According to a recent statement from the Office for National Statistics, the state of public finances in the UK, are even worse than that of Greece. The latest figures on government borrowing show that in January there was a net shortfall of £4.3 billion, which is much higher than even the most pessimistic of forecasts. January is traditionally the month where a healthy balance of payments is the norm. If the trend continues, the UK will be looking at a deficit of £180 billion for 2010, equivalent to 12.8 per cent of GDP, which will even beat Greece into second place in the "whose going skint fastest" race.

The reasons given for the UK’s poor performance included considerably reduced earnings in the financial sector as well as general weaknesses in the economy. These factors combined to push cash receipts down by 9 per cent overall compared with last year tax, while public spending was up by 15 per cent up in January, driven higher by the rise in unemployment benefits.

The only positive piece of news coming out of the report was that the total national debt carried by Britain remains lower than Greece as well as the fellow financially challenged European countries, Portugal, Italy, Ireland, and Spain.

HSBC have announced a 24 per cent fall in profits for 2009. Their profits fell to £4.65 billion ($7.1 billion) with the main factor being increased loan impairment charges, which largely cancelled out the bank’s strong investment banking performance. Undeterred, HSBC have announced that they would be paying out a total of £4.6 billion in pay and bonuses to staff at their profit earning investment banking division. HSBC shares fell almost 6 per cent to 679 pence on the news.

After months of speculation, retailer to the upper echelons Liberty, have finally confirmed their plans for the sale and leaseback of their landmark mock-Tudor flagship store situated on Great Marlborough Street in London’s West End. The company, which was founded in 1876, and are partially owned by the MWB Group, announced that they had issued instructions to put the building up for sale, and it is expected to fetch around £40 million. A few of the London based property owners are believed to be interested in acquiring the property for lease back to Liberty, but are likely to face strong competition from overseas. A spokesman for Liberty announced that that turnover for the store in 2009 had jumped by 16 per cent.

Despite winning the Carling Cup Final at the weekend, all is not well at Manchester United, but not on the playing field, instead in the boardroom.

The problem is that United, owned by the Glazer family, are running a very high level of debt, some £716.5 million, a fact that has caused much discomfort and loads of speculation among their huge band of supporters. So much so that a group of city financiers, under the title the "Red Knights" have met to discuss the feasibility of setting up what will be a possible hostile takeover of the club. An immediate response from the Glazers was that Manchester United is not for sale."

However, it may not be that easy, as United’s owners are facing a two-pronged attack over their control of the club with the Manchester United Supporters’ Trust (Must) running a campaign to bring about a change of ownership, which might even involve fans boycotting the clubs matches, and with a 76,000 seater stadium to fill, that may well be too bitter a pill for the Glazers to absorb.

The fact that the British general election appears to be getting closer and is now expected in May is having a very negative effect on Sterling. The currency took another pounding on foreign exchange markets, with the possibility that the election may bring of a hung parliament looking an increasing possibility. The uncertainty has caused the pound to drop nearly four cents, reaching a low of $1.4984 at one point before rallying to close $1.5056. The pound also closed at 1.1044 against the Euro.

On the FTSE 100 supermarket chain Tesco were among the FTSE 100’s top performers as America’s second-richest man Warren Buffett raised his stake in the company. Share values rose by 3.2 per cent to 433 pence, after Mr Buffett announced to his Berkshire Hathaway shareholders that their holding had increased to 3 per cent. Berkshire Hathaway has been gradually raising their stockholding in Tesco since 2006 when the retailer announced their plans to enter the US market. Since making their first stock purchase, the American conglomerate is believed to have become Tesco’s sixth largest shareholder.

As the markets closed for the day, the FTSE 100 was up 134 points to 5,484.06.

According to Lawrence Summers, head of the White House National Economic Council, the impact of Barack Obama’s $800 billion fiscal stimulus is yet to be fully felt, and its impact will increasingly be sensed over the coming months. Summers has praised the fiscal stimulus as being an enormous achievement and the many projects that the stimulus funded throughout the country are running exactly as planned.

On Wall Street, the Dow Jones Industrial Average continued to creep upwards. It rose 80 points to close on 10,405.98 while the NASDAQ Composite jumped by 42 points to close on 2,280.79.

According to date from the Bureau for Economic Policy Analysis (BEPA), global trade in goods has continued its rapid recovery from its huge fall in 2009, when the recession was at its peak. Data from BEPA also indicate that the world trading system suffered very little permanent damage to global trade has been done to by the financial crisis. The bureau’s composite index reported that the volume of goods trade worldwide rose at 4.8 per cent in December, making for the most rapid monthly increase in December for any year in its 19-year history, with three monthly index, traditionally less volatile, also rising by a record rate in the fourth quarter of last year, finishing six percent higher than third quarter.

On the other side of the World, things are looking better. So much better that for the fourth time since October, Australia’s central bank has seen fit to raise their interest rates, as it seeks to cool its growing economy.

The increase, from 3.75%, to 4% was widely expected by economists.

Australia was not only the only major economy to avoid recession, but also the first to raise interest rates from half century lows as the economic crisis eased. Australia’s ability to avoid the worst of the global turndown was partially attributed to increased demand for its commodities from China.

However Australia’s boom times may be slowing down with the news that China’s manufacturing activity shrunk a little in February. However economists rushed to point out that while China’s recovery faced some flat periods, it was expected that industrial activity would continue to grow in the coming months.

After the massive earthquake that struck Chile, copper prices jumped more than five per cent on early trading on Monday. Chile is the world’s largest producer of the red metal, and the earthquake has severely disrupted mining operations in the country, consequently triggering a spree of panic buying in the major commodity centres.

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Tags: Bank, Banking, Barack Obama, British Economy, British Pound, Bureau for Economic Policy Analysis, Carling Cup Final, Credit Crunch, Dow Jones, Economics, Economy, Financial News, FTSE, Glazer family, HSBC, Lawrence Summers, Manchester United, Money, Money Management, Money Markets, MWB Group, NASDAQ, Office for National Statistics, Stocks and shares, Tesco, UK Economy, UK government, UK Recession, Wall Street, Warren Buffett, White House National Economic Council

That would make for very good news if only the Royal Bank of Scotland (RBS) hadn’t succeeded in making a loss of £24.3 billion shortfall in 2008. For 2009 RBS has announced losses for 2009 of just £3.6 billion after losing their struggle to recover billions of pounds of bad loans. Considering that city analysts had expected losses of around five billion, this is not a bad result for the bank whose Chief executive Stephen Hester said had "exceeded all the principal milestones" set for the first year of their turnaround plan.

