In a recent interview, Business Minister Lord Mandelson gave the first veiled indication of concern over the increasing number of Britain’s major businesses under foreign control. Mandelson pointed out that while the UK remained committed to open markets for trade and investment entailing that companies should remain open to foreign takeovers, whilst adding that the country should be "mindful" of the implications of foreign ownership

Mandelson’s comments appeared to signal a shift in the government’s open approach to takeovers by overseas firms and come amid a rising tide of protectionism around the world. In response to Mandelson’s comments, union leaders accused Lord Mandelson of "closing the stable door after the horse had bolted".

In his speech, Mandelson forecast that, foreign ownership could "disadvantage" the location of UK manufacturing plants over the next 20 years. His comments emphasised a growing concern as the government seeks to rebalance the economy and lessen the reliance on financial services.

Mandelson’s comments echoed those from City minister Paul Myners, who also has publicly expressed fears that too many British companies were falling into foreign hands because their shares are owned by international funds, and little concern was felt for their domestic heritage.

Britain has been a leading proponent of open markets and countless household names have been taken over by foreign companies. These include BAA, BOC, Marconi, Abbey National, Alliance & Leicester and British Energy.

Mandelson’s comments are bound to reverberate around the Vauxhall plants, fearing for their future after the car maker was bought by Canadian car parts firm Magna as well as at Cadburys where the American giant Kraft has attempted a hostile takeover.

When asked to comment on his speech Mandelson hastened to explain that while globalisation has served the UK well in the past and will do so in the future, there are issues around corporate institutional ownership and responsibility ". A major corporate buy-out by private equity can reshape a community or an industry, and there will always be a legitimate demand for transparency and accountability when that happens." He summed up.

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Tags: Abbey National, Alliance & Leicester, BAA, BOC, British Economy, British Energy, Cadburys, Credit Crunch, Economics, Economy, Financial News, Financial Services, Kraft, Lord Mandelson, Magna, Marconi, Paul Myners, Recession, UK Banks, UK companies, UK Economy, UK government, UK manufacturing, UK Recession, Vauxhall

It now appears likely that Bank of England Governor, Mervyn King will be awarded the post of deputy chairman of a Europe-wide board, that will be responsible for the tracking the stability of financial institutions as well as co-coordinating risk supervision by national bank regulators.

King would join the board as number two to the European Central Bank governor Jean-Claude Trichet, who has been invited to chair the new body.

Reports have it that although no formal offer to Mr. King has yet been delivered, if Mr. King was to accept the post as deputy, his presence might help to calm UK fears that the revamp of Europe’s supervisory system would undermine the City’s position as leader in financial services in Europe.

Meanwhile head City regulator, Lord Turner made a robust defence on Tuesday night of his allegations that the “swollen” financial services sector has produced “socially useless” products, He continued by adding that UK banks may become “boring” lower-risk, lower-return investments.

“Banks need to refocus their energies on their core functions of providing savings and credit and payment products to customers,” Turner added at a speech presented at the Mansion House City banquet hosted by the lord mayor of London.

"The huge profits that many banks were expecting to make this year should be attributed to implicit government guarantees and low interest rates, and therefore much of that money should be used to build bigger capital and liquidity buffers rather than paying big bonuses", summed up Lord Turner.

According to recently released information, the pace of business failures slowed in August to its lowest level in almost 12 months. Although statistics gathered continue to suggest the worst of the UK recession may be over, there are wide geographical disparities within the data, with the north-east of England showing a 92.7 percent increase in the number of insolvencies.

In the first deal of its kind since the credit crunch began in the summer of 2007, Lloyds Banking Group are set to sell more than £2.8 billion in new bonds. The bonds are backed by UK residential mortgages.

Understandably, the sale is being closely monitored, due to its potential to reopen the market for residential mortgage backed securities in Europe. The hint of a return to mortgage backed funding for banks, which helped to fuel the boom in mortgage lending before the crunch is reported to be making a few people in the city feel a little hot under the collar.

