The National Association of Pension Funds (NAPF) have called for a radical overhaul of the state pension system.

The NAPF, a leading pension’s body wants the next government to introduce a new ‘Foundation Pension’ that would combine the Basic State Pension and the Second State Pension and would entitle all Britons to a state retirement pot of £8,000 a year. If accepted the NAPF proposals would boost pensioners’ incomes initially by £25 a week and would later rise in line with average UK earnings. In addition, around two million UK pensioners would no longer be required to request means-tested benefits.

Consumer Focus, a UK consumer watchdog is set to complain to government regulators about the fact that individual savings accounts holders are missing out on £3 billion a year in interest because of inefficient practices by providers.

The organization are to complain to the Office of Fair Trading stating that savers were being unfairly treated by banks and building societies by the practice of “bait pricing”, meaning offering attractive headline rates on cash Individual Savings Accounts (Isas) only to see the interest rates dropping dramatically drop a short time later.

Consumer Focus have also pointed out that account holders often face unnecessary and costly delays when transferring accounts, as well as a lack of clarity on interest rates. In certain cases arbitrary rules were imposed by cash Isa providers forbidding transfers into more attractive accounts.

According to the Office of National Statistics (ONS), growth in UK household incomes has decreased rapidly during three terms of the Labour government. The ONS report shows that while growth to disposable income increased by 13 percent per person between 1997 and 2001, after these figures were adjusted to meet inflation, true incomes rose by just 1.2 percent between 2005 and 2008. And when the credit bubble was at its peak, between 2006 and 2007, incomes barely increased. During Labour’s second term in government from 2001-05, Growth in pay, benefits, pensions and dividends after tax fell to seven percent

The UK government’s car scrappage scheme, has officially come to an end, with at least 330,000 cars have been sold.

After the scheme was introduced a year ago to help the recession-hit motor industry cope with falling sales, a fifth of cars sold in the UK were part of the scheme which may have created around 4,000 new jobs with manufacturers and suppliers were supported by the scheme.

Business Secretary Lord Mandelson stated his pleasure that the scrappage scheme has delivered the results aimed for. Estimates that the 330,000 figure could still rise as a number of cars purchased through the scheme are yet be registered, meaning that figure could rise to 400,000.

Clothing retailer Matalan have announced the completion of £525 million capital rising which will replace its existing debt package. Matalan was withdrawn from the market in March after private equity groups failed to meet the £1.5 billion valuation set by Matalan. The successful refinancing means a £250 million dividend for Matalan’s founder John Hargreaves.

Music Company EMI continue to make waves, with the news that they may be taken over by its bankers. The move comes after EMI failed to meet the terms of their covenants after failing to clinch a deal with Universal to sell them their distribution rights in the United States. The debt stems from a £4.2 billion pound buyout in 2007, leaving Terra Firma the private equity firm, that owns EMI holding a £3 billion debt to Citigroup. Terra Firma is now faced with the prospect of approaching their investors in an attempt to raise £20 million pounds by June 12 or face the prospect of Citigroup seizing control of EMI.

The news that manufacturing growth in the UK has risen at its fastest pace since 1994, saw Sterling making a long overdue rise. The pound climbed 0.5 per cent to $1.5274 and gained 0.4 per cent versus the euro to close on 1.1257.

The benchmark FTSE 100 was also up as the market closed for the Easter weekend. It rose 65 points to 5,744.89, making for a 5 per cent rise during the first three months of the year, and its best start to the year since 2006

A report from the Institute for Supply Management’s (ISM’s) as shown that the US manufacturing sector expanded in March at its fastest rate for six years.

The highly rated ISM’s purchasing managers index rose by 3.1 points to 59.6 points in March. Any figure of 50 or above represents growth, and last month was the eighth in succession that US manufacturers have increased their output.

The news of USA’s continued growth, which was at its fastest for 15 years in March comes after China and European nations also announced higher factory output.

As Wall Street wrapped up for the long Easter weekend, the Dow Jones Index was still on the rise up 70.44 points to 10927.07. The NASDAQ was less conservative, rising just 4.62 points to close on 2402.58

The number of Americans filing for unemployment insurance fell for the first time fell last week, matching the lowest level since August 2008. According to government data released today by the US Labor Department, there were 439,000 initial jobless claims filed in the week ended March 27, down 6,000 from an upwardly revised 445,000 the previous week.

