The UK economy continues its recovery from recession, with the news that the UK gross domestic profit (GDP) rose by 0.2% in the first three months of 2010, according to information provided by the Office for National Statistics, The figure was lower than the 0.4% growth predicted by many economists, but like the last quarter of 2009 may still be revised. Initial figures for that period, when the UK moved out of recession were originally estimated at 0.1%, were later revised to 0.4%. The ONS estimated that bad weather at the beginning of the year may have had an impact on output, particularly in the retail and industrial sectors. Meanwhile it was reported that manufacturing output grew by 0.7% over the quarter, while the utilities sector output also rose by 2.5%.

It has been confirmed that UK Government borrowing hit a record high of £163.4 billion in 2009, whilst remaining lower than the £166.5 billion initially predicted by Chancellor Alistair Darling in his 2009 Budget.

Despite that fact the figure still makes for s the biggest annual borrowing figure for a UK Government in peacetime.

In March alone, the figures from the Office for National Statistics (ONS) showed total borrowing of £23.5 billion.

For the first time, bonus rates on save as you earn (SAYE) schemes are to be cut to zero percent next month. The news has fostered concerns that some employees could shun participation in SAYE plans because there will be less incentive to save.

A £1 billion profits boost looks to be on its way for the Lloyds Banking Group brought about a block in rises of the pensionable salary of its staff. This vital cost saving is expected to play a significant part in returning Lloyds to profit in 2010. The move will also increase the likelihood that the government will be in a position sell its 41 percent stake in the bank in the near future.

As part of their new chief executive Adam Crozier’s expansion plans, Broadcaster ITV is reported to be considering an acquisition of its rival Five Industry sources predict that Crozier will implement expansion plans as soon as possible, before the general consolidation in the sector. If the deal goes through it would give ITV a 53 percent share in the television advertising market.

Two of the UKs largest property investment trusts are to merge to create the sixth-biggest listed property company in the UK with a combined market capitalisation of more than £1.6 billion The F&C Commercial Property Trust (FCPT), are to be merged with the UK Commercial Property Trust (UKCPT) that is owned by the Phoenix Group.

The new company will have a market capitalisation of about £1.6 billion and a property portfolio with net assets of £1.5 billion.

British newspaper and stationery retailer WH Smith has announced a four percent drop in like-for-like sales for the six months to the end of February. WH have spent £35 million in the first half of the year repurchasing shares in a buy-back scheme that has seen their share price rise by ten percent and pre-tax profit rise two percent to £62 million A spokesperson for the group announced that they have decided against extending the buy-back programme, choosing instead to invest in acquisitions and to return cash to shareholders at the end of year. On the news shares in WH Smith closed down 9.5 pence at 505 pence.

Lord Kirkham, founder and chairman of furniture retailer DFS stands to make in excess of £300 million pounds from the sale of his company to private equity firm Advent International, who have purchased the company for £500 million Kirkham will, he will hold on to DFS Properties, which owns approximately one third of the group’s store estate.

Homebuilders were among the biggest gainers in London after the US Commerce Department reported that new home sales in the United States were up by 27 percent in March, the biggest monthly percentage gain in almost half a century. Taylor Wimpey who sells around a third of its properties in the US showed close to a 10% gain on the stock exchange, Barratt Developments was up 4.52 percent, Persimmon 3.81 percent and Bovis Homes 3.45 percent.

The travel and leisure sector also finished the session and the week on a high. Travel returning to normal after the recent closures of airports and airspace in Europe due to ash in the air from the volcanic eruption in Iceland having its effects.

Cruise ship operator Carnival led gains in the sector as it added 5.87 percent, while shares in hotels operator InterContinental Hotels Group rose up by 4.37 percent. British Airways gained 3.86 percent as fears of a protracted grounding were put to the side.

The pound closed against the dollar down .030 on 1.5358 while the Euro closed up to 1.1488

U.K. stocks advanced the most in three weeks before the weekend. Despite a smaller-than-forecast increase in British gross domestic product, prospects for global economic growth remained strong the benchmark FTSE 100 Index rose 58.32 to 5,723.65 on Friday the highest rise since April 1. The increase pared this week’s retreat to 0.4 percent.

Overall The FTSE 100 remains 5.7 percent higher for 2010.

In his weekly radio and Web address, President Barack Obama said on Saturday taxpayer-funded bailouts of the auto industry that he approved had paid off, in what amounted to a rejection of conservative arguments against such government help.

President Obama continues to apply pressure for an overhaul of U.S. financial regulations, saying the promising news from the auto industry had not reduced the need for Wall Street changes.

Government bailouts of Wall Street continue to come under heavy criticism from conservatives who feel the government is spending too much money and that big firms should be allowed to fail.

General Motors Co and Chrysler both reported progress this week in their government-financed turnarounds. However the Obama administration still forecasts some loss on the taxpayer bailout of both companies to help them recover from the economic slump and a steep drop in auto sales.

The Dow Jones Industrial Average closed for the weekend up 70 points to 11,204.29 while the NASDAQ Composite was up 21 points on 2,530.10

Reports are that Greece’s talks with the IMF on emergency loans to finance its debt are going well. The Greek finance minister George Papaconstantinou predicted that Greece would not face problems funding its debts. To tackle the crisis, which has undermined the Euro, Greece has called for emergency funding from the IMF as well as its Eurozone partners. The Eurozone nations are expected to provide emergency loans of up to €30 billion (£26 billion) in the first year, with a further €10 billion coming from the International Monetary Fund (IMF). Greece will need some of the money as soon as the 19th May, when it needs to make a debt payment of $11.3 billion.