Hester went on to add that t the group’s core business saw profits rise from £4.4 billion in 2008 to £8.3 billion last year, while bad debt increased to £13.9 billion from £7.7 billion in 2008. On an optimistic note, RBS announced positive signs of a peaking in the number of "toxic loans" being held by the bank, with the fourth quarter looking better for corporate clients.

Hester also revealed that in discussions with the Government about altering its lending commitments to "reflect the economic circumstances" over the next year, that they were very open to increasing its lending levels to

customers. However, strained economic environment still remained a factor that had caused many of the bank’s customers to reduce their borrowings.

As part of its bailout terms, the firm agreed to make an extra £25 billion available to customers in loans with £9 billion being allocated for mortgages and the remaining £16 billion for business lending.

Mr Hester summed up by saying that 2009 was "a year of substantial progress" for the bank.

On the controversial subject of bonuses, Hester requested that RBS should not be singled out and that the financial community as well as the UK public should recognise that that important staff would leave if pay was not competitive. Alistair Darling obviously agrees, because he has cleared the payment of £1.32 billion in bonuses to staff at the bank.

The announcement came just a few days after Stephen Hester opted not to take his £1.6 million bonus, with the CEO apparently still waiting to see if any of his colleagues at the bank will follow suit.

Also subject to change will be Northern Rock’s 100% savings deposit guarantee that is now to be lifted on the 24th May.

From that date, the UK government has decided that their deposits guarantee will no longer apply. The day has obviously been timed to specifically allow, savers exactly 12 weeks to decide what to do about any money that they have on deposit with the north east based building society, As was the case before the Rock began to crumble, savers who still have deposits worth up to £50,000 will be covered by the Financial Services Compensation Scheme. However those holding larger amounts will no longer enjoy the government’s protection. .

The decision may have come as result of complaints by other banks and building societies that the 100% guarantee has given an unfair advantage to the bank, with an increasing large number of deposit holders happy to deposit large amounts there, despite lower interest rates due to the 100% protection.

Leaders of the leading British unions have described a “still fragile” the labour market , despite the fact that recently released figures showed that unemployment surprisingly fell by 7,000 in the quarter to November 2009 to just below 2.5 million. Correspondingly e the number of people claiming jobseeker’s allowance was also around 15,000 lower in December at 1.6 million. However, the union leaders claim, thousands of job losses have only been announced in recent weeks, raising fears that unemployment will start to climb in the flat period that typically occurs in the run-up to a general election.

The TUC said it will be looking for a number of key signs in today’s figures, including a fall of more than 30,000 in unemployment and a reduction in the number of “involuntary” temporary workers. According to the TUC, the number of people taking temporary or part-time jobs because they can’t find permanent work has risen considerably. .

Operating profits at British Gas soared by 58% last year to £595 million, compared with £379 million in 2008. Its parent company Centrica said the figures beat the previous high of £573 million in 2007.

British Gas announced earlier this month it was reducing its gas prices by seven percent.

The U.K.’s second- largest department-store retailer Debenhams Plc, who recently acquired the Denmark based Magasin du Nord retail chain, are considering acquiring similar companies in the future. A spokesman for Debenhams stated that the company would like to become less reliant on the difficult home market. According to the British Retail Consortium Retail sales in the UK rose at the slowest pace in 15 years last month with London-based Debenhams, who operate 142 stores in the UK, obviously feeling the pinch. Until January’s acquisition of the six-store chain for £12.3 million pounds Debenhams’s overseas presence had been restricted to 11 stores in neighboring Ireland and about 50 franchised outlets.

On the foreign exchanges, the pound continued to fall, reaching $1.5266, whilst reaching .1245 against the Euro.

U.K. stocks dropped after a report showed confidence among U.S. consumers fell in February to the lowest level since April 2009. In London, the FTSE 100 dropped 64.69 points to close on 5278.83.

Overall, the FTSE 100 has gained around five percent since early February. as U.K. companies continue to confound the experts and expectations grow that the strengthening global economic recovery will signal further economic growth.

Confidence among U.S. consumers fell more than anticipated in February to the lowest level since April 2009 as the outlook for jobs diminished, a report showed today.

Federal Reserve chairman Ben Bernanke said there was a "nascent economic recovery" in a testimony before Congress.

US stocks jumped more than 1%, led by banks, as some had feared that the cost of borrowing would start rising soon.

Although the US economy is growing, some worries remain about its strength because unemployment remains high, meaning that the "Fed "has begun to gradually undo some of the emergency measures that they had implemented during the financial crisis.

The Dow Jones Industrial Average rose 47 points to close on 10,321.03 while the NASDAQ Composite also recovered by 25 points to close on 2,234.22

Ben Bernanke is taking a very close look at the role of Wall Street firms in helping Greece to cover up the extent of their financial troubles, with Goldman Sachs apparently under closer scrutiny than most.

Bernanke hinted that both the Fed and the US financial watchdog were "looking into a number of questions" related to banks’ arrangements with Greece, whilst stopping short on the question of whether an official inquiry was under way

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Tags: Alistair Darling, Bank, Banking, Ben Bernanke, British Economy, British Gas, British Pound, Centrica, Currency, Debenhams Plc, Dow Jones, Economics, Economy, Employment, Financial News, Financial Services Compensation Scheme, FTSE, Goldman Sachs, jobseeker’s allowance, Magasin du Nord, Money, Money Markets, NASDAQ, Northern Rock, RBS, Recession, Retail, Stephen Hester, Stock Markets, Stocks and shares, TUC, UK Banks, UK Economy, UK government, UK Recession, US economy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A recent report from the Chartered Institute of Personnel and Development (CIPD) has stated that the expected substantial cuts in the public sector, will mean that around one in three of the employers in the sector plan to shed jobs during the first quarter of 2010, which is now halfway through.

Despite the UK emerging from recession, CIPD’s latest quarterly survey found that the jobs outlook had worsened. UK unemployment currently stands at 2.46 million, with the number of people out of work steadily rising since the summer of 2008, despite a surprise fall in the three months to November.

British investors concerned about the outlook for UK inflation, consumer spending and the public finances following the recession, received some news that their fears would be confirmed. Inflation spiked up to a 14-month high of 3.5% in January, data released by the Office for National Statistics confirmed, as effects of the VAT hike and a number of other one-off factors such as the sharply falling oil and food prices of a year ago began to take their toll. The Bank of England’s forecasts suggest inflation should fall below the 2 per cent target in 2011 even though its latest analysis concedes that inflationary pressures are currently stronger than anticipated.