Meanwhile the Cadbury/ Kraft turnover saga continues. Cadbury has seemingly approached the UK Takeover Panel to ask Kraft to “put up or shut up” on their unsolicited £10. 2 billion takeover approach of three weeks ago.

Cadbury approached the panel to request that Kraft either make a formal takeover proposal or put their advances on hold for the next six months.

Financial experts are predicting that Kraft will be ordered to make a formal offer within the next two and eight weeks, and if no offer is forthcoming, Kraft will not be able to make another offer for Cadbury for at least six months. Meanwhile reports have it that head of Kraft Foods, Irene Rosenfeld, is due to fly in to London this week in an effort to persuade investors to back their £10.2 billion takeover offer.

The chairman and chief executive are scheduled to hold one on one meeting with global shareholders at an investor day organized by Bank of America Corp. A representative for Kraft wasn’t immediately available to comment, while a spokesman for Cadbury stated that it remained unclear whether chief executive Todd Stitzer would be among the company’s senior executives attending the conference, and that no meetings between Stitzer and Rosenfeld had been arranged. In the shadow of such uncertainty, Cadbury’s stock fell 0.5 percent to 788 pence on yesterday’s trading.

According to experts in the UK real estate market, home sellers have raised asking prices in September as confidence in the property market improved and the supply of homes dwindled.

The average cost of a home increased 0.6 percent so far this month to £223,996 after falling 2.2 percent in August. Price gains in London, the southeast and East Anglia outweighed declines in the rest of England and Wales.

The U.K. property market is showing signs of recovery as the country emerge from the recession. The recovery continues to be aided by the Bank of England maintaining the benchmark interest rate at 0.5 percent alongside other moves to stimulate the British economy.

On the FTSE, house builders Barratt Developments were reported to be looking to raise up to £700 million through a share placing and open offer, to reduce their debt level of £1.3 billion as well as to buy land for fresh housing developments. The news failed to either depress or excite the market, and their stock ended flat at 268 ½ pence.

High street retailer Blacks Leisure who operates the Millets and Freespirit chains saw their shares fall a considerable 17.5 per cent to 42 pence after admitting it was likely to breach its terms of borrowing.

A spokesman for the company warned that trading had missed targets and they are likely to be in breach of their lending agreements.

Shares in Carphone Warehouse, gained 4.9 per cent to 192 ½ pence due to positive comments on the company’s growth policies by their brokers.

On the day, the FTSE 100 ended up 8.24 points on yesterday’s trading at 5,142.60, while the FTSE 250, rose by 28.02 points to close on 9,248.67.

The pound made a minor recovery yesterday against the dollar and Euro while falling against the Yen.

• Pound/US dollar 1.6399
• Pound/Euro 1.1069
• Pound/Japanese Yen 149.188
• Pound/Swiss Franc 1.6767

The Dow Jones Industrial Average re-adjusted itself after losses on Monday, up 51.01 points to 9,829.87. The NASDAQ continued its steady rise, up 8.26 points to 2146.3.

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Tags: Bank, Bank of America Corp, Bank of England, Banking, Barratt Developments, Blacks Leisure, British Economy, British Pound, Cadbury, Carphone Warehouse, Credit Crunch, Currency, Dow Jones, Economy, European Central Bank, Financial News, Freespirit, FTSE, Interest Rates, Irene Rosenfeld, Jean-Claude Trichet, Kraft, Lloyds Banking Group, Lord Turner, Mansion House City banquet, Mervyn King, Millets, Money, Money Markets, Mortgage, Mortgages, NASDAQ, Recession, Retail, Stock Markets, Stocks and shares, Todd Stitzer, UK Banks, UK Economy, UK government, UK mortgages, UK Recession, UK Takeover Panel

It was a day for financial contemplation on Tuesday as the first anniversary of Lehman Brothers filing for Chapter 11 bankruptcy protection in the early hours of 15 September 2008 was marked, not quite by a minute’s silence but by many hours of contemplation of who the World’s financial systems almost went into meltdown.

