It came as no big surprise to anybody when the Bank of England (BOE) announced that they will be holding interest rates at their record low of 0.5%, and for the twelfth consecutive month.

The BOE’s decision gained a consensus of approval by UK economists, who pronounced, individually and collectively that rises in the cost of borrowing could set the UK’s fragile economic recovery back into the red.

The announcement that the bank will be standing firm on the amount of money that will be pumped into quantitative easing program (QE) programme was also met with a similar apathy.

BOE governor Mervyn King has long since made clear his opinion on increasing interest rates raising QE quotas, and all the rest of the UK’s financial programs by simply stating that that it was “far too soon” to make any changes to the status quo.

Sterling has now dropped in value for six consecutive trading days, with the bulk of opinion on the Pound’s increasingly weak position being because of speculation that the forthcoming general election is liable to see a hung parliament which translates to a government that will be too weak to mend the UK’s financial problems. Since the beginning of 2010, the pound has dropped by seven percent against the dollar, reaching a ten month low of $1.4783 on March the 2nd. The pound closed on Thursday on $1.5051 while the Euro was stabilising at 1.1078.

Financial Service Institute (FSA) chairman Lord Turner has voiced his opinion that that the size of banks was also not the main reason behind the economic turmoil, and even some of the UK’s smaller financial institutions could have been pronounced equally guilty of “over-exuberant lending” and taking “risky short-term wholesale deposits, Turner explained “Everyone was seduced by the long boom and were often led astray in the past by complicated mathematical rules. The Bank’s regulators were the ones who failed to notice the inherent weakness in that position.”

The FSA chairman also went on to explain that when the time comes to add up the cost of bailing out the financial services industry at the height of the global financial crisis may in the end turn out to be a lot less than first predicted.

“It is quite possible that the total overt costs of the UK’s big bank rescues may not exceed five-ten per cent of GDP," Turner predicted in a recent interview "and perhaps considerably less as indeed was the case in the Swedish banking crisis of the 1990s.” He summed up.

Recent research is pointing to a situation that increasingly adds weight to the theory that the UK’s property rental sector is heading towards a similar model of the mainland European countries of increasingly longer tenancy agreements.

According to one of the UKs largest letting agencies, during the last year and a half, a fairly dramatic increase in demand for rented accommodation has been observed, with potential tenants being especially interested in properties with long term tenure periods.

Reasons given for this new phenomena in property rental appears to be largely causes by increasing difficulties of young families to raise the new and higher deposit levels required to be granted a mortgage, while around a third confessed that they were unsure that the conditions were ripe to put their toe in the still turbulent waters of the UK property market. With almost 40 percent of potential first-time home buyers opting to remain tenants in the meantime, because of the current tough mortgage-lending criteria and 14% of those questioned said they preferred life as a tenant to that of a homeowner.

Home ownership in the UK has fallen by three percent since 2003 with the trend likely to continue. Several of the UK’s leading property management companies now believe that the UK Government now needs to ensure that renting a home offers the stability levels that are currently only afforded to home owners.

British Airways, once again under strike threat have dug in by saying that more than one thousand of the staff have volunteered to work as cabin crew if indeed the threatened strike goes ahead.

As a further back up, BA announced that they also intended to hire no less than 23 fully crewed planes from a leading European owned charter company. The company’s role will be to help run flights from Heathrow Airport should the strike threats eventually materialise.

The Society of Motor Manufacturers and Traders (SMMT) recently announced that new car sales in the UK increased by 26.4% in February compared with the same month in 2009, with the main push in demand coming because of the Government’s scrappage scheme.

Launched in May of last year in an effort to boost the ailing car industry, the £400 million initiative, which allowed owners of cars at least 10 years old would be offered a £2,000 discount off the price of a new vehicle, with half of the grant being provided by the UK Government and the other £1,000 coming from the lucky carmaker. Figures from the SMMT show that almost 20 percent of new car sales in February came a result of the scheme, which is due to be wound up by the end of March.

On the stock market, Barclays Plc’s Asian partner, the China Development Bank announced that they will be reviewing their “ties” with the bank, U.K.’s second-biggest. The announcement caused shares in Barclays to rise one percent, to 333.1 pence.

The U.K.’s third-largest supermarket owner J Sainsbury Plc has announced plans to expand their activities into non-food products. They will be marketing electronics, entertainment and sports equipment among others through their Web site. Despite the excitement, Sainsbury shares 0.2 percent, to close on 335.4 pence.

Michael Page International Plc, the U.K.’s second- largest recruitment company announced a drop in full-year pretax profit of no less than 85 percent to £21.1 million pounds. Despite the reversal, their shares climbed 6 1.7 percent, to close on 395 pence.

The benchmark FTSE 100 Index fell 0.1 percent, to close on Thursday at 5,527.16.

