) for £657 million ($1 billion)

A spokesman for HP said that Palm’s webOS operating system would help its expansion in the fast-growing market for smart phones and connected mobile devices. Although HP is paying a premium to Palm’s closing share price on Wednesday of $4.63, it is well below the company’s 52-week high of $18.09.

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Tags: AstraZeneca, Bank, BP, British Economy, BskyB, Davidoff, Dominique Strauss-Kah, Dow Jones, EasyJet, Economy, Employment, Financial News, FTSE, House Prices, HP, Imperial Tobacco, International Monetary Fund, Lambert & Butler, Money, Money Markets, NASDAQ, Palm, Recession, Retail, Royal Dutch Shell, Stock Markets, Stocks and shares, UK Banks, UK Department for Transport, UK Economy, UK government, UK Recession, Unilever, volcanic eruption, Wall Street

The International Monetary Fund (IMF) has stated that governments must act to curb the increasing power of banks in the aftermath of the financial crisis. The IMF has called for cooperation from governments to set out future financial regulatory reform agenda, whilst stressing that some of the "too-big-to-fail" institutions had been made even stronger by the financial crisis. The IMF went on to warn that the large government financed deficits run-up during the financial crisis could pose a risk of starting a second credit crunch.

Proposals from the IMF include imposing two new taxes on banks in order to raise funds to pay for potential future bailouts and to penalise excessive profit-making. UK Chancellor Alistair Darling was reported as having welcomed the proposal:

Recent reports show that the number of Britons buying a home for the first time fell to the lowest in almost two decades as tighter lending conditions curbed people’s ability to purchase property. Some 347,000 first-time buyers took out a home loan in the year through February, less than half the peak figure of 700,000 recorded in the period from 2004 to 2005. Reasons given largely include the bank’s policy of squeezing credit as they seek to rebuild their balance sheets To aid first-time buyers, the government last month scrapped a tax on house purchases for those spending less than £250,000 pounds ($384,000) which help a few buyers, However many don’t have the 25 percent deposit lenders that lenders now demand

Official data released on Wednesday showed that the number of people in the U.K. claiming jobless benefits has fallen further than anticipated in March. Overall unemployment rose above 2.5 million, reaching its highest level for more than 15 years. The data drew conflicting responses from the main parties ahead of the May 6 general elections. The Office for National Statistics said the number of people receiving jobseekers allowance fell 32,900 in March to 1.54 million, the fourth decline in five months.

Britain’s largest supermarket chain Tesco has announced plans to l create 16,000 jobs this year, after the company announced a 10 per cent rise in profits for 2009. Tesco pledged 9,000 new jobs for the UK as they confirmed pre-tax profits of £3.2 billion for the financial year to 27 February 2010. 2009

saw a record turnover of £56.9 billion for the retailer, which have now almost trebled in size over the past decade and currently employs 460,000 people in 14 countries. . The company’s non-food business generated £9 billion in UK revenues alone

In a bid to expand their share in Europe’s growing market for the auto rental service, the American company Zipcar Inc. has announced that they are to acquire UK car-sharing peer Streetcar Ltd. The acquisition, valued around $50 million, will give Zipcar a larger presence in the U.K., where Streetcar is the biggest car-sharing company,

Zipcar began operating in London in 2006 and has 12,000 U.K. members who pay a fee to rent cars by the hour or day while Wimbledon based Streetcar, based in Wimbledon, has 50,000 members in the U.K. Its revenue last year was about $25 million.

Online fashion retailer ASOS have announced that they anticipate profits of around £20 million pounds ($32.09 million) after an increase of turnover of around one third to £223 million for the year to the end of March. A spokesman for the company announced "another excellent year" and that ASOS are approaching this year with considerably more confidence."

Tui Travel announced that they have raised £500 million of fresh financing in anticipation of cash flow problems in the wake of travel disruption caused by the volcanic ash cloud. The holiday operator warned yesterday that it was losing up to six million pounds a day. A spokesman for the company said the new finance would be largely used to "exploit its strong pipeline of attractive acquisition opportunities". Analysts said the finance would also allow Tui Travel to partially repay a £600 million pound loan that they took from Tui AG, the German travel group who are majority shareholders in Tui Travel.

Sterling rose to a two-month high against the euro and advanced against the dollar on Thursday after the minutes of the Bank of England’s policy meeting earlier this month showed a more positive outlook. The pound closed against the dollar on 1.5388 while the Euro stood at 1.1157

London’s FTSE 100 failed to keep intraday gains on Wednesday as a recovery rally among banks faded coupled with concerns about the potential impact of the disruption caused by the volcanic eruption in Iceland on the recovering economy.

London’s benchmark index fell 62 points, to 5,665.33, turning round from modest opening gains as financial stocks joined resource companies at the bottom of the market.

US President Barack Obama has again attacked critics of his banking reforms. In a speech which warned that without change the financial crisis will be repeated, Obama pointed out that reckless practices and financial firms that acted like "bandits" should never be allowed to operate again.

Regulatory reform was in the financial sector’s interests, the president said adding that "bankers and lobbyists should not fight against it ".

President Obama made his speech to an audience of bankers and financial experts in New York

US stock prices dropped on Thursday after rising on Wednesday morning, boosted by earnings results from Apple that smashed analyst expectations, with Morgan Stanley and Boeing also posting higher than anticipated first-quarter figures. The Dow Jones Industrial Average closed on 11,134.29 while the Nasdaq Composite was up on 2,509.10.