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Tags: 2009 Budget, Adam Crozier, Advent International, Alistair Darling, Bank, Banking, Barratt Developments, Bovis Homes, British airways, British Economy, Carnival, Chrysler, Credit Crunch, DFS, Economics, Economy, Eurozone, F&C Commercial Property Trust, Financial News, FTSE, General Motors, George Papaconstantinou, InterContinental Hotels Group, ITV, Lloyds Banking Group, Lord Kirkham, Money, Money Markets, Mortgage, NASDAQ, Office for National Statistics, Phoenix Group, SAYE, Stock Markets, Taylor Wimpey, UK Banks, UK Commercial Property Trust, UK Economy, UK government, UK Recession, Wall Street, WH Smith

British Prime Minister Gordon Brown said on Sunday he wanted Financial Services Authority (FSA) – - Britain’s financial watchdog — to investigate Goldman Sachs after it was charged with fraud by U.S. regulators. Meanwhile, the UK Financial Services Authority did not make any comment on Brown’s speech on Sunday. The U.S. Securities and Exchange Commission on Friday charged Wall Street investment giant Goldman Sachs with "defrauding investors" over subprime mortgage securities, which were largely blamed for the worst financial crisis since the Great Depression. The government agency, which is responsible for regulating the financial markets in the country, alleged that Goldman Sachs failed to disclose crucial information to investors of its securities that a major hedge fund had bet against the securities.

Royal Bank of Scotland, the part-nationalised UK bank that lost $840 million in an allegedly fraudulent investment created by Goldman Sachs, will await the outcome of US investigations before deciding whether to pursue its own legal action. RBS will see if the Securities and Exchange Commission is likely to be successful in the civil suit it has launched against Goldman. In the suit, it accuses the investment bank of securities fraud relating to a complex derivatives deal linked to subprime mortgages. RBS lost money on the deal through its ownership of ABN, the Dutch bank it bought at the height of the credit bubble in 2007, which had acted as a guarantor for ACA, the main counterparty in the deal.

City bankers saw near unprecedented income growth over the past decade, with the highest paid receiving nearly a third of the UK’s total wage bill, according to recent research. The study, which cited bankers’ bonuses and pay at the top end of financial services as a driving force behind Britain’s rising pay inequality, found financial services professionals took home an additional £12 billion a year by the end of the ten year period.

Bank dividends throughout Europe are at their lowest level on record as recovering financial institutions retain earnings to increase capital. According to city banking sources the average dividend yield among European banks is now 1.9 percent, with over a quarter of the continent’s top 50 banks paying no dividend. Regulators have been pressuring banks not to resume or increase payments while details of new capital requirements remain unclear. Some banks have cut dividends despite making a profit, with British bank Barclays cutting its dividend from 11.5 pence to 2.5 pence despite profits of £11.6 billion last year.

Shares in Royal Bank of Scotland closed up 2.1 pence at 50.4 pence on Monday, 0.2 pence above the 50.2 pence average price paid when the Government invested £45.5 billion pounds. The current price represents a £180 million profit for British taxpayers. Shares in Lloyds Banking Group rose 0.72 pence to 65.42 pence, leaving the taxpayer £2.26 billion in the red on the Government’s 41 percent investment.

Some of the UK’s poorest northern and peripheral regions have seen a growth in business and investment, narrowing the gap with the south as an attractive place to do business, according to a recent survey. The survey showed that the highest increase in rankings since 1997 for the UK’s periphery. Northwest England was the star performer in the index, rising from eighth to fourth place among the UK’s 12 regions.

According to a quarterly report for the Institute of Practitioners in Advertising, (IPA) signs of improving business confidence among UK advertisers are beginning to show, and for the first time since 2007 The survey, regarded as a barometer for both the economy as well as the advertising industry, found some 21 percent of marketing directors had increased their advertising budget in the first quarter of 2010, while 36 percent signalled plans to raise their spending in the new financial year.

In the run up to the World Cup Bumper shipments of digital set-top boxes for televisions are set to buoy first-half sales at Pace. The football tournament, which will be broadcast in high definition and in 3D, has seen pay-TV operators ship set-top boxes to customers in time for the contest. A spokesman for the company said the World Cup would act as an advertisement for high-definition television, boosting sales after the competition has finished. Pace said trading in the first quarter of 2010 had been in line with management expectations. It has forecast double-digit revenue growth for the full year amid equally strong volume improvements. Pace is focusing on producing technology for the next generation of set-top boxes, which will combine internet connectivity, multimedia storage and digital television. Last month, it acquired Bewan, a French maker of modems and “gateway” boxes that combine the features of wireless modems, digital storage devices and internet telephony routers.

Supermarket chain Tesco are planning to recruit 1,000 new members of staff to sell electronics in its stores. Tesco’s announcement of its new scheme comes in response to the debut of the American electronics chain Best Buy in the UK next week. Best Buy specialises in offering expert advice to customers on its products, a model that Tesco is hoping to emulate with its own "tech team". Tesco is expected to become the third largest electrical retailer in the UK next year.

Sterling suffered as fears over a possible hung parliament after next month’s election weighed on the pound. An opinion poll showed the UK’s Liberal Democrats, the smallest of the country’s three main parties, had taken the lead. That was the first time the Lib Democrats have led the polls and came after a well-received performance by Nick Clegg, Lib Dem leader, in last week’s televised debate between the UK’s three main political parties. The news heightened fears that an incoming government would lack the strength to get to grips with the UK’s record fiscal deficit. The pound was last seen sitting on $1.5353, and at €1.1440.

The FTSE 100 rose 40 points to 5783.60 at close of trading on Tuesday.

Wall Street banking giant Citigroup has reported a profit of $4.4 billion (£2.9 billion) for the first three months of the year.

The result represents a return to profit after the bank lost $7.6 billion in the last quarter of last year after repaying government loans.

Last week, rival bank JP Morgan reported better-than-expected first quarter profits of $3.3 billion while the Bank of America posted a $3.2 billion profit for the period.

The Dow Jones Industrial Average made some profits early in the week, up, down 99 points to 11.117.06 while the NASDAQ Composite rose by 20 points to close on 2,500.31.

Japanese car maker Toyota has agreed to pay a record $16.4 million (£10.7 million) to US safety regulators following recent safety concerns.

Toyota was asked to pay the fine for failing to inform the US government of safety concerns surrounding faulty accelerator pedals.

Millions of Toyotas were recalled earlier this year amid reports that the pedals could become stuck.

The fine is the largest ever handed out by the US transportation department.