Taxpayers could be forced to wait five years before they start recouping the tens of billions of pounds spent propping up the banks.

UK Financial Investments, which oversees the Government’s stake in RBS, Lloyds and Northern Rock, fears it will be 2015 before it can sell off the shares.

It had hoped to start off-loading sooner after the bailout led by Chancellor Alistair Darling, but now believes that may not be possible without big losses. Officials, who have been careful not to give a timetable that could drive down share prices, are working on the basis of five years, while the Treasury fear that they may be forced to retain their minority stake for much longer.

According to a survey held by the Institute of Directors, sixty percent of UK companies who applied for a bank loan in 2009 ended up getting turned down. This sad and ridiculous situation has even led to company owners and directors being reduced to borrowing on their credit cards. Results of the Institute of Directors’ survey shows that the banks are simply not listening to Gordon Brown and Chancellor Alistair Darling orders to start lending again as payback for pumping £850 billion into the economy.

Even more of a cause for concern is that the report shows that 83% of businesses who were rejected for bank finance are also not receiving any information about alternative finance that may be available to them, including the Government’s Enterprise Finance Guarantee.

The report shows that increasingly more businesses, and especially the smaller ones, are turning to forms of expensive unsecured finance, such as credit cards, to get them through their short-term cash-flow problems. Particularly hard hit by the loan famine are small to medium sized UK companies whose desire to expand will be critical to creating jobs and dragging Britain out of recession.

On the same tack, credit card interest rates in the UK have climbed to their highest level since 1998. Millions now find themselves facing crippling repayments on their debts, despite the historically low Bank of England base rates. Average credit card interest has now soared to a staggering 18.8%, leaving consumers facing the prospect of paying more than 40% on the cash they have borrowed, an increase of 25% in the last four years.

Barclays Bank has announced an increase in their full-year profits of 92% in 2009. There full year profits were an outstanding £11.6 billion ($18.2 billion), with the figure being largely boosted by the sale of its BGI fund management arm to US firm BlackRock last year. Without the input from the sale of BGI, Barclays would have made just £5.3 billion, with £2.5 billion of that coming from their investment banking division…

Barclays, who did not take any direct state help during the financial crisis, also saw the level of its total bonus payouts rise to £2.7 billion, with £1.5 billion of that to be paid out for 2009 and a further £1.2 billion to be paid out over the coming three years.

Virgin Media are believed to be in the final stages of an agreement over the sale of its television channels to rival BSkyB. , the channels that are entirely owned and produced by Virgin Media, Virgin 1, Bravo, Challenge and Living, are due to be sold to BSkyB. Rupert Murdoch’s News Corp has a 39.1 percent share in BSkyB.

Meanwhile, Cheltenham based fashion retailer Supergroup, have announced that they ate to launch a flotation designed to rise up to £125 million pounds. If successful, the valuation of the company is expected to be around £400 million, roughly nine times Supergroup’s forecasted 2011 earnings

The pound fell back against the dollar, closing at 1.5633 while also slumping to 1.1453 against the Euro.

Overall, the FTSE 100 was stronger at 5,244.06, a rise of 58 points, and its sixth rise in seven trading days

Foreign demand for US Treasury bonds and notes in December fell by $53 billion as China was seen to be reducing its holdings. China cut its holdings by $34.2 billion, will still remaining the second-biggest US debt holder after Japan.

On Wall Street the Dow Jones Industrial Average continues to climb up 169.67 points at 10268.81. The NASDAQ gained a further 30.66 points to close on 2,214.19

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Tags: Alistair Darling, Bank, Bank of England, Banking, Barclays, BGI, Bravo, British Economy, BskyB, Challenge, Chartered Institute of Personnel and Development, CIPD, Dow Jones, Economy, Enterprise Finance Guarantee, Financial News, FTSE, Institute of Directors, Living, Lloyds, Money, Money Markets, NASDAQ, Northern Rock, Office for National Statistics, RBS, Recession, Stock Markets, Stocks and shares, Supergroup, UK Banks, UK Economy, UK Financial Investments, UK government, UK Recession, Virgin 1, Virgin Media, Wall Street

According to a leading economist the UK should be classed with Greece and Spain, as countries carrying severe debt problems Not in agreement and understandably so are the UK Treasury sources who rebuked the suggestions that the UK was gradually becoming one of the poor relations of Europe by confirming that all of the three major credit-rating agencies had reaffirmed the UK’s triple A credit status.

Meanwhile Chancellor of the Exchequer Alistair Darling is the man faced with balancing the demands of investors and rating companies who fear that Britain’s top-level credit rating could be at risk, with the hopes of the UK public as well as some of his colleagues for an easing of taxation in the coming budget. Darling has already put the dampers on a lot of people’s hopes that this year’s budget will not be too populist, in a move to win votes for the general election that is due to follow a few months later

“People in the U.K. will want the budget to be realistic,” Darling was quoted as saying. “No one is looking for giveaways; that’s not the mood.” He summed up. Darling said voters realize the need to reduce Britain’s record budget deficit having already vowed to more than halve the £176 billion-pound deficit by 2014 starting next year.

Britain’s budget shortfall, which the Treasury estimates at about 12 percent of gross domestic product this year, is the biggest among the Group of 20 nations.

Dividends paid out shareholders by UK companies were honed back by to the tune of £10 billion in 2009, according to recent research.

Total dividends paid out by British listed companies amounted to £56.9 billion last year, down 15 per cent on 2008. The figures would have been considerably worse for investors if it not had been for the contribution of just five leading UK companies, with almost fifty percent of all dividends paid out coming from them. The e British business heroes were by BP, Shell, HSBC, Vodafone and GlaxoSmithKline. A sign of the shifting sands in the UK trading picture is that as recently as 2007, these companies accounted for 35 percent of the total dividend payout.

All the UK banks combined cut their dividends by half, adding up to around £6 billion less in dividends than in 2008. Performing particularly poorly was the high-street sector whose dividend payouts fell by 62 per cent.

At the recent meeting of the Group of Seven finance ministers’ tacit agreement was reached to draw up as set of common rules designed to force banks to pay for possible failures similar to the current one, which led to taxpayers being forced to take on trillions of dollars in liabilities.

The ministers said the world’s most advanced economies should adopt common rules as long as other major countries also agree. Apparently the G-7 is moving closer to an agreement on a bank insurance levy, one of a range of options proposed by the U.K. in November.