Apple led the technology stocks in the Dow higher, rising 6.3 per cent as the company reported a 90 per cent increase in second-quarter profit and a 49 per cent increase in revenue after the session’s close on Tuesday, far surpassing analysts’ estimates. The consumer technology products group had been expected to record sales of around $12 billion; instead, it reported sales of $13.5 billion in the first quarter.

Software giants Microsoft announced a profits leap by 35% in the first three months of 2010, largely due to the continued success of their Windows 7 operating system. Microsoft’s net profits for the quarter of £2.6 billion ($4 billion) were also attributed to "strong growth" from its Bing search engine business and XBox Live. Sales hit a record $14.5 billion, up 6% on the same period in 2009.

Doing less well were Yahoo, whose share dropped by almost five percent as the search engine provider forecast lower-than-expected second-quarter sales citing losing market share.

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Tags: Alistair Darling, Apple, ASOS, Bank, Bank of England, Banking, Bing, Boeing, British Economy, British Pound, Dow Jones, Economics, Employment, Financial News, FTSE, International Monetary Fund, Microsoft, Morgan Stanley, Office for National Statistics, Retail, Streetcar Ltd, Tesco, UK Banks, UK Economy, UK government, Unemployment, Windows 7, Xbox Live, Zipcar Inc

Economists have warned that a rise in interest rates is likely before the end of the year in the event that the current spike in factory output prices continues. High petrol prices have caused manufacturers to absorb rising energy and raw materials prices, with the main being transferred to consumers, stoking fears of a rise in inflation. A five percent rise in year-on-year retail prices in March out-paced analyst expectations, causing them to refigure the probability that the Bank of England will raise rates earlier.

The Halifax Building Society, Group has released its house price index, showing that house prices rose by 1.1 percent in March, partially reversing the 1.6 percent decline in February. The average price for the first quarter of 2010 finished 0.6 percent higher than the same period in 2009. A spokesman for Halifax pointed out that the return of stamp duty on lower-priced homes as well at the severe weather had combined to create a negative effect on house prices in the first two months of the year.

The Society of Motor Manufacturers and Traders (SMMT) have revealed as increase in new car sales by 26.6 percent during March. March is typically a strong month for new car sales, regularly accounting for a fifth of annual sales in the UK due to the new registration plate. The SMMT predicts that the end of the government scrappage scheme will result in a nine per cent fall in total sales for the year. A spokesman for the SMMT, also pointed out that the UK motor industry has enjoyed a better than anticipated first quarter of 2010 while the coming months likely to remain challenging with registrations of new cars expected to dip. In a related statement, the SMMT recently revealed that the number of vehicles in the UK are at an all time low.

The remaining British motorists pulling will be helping to take part in another record breaking attempt from this week onwards, how much it costs too fill their tank. A spokesman for the AA has speculated that petrol prices are about to hit (and pass) the 120 pence a liter mark, with the previous high being 119.7 pence high seen in July 2008, when crude oil was coasting more than $147.00 a barrel..

Industry sources have rushed to point out that the increase is partly a result of soaring wholesale costs, with the price of oil hitting an 18-month high of $85 a barrel, a third less than it cost during the previous high, although the pound was much stronger them and the effects of Chancellor Alistair Darling’s latest duty rise in last month’s Budget of 1 pence a liter.

In April, 2009, petrol cost 92.44 pence a liter.

Postal operator UK Mail has announced that revenues of £388 million for the financial year up to March 31 despite a drop in demand for their services caused by the financial crisis. After the announcement UK Mail’s share price rose 21.5 pence to 333.5 pence, up 28 percent over the past year.

The number of passengers that flew with budget airline EasyJet has increased by 13.5% on a year-on-year basis. EasyJet flew 3.96 million passengers in March 2010, 13.5 percent more than the 3.49 million carried in March 2009 with rival budget airline Ryanair also reporting a 13 percent rise to 5.3 million for the same period. A spokesman for EasyJet projected that the company had benefited from the British Airways strike, as well recently increased its number of flights across Europe.

Marks & Spencer have reported a 5.1 percent fourth-quarter sales increase at the retailer, ahead of becoming non-executive chairman in May. The figures, reported by outgoing executive chairman Sir Stuart Rose, have surpassed analysts’ expectations with sales driven by strong performance in the group’s formalwear and knitwear divisions. Rose in a somewhat controversial final report called for "greater clarity on economic policy and how this will impact our customers individually" after the election.

Hamley’s, the UK historic toy retailer, took their first step in an ambitious drive into India, with the opening of their first store in Mumbai. The company’s £22 million expansion into Asia’s third-biggest economy will see 20 outlets open across the country in seven years. A spokesman for Hamley’s announced that India was a key part of Hamley’s effort to expand into emerging markets, as they were attracted to the growing population and the potential of a previously restricted retail sector.

Kraft Foods has thrown its support behind a national chain of Cadbury-branded cafés that will offer afternoon teas and a wide range if chocolate products service in a move to compete with the high street coffee shop chains.

Cadbury had been in discussions about the outlets long before Kraft made its hostile bid last September and signed off the deal at the end of January – just before the US company took control of the confectioner.