Toyota’s US sales have reportedly bounced back as substantial discounts helped to win back customers who had been shaken by the firm’s mass safety recalls. Sales in the US for the Japanese carmaker jumped by 40.7 %in March compared with a year earlier, and after a slump of 8.7% in February.

Ford and General Motors also saw their sales rise last month, up 39.8% and 20.6% respectively, while Chrysler saw its sales fall 8.3%.

In Japan a key survey of local manufacturers has indicated that confidence is continuing to return to businesses, with the Bank of Japan’s Tankan index showing that business confidence had improved for the fourth straight quarter. The news came as Toyota saw a 50% increase in domestic car sales last month, belying some of the safety problems that have been reported in the last few weeks.

Oil moved forward from the $83-a-barrel level that has proved its undoing on many occasions over recent weeks, climbing 1.3 per cent to $84.82, the highest point since October 2008.

Gold also joined the rush, rising 1.3 per cent to close on $1,126 an ounce

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Tags: Bank, Banking, Basic State Pension, British Economy, Chrysler, Citigroup, Consumer Focus, Credit Crunch, Dow Jones, EMI, Employment, Financial News, Ford, Foundation Pension, FTSE, General Motors, Gold, Individual Savings Accounts, Institute for Supply Management, Lord Mandelson, Matalan, Money, Money Management, NAPF, NASDAQ, National Association of Pension Funds, Office of Fair Trading, Office of National Statistics, pension system, Recession, Second State Pension, Stocks and shares, Tankan, Terra Firma, Toyota, UK Banks, UK Economy, UK government, UK Recession, Wall Street

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chancellor Alistair Darling, possibly with an eye to future job prospects, is expected to blow his own horn in the coming days, by claiming that the Labour government’s investment in jobs programmes are responsible for saving no less than £12 billion during the recession. Darling backed up his claims by stating that in the 2009 budget, the government’s prediction for unemployment was as high as 2.09 million by the end of 2009 and reaching close to 2.5 million in 2010. By the end of December of last year they had already revised, their estimates down to one and three quarters of a million by end 2009 and less than two million for 2010. The reduced number of benefit claimants, if maintained, will save £10 billion over the next five years according to the stressed Chancellor’s figures.

There is much speculation afoot that the UK government are about to introduce important legislation regarding the use of credit cards. The new legislation will prohibit credit card companies from using a method of calculating interest known as the "adverse order of payments method. The adverse order of payments is where credit card companies force customers to pay off the debts on their account holding the lowest rates of interest before higher interest rate debt is reduced. Figures show that currently there are close to ten million people in the UK holding credit card debts with multiple interest rates. The practice is said to cost credit card holders an average of around £250 pounds in the first year they hold the card.

Business Secretary Lord Mandelson has announced that the UK government will be offering a £270 million loan to GM designed to safeguard five thousand Vauxhall jobs in the UK. The money, which will go to Vauxhall’s parent company GM Europe, will guarantee production at the car maker’s plants in Luton and Ellesmere Port. According to a statement from Lord Mandelson, the outline deal followed "highly complex" talks between the Government and bosses in the US.

Lord Mandelson stressed in his statement: "I always said the Government would stand foursquare behind Vauxhall. With this announcement, we have kept our word." Unite boss Tony Woodley who represent the Vauxhall workers chipped in by saying that the loan is great news for British industry.

Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc improved on the increase in value of their U.S. bank shares. RBS soared 5 percent to 42.57 pence. U.S. banks yesterday closed at the highest since November 2008, led by Citigroup Inc. Lloyds climbed 3.4 percent to 58.47 pence. The bank is close to agreeing a joint venture to sell a number of the less than worthwhile assets assembled by HBOS.

BSkyB, the U.K.’s biggest pay-television provider, surged the most in almost eight months on a report that Rupert Murdoch’s News Corp. may bid for the shares that the y currently do not hold in the company. On the news BSkyB rose 5 percent to 598 pence, the biggest gain since July 30. News Corp, which already owns 39 percent of the pay-TV company, may be planning to pay 735 pence a share for the stake it doesn’t already own.