Already Sweden has taken the first step forward by creating a fund financed by their banks to help safeguard its financial system. In terms of the agreement, Swedish banks are required to make annual payments to the fund. The Swedish government injected 15 billion kronor (£1.2 billion) into the fund when it was set up, as well adding funds that had previously held in Sweden’s deposit guarantee fund.

According to government estimates, interest from the funds deposited by banks and on the money in the fund means it will swell to 150 billion kronor, or 2.5 percent of Sweden’s gross domestic product, by 2023.

U.K. stocks rose for first time in four days, led by a rebound in mining companies. The FTSE 100 Index increased 50.2 points to 5,111.84 at close of business in London.

The pound dropped to its lowest level in more than eight months against the dollar as growing concerns over the UK’s fiscal situation began to weigh on the currency. Sterling closed at 1.5701 and at 1.1388 against the Euro. The Euro has lost a lot of its attractions recently and was down to an eight-month low of 1.3583 against the dollar.

On Wall Street things were looking up. The Dow Jones Industrial Average finished up 74 points at 10058.64. The NASDAQ gained 15 points to close on 2,150.87.

Honda has added close to half a million cars to its existing global safety recall list. The problem this time is over airbag inflation problems mostly affecting cars sold in North America, with others Japan, Mexico, Taiwan and Australia due for recall. There was also further bad news for e Japanese carmakers Toyota after they were forced to recalled nearly half a million hybrid cars over faulty brakes, and millions of other models will need to be brought back to dealerships worldwide, suffering from accelerator and floor mat problems.

General Motors’ (GM) Opel unit has announced their plans to will invest 11 billion Euros (£9.7 billion) in introducing new product ranges over the next five years. Opel’s investment plan to breaking even within two years, a move that will entail cutting 8,300 jobs across Europe as well as the closure of at least one company plant in Antwerp, Belgium. Opel are trying to persuade

European governments to provide them with billions of Euros in loans to help the company’s plan to return to profitability.

India has announced that its economy is looking at growth levels by 7.2% in the year to the end of March. Government stimulus measures helped to maintain strong growth during the global downturn, but attention is now turning towards cooling rising prices, raising the chance that state support could soon be withdrawn. Many financial analysts also expect the government to raise interest rates earlier than expected. Strong growth in manufacturing in India is helping to compensate for falling agricultural output.

Oil prices rose and base metals moved higher as commodity markets managed a partial recovery after a sharp sell-off in the previous week US crude oil prices traded above the $71 a barrel.

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Tags: Alistair Darling, Bank, Banking, BP, British Economy, Credit Crunch, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, G-7, General Motors, GlaxoSmithKline, Honda, HSBC, Money, Money Markets, NASDAQ, Recession, Retail, Shell, Stock Markets, Toyota, UK Banks, UK Economy, UK government, UK Recession, UK treasury, Vodafone, Wall Street

As was generally expected, the Bank of England (BOE) monetary policy committee has announced that they will not be extending their quantitative easing programme, under which it has purchased just over £200 billion, mostly in government gilts. The decision came after that the UK economy posted slight growth for the fourth quarter of last year However the BOE did retain their right to resume purchases should circumstances warrant it. At the same meeting, BOE officials voted to continue holding interest rates at their current record lows.

The Institute for Fiscal Studies (IFS) has issued a statement expressing their conviction that government’s plans to cut Britain’s yawning budget deficit after that do not go far enough. Instead the IFS called for "more ambitious plans", suggesting that no less than £13 billion of extra cuts or tax hikes will need to be implemented by 2015 to stabilise the country’s finances. The IFS also called for an independent body to oversee official forecasts for the public finances

In addition, the IFS’s statement pointed out that the UK Government needed to aim for a tightening of around 5 per cent of national income, amounting to a ballpark figure of £70 billion over the five years to 2015, in order to stem up the hole in the country’s public finances. Chancellor of the Exchequer Alistair Darling, in his pre-Budget report, pointed to a fiscal tightening of £57 billion in for the same term, which according to the institute would be slightly more than four percent national income for the entire period.

The IFS report is only one of a few that Darling has had to contend with, all of them criticising his plans to address the public finances saying his plans do not go far enough and that his aim of halving the budget deficit as a proportion of national income by the 2013-14 financial year was unlikely to succeed.

According to a report from, the Nationwide Building Society, U.K. consumer confidence rose in January, on news that the economy has eventually emerged from its worst recession on record. The index of sentiment increased 3 points from the previous month to 73, almost double the level of 39 measured in the same month last year.

Meanwhile it appears that the Government faces a battle to pass its flagship digital economy bill before the forthcoming election, largely due to the surprise resignation of one of the ministers charged with pushing it through parliament. Aims to address the UK’s future infrastructure needs, with regards to the digital industry, the bill is scheduled to deal with some controversial measures, including anti-piracy policies and the introduction of a 50 pence-a-month broadband tax on every phone line

Toyota world’s biggest car maker, with around 1.6 million of its cars on UK roads, is to recall millions of cars around the world following an accelerator pedal problem affecting seven of its models. The company’s UK division will be making contact with more than 180,000 UK drivers warning them to arrange repairs after a potential problem with sticking or jamming accelerator pedals was identified, but it will be nearly a week before it can start repairs on cars with defective accelerator pedals

In the meantime, the company’s financial results for the three months to December 2009 show a huge swing back into profit. Toyota announced a net profit of 153 billion yen (£1.06 billion) making for an almost 100% reversal on the same period last year.

Toyota also confirmed that they expect to £1.23 billion in recall costs and lost sales, but said it still expected sales to increase to 7.18 million units in the current financial year.

Broadband provider Virgin Media have announced that their TV subscribers will now be able to access to a high definition (HD) channel from Eurosport, which will be the first of several new services that will be launched on its TV platform over the next few months.

Eurosport typically covers such events as the Tour de France, French Open tennis and the World Touring Car Championships. A spokesperson for Virgin Media was quoted as saying: "With HD ready TVs now common in UK homes, the combination of HD channels as well as our pioneering TV on-demand service gives Virgin TV customers a huge range of HD programming with the unique flexibility to enjoy HD content whenever they want, at the touch of a button."

On the FTSE, U.K. pub chain owner, and brewers of London Pride ale saw their shares rise 1.8 percent, to 537 pence in anticipation of the release of their latest trading statement. Also due to publish their recent earnings are the Vodafone Group Plc. the world’s largest mobile phone company. The news failed to spark too much excitement, and their stock fell 0.6 percent to 134.5 pence. In the same boat were the Yell Group Plc who publish of the U.K.’s yellow pages directory, who are about to publish a trading statement. Their shares dropped 0.5 percent to 36.8 pence.