The US food-maker, who took over Cadburys this year, has now endorsed a 20-year licence to a group of retail entrepreneurs to set up and manage the high street chain, to be called Cadbury Cocoa House.

The group could open as many as 60 cafés in locations around the UK in the next three to five years, and has already begun to negotiate with landlords for the first sites in London, which could be running before the end of 2010.

Following a £13 million ($20 million) management buyout the British arm of Reader’s Digest was pulled out of bankruptcy on Friday, The news means that Reader’s Digest Association Ltd. will now continue to be published under its well-known name.

The U.K. subsidiary of Reader’s Digest took shelter in administration, a form of bankruptcy protection, on Feb. 17 because it had been unable to gain agreement on a plan to close a pension deficit. That decision paved the way for the U.S. parent company to emerge from Chapter 11 reorganization.

Analysts have confirmed that since the start of 2007, the pound has dropped about 25 percent on a trade-weighted basis, making exporters’ goods less expensive overseas. Bank of England policy makers are counting on sterling’s weakness to aid the recovery and reduce domestic spending at a time when the nation faces a record budget deficit.

The pound continues to retain its level above $1.50, closing at $1.5372, while falling back in value ever so slightly against the Euro at 1,1403.

U.K. stocks rose again before the close on Friday, making for the benchmark FTSE 100 Index’s sixth straight weekly gain, the longest stretch of such gains since 2005. The gains were on increased confidence, as the European Union agreed to a contingency rescue package to help Greece cut its budget deficit.

The FTSE 100 advanced 58.28, to 5,770.98, extending this week’s gain to 0.5 percent.

US stock prices dramatically reversed Thursday’s negative start

At the closing bell, the Dow Jones Industrial Average was up 70 points at 10,927.07 while the NASDAQ Composite was 18 points higher at 2,454.05.

Greek bonds have plunged this week on renewed concern that the country won’t succeed in cutting its budget deficit, the European Union’s largest. Leaders of the nations who share the euro last month endorsed a Franco-German proposal to help Greece with a mix of International Monetary Fund and bilateral loans at market interest rates that would be triggered only if Greece runs out of fund-raising options.

China on Saturday announced a rare deficit in its politically sensitive trade balance for March, the first in six years, bolstering Beijing’s argument that the value of its currency only has a limited impact on international trade flows.

News of the $7.2 billion deficit comes at a fortuitous time for Beijing, which is under pressure particularly from the US to allow the renminbi or the Chinese yuan to appreciate.

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Tags: Alistair Darling, Bank, Bank of England, Banking, British Economy, Cadbury, Credit Crunch, Currency, Dow Jones, EasyJet, Economics, Economy, Financial News, FTSE, Halifax building society, Hamley's, Interest Rates, International Monetary Fund, Kraft Foods, Marks & Spencer, Money, NASDAQ, petrol prices, Reader's Digest, Recession, Ryanair, Sir Stuart Rose, Society of Motor Manufacturers and Traders, Stock Markets, UK Banks, UK Economy, UK government, UK Mail, UK Recession

Much as he tried to keep a low profile on the subject, Chancellor Alistair Darling’s budget speech on Wednesday had a definite pre-election feel to it as were most of the measures taken, with the useful suspects of cigarettes, spirits and petrol taking their usual pounding, but to varying degrees.

No sooner than Darling closed his famous red briefcase,

Shadow chancellor George Osborne launched his expected attack, describing Labour’s Budget as being empty and lacking in vision.

In his speech the Chancellor was not slow to point out that Labour’s policies were "bearing fruit" and expressed what appeared to be genuine concerns that if the Tories should get into power their spending cut plans could send the UK back into a much feared "double dip recession".

The Liberal Democrats, who obviously felt that they had to add something to the debate, chipped in with "Labour and the Tories are both in denial about the scale of spending cuts needed".

In his budget speech, Darling did announce that the government will need to borrow less than expected this year to plug the gap in the UK’s finances, with

Net borrowing for the financial year expected to total £167 billion, down from the £178 billion previously forecast. Borrowing this year is still expected to be at a record high – equivalent to 11.8% of GDP.

On the downside, Darling also downgraded his growth forecast for the UK economy.

Fuel duty will rise more slowly than previously planned, with a previously announced 3% rise in fuel duty l now be staggered, with a 1% rise in April, a further 1% rise in October, and then again in January. 2011, with phasing the increase rather than raising fuel duty by 3% immediately will cost £550 million.

UK banks received a number of mentions in Darling’s speech some of which were even favourable. The general underlying theme was that the UK taxpayer will be looking to see the banks move back to profit while increasing their support the economic recovery and improve financial expansion.

Alistair Darling noted that £2 billion had been raised through the 50 per cent one off "super tax" on bankers’ bonuses over £25,000, making for a 400% increase of the original forecast of £550 million. The windfall will largely be spent on further measures to stimulate the economy as well as some to be set aside to subsidies university places.

Other interesting snippets from the budget were that the government will allow tax breaks for companies who run zero-emission cars. Currently employees with a company vehicle for private use are required to pay a tax charge, with the exception of electrically propelled cars. However, the government has pledged to expand the exemption to cover "green cars" with these incentives to come into effect after April 6. Darling also threw in the information that the scheme to fund the deployment of superfast broadband looks likely to cost the industry and the consumer much more than expected, with every telecommunication line be subject to a monthly 50 pence levy on landlines. The government claims the new tax is necessary to ensure superfast broadband reaches suburban and rural areas.