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Tags: ABN, Bank, Banking, Barclays, Best Buy, British Economy, Citigroup, Credit Crunch, Dow Jones, Economics, Economy, Employment, Financial News, Financial Services Authority, FSA, FTSE, Goldman Sachs, Gordon Brown, Institute of Practitioners in Advertising, JP Morgan, Lloyds Banking Group, Money, Money Management, Money Markets, NASDAQ, Nick Clegg, Recession, Retail, Royal Bank of Scotland, Securities and Exchange Commission, Stock Markets, Stocks and shares, subprime, Tesco, Toyota, UK Banks, UK Economy, UK government, UK Recession, Wall Street, World Cup

There is a lot of speculation about that the Treasury has set the wheels in motion to reduce their stake in the Royal Bank of Scotland and Lloyds Banking Group, both of which are partially state-owned. The staged de-privitisation will be effected through the creation of "convertible gilts", or government bonds. These bonds could then be exchanged for Lloyds or RBS shares once certain price targets are achieved. This way the government might be able to slowly reduce the taxpayers’ stake in the banks, hopefully over the next five years.

On another vein, the Treasury has warned banks that investors could be given the powers to veto top salaries, even before they are paid. Current rules that allow shareholders to vote on remuneration reports detailing pay only for the previous year, meaning that anyone that votes against bonuses in particular or large and unjustified ones in particular are for the protocol only. The revised proposals were made in Budget documents issued by the Treasury, with a more detailed and final proposal unlikely to come before the election.

Telecoms Company Vodafone are reported to be in discussions with their US counterpart Verizon Communications over the future of Verizon Wireless, which is a US mobile phone joint venture between the two companies. Apparently the discussions are based around a full merger of the two groups, which could take the form of an all-stock combination with a value of more than £120 billion.

US consumer electronics retailer Best Buy have outline details of their expansion plans for the UK. Best Buy intends to open four stores across the UK in the spring. A fifth will open in south London in the autumn.

Ofcom has ruled that UK mobile phone companies will have to cut their charges by at least a billion pounds a year. The ruling comes after a review of the cost of connecting mobile phone calls from one network to another, with the move is expected to aid smaller operators as well as consumers, to cut losses through having to pay extra to connect customers to rival networks.

Toyota announced before the weekend that they are temporarily halting production at its factories in France and the UK. The stoppage, expected to last for a total of nine days, come as a result of falling sales that the company have partly attributed to its recent recall woes.

Toyota will put production on hold at its two factories in Britain for five working days sometime in May. In early June, Toyota also plans to halt one of its two assembly lines at its Burnaston plant for a further five working days. The stoppages come after Toyota recalled 8.5 million vehicles globally over braking problems in its Prius hybrid, sticky gas pedals and pedals that can get stuck under floor mats. Toyota’s sales in the 27-nation European Union sank 20 percent in February from a year earlier, even though overall EU car sales rose 3 percent.

News has been released that the Teeside Cast Products steelmaking site has been approached by a potential buyer, with the purchase offer being the first confirmed approach since Corus CSL announced last year it was to end production. The offer has come from Rutland Partners, a London-based mid-market firm specialises in turning round underperforming companies.

Operator of the National Lottery, Camelot have announced that they are to be sold to the Ontario Teachers’ Pension Plan (OTPP) for close to £400 million pounds. A representative of OTPP has stated that managed to defeat private equity group CVC’s bid, largely because as a pension fund they promises long-term stability for the lottery. The bid from OTPP is being underwritten by the Royal Bank of Canada.

The Times and Sunday Times newspapers will start charging to access their websites in June, owner News International (NI) has announced.

Users will be required to pay £1 for a single day’s access and £2 for a week’s subscription. The move looks likely to open a new front in the printed media/internet front and will be watched closely by the industry.

At long last the sale of the Independent and Independent on Sunday newspapers to Alexander Lebedev, owner of the London Evening Standard has been completed.

The Russian billionaire purchased the loss-making paper from Irish company Independent News & Media (INM) for £1, the cost of one daily edition of the newspaper.

The deal between the two parties has been under discussion for many months.

American businessman Stan Kroenke increased his stake in the Arsenal football club. His latest shares acquisition places him within 10 shares of the threshold that forces him to make a takeover bid of the English soccer power.

Kroenke now owns 29.9 percent after acquiring seven more shares ay at a cost of $12,650 each, the Premier League club announced before the weekend. If the Denver based Kroenke passes the 30 percent mark, he will be obliged to make an offer for the remaining shares in Arsenal Holdings.

Kroenke, who first bought a 9.99 percent stake in Arsenal in 2007

The Euro has strengthened against the dollar and the pound after eurozone leaders agreed a financial aid package to help debt-laden Greece.

The leaders agreed to provide €22 billion (£20 billion) should Greece run into difficulties borrowing money to service its high debt levels.

On Friday the euro rose by more than one cent to $1.3393 before falling back slightly. The pound also declined against the euro, paring a weekly advance, as a report showed U.K. business investment had the biggest annual drop on record in the fourth quarter, fueling concern the recovery has yet to take hold.

The pound headed for a second weekly loss versus the dollar.

The pound continues to be a problematic issue in the Forex markets. It closed on Friday y on $1.4877 while the Euro fell to €1.1113.

The FTSE 100 index dropped before close on Friday, finishing down 24.63 points to 5,703.02.

The White House announced on Friday that they will require lenders to lower the mortgage payments of some unemployed workers and encourage lenders to eliminate some principal debt of homeowners who owe more than their home is worth.

President Barack Obama’s plan comes after increasing political pressure to change his strategy for helping struggling homeowners and stem the tide of rising foreclosures. This is the second major housing initiative announced in as many months.

Delinquencies on U.S. mortgages rose to nearly 14 percent in late 2009, led by a sharp increase in seriously overdue home loans held by the most credit-worthy borrowers.

Obama’s $75 billion homeowner assistance program announced last year has been widely criticized as ineffective by both Democrats and Republicans on Capitol Hill.

The Dow Jones rose a little to complete a week of impressive gains closing on 10850.36. The NASDAQ dropped 2 points to 2395.41.

US economic growth has been revised down to an annualised rate of 5.6% for the fourth quarter of 2009 from 5.9%, in the US Commerce Department’s third estimate of fourth-quarter GDP.