The Pound was still seen to be struggling again the main currencies, although the currency did rise slightly before the weekend. The pound was on $1.5183 while remaining almost on par with the Euro on €1.1033

As the markets closed for the weekend U.K. stocks gained, extending a second weekly increase for the benchmark FTSE 100 Index, largely on the back of increases in financial share values.

The FTSE 100 increased 0.2 percent to 5,625.65, bringing its weekly gain to 0.5 percent. The FTSE 100 has climbed to near the highest level since June 2008, lifted by optimism that the global economic recovery and higher earnings will support the 12-month rally in equities.

Former executives of the now defunct Lehman Brothers firm as well as the senior executives of their erstwhile auditor, Ernst & Young headed home for a weekend of self contemplation as they were severely censured in a recent report for some serious professional lapses that led to the firm’s collapse.

The report also went on to say that Lehman trading on knowing they were insolvent for a number of weeks before eventually declaring themselves bankrupt. Lehman’s bankruptcy is generally recognized as being the catalyst that sparked of the global financial meltdown. The collapse of the 158-year-old investment bank in September 2008 was the world’s largest bankruptcy at that time.

The report made for some heavy and disturbing reading, accusing the Lehman Brothers’ management of "actionable balance sheet manipulation" and using accounting tricks to hide debts. In their defence, Ernst & Young said that its last audit of Lehman was "fairly presented" according to accounting rules. As Lehman Brothers wobbled on the edge of collapse, a determined effort from Wall Street, the City of London, and the US and UK governments did all that they could to prevent the banks’ fearing the chain reaction that Lehman’s failure would set off around the globe.

Whether the long awaited report had an effect on Wall Street trading remains to be seen, but share trading was certainly restrained on Friday before the markets closed. The Dow Jones was up 12. 85 points to 10624.49 while the NASDAQ dropped less than a point to 2367.66

After weeks of crisis, it looks like the Eurozone region are on the verge of agreeing to support a multibillion-euro bailout for Greece as part of a package to shore up the Euro, the zone’s single currency.

Despite huge resistance, Germany, who were against the bailout, have bowed to pressure from fellow members of the 16 strong Eurozone members who expect to draw up the rescue package in the early days of this week. At the same time, the Eurozone members, at Germany’s behest, will introduce new legislation to enforce greater fiscal discipline among its members.

According to a senior European commission official, the Euro member states have agreed to provide a series of loans or loan guarantees to Greece in the likely event that Athens finds itself unable to refinance its soaring debt and requests help from the EU. Speculation has it that the initial aid to Greece could reach as high as €25 billion (£22.6 billion), with estimates that the total extent of Greece’s financial problems could see them needing up to €55 billion in loans by the end of 2010. Despite the fact that Germany were the most reluctant to come to the rescue of a fiscal delinquent in the current crisis, they have played the pivotal role in organising the rescue package, in their role as the EU’s traditional paymaster,

According to a report by the International Energy Agency (IEA),

China’s demand for oil jumped by an "astonishing" 28% in January compared with the January 2009. The IEA went on to point out that added that the estimated global demand for oil in 2010 would be driven by rising demand from emerging markets, with half of all growth coming from Asia while demand in developed countries is likely to fall by 0.3%.

The IEA has increased its global oil demand forecast for 2010 by 1.8% to 86.6 million barrels a day.

Oil prices were above $83 a barrel on Friday, the highest in two months.

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Tags: Alistair Darling, Bank of England, Banking, British Economy, British Pound, BskyB, Citigroup Inc, Dow Jones, Economics, Economy, Ernst & Young, Financial News, FTSE, GM Europe, HBos, International Energy Agency, Labour government, Lehman Brothers, Lloyds Banking Group Plc, Lord Mandelson, Money, Money Management, NASDAQ, News Corp, Oil prices, Recession, Royal Bank of Scotland Group Plc, Rupert Murdoch, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Vauxhall, 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

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

With the Bank of England (BOE)’s decision to put its quantative easing programme on hold, the Debt Management Office, held with the task for issuing of bonds to pay off the public deficit, are expecting difficulties in finding buyers. A spokesman for the DMO has said that the agency will continue to use new methods of issuing debt bonds in what will be a record number, including syndications.