It also appears that in order to partly fund the Budget’s 2.5 billion pound package for small firms, Darling intends to switch £230 million pounds of spending for 2010-11 from the departments for business and transport. The department for business said 1£50 million pounds will be transferred, largely at the expense of the £950 million pound strategic investment fund, which is supposed to provide state financing for strategic growth sectors, such as the civil nuclear industry.

Returning to reality, the UK’s two rail trade unions have announced their plans for four days of strikes to kick-off two days after Easter. If the industrial action from the RMT and the Transport Salaried Staff’s Association does transpire , it could see the UK hold its first national rail strike since the system’s privatisation. However, there is a strong possibility that the strikes will be called off, with negotiations with National Rail, the infrastructure owner, already well under way. .

U.K. engineering-services firm Babcock International have announced their plans to acquire the VT Group for around £1.33 billion pounds, in a mix of cash and stock. The announcement comes after two previous bids had been rejected.

Babcock is to pay 361.6 pence in cash and 0.701 of its own shares for every share in VT Group. As the sale was concluded, the offer was valued at 734.9 pence a share, meaning that Babcock paid a 39% premium to the average closing price over the month VT investors will hold around 36% of the combined company once the deal is completed. On the news shares in VT Group rose 4.4% on the FTSE to 721 pence, while Babcock also posted strong gains, rising 3.8% to 553 pence. A spokesman for Babcock said that they expect the deal to boost their earnings significantly in the first full year after completion.

The pound continues to be a problematic issue in the Forex markets. It closed On Thursday on $1.4863 while the Euro rose a little to on €1.1143.

The FTSE 100 index seemed to be pushed forward by Darling’s budget as well as increased optimism on Greece. It closed up 54 points to 5,727.63.

The House of Representatives put the finishing touches on the overhaul of Obama’s pet Health Care bill by passing a companion package that would make insurance more affordable, raise taxes on the wealthy and close a gap for prescription drug coverage for seniors. The Senate approved the package earlier in the day, which means that it now goes to Obama to sign.

The votes concluded a yearlong political struggle that tied up lawmakers, as well as making for a noticeable dent in Obama’s popularity

However passing the Health Care bill might be causing some problems on Wall Street. The Dow Jones retreated a little after a week of impressive gains; down by 377 points to close on 10841.21 The NASDAQ also dropped 18 points to 2397.41.

Greece seems to be out of trouble, at least for the time being. All of the 16 Eurozone member countries have finally come up with their backing for a financing plan, with some of the funds coming from the International Monetary Fund (IMF). The loan will total €22 billion (£20billion), with the condition that it is only to be used if normal market lending facilities to Greece will dry up. According to French President Nicolas Sarkozy, the Eurozone nations would grant bilateral loans, totalling some two-thirds of the funding,

Greek PM George Papandreou was quoted as saying that it was "a very satisfactory" move.

Also breathing sighs of relief are the owners of the Dubai World investment vehicle who have just been granted a £6.4 billion ($9.5 billion) loan help it’s to restructure their debt burden from the Dubai government

Dubai World has presented a plan to restructure $ 23.5 billion of debt to its creditors, with the proposal including converting almost a quarter of the debt into equity. Creditors have now to decide on whether to accept the plan, with analysts predicting that it is as good as it gets. The troubled company stunned global markets in November last year when it asked for a six-month delay on debt repayments.

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Tags: Alastair Darling, Babcock International, Bank, bankers' bonuses, Banking, British Economy, Budget, Currency, Dow Jones, Dubai World, Economics, Economy, Financial News, Forex, FTSE, Fuel duty, George Osborne, George Papandreou, International Monetary Fund, Money, Money Management, NASDAQ, National Rail, Nicolas Sarkozy, Stocks and shares, superfast broadband, Transport Salaried Staff's Association, UK Banks, UK Economy, UK government, UK Recession, VT Group, Wall Street

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.

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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

Continued uncertainty regarding cash-strapped Greece’s ability to be granted loans from their Eurozone partners, and if they are granted them if they will agree to accept them, continues to cause uncertainty in both the currency markets and stock exchanges not only in the UK but in all of the Eurozone member countries. Recent reports coming out of Athens have stated that Greece is lacking in confidence that their partners in Europe are either willing or able to provide sufficient and timely aid, and that they may have no option but to turn to the International Monetary Fund (IMF) for a bail out. The principal stumbling block to the EU loan is Angela Merkel, the German chancellor who HAS repeatedly stated that any other form of loan agreement would be impossible in terms of the European Union’s Maastricht treaty and German constitutional law. Berlin has shared widespread EU hostility towards any involvement of the fund, fearing that such a move would demonstrate Europe’s inability to regulate its own economic and monetary union.

After the release of more positive figures for February and the revision of data for January, it begins to appear that UK government borrowing for 2010 could be less than forecast. According to official figures, government borrowing for February was £12.4, much less than economists had expected.

Borrowing figures for January were also reviewed and sharply downwards, to £43 million from £4.3 billion.

Analysts now predict that UK’s full-year borrowing total may work out a lot less than the government’s original £178 billion forecast.

The Office for National Statistics also announced that the overall effect of the latest revisions to historical data for the year had cut overall borrowing for 2009/10 by £2.9 billion.