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Tags: Alexander Lebedev, Bank, Banking, Best Buy, British Economy, Camelot, Corus, Dow Jones, Economics, Economy, Financial News, FTSE, Independent News & Media, Lloyds, Lloyds Banking Group, London Evening Standard, Money, NASDAQ, National Lottery, News International, Ofcom, RBS, Royal Bank of Canada, Royal Bank of Scotland, Rutland Partners, Stan Kroenke, Stocks and shares, Sunday Times, the Times, Toyota, Treasury, UK Banks, UK Economy, UK government, UK Recession, Verizon Communications, Verizon Wireless, Vodafone

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

UK Prime Minister Gordon Brown received a polite warning yesterday from international leaders who attended a conference in central London that Britain’s tax regime and infrastructure must be improved if the country is to continue attracting investment. Brown and business secretary, Lord Mandelson stressed that the UK still remained a competitive place to do business despite the turmoil caused by the recession.

Following in the footsteps of his opposite numbers at Barclays and Royal Bank of Scotland is Eric Daniels, chief executive of the taxpayer-supported Lloyds Banking Group. Daniels has joined them in waiving his right to a bonus for 2009 of around £2.25 million. Lloyds Banking Group have announced that they would pay 2009 bonuses to those who were entitled to them, whilst emphasising that these awards would be paid in shares and subject to clawback.

Criticism has been rained on the government’s planned 50 pence monthly tax on telephone lines designed to subsidise the cost of superfast broadband has come from all places, by a Labour-dominated group of MPs.

The Commons Business Committee said the new tax, which is expected to raise £175 million per year, would hit poorer families who were less likely to pay for faster broadband. The committee went on to add that the “regressive” tax would “place a disproportionate cost on a majority who will not, or are unable to, reap the benefits of that charge”.

The UK’s largest airports operator of airports BAA, announced on Monday that their pre-tax losses for 2009 had widened, partly because of losses of £277.3 million from the sale of Gatwick Airport, London’s second-largest. The £1.5 billion sale of the airport to Global Infrastructure Partners (GIP) took place just before the end of the financial year. GIP is an infrastructure fund backed by Credit Suisse and General Electric. Competition authorities had ordered a sale to meet concerns about BAA’s market dominance.

The loss on the sale helped inflate losses at BAA owned by a consortium led by Spanish group by Spanish group Ferrovial, from £324.2 million to £821.9 million. Total revenue for the year to December at the group’s London airports, including Gatwick, rose from £2.3 billion to £2.4 billion. Figures for the group excluded BAA’s other airports around the country at Glasgow, Edinburgh, Aberdeen and Southampton

The prospect of a strike is again raising its head for British Airway’s cabin crew. Their proposed strike action looks likely to cause travel chaos for hundreds of thousands of air passengers across the UK. The vote in favour of industrial action by the 12,000 member BA cabin crew comes as a reaction to ongoing disputes over pay and working conditions.

The cabin crew’s union Unite had already decided on a walkout in December, but that BA strike threat was defused by an eleventh-hour High Court ruling.

Meanwhile a strike by around four thousand German airline Lufthansa pilots has been suspended, with union officials agreeing to resume negotiations on disputes covering job security and pay issues.

The action, scheduled to run for four days, was suspended after less than 24 hours, and caused delays and cancellations for passengers. According to the pilot’s union, there will be no further action until at least March 9, the union said.

According to a company spokesman, electronics giant Samsung will introduce its 3D-enabled TVs to the UK within the coming month. No less than twenty different 3D-capable products, with Blu-ray players and the required 3D glasses are expected to be included in the range. To keep pace with demand, TV shows with 3D content will be making their debut in or around the same time, to a partnership with DreamWorks. The rapidly approaching 2010 soccer World Cup will also be broadcast in 3D.

Sterling fell on Tuesday after Mervyn King, governor of the Bank of England, said he could not rule out the possibility of further quantitative easing. Speaking before the Treasury select committee King confessed his concern over scant evidence of a pick-up in UK trade in spite of the weakness of the pound. The pound, which had risen to a high of $1.5575 ahead of the Bank’s statement, fell more than a cent to $1.5441, whilst rising to 1.1415 against the Euro.

The FTSE 100 turned negative on Tuesday following King’s gloomy assessment of the UK economy. The index closing 0.7 per cent lower at 5,315.09.

The US Senate on Monday voted to move forward on a $15 billion jobs bill.

The 62-30 vote in favour of ended months of gridlock in Congress, and is expected to pave the way for a jobs bill to clear the Senate, just as other critical employment benefits are set to expire.

The scaled-back measure is expected to create 250,000 jobs through an array of tax credits and payroll tax exemptions to stimulate hiring. The bill frees businesses from payroll taxes on workers who are hired after more than 60 days of unemployment and gives them a tax credit of $1,000 for new hires that they keep for more than a year.

A number of retail giants reporting positive earnings surprises were not enough to offset Tuesday’s poor macro data, as investors grow concerned that last week’s rally overshot.

Consumer confidence index dropped dramatically to 46.0 in February versus 56.5 in January, the lowest level since last April.

The Dow Jones Industrial Average dropped 126.41 points to 10,276.97 while the NASDAQ Composite also crept back by a significant 34 points to close on 2,209.6.

Chinese premier Wen Jiabao has announced his concern regarding the stability of his country’s investments in US bonds.

China disposed of $34 billion (£21.5 billion) of US government bonds in December 2009, raising fears that Beijing is losing confidence in American economic policy.

US treasury figures show that China is once again no longer the largest overseas holder of US treasury bonds. Beijing ended the year sitting on $755. Billion worth of US government debt, compared to Japan’s $768 billion.

Oil prices retreated below $80 a barrel Tuesday as r sluggish US crude demand justified a 14 percent rally over the last three weeks.

Benchmark crude for April delivery was down 34 cents to $79.97 a barrel, later rising 25 cents to settle at $80.31 on Monday.

Oil had jumped from $69.59 a barrel in early February due to optimism that the global economy will rebound strongly from recession last year. Yet growing inventories of crude, gasoline and diesel fuel suggest demand in the US remains weak.

Some analysts expect crude demand in the US and Japan will gradually follow overall economic growth and lift prices, with crude expected to trade at between $85 and $95 a barrel for most of 2010.