The pound closed down at 1.5777 against the dollar, while the Euro the dollar was up a little at 1.1458

The FTSE 100 Index dropped 30.16 points to reach 5,253.15 at the close of trading on Thursday. The index has dropped 3.6 percent so far this year while still 49 percent higher than in March of 2009.

Troubled Asset Relief Program (Tarp) paymaster Kenneth Feinburg has called insurance giant AIG’s expected latest round of bonus payments "outrageous".

Feinburg’s comments came as reports say the insurance giant are to announce bonus payouts of around $100 million (£63 million) to its financial products division.

AIG was bailed out from bankruptcy thanks to $182.3 billion of US aid in 2008. Their staff has already been compelled to return $39 million of bonuses paid out last year, with Feinberg "insisting" that AIG workers repay a further $7 million of bonus payments.

Time Warner has announced a major leap in their fourth quarter profits, largely thanks to their two recent hit films Sherlock Holmes and The Hangover. This is the first profit that the company has reported since they

split from AOL in 2008. Net income for the leaner and meaner Time Warner was $627 million (£387 million), compared with a $16 billion loss for the last quarter of 2008, largely due to value write-downs for AOL as well as the company’s cable assets.

Even leaner and meaner AOL also reported fourth quarter results showing a reversal in fortunes from the year before.

Despite encouraging news from the retail sector, an unexpected rise in unemployment benefits claims for sent US stocks sharply lower in early trading on Thursday. On the news, the Dow Jones fell sharply by 192 points, to close on 10092.49, while the NASDAQ dropped 38 points, to finish on 2144.32

Oil prices CL-FT dropped by 5 per cent on Thursday’s trading , the steepest one-day drop since July, due to the fear that demand in debt-laden European economies is liable to fall as well as the rise in U.S. unemployment . U.S. crude for March delivery settled down $3.84 (U.S.) a barrel to $73.14, while London Brent fell $3.79 to $72.13 a barrel.

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Tags: Alastair Darling, AOL, Bank of England, Banking, British Economy, British Pound, Dow Jones, Economy, Eurosport, Financial News, FTSE, Institute for Fiscal Studies, London Pride, Money, Money Markets, NASDAQ, Nationwide Building Society, quantitative easing, Recession, Stock Markets, Stocks and shares, Toyota, UK Banks, UK Economy, UK government, UK Recession, Virgin Media, Vodafone

With an earlier than expected rise in inflation, which soared to 2.9% in December, interest rates could be rising sooner than expected in 2010.

The reading for the consumer prices index (CPI) came in well above the expected 2.4% figure making for the largest ever rise in inflation over a single month, according to figures issued by the Office for National Statistics (ONS) Reasons given were reduced s discounting from retailers in the run-up to Christmas and fuel prices remaining unchanged compared with sharp falls a year earlier.

The Bank of England had already expressed fears that inflation would rise this year, but this high figure will curtail the bank’s efforts to store up inflationary pressures while kick-starting the economy out of recession.

The Bank’s target for CPI inflation for 2010 is 2% and the jump to 2.9% puts its policymakers in a delicate position. While higher than expected inflation would force them to raise rates before the economy has properly recovered.

The head of the International Monetary Fund head has again warned that the global economy could yet experience another downturn, known in financial circles as a double dip recession.

Managing Director Dominique Strauss-Kahn said countries should rush to exit from stimulus packages that have bolstered growth through huge amounts of government spending and that it is too early for policy makers to withdraw stimulus that’s driving the global recovery.

“The global economy is recovering, even if its recovery is fragile,” Strauss-Kahn said in a recent speech. "While a plan to withdraw emergency measures “should be designed today” it should not yet be “implemented” because world economies are still dependent on government support and private demand remains weak" Strauss-Kahn has previously voiced his opinion that the world’s economic recovery is occurring “sooner and stronger” than anticipated. More than $2 trillion in government spending around the world has spurred growth, pulling economies out of a recession spurred by a meltdown in the U.S. housing market. Separately, Germany and France raised their growth forecasts for the year. Strauss-Kahn went on to add that China and Asian economies are leading the recovery.

British Airways cabin crew is to vote again on possible strike action, according to a recent announcement from the Unite union.

A spokesman for Unite predicted that a fresh ballot of its members would be held in the near future. The move came after recent talks with BA failed to find a resolution to a long-running dispute. BA announced in reply that they were "saddened but not surprised" by the decision, whilst promising to make every effort to allow talks to continue. If talks fail, a strike could begin as early as March if cabin crew vote in favour of industrial action.

BA had already planned a 12-day strike for Christmas last year which was blocked by a court injunction.

The long protracted takeover of Cadbury by US food company Kraft now appears to be going forward after the Cadbury board approved a new increased bid. Cadburys will now advise their shareholders to accept a new offer of 840 pence a share – valuing the company at £11.5 billion ($18.9 billion). Shareholders will also receive a dividend of 10 pence a share.

The additional cash represents a 90 per cent premium to the Cadbury share price before the deal was announced and a 50 per cent premium to Cadbury’s undisturbed share price of 568 pence before Kraft approached Cadbury in late August

Spokespersons from both Cadbury and Kraft jointly announced that details of the agreement were still being finalising and would make a statement later.

Many city pundits were surprised that the deal eventually went through so smoothly after months of animosity between the two companies.

It is expected that Kraft’s final offer consisting of 500 pence in cash, with the rest made of Kraft shares made the deal much sweeter for Cadbury shareholders. To finance the takeover Kraft will require borrowing around £7 billion ($11.5 billion)

Shares in Cadbury topped the FTSE 100 on Tuesday.

Sterling was among the few currencies to rise against the dollar and the Euro on Tuesday after UK inflation jumped in December, increasing the possibility of monetary tightening and increases in interest rates being brought forward. The pound closed at 1.636 against the dollar, with the Euro being traded at 1.1459

The FTSE 100 index rose 41.6 points to 5,496.9, while the FTSE 250 index added 33.4 points to 9,571.6.

In the US, Citigroup announced losses of $7.6 billion for the last quarter of 2009, large due to their efforts to repay US government bail-out funds, and coming after three consecutive profitable quarters. Citigroup’s ’s loss was in line with Wall Street analysts’ expectations and would amounted to a loss of $1.4 billion, had it not been for its repayment of the $20 billion in funds it received from the troubled asset relief programme. For the same period of a year ago, Citigroup reported a loss of $17.3 billion. In 2009 as a whole, Citigroup made a loss of $1.6 billion on $80.3 billion turnover.

