An increase in July of more than 75% in the number of home purchase loans approved by British banks, made for the most encouraging figures since February 2008, while net mortgage lending growth remained as its weakest level since the year 2000.

The British Bankers’ Association announced 38,181 mortgage applications were approved in July in comparison to 35,564 in June and up from 22,248 in July when demand for properties in the UK were are at an all time low. In addition, average loan values rose from 136,400 pounds in June to 139,700 pounds.

This month’s statistics add further proof that the housing market may be entering into a period of continued stability; however analysts hastened to temper enthusiasm by pointing oath that mortgage approvals remained below the average and were indicative of falling property prices.

Bovis Homes recently reported that they have moved into a positive cash situation, and for the first time in two years, yet another sign that of recovery in the UK’s hard pressed domestic construction industry.

The group’s who were holding a net debt package of £8 million at the end of June, are now in funds to the tune of £7 million.

It appears that the Royal Bank of Scotland have hit a stumbling block with the proposed sale of their retail and commercial assets in China to their preferred bidder, Standard Chartered. The company had entered exclusive talks with the RBS last month to acquire assets in China, India and Malaysia, and were excited at the prospect of closing the deal "within a matter of weeks " However reports now have it Standard Chartered and now a lot less enthusiastic about the deal than they were, which now appears to have been put on hold.

British steel-maker Corus announced recently that they intend to kick start production at its Llanwern works in Wales. Their decision was prompted by a revival in the demand for steel, as the global economic downturn eases and generates a rise in the price of steel. Corus, Europe’s second-biggest steel concern, are to restart production at their hot rolling mill, shut down in January due to lack of demand.

Reactivating the plant will not mean that 500 or more jobs cut by Corus at the time when they put the plant in mothballs will automatically be restored, as the company claims that their operating costs have since risen.

Home improvement chain Focus DIY has reached an agreement with their creditors, particularly their landlords, which will save them from administration.

An overwhelming majority of the company’s creditors voted in favour of the company’s proposal to enter into a Company Voluntary Arrangement (CVA).

Under the terms of the CVA, an increasingly popular insolvency process, Focus will be able to reduce annual overheads by £8.6 million by shedding leases on 38 stores where the company has ceased to operate, and in return Focus has offered their landlords partial compensation. In addition the landlords of the company’s 180 stores have agreed to accept monthly rather than quarterly rent payments until 2011.

Focus, acquired by Cerberus, the US private equity group, has been carrying a heavy debt burden which has been exacerbated by a marked reduction in consumer spending.

On the FTSE, optimism lifted shares in Diageo, producers of Smirnoff vodka and brewers of Guinness beer up 0.9 per cent to 971½ pence, in anticipation that results due to be issued on Wednesday will show that the company’s sales have taken a turn for the better. Demand is expected to be on the increase among US wholesalers with Diageo looking to increase their market share.

Shares in National Express rose to their highest level since January, gaining 3.5 per cent to 395 pence, as speculation increases that that any break-up bid could value the transport group at as much as 450 pence a share.

Shares in the Royal Bank of Scotland rose by 3.9 per cent to 54 pence, fired by speculation that the bank may try to buy back some of the seventy percent stake held by the UK government.

Profit taking weighed on car insurers Admiral Group, whose shares dropped by 2.6 per cent to close on 1044 pence, after the company released first-half results that exactly matched analysts’ expectations. The company’s stock has gained 20 per cent recently.

Increased US consumer confidence and housing data helped the FTSE 100 reverse to close up 20.57 points, at a new 10-month high of 4,916.8, at its highest level for the year. The FTSE 250 rose by a further 28.92 points to close on 8,860.81

Sterling continued to weaken on Tuesday’s trading, remaining in a 10-week trough against the Euro,

• Pound/US dollar 1.6329
• Pound/Euro 1.1429
• Pound/Japanese Yen 153.6205
• Pound/Swiss Franc 1.7364

The Obama administration is bracing for a political backlash on Tuesday when it issues national debt numbers showing federal debt rising by $9,000 billion over the next decade, a figure significantly higher than forecasts made earlier. In addition the both the White House and Congress have warned that US budget deficit will soar to almost $1.6 trillion (£978bn) this year, the highest on record,.