According to official data released on Friday, by the UK Insolvency Service, the number of companies going into liquidation fell in the final quarter of 2009 for the first time in more than a year on an annual basis. However the report showed that the number of individuals who succumbed to insolvency was on the increase.

The quarterly figures may be a sign the economy is slowly getting back on its feet, with companies finding it easier to get credit. A Bank of England survey which showed the flow of lending to businesses picked up in November for the first time since the beginning of 2009. However UK business analysts hastened to point out that the number of liquidations were liable to be high unless access to finance continued to improve.

Private demand in the UK will remain weak for the most part of 2010 and the British government will maintain its stimulus measures, UK Business Minister Lord Mandelson said after a meeting with German Economics Minister Rainer Bruederle here. "As private demand remains weak, as I suspect it will for a lot of this year, it is the job of the government to balance that weakness and to maintain our stimulus while it is needed," Mandelson said. "We also have to plan the exit from that stimulus and we will do that step by step and in coordination with each other." he continued.

Lord Mandelson also announced on Friday that European governments could consider some support for U.S. carmaker General Motors’ European operations if the carmaker presented them with a business plan.

General Motors’ European arm Opel plans to slash thousands of jobs as part of a restructuring plan and also wants around £2 billion in state aid either as loans or loan guarantees to help finance the 3.3 billion euro revamp.

UK Business Secretary Mandelson in Berlin for a meeting with German Economy Minister Rainer Bruederle said "The primary responsibility for bringing about the future investment, the use of new technologies and models, the reduction of emissions, rests with the private companies concerned, not with the governments,".

"If in the case of General Motors, they present a business plan that involves some financial role or underpinning by our governments, then of course we will consider that. But first we have to see the business plan," continued Mandelson

U.K. defense company BAE Systems announced on Friday that it had reached settlements with the U.S. Department of Justice and with the U.K.’s Serious Fraud Office regarding investigations into the company’s activities in Saudi Arabia as well as the sale of radar systems in Tanzania. Under the U.S. deal BAE will plead guilty and will pay a fine of $400. Under the deal with the U.K. authorities, the company will plead guilty to one charge of breach of duty and pay a fine of £30 million pounds. BAE issued a statement both regretting and accepting full responsibility for both offences.

The Digital TV Group (DTG), made up from a consortium of broadcasters, technology providers and set top box manufacturers, has expressed widespread industry concern regarding a proposed new venture, aimed to market a £200 pound set-top box, which will provide internet services to the television, to be launched later this year. Project Canvas, a joint venture between the UK’s public sector broadcasters and two of the country’s broadband providers, has won initial approval from the BBC Trust. However in a submission to the BBC Trust’s consultation, the DTG, whose members include Virgin Media, BSkyB and Sony expressed their fears that Canvas’ members had not engaged fully with the industry. DTG will need to wait a few months to discover the BBC Trust’s final ruling on the matter.

The pound weakened 0.7 percent to $1.564, its lowest level since October 2009. The decline came after the Bank of England kept the door open to more asset purchases to safeguard the economic recovery.

Sterling closed up at 1.1447 against the Euro.

The benchmark FTSE 100 Index was taking a beating before the weekend put an end to the shares sell-off. It closed down 223 points at 5060.92

U.S. stocks on Friday pared earlier losses as the equities tracked the dollar and the commodities market. Stocks came off their lows as the price of crude oil pulled back above $70 a barrel. The Dow Jones Industrial Average finished down 27.2 points at 9,974.98. The NASDAQ gained 9.73 points to close for the weekend on 2,135.16.

Following the devastating earthquake that struck Haiti last month, the world’s leading industrialised nations have pledged to write off the debts owed to them by the country. Canada’s finance minister made the announcement at a Group of Seven countries summit in Canada. A spokesman for the group announced that they would encourage international lenders to do the same.

Bi- and multilateral lenders including international bodies have already canceled some £800 million ($1.2 billion) of Haiti’s debt in 2009.

Toyota’s reputation was in danger of plunging into freefall tonight when it admitted investigating reports of brake faults in Prius hybrid cars in the US and Japan in a move that could trigger another recall.