The Dow Jones Industrial Average rose sharply on early trading after being closed on Monday for Martin Luther King Day. The index rose 115 points to close on 10,725.43. The NASDAQ Composite was also on the up, 32 points to 2320.4

Computer giant IBM has announced that after cost-cutting work helped to increase its earnings by 9% in the last three months of 2009.

They have raised their profit target for 2010. IBM made a net profit of $4.8 billion (£2.9 billion) for the fourth quarter, up from $4.4 billion from the same period in 2008, with turnover for the quarter increased by 1% to $27.2 billion

Crude prices fell to a three week low on Tuesday, with prices averaging around $77.00 a barrel. Traders pointed out the implications in the oil market of the bankruptcy of Japan Airlines, as the Tokyo-based carrier made extensive use of oil derivatives to hedge its cost and the bankruptcy is likely to force investment banks to unwind the hedges.

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Tags: Bank, Bank of England, Banking, British airways, British Economy, British Pound, Cadbury, Citigroup, consumer prices index, Crude oil, Currency, Dominique Strauss-Kahn, Dow Jones, Economics, Economy, Financial News, FTSE, IBM, Inflation, Interest Rates, International Monetary Fund, Japan Airlines, Kraft, Money, Money Management, Money Markets, NASDAQ, Office for National Statistics, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Unite, US Government

According to a recent survey conducted by the Confederation for British Industry (CBI), around a third of the UK financial services companies were said to be more optimistic about their situation and that of the sector in general. This makes for the third consecutive quarter that confidence has risen in the financial services industry, making for a 100% increase since the middle of 2009. The increased optimism comes despite slightly weaker volumes being recorded than forecast in the fourth quarter, coupled with some fears that business will contract in the first quarter of this year.

There were smiling faces all around as retailer House of Fraser delivered a trading update on Monday showing a new record for festive sales. Signs that the UK consumer was shrugging off the recession came as the privately-owned department store chain showed sales rising by 7.1 percent in the eight weeks to Jan. 2nd as well as Boxing Day sales figures that were up climbed 27 percent on 2008.

Less happy were the management team at, Tesco, who according to a global study has dropped to fourth place in a league table of the world’s biggest retailers. Tesco dropped one place pushed down by the German retail group, Metro. Sales figures for Tesco for the six weeks to January 9 is expected to report like-for-like sales growth of about three percent for the period.

Some good news for those UK householders whose boilers are rated at G level or lower. In addition to the two combined subsidies from the UK government and British Gas that is liable to cover around a third of the estimated cost of buying and installing a new boiler, British Gas has just added a further £452 in cost savings for those who will be replacing their boiler under the scheme which will come in two forms.

• A set of comprehensive radiator controls for the home or office valued at £248.
• Homecare 200 repairs cover for the boiler costing £204.

Anyone who is liable to receive these subsidies, which in general should include anyone who has a boiler more than 15 years old may be eligible to receive these grants and subsidies, contact British Gas on 0845 074 5991 for a free consolation or click http://www.britishgas.co.uk/yourboiler

Spanish banking group Santander has announced the launch of a marketing campaign aimed at bringing its UK brands under one name. Santander will invest around £30 million pounds refurbishing the 1,000 branches across the UK coming under their label as well as printing new product literature for the Abbey, Bradford & Bingley and Alliance & Leicester banks. To add some glamour, formula one racing driver Lewis Hamilton has been chosen to publicise the company’s new image at a Santander branch to be opened in central London.

Manchester United FC have announced their plans to mount a bond issue intended to raise £500 million in order to refinance the club’s mounting debts.

The announcement came as the club announced pre-tax profits of £48.2 million for the year to 30 June 2009, compared with a loss of £21.4 million last year. The profit was swollen by the £80 million fee received by the club from Real Madrid who purchased the services of Cristiano Ronaldo during the close season. According to information issued by the club’s holding company Red Football Ltd, group turnover rose to £278.5 million from £256.2 million in 2008. Although Red Football disclosed no total debt figure was announced, estimates have it at around £700 million.

British Land has unveiled plans to manage a £300 million pound buy-to-let fund being launched by Charles Russell, the prominent UK law firm. The fund has been established to acquire prime residential real estate in London. British Land will also take a small stake in the fund as the property group rapidly expands its residential business, marking British Land’s first residential investments since selling the majority of its portfolio in 2006.

Revenue at IT services group Computacenter remained weak for 2009, largely due to a shortage of large infrastructure projects. With this factor taken this factor into account, the company instituted a substantial cost-cutting programme which look likely to see them beat profit forecasts for 2009, which could be close to £50 million pounds. On the news shares in Computacenter rose 17.7 pence to 309 pence on Tuesday.

The pound continued its recovery above the dollar in mid week trading, while moving up slightly against the Euro.

• Dollar 1.6207
• Euro 1.118

On Tuesday the FTSE 100 Index fell 0.7 percent, to 5,498.71.

Meanwhile it has been announced that during one of the biggest turn-downs in US financial history the US Federal Reserve announce that they made a profit of $52.1 billion (£32.2 billion) in 2009, marking a rise of 47% over the previous year, allowing them to pay a record $46.1 billion to the US Treasury last year.

The $46.1 billion was the largest amount ever paid by the central bank since it was creation in 1914, and was largely thanks to the Fed’s attempts to support the financial system throughout the ongoing financial crisis.

The Dow Jones Industrial Average closed Tuesday up slightly, nine points to 10,627. The NASDAQ dropped to close on 2,282.

The recently formed US Financial Crisis Inquiry Commission (FCIC) is to hold their first public hearing on Wednesday.

The 10-member panel was established by Congress to examine the causes of the 2008 US financial crisis. The committee will examine the causes of the crisis, and are scheduled to hear testimony on the current state of the crisis from a cross section of private and public sector leaders.

Witnesses will include top executives from Goldman Sachs, JPMorgan Chase, Morgan Stanley and Bank of America.

Findings and the report of the panel are due to be presented to Congress and President Barack Obama by 15 December.