Fuelled by President Obama’s $787 billion stimulus package and reduced tax revenues due to the recession, this year’s deficit compares with $455 billion for 2008.

The White House also expects that US unemployment will pass a 10% figure during 2009, before slowly beginning to decline in 2010.

US stocks once again rose to record heights for the year on Tuesday as encouraging economic data was enough to keep the rally going as well as optimism sparked by Ben Bernanke staying on for a second term as chairman of the Federal Reserve.

The Dow Jones Industrial Average and the NASDAQ Composite index both gained 0.3 per cent to 9,539.29 and 2,024.23, respectively.

Commodities markets ticked lower on Tuesday as investors paused for breath following the recent run higher in anticipation for a swift and sustained world economic rebound.

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Tags: Admiral Group, Banking, Bovis Homes, British Bankers Association, British Economy, British Pound, Cerberus, Congress, Construction, Corus, Currency, Diageo, Dow Jones, Economy, Financial News, Focus DIY, FTSE, Guinness, Loans, Money, Money Markets, Mortgage, mortgage application, Mortgages, NASDAQ, National Express, Obama, Property Prices, Royal Bank of Scotland, Smirnoff vodka, Standard Chartered, Stock Markets, UK Banks, UK government, US budget, White House

Although your bank manager will tell you that he or she is your friend, and that they have your best interest at heart when they cut your overdraft or credit card levels, don’t believe them. The truth is that banks thrive on people who are in financial trouble and know exactly how to play on your weakened situations to continue to feed their insatiable drive for profit.

More so, that when you go to them on your knees asking for just a little more leeway, they will already have made sure that you will find it difficult if not impossible to find alternative finance elsewhere, and will take full advantage by providing you with additional finance at horrendously high interest rates.

The UK public must surely have learned one expensive and painful lesson from the current financial crisis and that is to keep the credit under control, and to try to do so by achieving and maintaining a credit rating that is as pure and white as the first snows of winter.

And believe it or not, despite prodigious efforts by the FSA to prevent this from happening, lenders, be they banks, building societies or credit card companies, are pooling their efforts to make sure that people who have fallen into debt in the past will find it very difficult to improve their credit rating.

There is, and always has been, a great anomaly about how finance providers look upon a potential client. If someone has money, why should they need to borrow it? Yet in many cases it is sensible to borrow money, particularly for a mortgage, or to buy a new car or even some major household appliance. Banks carry out tens of thousands of transactions every month, although secured loans are much less attractive to them than unsecured loans, where they can make more than twice the interest.

The sad truth of the matter is that if people are in severe financial trouble the last place they should set foot in is a bank, building society or credit card company, except to ask for an extended agreement on the same terms. Under no circumstances should they agree to accept a new refinancing agreement which will certainly be on prohibitive terms.

Only time will cure most people’s problems, and eventually better times will come. In the meantime it is everyone’s interest to keep the head down, draw in the belt even tighter, and repair each credit status. Learning to be less credit dependent will be a challenge for all of us, but it will be justified by never having to bend your knees to your bank manager again.

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Tags: bank manager, Banking, Building Society, Credit, Credit Card, Credit Crunch, credit rating, Current Account, Debt, extended agreement, Finance, finance providers, financial trouble, FSA, Interest Rates, Loans, Money, Money Management, Mortgage, Mortgages, negative equity, Savings, UK Banks, UK Credit Cards, unsecured loans

There were some glum faces yesterday at the Office for National Statistics on the announcement that consumer price inflation remained unchanged in July at 1.8 per cent in July, after forecasts that it would drop sharply for the month to 1.5 per cent.

Hopes were that after the Bank of England had extended its quantitative easing programme by £50 billion taking it up to £175 billion, that inflation figures would react accordingly. The fact that they didn’t points to signs that the recession is deeper than analysts have been calling till now. During the last 16 months inflation has proved higher than analysts predicted on no less than 12 occasions.

The Building Societies Association (BSA), the body appointed to represent Britain’s mutually-owned lenders, has issued a complaint to Europe’s anti-trust regulator. The complaint is regarding a planned restructuring of state-owned bank Northern Rock, that the organization claims would distort competition in the mortgage market.