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Tags: 3D TV, 3D-enabled TV, BAA, Bank, Bank of England, Banking, Barclays, British airways, British Economy, Commons Business Committee, Credit Suisse, Currency, Dow Jones, DreamWorks, Ferrovial, foreign investment, FTSE, Gatwick Airport, General Electric, Global Infrastructure Partners, Gordon Brown, Lloyds Banking Group, Lord Mandelson, Lufthansa, Mervyn King, Money, NASDAQ, Recession, Royal Bank of Scotland, Samsung, UK Banks, UK government, UK Recession, Wen Jiabao

Rumours have it that Bank of England governor Mervyn King may have had some serious explaining to do Chancellor Alasdair Darling as to why the consumer prices index went shooting up to 3.5% added to the worst ever January figures on record with a first time deficit for the traditionally high income month. The deficit was a staggering £4.3 billion, largely due to higher government spending and considerably reduced tax receipts. Estimates were for a £2.6 billion surplus for the month. Income tax receipts were down a massive 20% on January 2009, while corporation tax receipts were 6% lower. The only plus was the 3% upturn on VAT receipts rose by 3% due to the rate hike. However total tax receipts for January still dropped by 9%.

It would appear that Royal Bank of Scotland Chief Executive Stephen Hester has decided to decline his 2009 bonus. According to reports, the bonus was to be around £1.6 million pounds, paid out under terms already announced by the bank. The terms were that the bonus payout would not be in cash, and deferred for three years.

Pressure has increased on both Hester and Eric Daniels, CEO of the Lloyds Banking Group, after top bosses at Barclays turned down their multi-million pound bonus payouts last week, despite the bank announcing bumper profits.

The ever optimistic Gordon Brown announced that the Government was continuing in their determination to invest in measures that will promote growth and preserve jobs in the industries of the future, adding weight to his backing of Chancellor Alistair Darling over his decision to delay spending cuts until next year.

Mr Brown, speaking at the Policy Network conference told the audience: "I say to the British people, this is not the time to put the economy at risk. This is the time to make sure that growth and jobs are secured. 2010 must be the year of growth. It must not be the year when the economy dips back into recession. Instead of admitting the mistakes of private banks and institutions in causing the recession, the well-financed right-wing are not only trying to blame governments for the crisis but trying to use legitimate concerns about deficits to scare people into accepting a bleak and austere picture of the future for the majority, and then to use what’s happening as a pretext for public services to be marginalised at precisely the moment they should become smarter and more personalised. "He summed up

Also on Brown and Darling’s side is UK Business Secretary, Peter Mandelson, who has told his senior colleagues that he intends to backs plans for a state-run investment bank that would use public funds and private capital to back small business and large-scale UK infrastructure projects. The new bank would be modelled on the KfW Bank in Germany, which provides funding for banks to loan to small businesses as well as capital for major projects. Apparently Mandelson has met senior KfW executives to discuss if such a bank could be feasible in the UK. Plans for such a bank are now being surveyed by a Treasury team. Hopefully some form of announcement of the formation of such a bank will be announced in the forthcoming Budget.

Overall Lord Mandelson has been increasingly seen and heard on the public stage these days. The UK Business Secretary was reported to have severely criticised monetarist economists for their involvement in getting Britain into its present economic "pickle". Mandelson has voiced his support for economists who have warned how "reckless" early spending cuts could hamper Britain’s fragile recovery. Mandelson’s comments come as Labour seeks to take advantage of the support for delaying spending cuts until 2011.

Also on the downward slope was mortgage lending with the council of mortgage lenders revealing that gross mortgage lending in January 2010 fell to its lowest level in ten years. Reasons given were that property buyers have been deterred by the end of the stamp duty holiday. Gross mortgages totalled £9.1 billion pounds in January, down almost a third from December 2009. These figures are despite a recent increase in mortgage availability, adding concern that poor market conditions would continue or even worsen as the government withdraws monetary support for banks between 2011 and 2014.

The trend for online purchases in the UK fell to its lowest level last month, according to recent figures. Electrical goods, clothes and holidays were the online sectors that recorded the biggest drop in sales, with monthly growth for January of just five percent compared with 19 percent for the same period in 2009.

On the business front, there appears to be increased optimism regarding lending. Research has shown that the number of private companies that anticipate finance to become more readily available has increased, with around 44 percent under the impression that finance would be more accessible this year, compared with eight percent with the same view in last year’s survey. However, despite rising confidence in the availability of finance, fewer businesses said their lender was more supportive than this time last year.

It now looks like BAA will be looking to sell off Glasgow Airport after new figures revealed it is lagging behind Edinburgh in customer traffic. The Glasgow branch has found it difficult to win new airlines who want to use the airport, and have lost a lot of passenger traffic, apparently around half a million a year after the collapse of Scottish airline Flyglobespan. Meanwhile a spokesman for Scotland’s capital has reported that Edinburgh has managed to fill the gap with new routes and extra flights added by air carriers in January, including Ryanair and Jet2. Their entry on the scene has already replaced the 400,000 Flyglobespan passengers a year that were passing through the airport. .

Sterling enjoyed mix fortunes on Fridays trading. It closed up 0.012 against the dollar at $1.54692 while falling to 1.1374 against the Euro.

Overall, the FTSE 100 added a further 51 points to 5,358.175, before the close of business on Friday.

In US forex trading, the dollar hit a nine-month high against the euro of $1.3477, whilst also rising against a basket of currencies. The rise came after the US Federal Reserve’s surprise increase in interest rates for emergency bank loans, to 0.75%, from 0.5%. Analysts saw the move as a sign that the Fed could soon raise its other key lending rate.

US stocks fell in early trading as investors feared any further rate rises could slow the economic recovery.

The Dow Jones Industrial Average was up another 9.45 points to 10,402.35 while the NASDAQ Composite also crept up another 2.16 points to 2,243.87 on Friday’s trading.

US consumer prices rose by less than expected in January, easing concerns about growing inflationary pressures. According to the Labor Department, prices increased by 0.2% last month, with analysts forecasting a rise of 0.3%.

The rise was largely driven by energy prices, which rose for the ninth consecutive month. Over the last 12 months, US energy costs have risen by close to 20 percent. Excluding food and energy, prices fell by 0.1% in January – the first monthly drop since December 1982.

