One of the good things that have come out of the global economic downturn is the unparalleled fall in greenhouse gas emissions. A recent study sponsored by the International Energy Agency (IEA) has stated that the recession has in fact provided a “unique opportunity” to move the world away from high-carbon growth,

In this first major study of the impact of the recession on climate change, the IEA found that CO2 emissions from burning fossil fuels had undergone “a significant decline” in 2009, more than in any year since the late nineteen sixties. The decrease well exceeds the drop in greenhouse gas emissions that occurred after the 1981 recession.

Whilst falling industrial output is largely responsible for the plunge in CO2, there are other factors that have played a role, including the shelving of many plans for new coal-fired power stations owing to falling demand and lack of financing.

Rights issue speculation led Severn Trent lower on Monday Severn, Britain’s second-largest water company, lost 1.8 per cent to 993 pence. Severn has been widely rumoured to be looking at a fund-raising after July’s tougher than expected draft pricing review from Ofwat, the industry regulator. Severn’s options look likely to include a dividend cut and a rights issue to raise around £400 million. No decision is expected before November; when Ofwat is due to give its final determination.

The British Government has announced that they will grant a £10 million loan to Indian car maker Tata Motors to finance the electric car manufacturing project in the UK.

The loan, which will be part of a scheme backing low carbon technology in the motor industry, will support a £25 million pound investment by Tata Motors in its West Midlands base.

In July, Tata Motors had threatened to scrap plans to build electric cars in the UK if it did not receive the £10 million pound loan.

Tata almost said ta-ta to officials from Mandelson’s Business Department after being told that they needed more time to find out if the venture will be considered for the loan, taking the total waiting time to six months.

In a £50 million deal, the UK Atomic Energy Authority agreed to sell their wholly-owned commercial subsidiary UKAEA Ltd. to the defence and energy support services firm Babcock International.

UKAEA oversees nuclear clean-up work at three sites in Britain as well as providing consultancy services worldwide, Lord Mandelson said; “The sale will allow the company, as part of Babcock International, to continue its development and take advantage of new opportunities in the nuclear industry.”

UKAEA, which has been playing an active role in nuclear energy since for close to fifty years, has an annual-turnover worth around £32 million and employs more than 200 people.

Marks and Spencer was among the few companies to shine on the Footsie yesterday, in anticipation of positive second-quarter figures to be released next week. The high street retail chain was up 1.6 per cent to 374 ½ pence.

Slipping into reverse was the van hire group Northgate, whose shares dropped 2.1 per cent to 27 pence after the company admitted that they had made an “internal administrative error”, which meant that that their debt burden was £32 million more than previously reported.

The UK’s FTSE 100 index made its first reverse for a few days, down 38.53 points to close at 5,134.36.

Meanwhile the FTSE 250 continued to reverse last week’s gains, down yesterday by a further 86.28 points to close on 9,220.65

The pound continued to lose value against the main currencies on Monday’s trading with the notable exception of the Japanese Yen, where markets were closed for a public holiday.

• Pound/US dollar 1.6245
• Pound/Euro 1.1038
• Pound/Japanese Yen 149.188
• Pound/Swiss Franc 1.6721

The Dow Jones Industrial Average took a minor spin backwards after the weekend, down 41.34 points to 9,778.86. The NASDAQ continued to consolidate, up 5.18 points to 2138.04.

Computer giant Dell is buying IT services provider and fellow Texan firm Perot Systems for £2.4 billion ($3.9 billion)

Dell announced that the takeover, which it hopes to conclude between November and January, will help to provide a wider range of services to its customers.

The all-cash deal will see Perot shareholders receive $30 per share, making a 68% premium on the company’s closing share price on Friday.

Perot is owned by billionaire Ross Perot who twice ran as an independent candidate for the US presidency.

Oil prices have fallen by almost $3 on fears that energy demand may not be as strong as once thought.

The price of US crude was down to less than $70 a barrel. The price reduction confirms the findings of a report issued by the Centre for Global Energy Studies forecasting that there was unlikely to be a sustained rise in prices until the global financial recovery was well established.