BSA has requested from the European Commission to ensure that Northern Rock be made to pay financial penalties if the proposed overhaul goes ahead.

The Commission is due to deliver its verdict in the autumn, with a negative verdict liable to cause a major setback in the British government’s efforts to restore Northern Rock to financial health and sell it back into private ownership

Spiralling costs seems to be hitting home everywhere, with the news that the cost of running the Houses of Parliament has reached almost half a billion pounds in 2008-9 being another example. The costs of operating the UK seat of government is proving to be an increasingly expensive pastime, with costs up

more than £12 million from 2008 arriving at close to £400 million, a sum that includes salaries, allowances and pensions for MPs and their administrative staff. One the upside, the costs of maintaining the House of Lords dropped by almost a third from £152.5 million to £106.5 million. There must be a message there, somewhere.

The news that the Royal Bank of Scotland Group PLC is close to putting its asset management business up for sale, will be good news for most, but not for those who bank at Coutts, the private bank owned by RBS, renowned as an adviser to the Queen, that will be included in the package and may well fall into foreign hands.

On the FTSE, shares in African Minerals, the iron ore mining company, managed by Regal Petroleum founder Frank Timis, rose 1.6 per cent to 312 pence on news that the company had embarked on takeover talks with Eurasian Natural Resources Corporation (ENRC).

Shares in the Sierra Leone-based group have risen 13-fold this year amid speculation of interest from several parties including ENRC.

In the retail sector Tesco’s shares were the weakest, falling 0.5 per cent to 363 pence after industry data for July showed a poorer month.

Credit checking agency Experian inched 0.4 per cent higher to 517 ½ pence after suggestions from the US Federal Reserve that lending supply was improving.

The FTSE 100 made up for most of yesterday’s reverses rising 40.77 points to close on 4685.78. The FTSE 250 recovered after a major collapse on Monday, rising 80.39 points to close on 8,354.48

According the BOE Governor Mervyn King the pound’s biggest five-month rally in 24 years may be stuttering to an end, largely due to the Bank’s flooding the U.K. economy with newly printed cash.

Sterling soared in value by 23.5 percent from March 10 to Aug. 5 on speculation U.K. assets would rise as the worst financial crisis in six decades eased. The rally appeared to be petering out and the pound has slumped 2.6 percent since Aug. 5 to last week’s $1.6543 close. However on Tuesday, the pound improved a little on figures showing inflation proving far more resistant to recession than economists had expected.

• Pound/US dollar 1.6353
• Pound/Euro 1.169
• Pound/Japanese Yen 156.3554
• Pound/Swiss Franc 1.777

In the US, news that construction starts of new homes had fallen in July, after three straight months of increases caused no little construction.

The number of new properties sold for last month fell 1% to an annual rate of 581,000.

US wholesale prices also recorded an unexpectedly large fall last month, down 0.9% from June, and by 6.8% from July 2008.

The Dow Jones Industrial Average recovered part of the previous day’s losses rising 82.6 points t to close on 9217.94. The NASDAQ moved up 25.08 points to close on 1955.92.

The ongoing weak demand for personal computers and printer ink has seen Hewlett-Packard (HP) Revenue fell by 2% to $27.5 billion, not encouraging but better than Wall Street estimates.

Like most technology firms, HP has suffered in the global downturn as consumers trim their spending.

Meanwhile that perennial optimist the International Monetary Fund (IMF) has woken up to remind us that the world has indeed begun to recover from recession, adding that the process will not be simple.

A chief economist for the IMF warned that the recession had "left deep scars, which will affect both supply and demand for many years to come"

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Tags: Bank of England, Banking, British Economy, British government, British Pound, BSA, Building Societies Association, Coutts, Credit Crunch, Currency, Dow Jones, Economics, Economy, Eurasian Natural Resources Corporation, European Commission, Experian, Financial News, FTSE, Global Credit Crisis, Hewlett-Packard, House of Lords, Houses of Parliament, HP, IMF, Inflation, International Monetary Fund, Mervyn King, Money, Money Markets, mortgage market, Mortgages, NASDAQ, Northern Rock, Office for National Statistics, RBS, Recession, Retail, Royal Bank of Scotland, Stock Markets, Stocks and shares, Tesco, Tesco's, UK Banks, UK Economy, UK government, UK Recession, US Federal Reserve, Wall Street

U.K. home sellers lowered asking prices in August by the most in eight months as banks continued their credit squeeze.