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Tags: Alasdair Darling, BAA, Bank, Bank of England, Banking, Barclays, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economics, Economy, Employment, Financial News, Flyglobespan, FTSE, Glasgow Airport, Gordon Brown, KfW Bank, Labor Department, Lloyds Banking Group, Mervyn King, Money, Money Markets, NASDAQ, Peter Mandelson, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, US forex

Alistair Darling, UK Chancellor of the Exchequer has announced that he is open to discussion on the possibility of scaling back on the interest rate charges which Iceland is required to make on the £3.4 billion pound losses from failed online bank Icesave. After talks between the governments in London, Darling was reported as saying that although British taxpayers "must get their money back" the Treasury could be willing to negotiate terms. The Treasury is considering two options to scale back interest rate charges while insisting that both options must see debts being fully recouped. The Icelandic government is seemingly eager to arrive at a more flexible compromise as opinion polls in the country suggest the initial deal that was hammered out would be more than likely rejected in a forthcoming referendum.

According to a very recent survey, the UK personal computer (PC) market saw fourth quarter growth for the first time in a year, despite a fall in sales from the business sector. Holding the top spot were Acer with 19.1 per cent market share, with HP hot on their heels with an 18.9 per cent market share. Dell was in third place with 16.5 per cent, followed by Toshiba and Samsung with 10.4 per cent and 6.5 per cent respectively. The total UK market in terms of shipments in the fourth quarter of 2010 was 3.8 million units. A market analyst reported that the personal computer market in the UK was becoming increasingly dependent on laptops (mobiles), which accounted for 70 per cent of the total PC market, with growth in demand reaching 24 per cent in the fourth quarter of 2009. However, the report did state that despite the overall growth, the professional PC market declined by 25 per cent in the fourth quarter of 2009.

The much loved general interest magazine Reader’s Digest UK has been forced into administration after failing to gain support from the UK pension’s regulator over an agreement for funding their £125 million pension deficit. The UK subsidiary of U.S. Reader’s Digest Association have recently brokered a deal with trustees of its pension plan and the Pension Protection Fund. The deal would have seen a capital payment alongside the transfer of a one-third interest in the equity of the UK business to the UK pension scheme trustees. The UK is the only branch of the multiple national Readers’ Digest Association with a large pension shortfall. The parent company said the UK insolvency is not liable to have a material impact on its other global operations.

Legal & General (L&G) has revealed plans to supply "longevity insurance" to pension funds, in a move which will see the insurer compete against the major European insurance companies. The launch of the new insurance product by L&G will precede similar plans by others in the insurance sector including Prudential, who are also considering moving into this market. A spokesman for L&G emphasised that the provision of longevity swaps will "develop alongside and not necessarily compete with" L&G’s bulk annuity business. Babcock International and RSA were reported to be the first companies to take out longevity protection in 2009.

Private equity group HgCapital Trust is seeking to raise more capital from investors by preparing a share issue to shore up its finances, amid expectation of a rise in new investments. Industry sources suggest the London-listed group could raise as much as 50 million pounds. As one of the best-performing listed private equity groups with a market capitalisation of 210 million pounds, HgCapital is hoping to appeal to investors from its position of strength by making a placing of ordinary shares with subscription shares attached. A spokesman for the company projected that HgCapital will invest more than it sells, as the market conditions present bargains.

Shares in Barclays were up 2.9 per cent to 302 pence on a positive response to their recent results. Ahead of their results due to be issued next week, Lloyds Banking Group rose 3.2 per cent to 50½ pence and Royal Bank of Scotland took on 1.9 per cent to 34 pence.

Sterling continued to slip against both the Euro and the Dollar. It closed at $1. 5392 while settling on 1.1409 against the Euro.

Overall, the FTSE 100 added 32 points to 5,307.85, meaning that it has risen for seven of the last eight sessions.

According to a report released on Thursday, certain of the states of the U.S. look like facing a total shortfall totaling no less than $1 trillion in their funds for employees’ pensions and retirement benefits. The state of Illinois is reported to be in the worst shape, with only 54 percent of its pension obligations funded, according to the report, taken into account only the fiscal years up to June 2008. That fact makes the picture even less than rosy as the downturn that began in the final six months of 2008 and continued till the end of 2009 – was when many funds’ investment portfolios suffered their most serious devastation. Regardless of stock market fluctuations, pension funds were destined to fall down a budget hole, the non-profit research center who prepared the report pointed out.

The US Federal Reserve has predicted that the US economy is still on target to grow strongly during 2010, but unemployment will remain high, has warned. In its latest forecast, the Fed said that the economy would expand between 2.8% and 3.5% in 2010, with the unemployment rate expected to remain between 9.5% and 9.7% in 2010.

Encouraging January housing starts, better-than-expected earnings and receding fears on the European sovereign debt situation boosted risk appetite prompted Wall Street stocks to rise moderately for the second consecutive session. The Dow Jones Industrial Average was up 93 points to 10,392.9 while the NASDAQ Composite rose 15 points to 2,241.71

Hewlett-Packard (HP) has raised its outlook for its financial year after strong sales over the Christmas period lifted its profits by 25%.

Higher demand for its personal computers and servers saw its net profit for the three months to 31 January total $2.32 billion (£1.48 billion).

This compares with $1.86 billion for the same first quarter period a year earlier. HP’s revenues for the quarter were up 8% to $31.2 billion, as its results came in ahead of market expectations.

The price of oil has risen sharply as the dollar, the currency in which the commodity is priced, weakened against the pound and the euro.

US light crude rose by $3 to $ $77.01 with London Brent settling at $75.68 a barrel.

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Tags: Alistair Darling, Babcock International, Banking, Barclays, British Economy, British Pound, Credit Crunch, Currency, Economy, Financial News, FTSE, Hewlett-Packard, HgCapital, Icesave, Legal & General, Lloyds Banking Group, Money, NASDAQ, Reader's Digest Association, Recession, Retail, Royal Bank of Scotland, RSA, Savings, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Wall Street

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

While the UK economy snapped back into growth in the fourth quarter of 2009, it did so at a rate considerably less than economists’ forecast. It was thanks to the service industries and manufacturing sector, which expanded just enough to pull Britain out of its longest recession on record. According to figures released by the Office for National Statistics, gross domestic product (GDP) rose by a mere 0.1% from the third quarter. The weakness of the recovery will pose a challenge to Bank of England officials who are due to sit next week to consider week whether the economy is strong enough to begin winding down the Government’s emergency stimulus measures. Prime Minister Gordon Brown’ is regarded as being especially anxious to see and end his government’s propping up of the economy, as delaying it may hamper his efforts to win an election due by June of this year. Much of Brown’s campaigns have been based on promises to curb the budget deficit.