The Co-operative which traces its roots to the founding of the co-operative movement in 1844 has reported a major profits surge in its banking division, on the back of thousands of bank account customers disillusioned with Britain’s big banks switching their allegiance to the "co". In addition, the acquisition of the Somerfield supermarket chain coupled with the merger of the Cooperative’s financial services arm with Britannia Building Society have provided a major boost in turnover and profit for the company. As part of a revised tradition, the Co-op will be paying their five million members- a dividend of £55 million, up 16% from 2008. The dividend scheme or "divi" as it is widely known was re-introduced by the group in 2006 after a break of 30 years. The Coop’s banking division reported a 38% jump in new current or 140,000 new customers, taking the total to 1.2 million. The increase effectively doubled their share of the current account market to reach 4%.

To scenes of great excitement, Japanese care manufacturer Nissan have announced that they are to build its new electric car, to be known as the Leaf, at their UK plant in Sunderland. Once production begins in 2013, it will mean that hundreds of jobs are expected to be safeguarded as part of the company’s £420 million investment in electric cars. Nissan’s investment will be backed by a £20.7 million government grant and up to £220 million from the European Investment Bank. About 50,000 Nissan Leaf hatchbacks, which will run entirely on lithium-ion batteries, will roll off the Sunderland production line each year. Business Secretary Lord Mandelson said the development was a "fantastic vote of confidence" in the plant and its "excellent workforce". Mandelson also confirmed the UK government will be providing £360 million in loan guarantees for Ford’s planned £1.5 billion investment in cleaner engines.

At a hearing of the Commons business, innovation and skills committee held on Tuesday, representatives of Kraft Foods made a commitment not to close any more Cadbury factories in the UK or make compulsory redundancies in its domestic manufacturing operations for at least two years, The promises came as Kraft were seen trying to placate furious MPs and union members over its broken promise to save a Bristol factory from closure.

The US food group came under heavy fire for reneging on a pledge made last September to keep open the Somerdale factory, near Bristol, within days of agreeing an £11.7 billion take¬over of Cadbury in January, having overcome hostility from the UK-based maker some of the UK’s favorite chocolates.

On the FTSE, the Royal Bank of Scotland Group Plc had a bad day, their shares dropped by more than 3 percent as the biggest government-controlled bank issued warnings that their £2.9 billion pound ($4.45 billion) pension deficit looks likely to rise. The bank today reported a 46 percent rise in its pension deficit. .

Sterling fell to $1.5229, with the Euro coming under heavy pressure at €1.1181

The FTSE 100 jumped 17 points to close on 5,642.62.

According to official figures US consumer prices have risen very little between January and February.

The report issued by the US Labor Department showed the consumer price index was flat in February, though prices were 2.1% higher than a year ago , indicating that there were little sign of inflationary pressures in the offing for the US economy, allowing interest rates to remain low.

US stocks closed modestly higher on Thursday, aided by some strong corporate results. At close of trade the Dow Jones Industrial Average was up 0.4 per cent at 10,779.17 and the NASDAQ Composite index rose 0.1 per cent at 2,391.28.

Crude oil prices have fallen to an average of $81.85 a barrel, yet still placing them within levels are within Opec’s preferred price band of about $75-85 a barrel. The cartel reasons prices below that band risk choking off investment in new oil projects while prices above it could threaten the recovery of world economies

The fall came after the OPEC oil cartel announced on Wednesday their intention to hold production quotas at the same level for the time being.

The price of gold rose 0.1 per cent to $1,126 a troy ounce after ending Wednesday’s session in New York at $1,124.05.

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Tags: Angela Merkel, Bank, Banking, British Economy, Cadbury, Credit Crunch, Dow Jones, Economics, Economy, electric car, Employment, Financial News, FTSE, Gold, International Monetary Fund, Kraft Foods, Lord Mandelson, Money, NASDAQ, Nissan, Office for National Statistics, OPEC, Recession, Retail, Royal Bank of Scotland, Somerfield, Stock Markets, Stocks and shares, The Co-operative, UK Banks, UK Economy, UK government, UK Recession, US labor Department

Blame can be attached to UK Prime Minister Gordon Brown for many of the nation’s financial woes, rightly or not. On one fact, however, there is a consensus. That he had the foresight to keep the UK out of the euro. The recent financial crisis has shown that the structural weakness of the eurozone, which already seems to be crumbling, with the Greek tragedy exposing the weakness of a system of "mutual guarantees" by 16 different fiscal regimes. Opponents of the UK joining the single currency are basking in the light of their wisdom, but the smiles may soon be wiped from their faces, as it looks like Britain may be pulled into the crisis indirectly. This may happen if the International Monetary Fund (IMF) gets involved although the UK will be nowhere near the front line of a rescue package, unlike the Germans and the French.

Rumors that the problems that Greece, Spain, Portugal and Italy are experiencing– will lead to a break-up of the European currency is far-fetched. Above anything else, the single currency is a Franco-German political project with huge symbolic investment for postwar, post-Iron Curtain Europe.

The problem for Greece and the other Mediterranean counties is that their membership of the single currency means that they cannot devalue its way out of difficulty.