The average cost of a home fell 2.2 percent to around £225,000 after gaining 0.6 percent in July. Prices in London dropped 3.8 percent, while in the East Midlands the asking price by sellers fell by the highest level, averaging 9 percent.

The number of new homes on the market was reported to be almost half of what they were before the financial crisis began. ,

Further evidence that the traditional UK high street banks catering manly to the private individual is about to be come scarcer over the coming years was provided in a recently published report. The reports points out that the major British banking groups are considering closing down a third of their branches in a drive to reduce cost and restore profitability. During the recession, retail banks lost money in droves as the public drew in their belts and in future retail banks will not be able enjoy profits personal loans and overdraft that they did during the so called “ boom years”..

Despite all the hooing and hahing on the subject, bonuses for the top directors of major UK companies remained at an unacceptably high level in 2008, showing that the trend is far away from disappearing, despite the country still being in the depths of a recession, and companies that succeed in making profits still reducing their dividends. A recent report showed that some of Britain’s largest companies were still voting to pay their senior executives around half of the bonuses they were receiving before the financial downturn began, around two years ago. A fact that has not been well received by company investors.

Bradford & Bingley plc has released its interim financial report, covering the first six months of the year and the figures are less than inspiring.

The company made pre-tax losses of £160 million, and bucking the UK trend they were substantially worse than the same period in 2008, when the bank succeeded in only losing £26.7 million.

As the financial crisis hit its peak late last year, Bradford & Bingley was nationalised, and has since been sold of to Spanish banking giant Banco Santander.

British Sky Broadcasting has expressed their “serious concerns” regarding the recent actions of the Project Canvas trust. Project Canvas is behind the plan to establish an internet-connected successor to Freeview, the free-to-air digital TV service that will compete with Sky.

Since February, the Trust has been conducting an assessment to ascertain whether Canvas, comprising the partnership of BBC with ITV, BT and Five, is doing justice to UK licence fee payers. Canvas was intended to be the blue-print for assessing and progressing on-demand video from the PC to the television. The introduction of a smarter set-top box would strengthen the competition from free-to-air broadcasting for pay-TV operators such as Sky and Virgin Media.

Trading was slow in the city with the only rising star being GlaxoSmithKline who gained 0.8 per cent to close on 1167½ pence after analysts advised investors to buy shares in anticipation of the news that the company’s long awaited cervical cancer vaccine is likely to win US regulatory approval early next month.

Also in the news were the world’s largest water company Veolia Environment SA who were rumoured to be selling £500 million-pound stake in its U.K. water business to either the Blackstone Group LP or the Goldman Sachs. On the news, Veolia shares fell 2.5 percent to 22.74 pence.

The FTSE 100 continued to indicate that profit taking was rife, dropping 68.96, points to close on 4645.01. The FTSE 250 collapsed by 2.84 percent on the day, meaning a 241.74 point fall to close on 8,274.09.

Sterling had another mixed day on pre-weekend trading yesterday’s markets, falling against the major currencies, apart from the Japanese Yen.

• Pound/US dollar 1.6386
• Pound/Euro 1.1606
• Pound/Japanese Yen 155.4618
• Pound/Swiss Franc 1.7624

US stocks suffered their worst day since the beginning of July on Monday after the global share sell-off caused the market to fall. Concerns over the health of the US consumer were at the forefront of investors’ minds after last week’s weak retail sales and consumer confidence figures. .

The Dow Jones Industrial Average plummeted 186.06 points on an edgy market to close on 9135.34 with the NASDAQ faring little better down 54.68 points to close on 1930.84. .

Japan’s economy grew by 0.9% in the April-to-June quarter meaning that the country has joined the fast growing list of industrialised nations to come out of recession.