Brown is putting up his case that he is better placed that Conservative leader David Cameron to cut the ballooning budget deficit without hurting the economic recovery. Splits in the Labour Party are beginning to show as election day draws closer with Chancellor of the Exchequer Alistair Darling announcing that it would be “absolutely mad” to withdraw stimulus measures now.

The Bank of England’s £200-billion pound asset-purchase facility, designed to keep borrowing costs low and help pull the economy out of the recession also expired this week.

Meanwhile it was announced that the UK economy shrank 4.8% in 2009, making for the biggest annual drop since records began in 1949. It was also reviled that the in the fourth quarter the economy contracted 3.2% compared to records from 2008.

The fourth quarter data, the first to be released by a Group of Seven nation, means Britain is the last member country to exit the recession that was sparked by the worst financial crisis since the Great Depression. The US Government was expected to release GDP data for the fourth quarter on late January 29.

The news that the Lloyds Banking Group has succeeded in placing of £2.5 billion pounds of mortgages with investors, has raised new hopes that securitisation markets are beginning to open for banks. A £4 billion issue last September by Lloyds recorded a first attempt by a bank to tap the securitisation markets since the onset of the credit crisis. However Friday’s issue was the first to cause any form of reaction interest among U.S. investors to purchase prime residential mortgage securities

There are strong signs of recovery popping up London’s financial services industry, which took a severe pounding during the credit crunch. Recruitment is already on the up, and a recent survey showed that more than 80 percent of hiring managers are expecting recruitment volumes to rise in 2010. Only five percent of those responding to the survey named handling redundancies as a key personnel challenge for the year ahead, will close to half of those interviewed pointed to the threat of competitors poaching staff as a problem. The main problem for 2010, according to close to two thirds taking part, would, be salaries and particularly of discretionary bonuses. Remuneration has become a major hot potato in the financial industry, as the sector has emerged from the crisis under increased public and regulatory scrutiny.

Irene Rosenfeld, chief executive of Kraft has predicted that Cadbury has a positive future under the ownership of the US conglomerate, whilst adding fears of job losses at the UK company are "greatly overstated" and.

In her first interview since the takeover was agreed by the Cadbury board earlier this month, Rosenfeld announced that Kraft would not be looking for any mergers and acquisitions activity in the "near term" following the purchase of the UK confectionary company. "We acquired Cadbury because we believe it is a fabulous business and it is our intention to protect those assets," Ms. Rosenfeld pointed out. "It is our intention to invest in the business; in fact, if anything, the opportunities for the business will be greater as a result of the combination than perhaps they might have been on a standalone basis, given some of the competitive pressures." She continued.

Speculation is growing that the planned sale of the discount fashion chain Matalan is unlikely to raise the sum in excess of £1.5 billion pounds targeted by the company’s owner John Hargreaves. American private equity firms TPG, Advent International among others are expected to make offers in time for next Friday’s deadline. Analysts fear that the parties involved are wary of paying too high a price for Matalan. A clause in the deal specifying a "break price" of between £1.2 to £1.25 billion pounds, has been inserted by Hargreaves, entitling him to refuse any bids below this figure

Expectations are that the release of British Airways’ results for the three months to the end of December 2009 will expose further heavy losses at the airline. BA is expected to reveal a loss of £151 million for the third quarter of the financial year, making for total losses up to the end of March to £602 million, up almost fifty percent from 2008, which was BA’s previous record loss. The threat of pre Christmas strikes and severe weather conditions are two factors among many that have contributed to the company’s already poor situation.

Carphone Warehouse subsidiary TalkTalk have announced the launch of a new television and mobile phone service. The launch is yet another sign of the telecoms group desire to step up its challenge to their sector rivals. Charles Dunstone, chief executive of Carphone Warehouse, outlined the plans for the new division on Friday as the company also released details of the demerger of its telecoms and retail interests. TalkTalk, due to gain a stock market listing in March, have identified TV and mobile services as potentially strong sources of growth. Carphone Warehouse’s broadband rivals already offer TV services, and the market is rapidly expanding.

UK Coal’s already stagnating share price was sent even lower as the mining and property group announced that were liable to increase by £100 million pounds in 2009. UK Coal has announced that they expect production in 2010 to be roughly seven million tonnes, compared with 7.9 million tonnes last year. The company faced severe technical and geological problems in its underground mines in the second half of 2008. The troubled company’s shares fell 4.5 pence to 61.5 pence.

The pound posted a weekly advance against the euro after the U.K. economy exited recession in the fourth quarter and Bank of England policymaker. Expectations are that the U.K. currency will continue to gain value as the government’s propping up of the economy may not be extended, with the decision to be announced when the Bank of England meets to decide on interest rates on Feb. 4. Sterling also posted a monthly gain against the Euro, when closing for the weekend at 1.532.

The pound strengthened 1.3 percent in the week, its strongest level in five months. It advanced 2.3 percent in the January. The U.K. currency dropped 0.7 percent to $1.5993 for a monthly decline of 0.8 percent.

The pound rose 8.5 percent against the euro in the first month of 2010, the biggest monthly gain since the single European currency was launched in 1999.

The US economy grew by an annual rate of 5.7% between October and December, official figures have shown.

The number, which is a first estimate, is a big rise from the previous quarter’s growth rate of 2.2%.

It suggests the country’s economy is growing at its fastest pace for six years and confirms the US economy has left its year-long recession behind.

But even with the rebound, gross domestic product (GDP) shrank by 2.4% across 2009 as a whole, making for the worst annual performance since 1946.

On the news, the Dow Jones fell again this time by 53.13 points, 135 points, to close on Friday at 10067.33, while the NASDAQ lost another 31 points, to finish for the weekend on 2147.35

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Tags: Advent International, Bank of England, Banking, British airways, British Economy, Cadbury, Carphone Warehouse, Charles Dunstone, David Cameron, Dow Jones, Economics, Economy, Financial News, GDP, Gordon Brown, Irene Rosenfeld, John Hargreaves, Labour party, Lloyds Banking Group, Matalan, Money, NASDAQ, Office for National Statistics, Recession, Retail, Stock Markets, Stocks and shares, TalkTalk, TPG, UK Banks, UK Coal, UK Economy, UK government, UK Recession

Heathrow baggage handlers and Eurostar train drivers have said they are ready to join British Airways cabin crew and strike in the lead-up to Christmas. Following a breakdown in talks with managers over pay, British Eurostar drivers announced they will go on strike on Friday and Saturday. Unite, the union representing BA cabin crew, said the 500 baggage handlers and check-in staff it covered at Heathrow and Aberdeen airports also planned to strike over pay from Tuesday 24th December, the same day that BA cabin crew are set to commence their 12-day strike action.