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Tags: atmosphere, Babcock International, British Economy, British government, British Pound, climate change, CO2 emissions, coal-fired power stations, Credit Crunch, Currency, Dell, Dow Jones, Economy, emissions, Financial News, FTSE, Global Energy Studies, greenhouse gas, high-carbon, IEA, International Energy Agency, Lord Mandelson, Marks and Spencer, Money, Money Markets, Northgate, nuclear energy, Ofwat, Perot Systems, Recession, Severn Trent, Tata Motors, UK Atomic Energy Authority, UK Economy, UK government, UKAEA Ltd

After an inquiry found they had taken unreasonably large rewards from the now bankrupt car maker MG Rover Group Ltd, UK Business Secretary Peter Mandelson is seeking a ban on the investors involved in the collapse from running other companies

A recently released 800-page government-commissioned report into the demise of MG Rover, who went belly up in 2005 with debts amounting to £1.3 billion states that directors of Phoenix Venture Holdings, Peter Beale, John Edwards, Nick Stephenson, John Towers and Kevin Howe had drawn a combined 42 million pounds in pay and benefits over five years.

About 6,000 people lost their jobs when the car maker collapsed.

Lord Mandelson, business secretary, has also announced his confidence that following the sale of General Motors’ European business to Magna International, a Canadian car-parts supplier, and Russia’s Sberbank jobs were safe at Vauxhall’s plants in the UK. GM’s decision to sell Opel to the Canadian and Russian partnership ended months of uncertainty over the fate of the car maker.

Magna has already made a commitment to the German government not to shut any of its four factories there, however t there is still unease and uncertainty among Britain’s trade unions that either the Luton or Ellesmere Port plant, might be slated for closure by Magna. Without giving any specific reason why, Lord Mandelson, in a statement issued before the weekend. Said he was satisfied with the deal and that the immediate uncertainty about GM’s future in Europe has been removed.

The star of the show on the FTSE Friday was the rail maintenance group, Jarvis, whose shares jumped to their highest level in more than a year after the company reported an “extremely preliminary” takeover inquiry.

Their stock, which has been stuck below the 15 pence since a profits warning way back in November 2007 wiped 75 per cent off its value, has increased in value by close to 70 percent from 17 pence to 24 pence with two days of trading after the company released a statement to the markets on the approach

Analysts speculated that that any of the other companies involved the rail maintenance sector might be interested in the company, with others suggesting that an overseas buyer might also be a candidate.

The UK’s fourth-biggest supermarket group WM Morrison warned of lower sales growth on the back of more moderate rises in food prices, as it lifted profits and raised its interim dividend by 35 per cent.

Morrisons, who increased their underlying profits by 22 per cent, also announced that they are embarking on an expansion drive containing its fresh food shop within a shop concept, as it seeks expansion.

A spokesman for the company did warn that a natural reduction in comparative growth rates was liable to be caused by easing food price inflation, along with strong like-for-like sales growth. Shares in the group dropped by 0.8 pence to 283.7 pence.

As the market continued to digest news it was under investigation by the Serious Fraud Office and Office of Fair Trading over allegations of anti-competitive business practices, shares in Sports Direct International dropped 0.9 per cent to 107.9 pence.

The FTSE 100 index made it back over the 5,000 points, rising. 23.79 points to close at 5,011.47

The FTSE 250 rose again on Friday, up 82.18 points to close for the weekend to close on 9,207.89

The pound rose against the dollar yet took a minor tumble against the Euro on Friday’s trading, as well as the other major currencies.

• Pound/US dollar 1.616
• Pound/Euro 1.1433
• Pound/Japanese Yen 150.5651
• Pound/Swiss Franc 1.7281

According to a recent declaration by Treasury secretary Tim Geithner, the US is starting to pare back its emergency support for banks and financial markets, stating that the US financial system was no longer in need of extensive government prop-ups.

Almost a year since the collapse of Lehman Brothers, which triggered a financial panic that tipped the world into a deep recession, Geithner has announced that the time had come to ease the US economy from crisis to recovery mode.

Pointing to the evidence of a return to partial stability in global financial markets, Mr. Geithner announced that the US would allow their $2,500 billion guarantee for industry to expire as scheduled this month.

The Dow Jones Industrial Average faltered by just a little on Friday down 12.07 points to 9695.44 while the NASDAQ Composite rose by 0.2 points to close on 2080.9.