The rise has been attributed to the Japanese Government’s huge stimulus package. The test for the Japanese economy will come when their stimulus package will come to an end and the economy will require standing alone.

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Tags: Banking, Bradford & Bingley, British Economy, British Sky Broadcasting, Credit Crunch, Dow Jones, Economy, Financial News, FTSE, GlaxoSmithKline, Global Credit Crisis, Goldman Sachs, Money, Money Markets, Mortgages, NASDAQ, Project Canvas, Property Prices, Recession, Santander, UK Banks, UK Banks, UK Recession, Veolia Environment SA, Virgin Media

Whether it is good news of bad remains debatable, as many people feel that under no circumstances people should be evicted from their homes, at least the numbers are decreasing. The Council of Mortgage Lenders announced on Friday that that the number of U.K. homes repossessed in the second quarter of 2009 fell to 11,400 compared to 12,700 in the first quarter.

The reason for the reduction in repossessions was attributed to increased Government pressure on lenders to show flexibility to families who had fallen behind in their mortgage payments because one or more breadwinners have been made redundant. In addition, the number of delinquencies on UK buy-to-let mortgages has fallen for the first time in two years, with borrowers apparently taking advantage of low interest rates to reduce their arrears.

Average delinquencies for UK prime buy-to-let mortgages fell for the first time in two years, l from 6.2 per cent in the first quarter to 6.1 per cent.The news that, while the UK remains deep in the throes of a recession while European neighbours France and Germany have officially announced an end to theirs, has not left Lord Mandelson wanting for words. Despite evidence to the contrary, the Business Secretary has insisted that Britain is not being left behind in recovery from the recession, and that the UK needed to “keep going” y until it saw an upturn.

He went on to add “ “The important point about this good news from Germany and France is that if they are now recovering this is good news for our manufacturers, our exports, because it will mean more orders for our companies in Britain.”

In a move that owes itself more to public relations and less to sound business sense, Britain has announced that they will be injecting a further £340 million pounds in the form of long term loans that will go towards the development of wings for Airbus SAS’s A350 model. In return the European corporation formed to build the super passenger jet will guarantee an 18 percent share of work on the project. The loan will guarantee the future of 1,200 jobs at the company’s U.K. factories.

Airbus announced recently that they are in immediate need of further finance to fund the purchase of jigs and machine tools as it begins production. The 300-seat A350 is scheduled to enter service in 2013.

France plans to contribute 1.4 billion Euros in A350 funding while Germany looks likely to provide 1.1 billion Euros, subject to receiving a commitment for more work on future Airbus planes.
In return for their continued support, France, will own 38 percent of Airbus, Germany 34 percent, and Spain who gets to make the tail will own 10 percent, of the company.
The U.K.’s largest insurance company ,Prudential Plc, announced on Friday that their first-half profit had fallen 7 percent to £129 million on turnover of £1.25 billion, considerably less than analysts’ expected, largely on the back of increased U.S. sales and climb in security values held by the company.

Shares in Prudential rose 11 percent, (51.2 pence to 529.5) the most in almost five months on the news that Prudential will raise their first-half dividend 5 percent to 6.29 pence a share. Aviva Plc and Legal & General Group Plc announced last week that they would be cutting their dividends as Britons continue to reduce their outlays on life insurance and pensions.

Another UK insurer, Old Mutual announced that they are looking to inject as much as £200 million into their U.S. life-insurance offshoot to strengthen their presence. On the news, their shares rose by 4.4 percent, (3.95 pence to 93.85).

PayPoint Plc, operators of the U.K.’s largest cash payment network declared that bill and general payment transactions are in line with its forecasts while mobile top-up volumes in the U.K., Romania and Ireland are lower than last year. On the news, their stock dropped 1.6 percent, to 531.5 pence.

U.K.-based travel company Thomas Cook Group PLC issued a profit warning for 2010, due to the ongoing downturn in the industry, after posting a widened loss in the last nine months. The company said that they are still liable to meet their targets for the current fiscal years despite the widened loss, but it won’t make the £480 million in earnings before interest and tax.