On Wall Street, for the Dow Jones Industrial Average the only way was up, this time rising 47.38 points to close on 10,444.14. The NASDAQ Composite also held its own, rising 11 points to close on 2,292.31.

financial

• Are 50% Discounts Becoming Common In Florida? Looks like the housing market is bad in more than...
• Gators' Winning Streak Ends with a 32-13 Alabama Victory With Alabama and Florida both 12-0 for the season, both...
• Incline Village - Mountain Golf Course   Incline Village - Mountain Golf Course   Phone: (775)...

Tags: Bank of England, Barclays, BOE, British airways, Dow Jones, Financial Service Institute, FTSE, general election, Heathrow Airport, Interest Rates, Lord Turner, Mervyn King, Michael Page International Plc, NASDAQ, quantitative easing, Sainsbury, SMMT, Society of Motor Manufacturers and Traders, UK government, Wall Street

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

financial

• Brickyard Cove Marina Brickyard Cove Marina is located in Point Richmond, CA Phone:...
• AARP Wants to Give Everyone a Life Tune-up You have to give the AARP credit. It is first...
• New Loan Funded — Relocating, Need Quick Cash to Payoff Home Equity Loan — $25,000 at 22% — C Credit — DTI 28% A new loan funded (Relocating, Need Quick Cash to Payoff...

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

Prime Minister Gordon Brown has given his tacit approval without officially endorsing Lord Turner, chairman of the Financial Services Authority recent statements that the banking sector was "bloated and needs to be cut down to size." Brown, in a recent interview, did however pledge to take tough action to clamp down on excessive remuneration for bankers.

The prime minister explained that his policy for the future would be that remuneration and especially bonuses should be based on long term profits success not short-term speculative gains. Also those banks should have the framework installed that would allow them to recover bankers’ bonuses if performance and profits suffered in later years. He also suggested that regulators should be able to impose higher capital requirements on financial institutions.

U.K. Chancellor of the Exchequer Alistair Darling has strongly suggested to his counterparts in European governments to grant the International Monetary Fund (IMF) an increase in the funding previously pledged in order to provide increased support for the countries that have been hardest hit by the global financial crisis.

Four days before Darling is due to host a meeting in London for the Group of 20 financial ministers, Darling urged the 27 European Union nations to provide the IMF with $75 billion on top of the $100 billion previously committed.

Workers employed by the UK branch of Fujitsu Ltd. have decided to take strike action to oppose proposals made by the company to place a final-salary pension plan in mothballs as well as freeze pay, according to Unite trade union official representing the employees.

A spokesperson for Unite revealed that 87 percent of their members at the company voted for strike action, while 96 percent were also prepared to consider a less severe form of industrial action.

Fujitsu, Japan’s largest computer-services provider, employing 12,500 people in the UK, announced plans to cut as many as 1,200 jobs in the U.K. because of “lower than anticipated revenues

There was no action on the FTSE yesterday, due to the August bank holiday

Sterling made a minor recovery against the dollar, but continued to struggle against the Euro

• Pound/US dollar 1.628
• Pound/Euro 1.1351
• Pound/Japanese Yen 151.6273
• Pound/Swiss Franc 1.7232

On Wall Street, markets struggled largely due to uncertainty in the Chinese stock market, that fell by 5% on the day.. The Dow Jones Industrial Average fell 47.92 to close on 9496.28 while the NASDAQ Composite index dropped 19.71 points to close on 2,009.06

Entertainment giant Walt Disney announced that that they are to take over Marvel Entertainment and with it some of 5,000 Marvel characters, including Spider-Man and the X-Men.

In a shares and cash deal valued at £2.5 billion, Marvel shareholders will get $30 per share in cash plus 0.745 Disney shares for every Marvel share owned.

The boards of Disney and Marvel have both approved the deal, which now needs the backing of Marvel shareholders and competition authorities.

The annual rate of inflation for August in the Eurozone registered negative for the third consecutive month.

Prices in the 16-nation bloc have fallen by 0.2% in the past year, according to statistic issued by Eurostat , exacerbated by a record 0.7% fall in July.

Inflation in the eurozone has been dragged down by lower energy and food prices and by falling demand from both companies and households.

The Indian economy has grown by a remarkable 6.1% in the second three months of 2009, in comparison with the same period of last year, results that were marginally higher than predicted.

Although growth has slowed from last year, India’s economy is still expanding faster than most other countries.

• Are You Saving Money Just to Save, Or Saving With Purpose? Earlier this week I walked into our HR office and...
• Top Travel Places to Go in 2010 reprinted from New York Times 2. Patagonia Wine Country Ten...
• The Money Genie Grants 3 Wishes Last week, Adam of Your Money Relationship posted "Money Genie:...