The UK Secretary of State for Business, Lord Mandelson has predicted that a decision on government funding to help rescue the car manufacturer Vauxhall could be completed within weeks. GM.UL is said to be looking for an investment of £2.9 billion pounds from European governments to facilitate a return to growth. Mandelson confirmed that the government is prepared to play a part in the rescue plans and that negotiations have started over what conditions could be imposed in return for government support

Difficult though it may be to accept, a recent survey on the banking sector has revealed that 57 percent of UK bankers and financiers received a bonus increase during 2009. The poll, which took in close to seven hundred financial professionals indicates that the Chancellor’s "super tax" on bankers’ bonuses had caused little effect on lavish remuneration packages.

More than a third of the bankers in the poll saw their bonuses either decrease or at least remain static. However those who fell into the this category did not cite the super tax to be the primary reason for the absence of an increase, preferring to cast the blame, and rightly so, on the performance of their companies with half of those who did miss out on a bonus were reported to be less than satisfied.

Prominent UK property developers the Shaftesbury Group have announced a major upturn in demand for property in the West End of London, with the Christmas and New Year period especially brisk. Shaftesbury announced a significant increase in new tenant agreements approved at rates at or above recent property values for the company’s various assets. While many UK property companies still struggling to honour their various banking covenants, the overall picture denotes that the UK property tide has turned, the company reports.

Lloyds Banking Group (LBG) is looking to sell or spin off major assets from the failing £70 billion pound property. The bank is establishing a review process, which currently in its early stages. The process will seek to reduce the amount of regulatory capital tied up in keeping the assets on Lloyds’ balance sheet, with the strategy expected to be finalised by Easter. At the same time, Lloyds plan to step up their sale of HBOS Integrated Finance, an investment business with stakes in about 60 companies.

Meanwhile the Royal Bank of Scotland (RBS), remain sitting on losses of several hundred million pounds after being forced to take back ownership of £1.8 billion in German properties bought at the market’s peak by a fund run by Morgan Stanley. In one of the largest paper losses on property for a UK bank, RBS has taken control of a portfolio of 28 German properties, after lending about €1.9 billion to acquire the portfolio in 2007. RBS are to follow the trend set by LBG to hold on to the properties until they return at least some of the losses..

Mobile telecommunications operator O2 believes that its purchase of Jajah, an Israeli voice over internet protocol (VoIP) company, will help the firm out- perform rival mobile operators and the current VoIP market leader Skype. A spokesman for Telefonica Europe, O2’s parent company, said that the company will use Jajah to attack the international calling card market, currently worth £100 million pounds a month in the UK, rather than to slash mobile call costs.

Fashion chain New Look are giving a lot of indications that they will become the third company in as many days to scrap a planned stock market flotation. The writing seems to be on the wall for New Look’s float, when they called off a proposed £1.7 billion initial public offering (IPO) on Friday, blaming a lack of appetite among potential investors. New Look had planned to raise a total of £650 million pounds from their IPO, using the money to cut debt as well as fund an expansion programme in the UK and overseas.

As the FTSE 100 was switched off for the weekend UK, stocks had receded a little The 100 Index was down 10.03 points to 5,142.45

The pound rose slightly against the dollar, closing at 1.5702 while jumping to 1.1522 against the struggling Euro.

President Barack Obama has signed a law increasing the limit on how much the US government can borrow.

The debt limit was raised to $14.3 trillion (£9.1 trillion) from $12.4 trillion, which will allow the government to function for the rest of the year.

Correspondingly Mr Obama also approved legislation that requires new spending to be offset with cuts elsewhere. The legislation will seek to address the record US budget deficit, which is predicted to reach $1.56 trillion in 2010.

The "pay-as-you-go" or "paygo" rule was in place in the 1990s – the last time there was a federal budget surplus.

On Wall Street things were still looking up. The Dow Jones Industrial Average finished for the weekend up 41 points at 10099.14. The NASDAQ gained 33 points to close on 2,183.53.

According to the US Commerce Department, retail sales rose at a higher rate than expected in January, boosting hopes that strong economic recovery will continue. Sales grew 0.5% month-on-month, while December’s figure was revised to a 0.1% fall from a first estimate of a 0.3% fall.

Sales were up by 4.7%, Compared with January 2009.

According to preliminary figures released on Friday, Germany’s recovery from recession faltered in the final quarter of 2009, failing to show any signs of growth at all in the last quarter of the year. France did better, reporting a 0.6% rise in GDP for the same three-month period which was higher than forecast. The figures released also showed that the economy in the Eurozone also grew 0.1% in the same quarter.

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Tags: Bank, Banking, Barack Obama, British Economy, British Pound, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, Gordon Brown, HBOS Integrated Finance, International Monetary Fund, Jajah, Lloyds Banking Group, Lord Mandelson, Money, Morgan Stanley, NASDAQ, New Look, O2, Recession, Royal Bank of Scotland, Shaftesbury Group, Skype, Telefonica, UK Banks, UK Economy, UK government, UK Recession, Vauxhall, Wall Street

Figures released yesterday confirmed that the UK economy grew by 0.1% in the last quarter of 2009, meaning that the recession is finally over, but later and which much less impact than the US or the Eurozone economies. Britain’s economy had been in recession for eighteen months, the longest period since quarterly figures were first recorded in 1955.

The news was widely anticipated with signs such as last week’s UK unemployment figures that fell for the first time in 18 months.

Analysts now predict that no matter which party wins this year’s election when it happens, the loser will be the pound/ Reasons given are that neither David Cameron or Gordon Brown will be able to muster sufficient support in parliament to control the UK’s budget deficit, which is the largest in the in the Group of 20.