Fast-falling corporate inventories meant Japanese gross domestic product grew more slowly in the second quarter of this year than was initially forecast, according to government data released on Friday, but analysts stated that the world’s second largest economy’s recovery remained on track.

In the three months to June, GDP expanded 0.6 per cent quarter-on-quarter on a seasonally adjusted basis, revised data issued by the cabinet showed, down from the 0.9 per cent growth initially estimated last month.

Global oil consumption will contract less than previously feared this year and grow strongly in 2010, according to the International Energy Agency (IEA) the developed countries’ energy watchdog, another of the signs of optimism for the economic welfare of the World popping up on a regular basis these days.

The IEA now expect global oil demand to drop 1. 9 million barrels a day for 2009, less than the 2.3 million forecasts as recently as last month, making for the third revision since May, when the organisation forecast a contraction of 2.6 million barrels per day. .

Gold reached $1,011.55 a troy ounce on Friday, just 1.9 per cent below the record $1,030.80 reached in March 2008.

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Tags: British Economy, British Pound, Dow Jones, Economy, Employment, Financial News, FTSE, GDP, General Motors, International Energy Agency, John Edwards, John Towers, Kevin Howe, Lehman Brothers, Lord Mandelson, Magna International, MG Rover, Money Markets, Morrisons, NASDAQ, Nick Stephenson, Office of Fair Trading, Peter Beale, Peter Mandelson, Phoenix Four, Phoenix Venture Holdings, Recession, Retail, Serious Fraud Office, Sports Direct, Stock Markets, Tim Geithner, UK Banks, UK Economy, UK government, UK Recession, US economy, WM Morrison

The British pound continues to fall sharply against the dollar as foreign exchange traders predict that the UK economy will continue to lag behind that of the US and the 16-nation Eurozone.

UK short-term bond yields have hit all-time lows as analysts begin to predict that the Bank of England may go as far as to introduce negative interest rates on its deposits in an attempt to encourage lending to the wider economy.

On that piece of stunning news, Two-year gilt yields, which have an inverse relationship with price, fell to 0.83 per cent – the lowest level since records began. Commercial banks have begun to transfer cash deposits at the Bank of England into gilts. Mervyn King, governor of the BoE has strongly hinted that he is considering charging banks for holding deposits at the central bank because he fears the quantitative easing initiative is being undermined by commercial bank’s lake of desire to circulate money into the economy through increased lending.

According to information issued by the Office for National Statistics (ONS) one in six UK families have at least one unemployed, making for the highest rate since 1999. The number of households where at least one person is unemployed reached 3.3 million in the second quarter of 2009, a rise of almost a quarter of a million from the previous year, with the north-east of England being the hardest hit.

Lord Mandelson has once again displayed his desire to put the UK taxpayer’s money where his mouth is, by announcing that he is willing to invest heavily to ensure commit taxpayers’ money to, in exchange the long-term survival of Vauxhall, about to be sold off by General Motors, the American car group who are in liquidation.

The Business Secretary has again reiterated his pledge of financial help, around £500 million to any one of the three parties interested in buying the UK branch, and save its 5,500 jobs.

The minister is insistent that the party that receives taxpayer funds will be the one that produces a business plan protecting most of the Vauxhall workforce for the long term.

On the FTSE yesterday, it was reported that the U.K.’s mortgage lender, Lloyds Banking Group Plc may have no option but to write off £500 million on loans made to Admiral Taverns Ltd. The news did not inspire the market and their stock fell 0.1 percent, to 107.8 pence.

The FTSE 100 had a flat day’s trading, falling 26.22 points to 4,890.58, while the FTSE 250 took a sudden reverse, dropping 77.60 points to close on 8,783.21

Sterling continued to weaken on Wednesday’s trading, on reports that it was being hindered by poor financial results in the UK.

• Pound/US dollar 1.6228
• Pound/Euro 1.1391
• Pound/Japanese Yen 151.8732
• Pound/Swiss Franc 1.7324

In the US, the latest indications that the state of the world’s largest economy is growing increasingly positive came with the news that sales of durable goods and new home sales both soared last month, Durable goods orders were lifted by the popularity of the government’s "cash for clunkers" car scrappage scheme, helping US car orders to rise 0.9%, in July.