Tags: Alistair Darling, Banking, British Economy, British Pound, Dow Jones, Economy, Eurozone, Financial News, Financial Services Authority, FTSE, Fujitsu, Gordon Brown, IMF, International Monetary Fund, Lord Turner, Marvel Entertainment, Money Markets, NASDAQ, Recession, Spider-Man, UK government, Wall Street, Walt Disney, X-Men

Chairman of the Financial Services Authority (FSA) Lord Turner revealed during a recent interview that in order to prevent excessive bonus payments he consider imposing a tax on banks.

The FSA chairman also stated that the financial services sector had "grown beyond a socially reasonable size". Lord Turner did hasten to add however that it was not the role of the FSA to set out any new government policy and that taxation was a matter for the Treasury.

In the past, the FSA have been the subject of criticism regarding their regulations on bonuses. Lord Turner is apparently concerned about the return to “business as usual” syndrome in the banking sector, suggesting that new taxes may be necessary to curb excessive profits and pay in the financial sector.

Meanwhile, newly recruited bankers at the Royal Bank of Scotland are liable to be feeling the pinch when pension time comes around. They are set to become the guinea pigs of a pension’s cutbacks scheme proposed by the U.K. bank. The scheme will be based on a lower-bonus, higher-base-salary recruitment environment in the City of London.

According to a recent poll, UK business leaders are more upbeat about the prospects of economic recovery than at any time since the recession began,

the survey of leading businessmen found that 38% see signs of recovery in their sector, up from 33% last month and the highest figure since the "green shoots" index was launched.

The bad news for hard pressed PM Gordon Brown was that the survey found only 18% of business leaders are confident in his ability, while 19% were impressed by Chancellor Alistair Darling’s efforts to date. Tory leader David Cameron got the thumbs up from 53% of the participants with shadow chancellor George Osborne polling 41%.

A group of distressed debt investors, which bought debt claims against the Yorkshire power station, have exercised an option to take control of one of Britain’s biggest coal-fired plants, at Eggborough, one of EDF Energy’s power stations which could eventually be sold on for up to £1 billion.

Japanese computer maker Fujitsu Ltd. said Wednesday it plans to axe 1,200 jobs in its British IT services unit because of lower than expected revenues.

Fujitsu, who employs around 12,500 workers in the UK, explained that the cuts were necessary to ensure the company remained competitive during the current downturn.

Following the 2005 restructuring of British Energy, creditors have the right to take ownership of the plant in March 2010 with the option only being exercisable till the end of this month.

Shares in the world’s largest advertising company WPP Plc fell 1.4 percent, to 512.5 pence after the company reported a 48 percent drop in first-half profit to £108.4 million blaming the pounds rise against the dollar and increased finance costs.

The FTSE 100 moved lower on Thursday following a weaker opening on Wall Street, falling 21.23 points to finish the day on 4,869.35, while the FTSE 250 continued to reverse, dropping a further 81.88 points to close on 8,701.33

As short-term UK government bond yields fell to record lows, Sterling dropped to a six-week low against the dollar and a 10-week low against the Euro.

• Pound/US dollar 1.6239
• Pound/Euro 1.1351
• Pound/Japanese Yen 151.8974
• Pound/Swiss Franc 1.7173

On Wall Street, markets continued to drift, with the Dow Jones Industrial Average closing up 23.5 points while the NASDAQ lost 3.55 points to close on 2,020.88.

Angela Merkel, German chancellor, has thrown her considerable (political) weight behind calls from French president Nicolas Sarkozy for tougher international curbs on bankers’ bonuses, in anticipation of next month’s G20 summit to be held in Pittsburgh, USA.

Ms Merkel, who said large bonuses encouraged excessive risk-taking, will meet Mr. Sarkozy to discuss the French plans, which Mr. Sarkozy presented to bankers on Tuesday. Plans that include deferring at least half of a year’s bonus and paying it over the three subsequent years, subject to performance criteria

• Europe Issues New Bank Guidelines - BusinessWeek Europe Issues New Bank Guidelines zyakaira notes: These common rules...
• FT.com / Companies / Banks - AmexCo converts to bank holding company AmexCo converts to bank holding company By Francesco Guerrera in...
• The Amateur Financier Millionaire To-Do List I want to be a millionaire.  That probably strikes you...

Tags: Alistair Darling, Banking, British Economy, British Energy, Currency, David Cameron, Economy, Employment, Financial News, Financial Services Authority, FSA, FTSE, Fujitsu, George Osborne, Gordon Brown, Lord Turner, Money Markets, NASDAQ, Nicolas Sarkozy, Recession, Royal Bank of Scotland, Stock Markets, UK Banks, UK business, UK Economy, UK Recession, Wall Street