Strategists have pruned back their forecasts on the sterling versus dollar pair by as much as 2 percent this month, to the lowest level since June 2009, with Sterling liable to be weighed down by possibility of the first parliamentary stalemate in more than a generation and growth levels that lag far behind Britain’s rival industrialized economies. Add that to a fiscal shortfall that has ballooned to almost 13 percent of gross domestic product and the picture for the pound looks less than rosy.

Previous precedents do not bode well for the pound, as when the last time a U.K. election failed to produce a clear winner in 1974, Sterling fell in value by 28 percent in the next two years, with the government’s failure to fund its deficit leading to the International Monetary Fund stepping in to bail-out the economy.

The UK’s so-called ‘Big Six’ group of energy suppliers is on course for a profits windfall due to the extremely cold weather conditions experienced in the UK during December and early January. Consumers were forced to turn up their thermostats when the country experienced the coldest weather conditions for decades with the daily demand for gas hitting an all-time high on Jan. 7th of 454 million cubic meters. Analysts predict that accumulative profits for the big six (Centrica, EDF, E.ON, Scottish and Southern Energy, ScottishPower and RWE npower) could easily reach an additional £100 million for the period.

The Chelsea and Yorkshire building societies are expected to finalise details of a merger this week. Doing so will mean the creation of the second biggest society in Britain, after the Nationwide. Yorkshire Building Society members are liable to give their thumbs up for the merger, following the lead of the Chelsea Building Society who gave their support to the deal on Friday. A successful deal would mean the consolidated company would have combined assets of £35 billion pounds, around three million members and 180 branch offices around the UK.

On the news that Barclays plans to defer bonuses for top executives including Chief Executive Officer John Varley for up to three years, stock in the company 4.1 percent, to 271.35 pence.

Pilots at British Airways pilots have been warned by the labor unions representing the cabin crews not to become strike breakers if an employment dispute leads to a work stoppage. News that caused BA’s stock to decline 0.8 percent, to 207.9 pence.

Prudential Plc, the U.K.’s largest insurer have announced plans to cut back expansion in developed markets to focus on growth in developing Asian countries, such as Malaysia, Vietnam and Indonesia. Shares in Prudential shares dropped 0.4 percent to 605.5 pence.

Sterling rose slightly against the dollar and the Europe in early week trading. The pound closed at 1.6144 against the dollar, with the Euro being traded at 1.146

Shares in the FTSE 100 took a minor downturn, despite the news that the recession was over in the UK. It closed on Tuesday down 26 points to 5,276.85.

A calmer mood prevailed in markets on Monday and Tuesday after a three day downturn that knocked 5 per cent of its values. Reports coming out of Washington over the weekend suggesting that Ben Bernanke looks like being reappointed chairman of the Federal Reserve for another four-year term settled the markets which had closed at fresh a 15-month high as recently as last Tuesday.

The Dow Jones rose by 84 points, to close at 10255.28, while the NASDAQ recovered 14 points, to finish at 2210.53.

According to the National Association of Realtors (NAR) sales of previously-owned US homes fell 16.7% in December, after having risen in the three months from September to November as first-time buyers took advantage of tax credits. However the decline in December came as no surprise as most buyers had rushed to complete deals before the original 30 November deadline. The first-time buyer tax credit has since been extended until 30 April, causing the NAR to predict that there was likely to be another surge in sales in the spring. December sales fell to a seasonally-adjusted annual rate of 5.45 million from 6.54 million in November, 15% higher than in the comparable period in December 2008.

Computer giant Apple have announced a 50% increase in profits after seeing a bumper Christmas period, with sales of iPhones doubled from a year ago.

Net income rose to $3.38 billion (£2.08 billion) in the three months to 26 December, from the $2.26 billion in the same period in 2008. A spokesman for Apple announced that they had succeeded in selling 8.7 million iPhones in the quarter. Sales of Macs also rose 33%, although iPod sales fell by 8%.

General Motors (GM) has confirmed that Saab is to be eventually acquired by Dutch luxury carmaker Spyker.

GM has been trying to sell Sweden’s Saab since January 2009 although recently they announced that they would begin the procedure of winding down the company while still continuing their search to find a buyer.

Wind-down activities have now been suspended, "pending the close of the transaction".

Saab lost £255 million in 2008, and has not made a profit since 2001.

In the commodities market, gold took advantage of the relative stability in the dollar, to rise to $1,097 an ounce. Oil also rose by 0.5 percent to $74.92 a barrel.

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Tags: Apple, Banking, Barclays, British airways, British Economy, British Pound, Centrica, Chelsea Building Society, Credit Crunch, David Cameron, Dow Jones, E.ON, Economics, Economy, EdF, Federal Reserve, Financial News, FTSE, General Motors, Gordon Brown, International Monetary Fund, iPhone, John Varley, Money, NASDAQ, National Association of Realtors, Nationwide, Prudential Plc, Recession, RWE npower, Saab, Scottish and Southern Energy, ScottishPower, Spyker, UK Banks, UK Economy, UK government, UK Recession, Yorkshire Building Society

With an earlier than expected rise in inflation, which soared to 2.9% in December, interest rates could be rising sooner than expected in 2010.