At the same time, the annual rate of sales of new US homes rose 9.6% last month, the biggest rise in sales of new houses since September last year.

On Wall Street, markets drifted from the morning’s highs during the afternoon, with the Dow Jones Industrial Average and the NASDAQ Composite index both gaining a further 0.3 per cent to 9,539.29 and 2,024.23, respectively.

The Bank of Japan announced on Wednesday that the volume of their exports rose by 2.3 per cent in July from June as stronger demand from Asia and replenishment of inventories boosted manufacturers.

The data suggest that Japan may enjoy another quarter of respectable economic growth from July to September, after last week’s report that output rose at an annualized rate of 3.7 per cent in the April-June quarter

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Tags: Admiral Taverns Ltd, Bank of England, Bank of Japan, Banking, British Economy, British Pound, cash for clunkers, Dow Jones, Durable goods, Economy, Financial News, FTSE, General Motors, Global Credit Crisis, Lloyds, Loans, Lord Mandelson, Mervyn King, Money, Money Markets, NASDAQ, Office for National Statistics, Recession, Sterling, Stock Markets, UK Banks, UK Economy, UK Recession, Vauxhall, Wall Street

Business Secretary Peter Mandelson is expected to announce on Wednesday the UK Government’s intention to launch a £150 million pound investment programme aimed towards small manufacturing companies specializing in areas where high levels of production and engineering skills are emphasized.

The program will be designed to benefit companies involved in high to medium tech manufacturing industries involved in the development of new technologies and designs.

Mandelson’s initiative comes as an extension of Prime Minister Gordon Brown’s package to help businesses access venture capital and loans.
Yesterday Mandelson along with Chancellor of the Exchequer Alistair Darling met with chief executives of the UK’s leading banks at Downing Street and told them to step up lending for small companies.
Those represented included the Royal Bank of Scotland Group Plc and Barclays Plc.

Veteran British banker Sir Win Bischoff is to become the new chairman of Lloyds Banking Group, taking over the reins in September from Sir Victor Blank who stepped aside after being blamed by investors for Lloyds’ disastrous takeover of HBOS. . The 67-year-old former chairman of Citigroup appointment comes despite objections from some investors who were less than happy about Sir Win’s handling of Citgroup’s problems during the financial turndown.

Europe’s largest short-haul airline Ryanair have announced a strong increase in their first-quarter profits which they attributed largely due to the steep decrease in fuel costs. Despite the fact, Ryanair’s share price fell by nine per cent or 20 pence to close at 400 pence, on warnings that their full-year earnings would be lower because of the need to cut air fares due to extreme competition.

Lower oil prices have affected the profitability of BP in the second quarter, in fact halving from the same period a year ago. This year’s results showed profits of a still commendable £1.9 billion
The results took BP’s half-year profits to around £3.2 billion, down 57% from the same period in 2008.

The situation at National Express, the bus and rail operator ,became even more complicated after their UK based competitor Stagecoach announced that they were in talks with the consortium led by Spain’s Cosmen family and CVC Capital over a possible asset trip operation if the group were successful in their take- over attempt.
Representatives of Stagecoach also hinted that they even consider making a bid of its own for the whole of National Express.
This latest development only strengthens speculation that the board of National Express will reject the takeover approach from the Cosmen and CVC consortium.
News of Stagecoach’s interest sent shares in National Express 6.4 per cent higher in mid-morning trading to 368 pence, while shares in Stagecoach were 2½ pence lower at 135 pence.

As was widely expected, the FTSE 100 failed to extend its winning streak to a record-breaking 12th straight session as profit taking began to set in.
The blue chip index sank 57.3 points, or 1.3 per cent, to 4,528.8,
The FTSE 250 recorded a further reverse this time down 145.70 points to 7,731.16

The pound continued to stutter on Tuesday against the leading currencies.
Pound/US dollar 1.6421
Pound/Euro 1.1591
Pound/Japanese Yen 154.7119
Pound/Swiss Franc 1.7659

The Dow Jones faltered slightly on a flat day’s trading, down 11.79 points to 9096.72 The NASDAQ made another small gain, up 7.62 points to close on 1975.51

Deutsche Bank has reported a 67% rise in quarterly profits, boosted by its investment banking arm.
Germany’s largest bank announced a net profit of £950 million (1.1 billion Euros) for the second quarter of 2009, compared to £550 million (645 million Euros) profit for the same period last year.