Music company Chrysalis Plc announced that their overall financial performance remained in line with the board’s forecasts, and the second half of the year had started well in music publishing. Despite their opposition, shares in the company dropped 0.4 percent to 67.75 pence Shares in Taylor Wimpey Plc, U.K.’s largest homebuilder advanced 1.75 pence, or 4.5 percent, to 40.29 pence after they were upgraded to “buy” from “hold” by the Royal Bank of Scotland Group Plc, On rumours that the company may attract a takeover offer from a group of foreign investor’s shares in British Land climbed 3.9 percent to 512.5 pence

Before winding down for the weekend, the FTSE 100 dropped 41.49, points to 4,713.97 making for a total loss of 0.4 percent for the week. The FTSE 250 climbed by 32.17 points on Friday to close on 8,515.83

Sterling had another mixed day on pre-weekend trading yesterday’s markets, ring slightly against the Euro while falling against the other major currencies.
Pound/US dollar 1.6444
Pound/Euro 1.1626
Pound/Japanese Yen 155.0566
Pound/Swiss Franc 1.7675

US banking group Colonial BancGroup closed their doors on Friday, and not just for the weekend, but forever. Colonial, a property lender based in Montgomery, Alabama, holding around $25 billion in assets, will be bought out of liquidation by BB&T, a North Carolina-based bank.

The total number of US bank failures for 2009 is now well over 70. On Wall Street, slurry of late buying saved the Dow Jones from recording their worst day in a month,
Worries about deflation added to poor consumer confidence and activity, leaving investors seeking safer assets than equities. Friday’s consumer price inflation figures, which showed the biggest year-on-year drop since 1949, saw inflation-sensitive sectors fall, with materials, industrial and energy stocks all doing badly. They were then joined by consumer discretionary shares after the University of Michigan’s consumer confidence index for August showed an unexpected drop.

The Dow Jones Industrial Average gave up 76.79 points to 9,321.40, making for a drop for the week of 0.5 percent, and NASDAQ fell 23.83 points to 1,985.52, finishing the week 0.7 per cent lower.

Hong Kong is the next industrial country to emerge from recession, after posting growth figures of 3.3% for the three months from April to June.
Hong Kong has reported negative growth for the last four consecutive quarters.

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Tags: Bank, Credit Crunch, Economy, Financial News, Money, Mortgage, Mortgages, negative equity, Repossessed, UK Banks

The baby boomers are retiring, and some of them, who placed all of their eggs in one basket, are retiring hurt.

The UK financial turn-down has altered the paths of most people’s lives in the country, but probably none more so, than baby boomers. This significant group of people, born in the five years after World War Two ended drove the UK economy forward in the seventies, eighties and nineties to reach the highest levels of prosperity and stability the Great Britain has ever known.

Encouraged by Margaret Thatcher, people were encouraged to acquire their own properties, mostly for a nest egg when retirement time came around, and with hopefully a little left over to provide for the children and grandchildren when the time came to depart this astral plane.

Unfortunately the property boom of the first decade of the 21st century shattered their plans. Many of them were hoping to downgrade a little, and while they could have earned a fabulous profit on the property they had bought in the seventies or eighties, they found it impossible to buy smaller properties at a representative value, because they were being snapped up by younger couples who would pay any price to get their feet on the bottom rung of the property ladder.

And when the bubble finally burst, many of them found them living in properties that were far too big for their needs, with all the attendant costs, and the nest egg that they had hoped to enjoy shrinking in value by an average of around £10,000 a year. Overall estimates are that properties owned by baby boomers have fallen in value by almost £30 billion in the last twelve months.

Surveys have shown the population sector that has placed too much reliance on their property asset to fund their retirement come from the East Midlands. However those hailing from the South and particularly London have spread their retirement portfolio.

Even more worrying is the fact that out or the entire UK population above the age of 25, have begun to look into alternative pension arrangements or investment opportunities.

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Tags: baby boomers, British Economy, Credit Crunch, East Midlands, Economics, Economy, Financial News, Margaret Thatcher, Money, Mortgage, Mortgages, property, Recession, UK Recession, World War Two

According to data released by the Halifax Building Society, property prices increased by more than one percent. Halifax, one of the UK’s leading building societies also reduced their forecast reduced how far they reckoned property values would fall in the remaining part of 2009. Their updated prediction is that house prices will fall by just seven percent in 2009.