The possibility that an estimated 270,000 of the latest model of the Japanese company’s flagship vehicles could be withdrawn because of safety fears follows 77 reported cases of braking problems among cars sold in Japan and 100 similar complaints in the US.

Prius owners have reported momentary loss of braking ability at low speeds on bumpy roads. Two of the incidents reportedly ended in crashes that resulted in injuries.

US safety regulators opened a formal investigation today.

The company is already reeling from a recall of more than eight million vehicles worldwide because of problems with accelerator pedals. A number of cases were reported where pedals jammed in causing vehicles to speed out of control.

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Tags: BAE Systems, Bank of England, Banking, British Economy, BskyB, Currency, Debt Management Office, Digital TV Group, Dow Jones, Economics, Economy, Financial News, FTSE, General Motors, Haiti, Lord Mandelson, Money, NASDAQ, Opel, Prius, Project Canvas, Rainer Bruederle, Recession, Stock Markets, Stocks and shares, Toyota, UK Banks, UK business, UK Economy, UK government, UK Insolvency Service, UK Recession

Retailers won the closely watched holiday skirmish with shoppers, who opened their wallets a little bit despite a still struggling economy, fewer discounts than last year and limited variety on store shelves, according to recently released data. A late boost from last minute shoppers and an extra day of shopping increased total retail sales by 3.6% over the year. According to estimates Shoppers in Britain spent over £130 million pounds online on Christmas Day alone, a 29 percent increase from a year earlier. The number of U.K. customers on Boxing Day, the day after Christmas, also increased, by 19 percent. Retailers avoided last year’s pre-Christmas discounting by cutting inventory to “much healthier” levels, according to Morgan Stanley analysts. Prices, which were slashed by as much as 75 percent in 2008, were down by about 50 percent on London’s Oxford Street shopping district on Dec. 26 at retailers including the Zara clothing chain, House of Fraser Ltd, Bhs and Topshop clothing outlets.

Recent data has shown that demand from house buyers in the UK fell in December for the first time since January 2009, with the number of new buyers registering with agents down 2.2 per cent. The monthly survey showed a slight rise in prices for the month of 0.1 per cent and also noted that about half of all homeowners had no mortgage or owned less than 25 per cent of the value of their home. This is the sole sector of the community said to be behind the increased demand for new houses.

Britain’s recovery from recession has so far been sluggish compared with other developed nations but stronger growth in 2010 should help it narrow the gap. The UK economy is forecast to shrink 4.5 per cent this year and Consensus Economics says that the consensus forecast is for a rebound of 1.4 per cent in 2010. The UK looks set to lag behind the recovery in the US where the consensus forecast suggests growth of 2.7 per cent. The sharp fall in the value of the pound will help UK exporters and the manufacturing sector will see a projected growth of 2.1 per cent.

Recent research has revealed that only one-in-three British businesses believe that plans by Lord Mandelson to boost production industries will do any good. In the survey of 57 manufacturers, only 20 said that the business secretary’s programme of ‘industrial activism’ was likely to benefit UK manufacturers. The remaining 37 said the programme would not help the sector or were unconvinced about its outcomes. However, there was better news regarding manufacturers’ expectations of an industrial recovery, with almost two-thirds of those polled saying the sector was in line for an upturn in 2010.

A spokesman for the Anglo-Dutch steelmaker Corus has said that Britain should shrug off worries about the huge government deficit and prepare to spend ‘tens of billions of pounds’ on infrastructure investment to push the economy out of recession. The spokesman went on to add that that the UK needed to draw up a ‘real industrial policy’ that would make the country more attractive to manufacturers. Lord Mandelson’s efforts to encourage ‘advanced manufacturing’ as a way of rebalancing the economy were worthy of praise, while stating that these initiatives did not go far enough, and that investment programmes should also railways, schools, roads, hospitals and other public amenities.

Virgin Money is reported to be in advanced talks to buy a small UK bank, which will provide an opening for the company to be granted a banking license, completing the Virgin’s long-standing ambition to provide a full range of financial products, including mortgages and current accounts to the British consumer.

The FTSE was closed on Friday as the market awarded itself a long weekend for the Festive Season.