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Tags: Alastair Darling, Financial News, Gordon Brown, Goverment, Lord Mandelson, Peter Mandelson, Small Businesses, UK government, UK Small Business

According to recent reports UK Business Secretary Lord Mandelson has "strongly advised" the Indian conglomerate Tatas to accept a revised proposal that will guarantee them hundreds of millions of pounds in short-term funding for luxury brands Jaguar Land Rover.

Apparently the UK government has issued a subtle hint to the Tatas management that they should not take too much time to accept their revised proposal to guarantee hundreds of millions of pounds in short-term funding s they run the risk that the offer will be withdrawn. Mandelson’s team are reportedly surprised that Tatas are stalling on the offer, obviously on the look out for better terms, which according to reports coming out of the UK treasury will not be forthcoming. What is currently on offer are government guarantees for 290 million pounds (340 million Euros) of European Investment Bank loans.

Britain’s biggest retailer Tesco, seem very determined to establish a financial services division and at a considerable scale. Recent reports suggest that the company is even considering seeking a separate credit rating for their banking wing that will provide them with considerably more clout to take on the UK existing high street banks.

The new division to be known as Tesco Personal Finance, planning to launch a current account section within the next 18 months, and a mortgage section, within the next two years.

On the stock markets, fears of the severity of a second wave of swine flu hitting the West has played a part in forcing share values down, with British Airways, down on Monday 2.4 per cent to 134¾p.

The insurance sector had an erratic day, with speculation that Resolution was preparing to offer about 80p a share for Friends Provident, valuing the company at £1.9bn.

After the market closed, Friends announced that they had rejected Resolution’s merger proposals. On the day shares in the insurance company, added 2.4 percent to 73¼ pence, while Resolution’s shares fell by 2.2 percent to 90¼p.

Shares in Legal & General closed up 7.6 per cent to 61¼p, as rumours began to mount that the company might be interested in selling off or at least splitting up their investment management business.

Sector leader Prudential also gained 5.5 per cent to 409½p, while Aviva added 2.9 per cent to 237¾p and Old Mutual who were 2.3 per cent higher on 88¾p.

In the banking sector, Barclays stood firm 313p, despite the fact that there were rumours abounding was that the bank were courting offers for their wealth management unit…

Shares in Lloyds Banking Group rose by 6.7 per cent to 72p, in anticipation of the announcement that they had made a trading profit for the first half of 2009.

Anticipating profits from the swine flu epidemic are drug makers, GlaxoSmithKline Plc whose shares added 2.6 percent to finish on 1,141 pence. Sales of GlaxoSmithKline’s swine flu vaccine could reach as high 1.3 billion pounds in 2010 if fears of the extent of the diseases prove to be true.

In the commodities sector, things were fairly rampant. Shares in BHP Billiton Ltd., the world’s largest mining company, added 3.4 percent as copper prices continued to rise. Europe’s second largest producer of zinc Boliden AB rallied 14 percent they announced higher than projected profits.

U.K. stocks continued their rally with the FTSE 100, which has climbed 7.7 per cent in six sessions, up a further 54.87 points to 4,443.62. The FTSE 250 climbed 85.97 points to close on 7,666.63. The FTSE 100 closed 1.3 per cent higher to reach its best level since early June.

The pound had a solid day, rising against all the main currencies.

Pound/US dollar 1.6524

Pound/Euro 1.162

Pound/Japanese Yen 155.837

Pound/Swiss Franc 1.7622

Stateside, there were sighs of relief all round as CIT Group, the struggling commercial lender, announced that they were on the brink of closing a deal that could save it from bankruptcy. As investors waited an official announcement from CIT Group, unofficial reports had it that bondholders would supply them with $3 billion in emergency funding over two years.

Inspired by the news, US stocks climbed towards their highest levels for the year.

On Monday’s trading , the Dow Jones continued its steady rise, on the day by 194,21 points to 8848.15 while the NASDAQ also climbed, breaching the 1900 point mark by closing up 22.68 points to 1909.29..