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Tags: Abbey, Alliance & Leicester, Bank, Bank of America, Banking, Barack Obama, boiler, Bradford & Bingley, British Economy, British Gas, British Land, British Pound, CBI, Charles Russell, Computacenter, Confederation for British Industry, Credit Crunch, Cristiano Ronaldo, Currency, Dow Jones, Economy, FCIC, Financial News, FTSE, Goldman Sachs, JPMorgan Chase, Lewis Hamilton, Manchester United, Metro, Money, Money Markets, Morgan Stanley, NASDAQ, Real Madrid, Recession, Red Football Ltd, Retail, Santander, Stock Markets, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, UK retail, US Federal Reserve, US Financial Crisis Inquiry Commission, US Treasury

In an interview held over the weekend, chancellor of the Exchequer Alistair Darling predicted that should the Labour Party be re-elected in this year’s anticipated elections they will be prepared to tightly rein in spending and curb Government borrowing. The treasury chief warned that the UK has little option but reduce the massive budget deficit entailing making the toughest public spending cuts seen in 20 years.

Darling’s comments signaled a change in direction or a possible split in Labour’s election strategy as until recently Gordon Brown’s has pinned the bulk of his preliminary electoral campaign and its possible success on the need to support economic recovery, instead of reducing the country’s current £178-billion-pound deficit. The International Monetary Fund has forecast that the UK’s GDP deficit will peak this year at 13.2 percent.

To the chagrin of many, city bankers look likely to suffer minimal impact from the bonus super tax imposed on them by the government last month.

Most banks who were available for comment hinted they are preparing to absorb if not all at least part of the cost of 50 per cent tax by inflating their bonus pools, and are prepared to run the risk of irritating the government and even their own shareholders in order to keep their staff happy. The banks are unofficially conceding that dividends are likely to be hit by their capitulation, and they are already under pressure as regulators have pressurized banks to increase their capital holdings, which will have a consequent effect on their profit margins.

Meanwhile, the Association of British Insurers (ABI) has written a letter to the remuneration committee chairmen of the UK’s top 350 companies warning boards against paying big bonuses and keeping directors safe from tax increases. ABI are concerned that investors will lose out amid fears that banks will absorb the supertax on bonuses at the expense of dividends. Last year was marked by a number of cases of shareholders rebelling against companies’ plans.

With Christmas trading a fading memory, it has been reported that city analysts are taking a close look at Tesco and attempting to determine how much the extra £100 million pounds’ worth of loyalty vouchers given to customers affected their Christmas trading. Fears are that by Tesco’s inflating their Clubcard loyalty scheme they could have "artificially" inflated their UK sales figures for the period, with estimates that the extra vouchers could have added around 1.5% the supermarket chain’s UK turnover for the Christmas , which is due to be released on Tuesday.

The Crown Estate, owner of the UK’s coastal seabeds, have granted development rights to energy companies that will herald the largest wind energy project ever seen in the world.

The announcement has the potential to see an additional 32 GigaWatts (GW) of clean electricity feeding into the UK grid, on top of 8 GW from previous rounds. 32 GW will mean enough offshore wind energy to supply nearly all the homes in the UK, with projection that investment in UK offshore wind overall could be worth £75 billion and support up to 70,000 jobs by the year 2020.

A total of nine development zones, with a capacity of just over 25 GW, have been allocated to Ten European Companies following a competitive tender.

Plans are currently under approval by the UK Government to construct what will be the fastest railway in Europe. The multi billion pound project would see trains travelling from London to the West Midlands at 250 mph from a new station to be constructed in the capital.

Construction is scheduled to begin in 2017, and the first trains should toll out of London 2025, carrying more than a thousand passengers at a time. The project is expected to cost as much as £60 billion.

Taking a short term view, the UK is currently investigating a variety of options on how to deal with increasing stocks of swine flu vaccines, with the British public showing a lack of interest in taking advantage of the free injection. The department of health is looking at either renegotiating existing contracts with the drug companies, such as GlaxoSmithKline and Baxter International to reduce the consignments. Other last attractive options are to sell the vaccines on to other countries or simply give them away. France and Germany also intend to cancel millions of doses of the H1N1 vaccines because of oversupply.

All of the five UK mobile networks are now reported to be in talks with Google over plans to market their new Nexus One mobile phone. Vodafone are the first operator to officially announce that had sealed a deal to offer the device, while no official launch date has been set as yet. The remaining four UK mobile phone operators. While it is expected that the big four will be providing support and service for the Nexus One, Google will be marketing their new baby exclusively online.

A little reminder that the internet doesn’t yet rule all of the World came with the news that UK greeting cards company Clinton have reported a rise in sales of 3.5 percent on last year for the weeks approaching Christmas, with like-for-like sales in the 22 weeks to Jan. 2 rising. However this upturn in sales appeared to be a drop in the ocean as the company continues to experience difficult trading conditions and has closed 12 of their stores in the last six months.

The pound stuttered slightly above the dollar in pre-weekend trading, while sliding backwards against the Euro.

• Dollar 1.6025
• Euro 1.1116

As brokers set off home for the weekend in their snow ploughs and sleds, the FTSE 100 edged just 7.52 points higher to 5,534.24. For the week the index was up 2.4 per cent, making for the third straight weekly gain.

In the US official figures have shown the unemployment rate holding steady at 10% despite the fact that employers unexpectedly cut 85,000 jobs in December. The US Labor Department had initially estimated that 11,000 jobs were cut in November, but now says that the economy had in fact added 4,000 jobs.

Since the recession began in 2007, 7.2 million jobs have been lost in the US, with 4.2 million of them in 2009 alone.

The Dow Jones Industrial Average closed for the weekend still on the up, eleven points to 10,618 while the NASDAQ also jumped 17 points to close on 2,3170.71.

General Motors (GM) reluctantly advised that they have begun "winding down" process for Saab, whilst continuing efforts to find a buyer for their Swedish car-making subsidiary.

GM intends to organize an "orderly" winding down at Saab, which they expects to take several months. The US group also confirmed that they are continuing to evaluate the several proposals they had received to acquire Saab, including the one from Formula One boss Bernie Ecclestone.

With the news that the exports had risen by 17.7% in December, China now claims to have overtaken Germany to become the world’s largest exporter.

December’s remarkable rise ends a 13-month decline in trade as a result of the global downturn.

Total Chinese exports for 2009 were £7.5 trillion, which marked a downturn in foreign of 13.9%, as the global economic downturn led to a fall in demand.

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Tags: Alastair Darling, Association of British Insurers, Bank, Banking, Baxter International, Bernie Ecclestone, British Economy, British Pound, budget cuts, Clinton Cards, Currency, Dow Jones, Economy, Financial News, FTSE, GDP, General Motors, GlaxoSmithKline, Google, Gordon Brown, H1N1, International Monetary Fund, Labour party, Money, Money Markets, NASDAQ, Nexus One, Recession, Retail, Saab, Stock Markets, Stocks and shares, super tax, swine flu, Tesco, The Crown Estate, UK Banks, UK Economy, UK government, UK Recession, US labor Department, Vodafone

While the UK and with it almost all of Western Europe and the West Coast of the US are caught in the grip of the longest running and most severe cold spell that it has seen for close to thirty years without a break in the foreseeable future, many analyst are now scratching their heads and asking themselves "what will this do to the price of oil?"

