The Office of Fair Trading (OFT) has lost its legal battle over bank charges with banks following the shock announcement by the Supreme Court on Wednesday. While the ruling effectively scuppers any chance of reclaiming fees in the foreseeable future it does clear the way for new rules to be drawn up that would limit charges. The Treasury did however stress that if lower bank charges could not be achieved voluntarily then it would consider passing legislation. The OFT’s four-year campaign and two-year legal case to win refunds for those overcharged by their banks after falling into an unauthorized overdraft fallen at the last hurdle. The Supreme Court, in a move that stunned campaigners, went against earlier findings by the High Court and Court of Appeal and decided the OFT did not have the right to assess the charges for fairness in the case

The good news from the U.K. economy is that it shrank in the third quarter less than previously estimated. It is now estimated that gross domestic product probably fell 0.3 percent from the second quarter, which less than the 0.4 percent drop is reported on Oct. 23, The Office for National Statistics will release its second estimate before the weekend.

More than £60 billion was secretly lent by the Bank of England to prevent Royal Bank of Scotland and Halifax Bank of Scotland from failing at the height of the financial crisis last year. In evidence to the Treasury Select Committee, the Bank revealed yesterday that such a catastrophe was averted when it decided "in exceptional circumstances" to act in its traditional role as lender of last resort and extended Emergency Liquidity Assistance (ELA) to RBS and HBOS. Meanwhile U.K. Chancellor of the Exchequer Alistair Darling Wednesday defended authorities’ secret provision of emergency assistance to Royal Bank of Scotland Group PLC and HBOS during the height of last year’s financial crisis. In a written ministerial statement to parliament, Mr. Darling said any disclosure of the loan at the time would have "seriously" jeopardized financial stability and "the risk to public resources was low" given the quality of the collateral received by the Bank.

Trading on the London Stock Exchange (LSE) was halted for three and a half hours earlier because of technical difficulties.

The LSE said it had been affected by connectivity issues, and at 1033 GMT had placed all orders for shares into an "auction call period".

This allowed traders to put orders to buy or sell shares into the system, ready for when trading restarted.

Normal trading was then able to resume from 1400 GMT.

Big banks will be obliged to disclose how many of their UK employees are paid more than £1 million, if City banker Sir David Walker has his way. Sir David is expected to announce that half of the bonuses paid to bank employees should be deferred for three to five years.

Travelers who book holidays on the internet could receive more financial protection if things go wrong, under plans in a European review.

Consumers who make up their own packages of flights, hotels and car rentals on one website or partner sites could get more protection.

Currently, only those who have booked specific package deals have rights to cancel or refunds if operators go bust. A review will consider help for passengers if airlines collapse.

Spanish investor Jorge Cosmen, the largest stockholder is reported to have boosted his stake in National Express Group Plc, the U.K. bus and rail company three times in as many days. The investor, a company board member, has spent 5.8 million pounds ($9.6 million) snapping up shares since Nov. 20. The third purchase, announced today by National Express, brings his family’s holding to 20 percent. Cosmen, who opposed National Express, wants the London-based company to refinance debt and reevaluate strategy before any rights issue, is apparently yet to decide whether to oppose the stock sale in a Nov. 27 shareholders’ vote.

The pound retreated slightly against the dollar, Swiss franc and the yen, while rising against the Euro.

• Pound/US dollar 1.6506
• Pound/Euro 1.10997
• Pound/Japanese Yen 142.3998
• Pound/Swiss Franc 1.6556

After trading resumed on the FTSE, the 100 went on to finish the day at 5,194, which was 130 points down on Tuesday’s closing price, while the FTSE 250 rose dropped 200 points to close on 8,880.52. Falls on the FTSE were also felt across Europe, as concerns about the wider impact of state-owned investment company Dubai World asking for a six-month delay on repaying its debts grew.

The US dollar has hit a 14-year low against the Japanese yen with low interest rates in the US making the greenback less attractive to investors.

The dollar slipped to 86.5 yen, its lowest level since July 1995.

The US has indicated it is unconcerned about the dollar’s slide, and will not intervene to strengthen it.

Many traders are swapping dollar holdings for gold as a safer investment in the current uncertain economic climate.

The price of gold is currently at a record high of $1,194.5 an ounce

The Dow Jones average was looking stronger rising 53 points to 10464.5 The NASDAQ also rose thirteen points to finish up on 2176.05

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Tags: Alastair Darling, Bank, Bank Charges, Bank of England, Banking, British Economy, British Pound, Currency, Dow Jones, Dubai World, Economics, Economy, ELA, Emergency Liquidity Assistance, Employment, Financial News, FTSE, Gold, Halifax Bank, HBos, Interest Rates, Jorge Cosmen, legal battle, London Stock Exchange, Money, Money Markets, NASDAQ, National Express Group Plc, Office of Fair Trading, OFT, Overdraft, Overdraft Charges, RBS, Retail, Royal Bank of Scotland, Sir David Walker, Stock Markets, Stocks and shares, Supreme Court, Treasury Select Committee, UK Banks, UK Economy, UK government, UK Recession

If the UK public needed any further proof that the recklessness driven by greed of the people that they trusted to run their banking system had driven their country to the verge of bankruptcy lies in the discoveries in a recent report that Great Britain, once the jewel in the crown of European commerce, now holds the highest percentage of toxic assets of financially distressed companies in all of western Europe.

In the days of the financial boom, and even before- hand , the British economy was substantially influenced by its financial sector, which made a tremendous contribution to growth in the United Kingdom. The British Chancellor of the Exchequer, Alistair Darling, was heard to say on more than one occasion that “London has risen to the challenge of the global economy and has become the world’s leading financial centre.”

In those halcyon days before the collapse of the financial system, London was indeed the Camelot of the European financial system , home to the highly influential London Stock Exchange, as well as the cream of the UK’s most important banks such as Barclays, Lloyds, the Royal Bank of Scotland Group and HSBC as well as several hundred international banks.

As the extent of the financial collapse began to hit home, it has come to light that the UK banks now currently hold just under a quarter of all the distressed assets in Europe. In terms of percentages, the UK banks were holding as security 24 percent of the assets all distressed companies in 2009, while Germany has 14 per cent, Italy 12 per cent and France just 6 per cent.

Those in the know were not surprised to discover the extent of the UK’s banks coverage, given the greater leverage that the British banks rushed to take on during the bubble years of private equity.

The European manufacturing sector has been the worst hit in recent years, with statistics showing that in July 2009, 41 per cent of distressed companies came from this sector manufacturing.

In the last few years, the UK accounted for 34 per cent of leveraged buyout (or LBO), or highly-leveraged transaction (HLT). This recipe for financial disaster for UK banks occurs when the assets of an acquired company are used as collateral for the borrowed capital, sometimes combined with the assets of the acquiring company.

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Tags: Alastair Darling, Alistair Darling, Bank, Bank of England, Banking, bankruptcy, Barclays, British Economy, British Pound, Credit Crunch, Currency, Debt, Economics, Economy, Finance, Financial News, Global Economy, HSBC, Lloyds, London Stock Exchange, Money, Money Management, Money Markets, Recession, Royal Bank of Scotland, Royal Bank of Scotland Group, Stock Markets, Stocks and shares, UK Banks, UK Recession