There was also some good news coming out of Iceland, for the first time in a while. The Icelandic Government announced their long overdue £1.3billion ( 270billion-crown) plan that it will enable the country’s s banking system to get back on its feet after their three main banks were subject to a last minute rescue bid in 2008..

The Iceland treasury intends to inject capital into three new banks to be formed to replace those that failed. The failed banks, Glitnir, Landsbanki and Kaupthing, all collapsed within a week last October, with debts of $60 billion.

Under the plan, the government will also offer controlling stakes in Islandsbanki (formerly Glitnir) and New Kaupthing to the old banks’ existing shareholders.

The dollar’s continued weakness helped commodity markets make a positive start to trading on Monday. Oil prices rose by more than $1 a barrel on Monday while gold jumped above the $950 level.

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Tags: British airways, British Economy, Credit Crunch, Financial News, Insurance, Jaguar Land Rover, Lord Mandelson, Money, Recession, stock market, Tesco, UK Banks, UK Recession

The battle to keep General Motors production in the UK to the highest level seems to be gaining ground. Business Secretary Lord Mandelson announced that he had been given a “positive response” from the US government on a recent visit to Washington during which he held talks with US Treasury’s car industry bail-out team.
Lord Mandelson is confident that there is no deal yet on the overall future of GM’s European operations and for Vauxhall who employ 5,500 people in the UK.

As Vauxhall ponder their uncertain future, it appears that most of the spoils to be gained under the British government’s vehicle scrappage scheme are going to South Korea. Reports have it that the bulk of new car sales are going to the Hyundai Motor Company whose range of small family saloons are doing very well out of Lord Mandelson’ s 300 million-pound scheme that invites motorists to trade in cars more than 10 years old in return for a 2,000 pound subsidy. Government figures released early this week said that the scheme had generated orders for 60,000 new orders in the period within the last six weeks alone, with Hyundai selling 8,246 new cars. A company spokeswoman announced that the Hyundai i10 was proving to be a big seller.

Understandable when you consider that with the scrappage discount you can have an i10 on the road for less than 5,000 pounds.

Former chief executive of the Royal Bank of Scotland, the much maligned Sir Fred Goodwin has shown a side we never knew existed by agreeing to hand back more than a third of the lump sum pension he snuck out of the back door of the bank with last year.

The banker, as well as his family, has felt a major downturn in their personal popularity since then. They have been reported to have actually been in hiding since their Edinburgh home came under attack in March of this year by angry shareholders.

Troubled sports broadcaster Setanta finally gave up their last hope of retaining their rights to broadcasting the 46 live matches allocated to the company for the 2009/2010 season through failing to meet another payment of the £30 million it owes the English Premier League. Without any further ado, the Premier League will begin an auction to find a broadcaster for the 46 UK live matches for the 2009/10 season.

The mining sector who until Friday had performed badly, were the main climbers on the FTSE on Friday. Shares in Anglo American driven by renewed speculation that they might be a target for takeover by the Brazilian mining group, Vale. Market analysts predicted that Vale’s move for Anglo would allow it to diversify beyond iron ore and increase coal and copper assets. Anglo closed up 2.7 per cent.

The house building sector also gained after Taylor Wimpey announced an increase in stability. On the announcement shares in the company rose 9.7 per cent to 34 pence; Barratt Developments also saw their shares rise by 7 per cent on Friday to close on 153½ pence. The Berkeley Group climbed but less spectacularly. Their shares rose by 2.5 percent firmer to 773 pence.

The World’s largest cruise line operator Carnival Corp. rallied 6.2 percent, to 1,668 pence, extending yesterday’s 7.2 percent advance after reported second-quarter profit that beat analysts’ estimates…”

Carphone Warehouse Group Plc Europe’s largest mobile-phone and laptop retailer had their shares increase in value by 6 percent, to 162.5 pence after RBS upgraded them from “hold” to “buy” and raised its share price estimation to 230 pence.

Overall, the FTSE 100 rose as the weekend loomed, climbing 65.07 points to finish on 4,345.93. On Friday the FTSE 250 made a bit of a recovery after a few days of losses up 92.67 points to close on 7,334.34.