Since the weather began to turn incredibly difficult about a week ago the price of oil has risen steadily from the around $78 to $82 within the space of one week, the highest price it has been all of 2009, and to those of you who may have forgotten, sat on a low of $32 a barrel towards the end of December 2008. With the news that the major economies, and especially China, were starting to build up stockpiles of oil, hopes were that prices would begin to fall and settle around the ideal figure of between $68 to $72 a barrel.

Analysts fear that if the span weather persists, and predictions are that at least in the UK it could continue to the end of January, and the increase in demand could push the price up oil even further, as stocks diminish. Meanwhile leading bodies in UK industry bodies have asked head- teachers to minimize snow-linked school closures to reduce levels of absence from the workplace. Although 61 percent of 200 companies surveyed by the British Chambers of Commerce said less than one in 10 employees was absent, the Federation of Small Businesses warned that childcare-related absences following school closures would become a serious problem. The cold snap looks likely to cost the economy close to £700 million pounds a day, meaning total financial damage of £14.5 billion pounds if, as expected. The bad weather lasts a further three weeks.

As expected UK interest rates will remain unchanged at 0.5%, meaning that the cost of borrowing has remained at a record low since March 2009. Economist are not expecting to see a rates increase s in the near term, despite expectations that the UK will finally have exited recession in the last quarter of 2009.

Formula 1 boss, Bernie Ecclestone is looking to buy a Saab, not the car but the company, and intends to do so in partnership with the Luxembourg-based private investment company, Genii Capital, which recently invested in Renault’s Formula 1 team.

Ecclestone’s dramatic announcement came shortly after the deadline for expressions of interest in the company closed without any public bids.

As well as Ecclestone’s offer, a second bid s also emerged, from the Dutch sports car maker, Spyker Cars.

U.S. food giant Kraft has received a ticking off from the principal shareholder Warren Buffett who has also thrown a spanner in the works of their proposed transaction. The Buffett-owned holding company Berkshire Hathaway who Hold 9.4% of Kraft’s stock announced that they will be voting against it is the proposal to issue up to 370 million shares to facilitate the Cadbury deal.

A spokesman for Kraft reacted to Buffet’s statement by saying that "Mr. Buffett is our largest investor and one of the most respected investors in the world. We take his opinion very seriously. We agree Kraft shares are deeply undervalued. We would not do anything to hurt shareholder value and we intend to remain disciplined in this process." Shares fell 7 pence, or 0.9 percent, to 772 pence on trading.

In their annual Christmas trading statement, Majestic Wine announced a rise in sales of 11.7 percent between Nov. 3 and Jan. 4 in the UK, with champagne sales regaining their seasonal appeal over Christmas. While champagne sales grew 11 percent, fine wine sales climbed 30 percent and online trading rose by 20 percent.

Family-owned brewer Fuller Smith & Turner also managed to increase its profits, sales and dividend in the six months to September, largely bucking the trend prevalent in the brewery sector. With members of the controlling families owning more than half of the company equity and 60 percent of the voting rights, executive chairman Michael Turner pronounced the effect that company’s long-term, risk-averse strategy was paying dividends.

The FTSE 100 brought in the New Year and new decade by closing above 5,500 for the first time since the start of September 2008 – before the Lehman Brothers collapse, coming after a 22% rise over the whole of 2009 and a 53% rally from the low last March. The FTSE 100 closed on Tuesday on 5522.5.

Britain’s currency weakened possibly due to U.K. Business Secretary Peter Mandelson hints that the pound’s devaluation aided the economy in the recession.

• Dollar 1,5967
• Euro 1.1126

The U.K.’s largest home builder by market value Persimmon Plc has announced that they completed the sale of 8,976 new homes in 2009 with a total value of around £1.4 billion pounds. On the news their shares gained 1.2 percent, to 469 pence. Wolseley Plc, the world’s largest supplier of heating and plumbing gear seemed to be moving in a positive direction, with their shares added 4.7 percent, to 1,361 pence.

The Vodafone Group PLC expects to be able to offer Google Inc.’s Nexus One smart phone to its U.K. customers in the next few weeks, with their rivals reported to be already in advanced talks with the Internet giant about the device.

Vodafone, the world’s biggest mobile operator, is also in early discussions with Google about supporting the phone in France, Germany and Spain, a Vodafone spokesman told Dow Jones Newswires Wednesday, and hopes to offer it across the rest of Europe through the course of 2010.

JD Sports Fashion Plc, the U.K.’s second- largest sportswear chain said sales at stores rose 6.6 percent in the five weeks up to the Ist of January .2010. On the news their shares jumped 6.2 percent, to 550 pence.

Marks & Spencer Group on Wednesday reported a small increase in third-quarter sales, despite not slashing prices in the run-up to Christmas, as customers snapped up cashmere sweaters and clothing for kids. But the company cautioned that trading will remain challenging this year.

Group sales at the iconic British retailer rose 2.6% in the three months to Dec. 26. In the U.K. same-store sales rose 0.8%, with general merchandise up 1.2% and food up 0.4%. Underlying sales returned to growth for the first time in two years.

Still, the results missed the consensus forecast for a 1.2% increase in same-store sales, partly because this year’s trading period excluded the first day of the company’s post-Christmas sales, when it typically sees a surge in revenue. Online sales increased 32% and international sales climbed 6%

Britain’s Home Delivery Network said it would buy DHL’s UK parcel delivery operations, DHL Domestic, from Deutsche Post DHL (DPWGn.DE), growing its market share in a sector profiting from a boom in online shopping.

With many of the UK s leading retailers, among them John Lewis and Next reporting significant online growth, companies such as Home Delivery Network have felt the impact.

The parcel delivery company, headquartered in Merseyside, northwest England, said the combined businesses would have annual revenues of more than £600 million pounds, delivering over 180 million parcels a year, with a combined market share of 17 percent.

Britain’s currency recovered slightly over the last two days

• Dollar 1,5992
• Euro 1.1198

The FTSE100 finished trading on Thursday in a fairly static position at 5526.72 barely moving on the week’s trading.

On Wall Street, the Dow Jones Industrial Average closed on Thursday up a further 24 points to 10,607 while the NASDAQ also dropped 8 points to 2,300.71.

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