The reading for the consumer prices index (CPI) came in well above the expected 2.4% figure making for the largest ever rise in inflation over a single month, according to figures issued by the Office for National Statistics (ONS) Reasons given were reduced s discounting from retailers in the run-up to Christmas and fuel prices remaining unchanged compared with sharp falls a year earlier.

The Bank of England had already expressed fears that inflation would rise this year, but this high figure will curtail the bank’s efforts to store up inflationary pressures while kick-starting the economy out of recession.

The Bank’s target for CPI inflation for 2010 is 2% and the jump to 2.9% puts its policymakers in a delicate position. While higher than expected inflation would force them to raise rates before the economy has properly recovered.

The head of the International Monetary Fund head has again warned that the global economy could yet experience another downturn, known in financial circles as a double dip recession.

Managing Director Dominique Strauss-Kahn said countries should rush to exit from stimulus packages that have bolstered growth through huge amounts of government spending and that it is too early for policy makers to withdraw stimulus that’s driving the global recovery.

“The global economy is recovering, even if its recovery is fragile,” Strauss-Kahn said in a recent speech. "While a plan to withdraw emergency measures “should be designed today” it should not yet be “implemented” because world economies are still dependent on government support and private demand remains weak" Strauss-Kahn has previously voiced his opinion that the world’s economic recovery is occurring “sooner and stronger” than anticipated. More than $2 trillion in government spending around the world has spurred growth, pulling economies out of a recession spurred by a meltdown in the U.S. housing market. Separately, Germany and France raised their growth forecasts for the year. Strauss-Kahn went on to add that China and Asian economies are leading the recovery.

British Airways cabin crew is to vote again on possible strike action, according to a recent announcement from the Unite union.

A spokesman for Unite predicted that a fresh ballot of its members would be held in the near future. The move came after recent talks with BA failed to find a resolution to a long-running dispute. BA announced in reply that they were "saddened but not surprised" by the decision, whilst promising to make every effort to allow talks to continue. If talks fail, a strike could begin as early as March if cabin crew vote in favour of industrial action.

BA had already planned a 12-day strike for Christmas last year which was blocked by a court injunction.

The long protracted takeover of Cadbury by US food company Kraft now appears to be going forward after the Cadbury board approved a new increased bid. Cadburys will now advise their shareholders to accept a new offer of 840 pence a share – valuing the company at £11.5 billion ($18.9 billion). Shareholders will also receive a dividend of 10 pence a share.

The additional cash represents a 90 per cent premium to the Cadbury share price before the deal was announced and a 50 per cent premium to Cadbury’s undisturbed share price of 568 pence before Kraft approached Cadbury in late August

Spokespersons from both Cadbury and Kraft jointly announced that details of the agreement were still being finalising and would make a statement later.

Many city pundits were surprised that the deal eventually went through so smoothly after months of animosity between the two companies.

It is expected that Kraft’s final offer consisting of 500 pence in cash, with the rest made of Kraft shares made the deal much sweeter for Cadbury shareholders. To finance the takeover Kraft will require borrowing around £7 billion ($11.5 billion)

Shares in Cadbury topped the FTSE 100 on Tuesday.

Sterling was among the few currencies to rise against the dollar and the Euro on Tuesday after UK inflation jumped in December, increasing the possibility of monetary tightening and increases in interest rates being brought forward. The pound closed at 1.636 against the dollar, with the Euro being traded at 1.1459

The FTSE 100 index rose 41.6 points to 5,496.9, while the FTSE 250 index added 33.4 points to 9,571.6.

In the US, Citigroup announced losses of $7.6 billion for the last quarter of 2009, large due to their efforts to repay US government bail-out funds, and coming after three consecutive profitable quarters. Citigroup’s ’s loss was in line with Wall Street analysts’ expectations and would amounted to a loss of $1.4 billion, had it not been for its repayment of the $20 billion in funds it received from the troubled asset relief programme. For the same period of a year ago, Citigroup reported a loss of $17.3 billion. In 2009 as a whole, Citigroup made a loss of $1.6 billion on $80.3 billion turnover.

The Dow Jones Industrial Average rose sharply on early trading after being closed on Monday for Martin Luther King Day. The index rose 115 points to close on 10,725.43. The NASDAQ Composite was also on the up, 32 points to 2320.4

Computer giant IBM has announced that after cost-cutting work helped to increase its earnings by 9% in the last three months of 2009.

They have raised their profit target for 2010. IBM made a net profit of $4.8 billion (£2.9 billion) for the fourth quarter, up from $4.4 billion from the same period in 2008, with turnover for the quarter increased by 1% to $27.2 billion

Crude prices fell to a three week low on Tuesday, with prices averaging around $77.00 a barrel. Traders pointed out the implications in the oil market of the bankruptcy of Japan Airlines, as the Tokyo-based carrier made extensive use of oil derivatives to hedge its cost and the bankruptcy is likely to force investment banks to unwind the hedges.

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Tags: Bank, Bank of England, Banking, British airways, British Economy, British Pound, Cadbury, Citigroup, consumer prices index, Crude oil, Currency, Dominique Strauss-Kahn, Dow Jones, Economics, Economy, Financial News, FTSE, IBM, Inflation, Interest Rates, International Monetary Fund, Japan Airlines, Kraft, Money, Money Management, Money Markets, NASDAQ, Office for National Statistics, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Unite, US Government