Halifax stated hat prices had fallen by 0.8 per cent during the first seven months of 2009, with average house prices at £159,623 in July compared with £160,861 in December 2008. July house prices were 12.1 per cent lower than the same period in 2008, with the annual rate of change showing an improvement for the third consecutive month.

On a more sober note a recent report released by the Royal Institution of Chartered Surveyors has reiterated their well known standpoint that there is little chance of a quick return to a housing boom, despite the fact that UK prices may well rise in 2010, while standing firm on their forecast of a price fall of 10-15% this year amid a “considerable shift” in the market. Tight credit and job losses are the principal causes for limited transactions in 2009 and if they continue may still cause prices to slip back in 2010.

Despite their expected £4 billion loss in the first half of 2009, shares in Lloyds Banking Group surged by 11% due to mounting bad debts at HBOS. The only reason that analysts could come up with were that most of the bad news that the bank could dish up was now out in the open, and investors now had a clearer picture to build on.

Lloyds Banking Group, of which 43% is owned by UK taxpayers, announced that although they were still sitting on £13 billion of toxic loans and investments, such charges for bad loans would be smaller in the future.

Meanwhile it seems increasingly likely that the sale of the healthy parts of Northern Rock will be held off until after the general election. Alistair Darling, UK chancellor said he was in “no hurry” to offload the bank he nationalised in February 2008 after they announced reasonable half-year losses of around £700 million. The chancellor remains adamant that the rescue operation could still reap a profit for the taxpayer.

A recent study also shows that the pension-plan shortfalls of the U.K.’s top publicly traded companies more than doubled to an unprecedented 96 billion pounds in June.
The deficit of these companies all of whom are listed on the FTSE-100 Index with a 41 billion-pound shortfall in the same period last year, The signs are that employers are cutting back on pension benefits after the global financial crisis eroded profits and stock prices. Europe’s second-largest oil company, BP Plc, announced in June their intention to close its final salary pension plan to new U.K. workers, while Barclays Plc are asking their 18,000 employees to surrender similar benefits that the bank now claim to have become too costly.

Insurance group Legal & General have announced that they have succeeded in “considerably reducing” their losses in the first six months of the year, as well increasing their capital surplus. L&G claimed that the cuts were brought about by reduced workforce headcount, and closing down activities in less profitable business areas.
Despite the fact, the insurance group halved its interim dividend as it pressed ahead with a programme to save costs, causing their shares to drop in value by 5.6 per cent to 62 pence. , For the half year, Legal & General’s showed pre-tax losses decreased by 81 per cent to £74 million on revenues that slid 6 per cent to £3.1 billion.

Industry tycoon Rupert Murdoch’s News Corp announced losses of £2 billion in the financial year to the end of June. A year which Murdoch claimed to have been “their most difficult in recent history”.

The loss, largely due to $8.9 billion in write-downs already announced, compares with a $5.4 billion profit a year earlier.
Revenues at the media giant, owners BSkyB, 20th Century Fox and the Sun newspapers among many others, were down 7.8%.

It appears that ITV is set to sell Friends Reunited to DC Thomson, the Dundee-based publisher, for £25 million, less than four years after the company bought the social network for £170 million, a sum that included £50 million in performance-related bonuses.

The FTSE 100 reversed early gains to close down 24.24 points at 4,647.13.
Meanwhile the FTSE 250 continued to gain, climbing a further 23.57 points to close on 8,266.08

The pound continued its rise against the dollar as well as all the other major currencies on Wednesdays trading.

Pound/US dollar 1.7009
Pound/Euro 1.1799
Pound/Japanese Yen 161.1997
Pound/Swiss Franc 1.8028

As a result of ongoing controversies, the US Senate looks likely to push through their $2 billion extension of the “cash for clunkers” car subsidy programme before it breaks up for its August recess on Friday.