Sterling held its ground against the dollar, while slipping slightly against the other major currencies

Pound/US dollar 1.6494
Pound/Euro 1.1832
Pound/Japanese Yen 158.8075
Pound/Swiss Franc 1.7833

As Wall Street closed on Friday, the Dow Jones was down just 15.87 points on 8539.73, while the NASDAQ climbed 19.75 points to close on 1827.42

Steve Jobs iconic CEO of Apple boss announced that he had been the recipient of a liver transplant about two months ago and is expected to return to work later this month.
Jobs would be returning to his job on schedule, but may initially work part-time, after winding down his normal management role more than five months ago.

Oil prices continued above the $70-a-barrel mark all this week, helped by suggestions the Chinese economy was rebounding faster than expected.

Spot gold prices continued to drop, on Friday by 0.3 per cent to $935.20 a troy ounce as data showed US inflation being contained lessening the metal’s appeal as a hedge against inflation.

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Tags: Carphone Warehouse Group Plc, Economy, Financial News, General Motors, Hyundai Motor Company, Lord Mandelson, Retail, Royal Bank of Scotland, scrappage scheme, Setanta, Sir Fred Goodwin, Taylor Wimpey, The Berkeley Group

The Halifax Building Society, now part of the Lloyds Banking Group UK announced an increase of around 2.5% in house prices for despite the fact that purchasing activity still remains lower than expected.

However encouragement can be taken from the fact that property prices did increase for the first time in three months, and the increase, although minor, eases the annual rate of decline to 16.3%, with the average UK home now valued at around £160,000.

Also on the rise are demand for workers in the service sector according to figures released by the highly respected Chartered Institute of Purchasing and Supply’s (CIPS). Their survey revealed that the services industry sector has begun to employ more people for the first time since the spring of 2008.

The UK service industry is the largest employer in the country, with more than 60% of the country’s employees earning their living in the sector, which covers catering, entertainment, sports and leisure. Signs of increased activity in this sector are yet another sign that the UK citizen has more cash in his pocket to spend on entertainment, yet another indication that the recession is slowly easing.

The signs of revival are yet to make their way to the care industry where figures show that sales of new cars in May were down by close to 25% on the same month last year, despite the considerable efforts made by Business Secretary, Lord Mandelson to boost sales of new cars by offering subsidized trade ins. The figures, issued by the Society of Motor Manufacturers and Traders (SMMT), show that 134,858 new cars were registered in May.

On the Stock Exchange, partially state owned Royal Bank of Scotland (RBS), saw their shares recover by 3.3 percent to 37.3 pence after they had fallen by more than 10 percent over the previous two days. Shares in the U.K.’s second-largest real estate investment trust, British Land, also took a turn for the better, rising d 2.9 percent to 376 pence. Land Securities Group Plc, also jumped by 2.2 percent to close the day on 486.5 pence.

Food retailers seemed to be doing well, with Sainsbury, Britain’s third-largest supermarket company climbing by 2.3 percent to 323.75 pence, while William Morrison Supermarkets Plc also climbed a more modest 1.2 percent to reach 250.5 pence, on the announcement of .first-quarter sales growth that exceeded expectations.

On expectations that the global economy will be able to absorb increases in the price of crude oil, Shell, Europe’s largest oil company, saw their shares rise by 0.7 percent to 1,674 pence. BP Plc also climbed 1.4 percent to 525.75 pence The FTSE 100 Index added 23.77 to close on 4,407.19 while the FTSE 250 closed on 7,660.07 down 8.12 points from Thursday.

With the current political uncertainty surrounding Gordon Brown playing no little part, the pound’s revival drew to a minor halt yesterday.
Pound/US dollar 1.6112
Pound/Euro 1.1373
Pound/Japanese Yen 156.4584
Pound/Swiss Franc 1.7313

In the US retails sales showed a major downturn as the public seem to be making a major effort to cut spending despite the many attractive offers around.
Unfettered by political scandals and instead bolstered by President Obama’s impressive speech in Cairo, the Dow Jones returned to moving upwards, 74.96 points to 8750.24, while the Nasdaq followed suit up 24.1 points to close on 1850.02

Unemployment in Western Europe (the Eurozone) has reached its highest level for ten years. Taking into account seasonal adjustments, unemployment in the 16 country region rose to 9.2 percent in April, and an increase from 8.9 percent of the total labour force in March 2008.