Sterling remained below the $1.60 level on Fridays trading, although rising a little, whilst falling slightly s against the Euro

• Dollar 1.5962
• Euro 1.1089

A resurgent dollar is likely to power through to 2010 with its up-trend intact, as a steadily improving economy leads investors to believe U.S. interest rates will increase sooner than had been expected. The demand for riskier currencies has broken down as the year has come to an end, with the dollar now gaining on positive U.S. data. Analysts predict that the U.S. economy continues to show strength, the dollar stands to strengthen even more.

Wall Street was closed on Friday for the Christmas holiday.

In Japan early Monday the Nikkei average hit its highest close in four months on Monday as stronger-than-forecast output data boosted the manufacturing sector. Adding to the upbeat mood in the market, data before the start of trade showed Japan’s industrial output rose a better-than-expected 2.6 per cent in November, the strongest gain in six months as rising exports to Asia bode well for a recovering economy. The benchmark Nikkei climbed 1.3 per cent, or 139.52 points, to 10,634.23, its highest close since August 26.

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Tags: Bank, Banking, Bhs, British Economy, British Pound, Christmas, Consensus Economics, Corus, Currency, Economics, Economy, Employment, Financial News, FTSE, House of Fraser Ltd, industrial activism, Lord Mandelson, Money, Money Markets, Morgan Stanley, Mortgage, Mortgages, Nikkei, Recession, Retail, Stock Markets, Stocks and shares, Topshop, U.S. economy, UK Banks, UK Economy, UK export, UK government, UK manufacturers, UK Recession, Virgin Money, Wall Street, Xmas, Zara clothing chain

The Treasury was "justified" in using taxpayers’ money to bail out banks to protect the wider financial system, according to an official report.

The National Audit Office (NAO) review said the cost to the UK public so far totalled £850 billion.

"It is difficult to imagine the scale of the consequences for the economy and society if major banks had been allowed to collapse," the NAO said.

It said that the final cost to the taxpayer will not be known for "years".

During the financial crisis, the UK government nationalized Northern Rock and took stakes in the Royal Bank of Scotland (RBS) and Lloyds Banking Group in return for bailing them out.

RBS also put £282 billion of its assets into a government insurance scheme for toxic assets.

Despite the fact that Royal Bank of Scotland has signaled that it will succumb to pressure to pay its high-flying investment bankers substantially less than rival institutions amid an escalating row with the government, it is feared that Alistair Darling may still be heading for a potentially disastrous showdown with the bank over their plans to pay £1.5 billion in bonuses to its staff.

RBS which is 70 per cent owned by taxpayers, is hoping to avoid the high-stakes showdown after it was forced to give the Treasury the final say over the total size of its bonus pool as a condition of signing up to a scheme that will insure £240 billion in toxic assets, with hints coming from the bank that pay-outs in its investment banking division would be “at the low, low end of the scale”. They also hastened to send out a veiled threat, that reduced pensions and bonuses could meant them losing experienced staff to competitors. The bank is confident of forging an agreement with the government after it emerged that RBS directors had sought legal advice about whether they would have to resign if the Treasury vetoed pay deals agreed by the board, Darling, who to be granted the right to veto bonus payments at the bank, is left with a dilemma of waving through potentially huge bonus pay-outs at RBS just months before a general election or plunging the bank, which has already received unprecedented support from taxpayers despite widespread fury over bonus levels, into further crisis.

The value of UK commercial real estate debt in default or in breach of key lending agreements more than doubled to about £30 billion in the first six months of the year, adding pressure on the banking sector, a survey has revealed. Banks have also extended or refinanced an extra £16 billion in the first-half of the year, rolling over maturing debt that could not be paid back by cash-strapped borrowers or restructuring loans when breaches were threatened owing to the steep fall in values. This strategy has been dubbed “extend and pretend”, with some banks even refusing to test loan covenants, given a reluctance to crystallize losses by selling the property asset or the debt attached to it. De Montfort University, which compiles the most comprehensive study of the sector, announced that banks are beginning to deal with the massive £224 billion of outstanding debt to the real estate sector.