Following the collapse of Lehman Brothers, once the fourth-largest US investment bank, the knock on effect caused meant that governments around the world had to pump trillions into their financial systems. The previously unimagined bank bail-outs, central bank actions and huge stimulus plans to save their biggest banks followed. Moves that are estimated to have cost every citizen of the developed world around $10,000 each..

On the day, Paul Myners, the minister who job it is to oversee London’s financial district, announced that he remains “very confident” that the UK’s multibillion-pound bailout of its troubled lenders will result in a profit for the country.

Last year the U.K. orchestrated a rescue package for banks including Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc. In the April annual budget the government submitted to Parliament it estimated that the bailout may cost taxpayers £50 billion

When asked to give his impressions when investments in the UK banking system would result in profit for members of the U.K. public, Myners replied by assessing that it will take “much less” time than a decade, and when it came it would add up to a “a nice little nest egg for the British taxpayer.”

Speaking of nest eggs or was it Easter eggs, Cadbury’s chief executive Todd Stitzer is due to be in the hot seat today, when he faces a group of the company’s’ top level investors since Kraft’s £10.2 billion unsolicited takeover proposal was rejected by the company. Stitzer as well as Andrew Bonfield, Cadbury’s chief financial officer are expected to be asked to outline the confectionery group’s long-term growth plans. The address was scheduled before Kraft approached Cadbury late last month.

UK oil and gas explorer, BG Group have announced another oil and gas discovery in a giant field off the coast of Brazil on Monday, making it the second in less than a week.

BG said further work was needed to evaluate the results before any concrete announcement can be made.

Hopes of a swift economic rebound and warned households and businesses of a “slow and protracted” recovery, according to Mervyn King, Bank of England governor.

King’s comments led to a sharp reassessment in financial markets of the likelihood and timing of any rise in interest rates.

The pound has taken a beating in the last few days, falling against all the major currencies for the last three months.

• Pound/US dollar 1.6477
• Pound/Euro 1.122
• Pound/Japanese Yen 148.8052
• Pound/Swiss Franc 1.7034

The FTSE 100 continued its upswing rising 60.31 points to finish on 5.102.44 while the FTSE 250 rose on Tuesday by 87.24 points to 9251.84/

The US recession is probably over but the economy will remain weak for some time due to unemployment, Federal Reserve chairman Ben Bernanke has said.

But he added that the economy would still feel "very weak" to Americans concerned about job security.

A year after Lehman Brothers collapsed, a think tank has warned the lessons of the crisis have not been learned.

The Institute for Public Policy Research (IPPR) says the rapid return to the City’s bonus culture shows that real reform has been "very limited".

The warnings echoed a speech by US President Barack Obama, who warned of complacency in the banking sector.

Despite President Obama’s and Bernanke’s comments , stocks on Wall Street rose on the day’s trading. The Dow Jones rose by 56.61 points to 9683.41, while the NASDAQ rose by 10.86 points to 2102.64.

Japan Airlines (JAL) plans to cut 6,800 jobs, as an airline trade body upped its projected losses for the global industry this year.

Media reports have said several US and European airlines are in the running to take a stake in the loss-making carrier.

The airline had already launched a programme of job cuts, plans for fuel-efficiency and a focus on business customers.

Reports this week have suggested that Delta Airlines and American Airlines are in talks to invest in JAL to expand into Asia via code-sharing agreements.

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Tags: Andrew Bonfield, Bank of England, Banking, bankruptcy, Barack Obama, Ben Bernanke, BG Group, British Economy, British Pound, Budget, Cadbury, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, FTSE, Gordon Brown, Institute for Public Policy Research, Investment, IPPR, JAL, Japan Airlines, Kraft, Lehman Brothers, Lloyds, Mervyn King, Money, Money Markets, NASDAQ, Paul Myners, Recession, Retail, Royal Bank of Scotland, Stitzer, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, US President

The Bank of England have announced that they will be holding interest rates firm for the sixth consecutive month, at a record low of 0.5%.

