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

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

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

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

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

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

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

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

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

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

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

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

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

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

As the UK wakes up this morning to the reality of being officially in recession, the three day working week is starting to look inevitable in certain sectors of industry. The news that Britain’s largest steel maker,

Corus, is to lay off 3,500 of its work forces added to the expected announcement that auto parts manufacturer GKN is due to announce that they will also be laying off thousands, in the wake of negative profits.

Signs that the automobile industry is being especially hard hit by the recession is the news that Jaguar Land Rover are also considering making yet another 1,500 job cuts within the next week or so. .

Corus, who employ 24,000 in plants situated throughout the UK, are in a period of restructure in an attempt to withstand strong competition in a rapidly dwindling market, and exceptionally strong competition from Brazil and India.

In what be a last minute attempt to prevent these painful job cuts, Business Secretary Lord Mandelson is believed to be in talks with the Treasury. His obvious goal is to prevent these cuts in work force for the car industry, and a probable compromise is to partially finance the salary costs, as well as suggesting that a three day working week be implemented at these plants still things begin to recover in the economy, which might well be a few years away. With car manufacturers throughout the World hinting and threatening that three day weeks and production breaks are inevitable, it looks like the UK will have no option but to follow suit.

On a more positive note, it appears that the UK public while cutting back on major purchases, such as property, cars, electrical goods and just about everything else, are spending more on cosmetics and personal hygiene products as well as on entertainment . These positive trends were well in evidence on Friday as PZ Cussons, whose brand name Imperial Leather and Carex both announced growth figures of more than ten percent in the last quarter of 2008.

The PZ Cussons group, awarded a M.E.N. Business of the Year prize for 2008, announced that it was continuing to witness growth in their UK business. A spokesman for the company said that they had put their success down to new initiatives, such as the re-launch and update of fragrances and domestic products in their Carex range. This included anti-bacterial wipes and waterless hand gels.

Another company that seems to be bucking the downward trend exceptionally well is BSkyB who’s expected announcement of trading results for the second half of 2008 December 31 will show a downturn, but one that is minor when compared to the state of the UK economy as it stands at the moment.
The forecast of pre-tax profits of £290m for BSkyB shows an increase of fifteen per cent on the same period in 2007.

So while the UK publics are digging in to see this recession through, it would appear that the trends are many of them are spending more time at home, and making a determined effort to look and smell better!

Late Friday on the US stock market, stocks continued their decline with disappointing earnings being reported by some industry standards such as Microsoft and Fifth Third Bancorp. The announcement, although expected, that Microsoft were to pay off 5,000 people Worldwide did send a chill down a few people spines on Wall Street as they announced to shareholders that they would be unwilling to provide a profit forecast for 2009.

The Dow Jones industrial average slipped 2.5 percent, to 8077.56, with Wells Fargo and Bank of America slumping by more than 13 percent for the week. These falls added fuel to the fire that the banks may well is forced to take decisive steps in order to shore up their balance sheets.

Average annual profits have decreased since January 2008 by sixty percent for the 69 companies that make up the S&P 500 whose fourth-quarter results have been released to date. U.S. financial analysts are now forecasting that most companies will report more than a 30 percent drop in profits for the last quarter of 2008 alone.

President Obama in a determined effort to show that he will be a skilled president as well as a great orator began to pressed congressional leaders to reach a consensus on an $825 billion stimulus plan. He warned that the country may be facing an economic crisis that was “unprecedented”. Obama’s warnings were given some added weight with the announcements that average home prices dropped the most since 1990 in November 2008, housing starts fell 16 percent in December and the number of Americans filing first-time claims for jobless benefits climbed to its highest level since 1983.

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Tags: Corus, Jaguar, Jaguar Land Rover, Land Rover, Lord Mandelson, PZ Cussons group, Recession

Just a few days after causing luxury saloon cars enthusiasts to purr with their launch of two exciting new models for 2009/2010 at the Detroit Motor Show, Jaguar Land Rover had the city to groaning, but only slightly, with the announcement that the company is to cut 450 jobs in 2009.

The Bulk of the jobs to be cut are in the group’s management sector, with 300 managers to be laid off. The remaining 150 will come from the factory floor.

Despite some very cautious optimism for sales in 2009, Jaguar Land Rover announced that they had a very tough 2008.

Overall, sales of new cars dropped by 11% in the UK during 2008, with the last quarter of the year being especially tough.

Strangely enough, sales at the top end of the market appear to be doing proportionately better, and this possibly the reason why Jaguar Land Rover’s

Owners Tata Motors of India appeared to have made a considerable effort to keep their factory floor staff as intact as possible.

Jaguar Land Rover , acquired by Tata from Ford for £1.7bn in 2007 has a total work force of around 15,000 people based in their Castle Bromwich, Coventry and Solihull plants in the West Midlands as well as at Halewood, on Merseyside.

Jaguar Land Rover’s decision to cut jobs follows a trend in the UK car industry that is causing Business Secretary Lord Mandelson to furrow his brow just a little.

When questioned on his thoughts on the Jaguar Land Rover redundancies. Lord Mandelson replied”: “Jaguar Land Rover’s decision today reflects the continued downturn in the market and that is a reflection of what is happening more generally in the global economy.”

Mandelson has recently revealed that the government was looking into a possible rescue package for the entire UK car industry in the wake of recent job cuts, not just at Jaguar Land Rover but also at other UK plants, most prominently Nissan’s North East plant where 1,600 jobs will be lost,

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Tags: Economics, Finance, Financial News, Jaguar, Jaguar Land Rover, Job Loses, Land Rover, Money, Retail, Tata Motors, UK Recession