Lord Mandelson, business secretary, on Friday issued a blunt warning to Kraft and hedge fund investors that they will face “huge opposition” from the British government if a takeover of Cadbury is used as a means to make “a fast buck” The comments represent a government intervention that is unprecedented in recent years, extending the business minister’s policy of “industrial activism” into a live bidding situation. Meanwhile a strategy appears to be emerging to fend off a hostile takeover from Kraft. The Cadbury strategy emphasizes the value of its brand image and its emerging markets footprint as well as highlighting the progress made on during their restructuring program

Kingfisher, the owner of B&Q DIY stores, has cut net debt by 90 per cent since the start of 2008 and on Thursday confirmed its debt burden at the end of the financial year will be lighter than previously forecast. Net debt fell to £200 million in the third quarter and Kingfisher forecasts net debt of about £300 million at its year end in January, an improvement on previous guidance, which was for £800 million.

The pound continued to lose value strongly against the dollar and the Euro before the weekend.

• Pound/US dollar 1.471
• Pound/Euro 1.1086

U.K. stocks climbed, with the FTSE 100 Index extending this week’s advance, after a government report showed the U.S. rate of unemployment declined in November.

The FTSE 100 climbed 9.36 points to 5,322.36, bringing this week’s gain to 1.5 percent. The measure has rebounded 52 percent from its low on March 3 as governments committed about $12 trillion and central banks cut interest rates to record lows to end the global recession and revive credit markets.

US labor Department figures show that unemployment rate fell in November to 10% from 10.2% in October, meaning that 11,000 jobs went over the month, a figure far lower than expected by most analysts.

On Friday’s trading, the Dow Jones Industrial Average gained 0.2 per cent to 10,388.22 and the NASDAQ was up 1 per cent to 2,194.35.

The price of gold price has taken a surprise slump after surprisingly positive US unemployment data sent the US dollar higher, making gold a less attractive investment.

Gold fell more than $65, or 5%, to $1,161.4 an ounce, down from a record high of $1,226.56 in early trading.

After the release of figures showing that the US jobless rate was on the decrease, the dollar gained 2% on the Japanese yen and 1.3% on the euro.

As the dollar weakened due to low interest rates in the US, gold has hit a number of record highs in recent weeks

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Tags: Alistair Darling, B&Q DIY, Bank, Banking, British Economy, Cadbury, Currency, De Montfort University, Dow Jones, Economics, Economy, Employment, Financial News, FTSE, Global Credit Crisis, Gold, Kingfisher, Kraft, Lloyds Banking Group, Lord Mandelson, Money, Money Markets, NAO, NASDAQ, National Audit Office, Northern Rock, Recession, Retail, Royal Bank of Scotland, Stock Markets, Stocks and shares, taxpayer, Treasury, UK Banks, UK Economy, UK government, UK Recession, US labor Department

The announcement made before the weekend that that 121,000 Royal Mail staff had voted overwhelmingly for national strikes over jobs, pay and working conditions had UK business owners and managers in a sweat. Companies fear that national action, on top of the regional strikes that have been taking place over the past three months, will cause widespread disruption to postal deliveries and hinder their long awaited and much needed economic Christmas rush. The Communication Workers Union announced that their members had backed nationwide walkouts by a three to one ratio in protest at the “imposition” of changes to working practices as well as cuts in pay and job losses. Dave Ward, deputy general secretary of the Postal Workers Union, said that representatives of the union were due to meet on Monday to agree its next step and would give the Royal Mail a “final opportunity” to resolve the dispute over the next week or so.

According to Britain’s business secretary, Lord Mandelson Britain is unlikely to accept Magna International’s plan for the takeover of Vauxhall/Opel unless certain “shortcomings” are addressed. In explaining Britain’s role in “signing off” on the deal, Lord Mandelson stated that an impact plan should be agreed even before talks on how much Britain will contribute to the ($3.1 billion ) €4.5 billion) of loan guarantees needed to restructure Opel can begin. While Germany is due to supply most of the loan guarantees, the British government is being called upon to supply €400 million in guarantees. In return Mandelson expects assurances on the fate of Vauxhall’s two UK plants, in Luton and Ellesmere Port, which employ about 5,000 workers between them, before giving the green light.