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Tags: British Economy, Financial News, FTSE, Halifax, Halifax International, Lloyds Banking Group, Lord Mandelson, Royal Bank of Scotland, Shell

If there are lessons to be learned from the current financial shambles that the UK finds itself in, there are many. And one of them has to be for the UK to become considerably less dependent on its financial services sector as source for jobs and profits, and to look again at the country’s magnificent tradition and history as a manufacturing nation. Something that propelled the British Isles to the forefront of the developing world way back in the nineteenth and twentieth century, long before global booms and burst had been thought of.

The UK financial sector has lost so much of its credibility in the recent past, and there are serious doubts that it will gain its strength and standing for years if not decades to come. And there are those who say that it is not a bad thing.

And they are coming in with some reasonable alternatives, by saying that as the financial downturn seems to be bottoming out, the economy should be rethought and rebuilt around the values and activities of our forefathers, who built the UKs global reputation for producing first class products and service.
Many of Britain’s leading industrialists have been critical in the past of the Treasury’s almost obsessive support of the money markets and those who operate and often manipulate them, without providing strong enough support for the manufacturing industries, both financially and morally.

Their hope is that instead of shoring up the banks, they will also release some of the taxpayer’s money at their disposal to reconstitute and revitalise certain industries, especially those situated in the periphery of the country, where unemployment rates are climbing daily and the people are not afraid to work hard and even get their hands dirty.

Lord Mandelson the Business Secretary seems to be heading towards this school of thought having stated recently that “Britain needs to move towards less financial engineering and more real engineering”

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Tags: British Economy, Financial News, Lord Mandelson, Recession, UK Banks, UK Recession

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The FTSE took a bit of a beating yesterday closing with around 5% losses. The main area of doubt amongst investors appeared to be small to medium sized public companies. Lord Mandelson’ announcement of improved guarantees and easier access to credit appears not to have revitalised these companies as much as had been hoped.

Brokers continued to warn that it appeared to be difficult to predict how severe the current financial slump actually was and how long it would last, even optimists are being heard to say, “two to three years”.

The day’s trading saw the FTSE 100 fall 218. 51 points to 4,180.64, with sellers outnumbering buyers, particularly in the banking sector, and for the second day in a row. Also down was the FTSE 250 at 6363.59 a fall of 183.7 points.

Among the ailing bankers , HSBC was still falling fast yesterday, losing around eight per cent, (51.25p to 588.75p). This fall may have been caused by Morgan Stanley’s prediction that the group would be looking for a further injection of capital. Possibly as much as £20bn

The banking sector in its entirety was in a depressed state, with The Royal Bank of Scotland shares losing 18.4 per cent of their value, ( 9.4p, to 41.7p). Barclay’s shares were down 14.4 per cent, (23.8p, at 142.1p.)

Reasons to be optimistic were few and far between, with only four stocks showing any gains on the FTSE 100. The star of the show was Amec, gaining 6.4 per cent, (34.5p, to 572p) on the back of a positive trading statement for the last quarter.

On the other side of the “big pond” Wall Street is currently going through its worst week of trading since November, with the Dow Jones falling 4.8 and the Nasdaq losing 3.7 percent.

Two industry standards, chip maker Intel Corp. and Wal-Mart Stores Inc. are showing little optimism, and it was difficult to find a smiling face around.

Another reason for faltering stocks were the Labor Department’s employment report showing that unemployment rate jumped to 7.2 percent from 6.8 percent in November, with economist predicting a 7 percent rise.

Investors are waiting for the release of the “beige book” report, to be released early today to gather a picture of company strengths and weaknesses in each part of the country to try and pick out some companies to take a chance on.

In the currency front, the dollar continues to rise against other major currencies. Sterling values were:

pound/US dollar 1.45
pound/Euro 1.10
pound/Japanese Yen 1.29

Gold prices fell as well as light, sweet crude oil, reaching as low as$38.51 in electronic premarket trading on the New York Mercantile Exchange.

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Tags: Banking, Finance, FTSE, Global Credit Crisis, Lord Mandelson, Money Markets, Recession, Stock Markets, Stocks and shares