Meanwhile an operation is under way to recover the UK thousands of people left stranded after Flyglobespan, Scotland’s biggest airline, collapsed. After their parent company, Globespan, entered administration on Wednesday. Around 4,500 passengers were stranded by the airline’s collapse, mostly in Spain, Portugal, Cyprus and Egypt, with the Civil Aviation Authority expected to be repatriating about 1,100 of those stuck overseas.

A recent poll has shown that UK business leaders have become more gloomy about the recovery of the British economy over the last month, with only 36 percent of business leaders sensing that a financial recovery is in the offing, down from 49 percent in November.

The survey, taken in the five days after Finance Minister Alistair Darling’s pre-budget report last week, found the number of business leaders who had confidence in Darling had fallen five percentage points to 20 percent following the statement. Almost three-quarters of businessmen reckoned that Darling was "out of his depth" while less than a quarter believed he "understands business".

Public sector net borrowing in the UKs hit a record high of £20.3 billion in November, according to figures issued by the Office for National Statistics.

The public sector net debt as a percentage of overall UK economic output now stands at 60.2%, a considerably rise since the start of the financial crisis.

UK insurance companies also have little positive to report about, with worldwide premium income plunging 18% in 2008 to £215.3 billion, with 2009 also looking to be a fairly tough year. The financial crisis has had a definite effect on insurance rates, with premium income it falling almost 25% to £168.1 billion in 2008. The first nine months of this year, however, do show some promise. Long-term premium income was off 35% relative to the same period in 2008, but general insurance premiums gained 8% to £47.2 billion, mostly due to overseas business.

Virgin Group controlled by billionaire entrepreneur Richard Branson have announced the launch of a new company, designed to come to the rescue of consumers experiencing technical problems with their such as PCs as well as wireless networks not connecting. The opening of this new company, to be known as Virgin Digital Help, is Virgin’s up’s first new UK company in three years offers free online self-help guides such as "speed up" to make computers go faster, or "get connected" to fix links to printers or wireless networks .

Shareholders in Punch Taverns revolted on Wednesday over the pay for executives at Britain’s largest pub owner, voting against its remuneration policies, in one of the biggest shareholder protests over pay this year. 55 per cent of votes on the remuneration policies of the heavily indebted company were cast against them as shareholders objected to the scale of the awards given to executives in a year in which the group suspended dividend payments after its annual pre-tax loss quintupled to £406 million. While the vote on pay was advisory only, a spokesman for Punch announced that they are to conduct “a full review of the remuneration policy and its future implementation” in the wake of the result. The ABI, which represents shareholders that account for about 20 per cent of investments in the UK stock market, signalled its objection to the pay policies by issuing a “red top” alert to its members. Under a long-term incentive plan, Giles Thorley, chief executive, and three other executives were awarded shares worth 200 per cent of their base salary that would vest if total shareholder returns were in the top quartile of the company’s peers over three years. Mr Thorley earned a base salary of £525,000 during the 2008 financial year to August 23. The vote at the annual meeting came after the company warned slowing food sales and patchy trading at its leased estate were depressing profits. Punch shares fell 4.7 per cent to 77.3 pence.

Carphone Warehouse, broadband group TalkTalk and Channel 4 have opted into a joint venture between the BBC, ITV RTL’s AUDK.LU Five and BT to install internet video on television sets. The backing from all public service broadcasters and the UK’s two biggest broadband providers for the project to be known as Project Canvas will help it "secure the future of free-to-air broadcasting" in the Internet age. The venture partners will share an estimated £115 million in yearly costs over the next four years.

Rentokil Initial was among the talking points in the London market on Wednesday, with the stock registering its biggest gain since July.

The pest control-to-package delivery group bounced 4.8 per cent to 105 pence ahead of its relegation from the FTSE 100 next week, with Rentokil management already hinting of a further £150 million of cost savings expected for next year.

Shares in the U.K.’s second-largest drug-maker AstraZeneca Plc climbed 0.5 percent to 2,843 pence after they won a U.S. panel’s backing to expand use of the cholesterol pill Crestor in the prevention of heart disease, a move that, if allowed, could add up to £300 million in annual sales.

Imperial Tobacco Group Plc Europe’s second- largest publicly traded cigarette company, lost 1 percent to 1,894 pence on threat that Japan, the fifth-largest tobacco market, are about to announce further tax increases on cigarettes . U.K. furnishings and clothes chain known for floral pattern Laura Ashley Holdings Plc added 3.8 percent to 13.75 pence, after analysts predicted a better 2010 for the company.

Barclays, Britain’s second-largest bank, slid 6.2 percent to 273.85 pence. HSBC Holdings Plc, Europe biggest, fell 3.5 percent to 684.1 pence.

Lloyds, the 43 percent government-owned bank, lost 8.1 percent to 51.1 pence, the steepest slump since May. Royal Bank of Scotland Group Plc fell 3.5 percent to 30.74 pence.

Sterling lost ground against the dollar and improved against the Euro in sluggish mid week trading.

• Pound/US dollar 1.6167
• Pound/Euro 1.1273

The benchmark FTSE 100 Index slid 102.65, or 1.9 percent, to 5,217.61. The index has rebounded 49 percent since March and is heading for its biggest annual gain since 1997 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy

As had been widely expected, the Federal Reserve have announced that US interest rates will be kept on hold at between 0% and 0.25%, despite continuing signs that the US economy is recovering. The central bank reiterated that rates would stay at the low level for an "extended period".

The Fed’s hand was strengthened by official data showing earlier on Wednesday that US inflation remains under control, rising by just 0.4% in November, as had been predicted.

With inflation continuing to be low, the Fed is not under pressure to increase interest rates as a means to tackle any inflationary pressure.

On close of trading, the Dow Jones Industrial Average had dropped more than 130 points to 10, 33.61 while the NASDAQ also dropped to 2,183.55.

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