According to a report from a leading UK global ratings agency, The recent gains in house prices are likely to prove only a temporary respite before a further steep fall next year, The agency has forecast that they expect UK property prices to fall by about 30 per cent in total from their October 2007 peak, despite the fact that property prices have improved for the last three months leading to hopes of a sustained recovery. However prices still remain 13 per cent below their peak in 2007.

Carphone Warehouse, whilst raising their target for the number of residential broadband customers it hopes to capture in 2009/2010 have taken the opportunity to disclose that the number of subscribers that they had hoped to take on board during their recent acquisition of Tiscali UK, were considerably less than the figures quoted. No fewer than 160,000 than the 1.45 million that Tiscali boasted before the acquisition. On the discovery, Carphone Warehouse has announced that they will be renegotiating the £236 million price it agreed to pay for Tiscali UK.

JJB Sports have announced that they are planning to instigate a share placing and open offer that they hope will rise close to £100 million, more than the total market value of the sporting goods retailer. Shares in JJB, who narrowly avoided administration in April, are likely to be priced below 25 pence, a significant discount to Thursday’s close of 34½ pence. On the news, shares fell sharply on Friday’s trading, down 6.5 per cent to 32¼ pence. On the upside, demand for the new shares has been so high that the company expects to rise significantly more than its current market capitalisation of £86.5 million with analysts predicting that it could even reach more than double that amount. .

On the FTSE 100 Friday, Unilever was among the risers on Friday up 2.7 percent to 1816 pence after industry data showed sales of product lines such as ice-cream and deodorant has been very buoyant since July. Confectionary giant Cadbury fared worse on announcement that their sales had fallen sharply below company targets since July, despite that fact that that the company has increased the number of promotions running after they fell into an unwelcome spotlight after last month’s bid from Kraft. Cadbury closed flat at 785 pence. Shares in Whitbread the brewer added 1.6 per cent to 1269 pence in anticipation of positive results due to be issued on Tuesday.

The FTSE 100 continued its steady rise, this time by 7.23 points to close on 5161.87. The index rose 3.5 per cent on the week, thanks largely to the falling US dollar.The FTSE 250 held its ground before closing for the weekend, up a mere 3.86 points to close for the day on 9,377.30

The pound lost some of its pace against the leading currencies, as well as again creeping below the $1.60 mark.

• Pound/US dollar 1.5843
• Pound/Euro 1.10757
• Pound/Japanese Yen 142.1499
• Pound/Swiss Franc 1.634

According to figures issued by the Commerce Department, the US trade deficit shrank unexpectedly in August as the weak dollar boosted exports.

The deficit, representing the difference between US imports and exports, fell to $30.7 billion (£19.3 billion) from a revised estimate of $31.9 billion in July.

Exports rose slightly on the back of the weak dollar while imports fell.

The dollar has slipped recently, with traders moving into other currencies as the global economy begins to recover. The sharp fall in the US dollar is giving ammunition to the critics of the Obama administration and fuelling broader concerns about the erosion of America’s reserve currency status.

The Dow Jones index closed strongly for the weekend up 78.07 points to 9864.94. The NASDAQ index continued its consistent rise, up a further 15.35 points to close on 2139.28.

In an unexpected development, but one which is expected to positive implications to the US economy, it was announced on Friday that President Barack Obama has been awarded the Nobel Peace Prize. The award has been granted for the President’s efforts to reduce the world’s stockpile of nuclear weapons and working for world peace. The first African American to hold the country’s highest office, Obama has consistently called for disarmament and since taking office in January has been actively involved in attempting to revive the stalled Middle East peace process.

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Tags: Banking, Barack Obama, British Economy, British Pound, Cadbury, Carphone Warehouse, Commerce Department, Communication Workers Union, Credit Crunch, Currency, Dave Ward, Dow Jones, Economy, Financial News, FTSE, GM, House Prices, JJB Sports, Kraft, Lord Mandelson, Magna International, Middle East peace process, Money, Money Markets, NASDAQ, Nobel Peace Prize, Obama administration, Opel, postal strike, Postal Workers Union, Recession, Retail, Royal Mail, Stock Markets, Stocks and shares, Tiscali UK, UK Banks, UK business, UK Economy, UK government, UK Recession, US economy, Vauxhall, Whitbread

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