The bank also announced that their quantitative easing program is not to be expanded, remaining at £175 billion.

The ownership saga at National Express seems to be drawing to a close, after the company reached an agreement to allow a consortium comprising its largest shareholder to examine its books. The next step is likely to be a £765 million takeover of the group, which operates both bus and rail networks in the UK. The successful bidders are a consortium headed by Spain’s Cosmen family, who already own 18.5 per cent of the group, private equity firm CVC Capital Group and Stagecoach who operate a similar facility in the UK. The consortium has apparently raised their cash offer to 500 pence per share from 450 pence, which had been magnanimously rejected by the board.

Shareholders in Cadbury are apparently not being coy, and are pressing Kraft to raise their takeover bid for the UK confectionery group and as soon as possible.

Reports have it that some of Cadbury’s principal shareholders are anxious to see the deal go through, as they are afraid to see any takeover become a long drawn out issue. A spokesman for one of Cadbury’s largest shareholders expressed their fears by saying: “The longer Kraft dithers, the more chance of a counter-bidder appearing on the scene."

On the FTSE, the U.K.’s third-largest oil and natural gas company, BG Group Plc, saw their share value rise by 3.8 percent after announcing that the Guara oil field, of which they hold 30 percent, has been found to contain between one to two billion barrels of oil.

Stock in the Hilton Food Group Plc climbed two percent, to 192.5 pence in anticipation of positive half year results. The U.K. meat-packer works with most leading supermarket chains including Tesco Plc. Home Retail Group Plc, owners of the Argos store chain is also scheduled to release their second quarter trading statement. The stock rose 0.6 percent, to 329.7 pence in anticipation of promising results. Not looking quite so promising was the outlook for Kesa Electricals Plc who owns the Comet appliance stores group. Their stock fell 0.9 percent to 151.6 pence pre-release of their first-quarter interim management statement

The FTSE 100 index failed to maintain its above 5,000 points status on a flat days trading on Thursday. The index closed down 16.62 points at 4,987.68

The FTSE 250’s rise was checked yesterday, with the index falling 11.34 points to close on 9,125.71

The pound rose against the Euro for the first time in almost a week, as well as continuing to improve against the dollar, and the other major currencies.

• Pound/US dollar 1.669
• Pound/Euro 1.1426
• Pound/Japanese Yen 152.8564
• Pound/Swiss Franc 1.7312

The Dow Jones Industrial Average continued to rise, up 70.29 points to 9617.51 while the NASDAQ Composite also rose by 20.31 points to close on 2080.7.

General Motors (GM) have finally reached a decision regarding the European based Opel and Vauxhall plants. As expected the successful bidder is the Canadian car parts manufacturer Magna

German Chancellor Angela Merkel was reported to be "very pleased" about GMs decision, especially as Magna, who are Russia’s Sberbank, has made it obvious that all four German plants will remain open.

However the long term future of Vauxhall and its 5,500 UK workers still remains uncertain.

Oil prices have risen above $72 a barrel following Opec’s decision not to change the amount of oil being produced by its members.

US light sweet crude rose 85 cents to $72.16 in Asian trading, as the euro continued to gain ground against the US dollar in currency markets.

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Tags: Angela Merkel, Argos, Bank, Bank of England, Banking, BG Group Plc, British Economy, British Pound, Cadbury, Currency, CVC Capital Group, Dow Jones, Economy, Employment, Financial News, FTSE, General Motors, Global Credit Crisis, Guara oil field, Hilton Food Group Plc, Interest Rates, Kesa Electricals Plc, Kraft, Magna, Money Markets, NASDAQ, National Express, Opel, Recession, Sberbank, Stagecoach, Stock Markets, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, Vauxhall