In a change of position from Monday, when senators from both parties expressed reluctance to follow the House of Representatives in extending the highly popular scheme the extension could be passed by the end of the week

Yesterday on Wall Street, the Dow Jones lost a lot of its previous days falling 39.22 points to 9280.97. The NASDAQ also crept back a little, down 18.26 points to close below the 2,000 mark on 1993.05

In the face of the global economic slump computer firm Cisco Systems have announced a fall in its quarterly profits by 46%, $1.1 billion compared with $2 billion for the same period a year earlier. Analysts, who had expected an even steeper decline, also were encouraged as was the company who announced that the quarter may have seen the last of the recession-related downturn.

Following the latest US weekly inventories data, US crude oil prices fell to $71.97 a barrel, after hitting a high of $74.89 in the previous session.
US crude stocks have risen to 1.7 million barrels.

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Tags: Alastair Darling, Barclays, BP, British Economy, Economics, Economy, Employment, Financial News, Halifax, Halifax International, Legal & General, Lloyds, Lloyds Banking Group Plc, Mortgage, Mortgages, News Corp, Recession, UK Banks

Yet another of the UK’s leading building societies have come up with some encouraging trading figures as well as interesting statistics to add weight to the now undeniable fact that the future is looking increasingly brighter for the housing market in Great Britain.

The UK’s fifth largest mutual society, the Skipton Building Society reported an increase of 23 percent in house sales in the first six months of 2009 compared with 2008. On the down side, Skipton announced that their profits had more than halved from £43.1 million to £17 million in the first half of 2009, largely due to bad debts that had jumped £14.2 from £7.9 million to £22.1 million in the comparable period last year.

Overall, it was reported that U.K. mortgage approvals had reached levels as high as they had been since April 2008, with banks granting 47,584 home loans in June, compared with 44,169 in May according to statistics issued by the Bank of England.

And it seems that those who aren’t buying properties are blowing their cash on chocolate. This certainly seems to be the case with chocolate giants Cadbury, who have announced a 12% increase in turnover for the first six months of 2009. Despite their increased revenues, Cadburys announced a drop in pre-tax profits of £22 million, down from £134 million last year to £112 million in 2009. However a spokesman for Cadburys announced that one-off costs of over £200 million had prevented them from reporting a trading profit of £262 million, which could be translated to a 24 percent increase in true terms. Cadburys attributed their turnaround to not only increased demand for their products but also a policy of cost cutting across the board, and particularly in their advertising costs.

The Bay Restaurant Group, who own, among others the Slug & Lettuce pubs and the La Tasca restaurant chain, have announced that they have succeeded in finding additional sources of finances allaying fears of possibly closure. This is the second time 18 months that the company, which operates about 190 outlets, has required to refinance their operations. This time they secured a new three-year £150 million pound loan package with Commerzbank) of Germany and Iceland’s Kaupthing.The refinancing deal gives the company, which has twice switched owners in the last two years, “secure financial footing” for the future,

The publishing group Informa has announced a sharp decline in their interim profits. The company, publishers of the Lloyd’s List, reported an increase in turnover of just one percent at £636.3 million in the six months to June 30, while their pre-tax profits fell £27.8 million (£32.2 million from £60 million). A spokesman for the company announced that their overheads included one of restructuring and reorganisation costs of £15.8 million.

The group, announcing that its events and training business was “experiencing the most severe downturn ever in this area” as companies cut back on spending, warned that trading remained difficult and the outlook for 2010 for the company looked “uncertain”.

In London yesterday, the FTSE 100 succeeded in getting back on track, rising 18.69 points to 4647.53, while
the FTSE 250 reversed some of its losses from the previous day, up 31.43 points to close on 7,762.59

The pound continued to stutter on Wednesday against the leading currencies, falling against the dollar whilst rising against the Euro, Yen and Swiss Franc.

Pound/US dollar 1.6381
Pound/Euro 1.662
Pound/Japanese Yen 155.6911
Pound/Swiss Franc 1.782

According to figures issued by the Federal Reserve, economic activity in the US has “begun to stabilise. Whilst the economy “continued to be weak going into the summer”, with sluggish retail activity and weak labour markets being key factors, signs are that t the pace of decline moderated over the last month.

However this little item of optimism failed to lift stock markets after earlier figures showed an unexpected fall in orders for US manufactured goods.

The Dow Jones closed down 26 points to 9070.72 The NASDAQ slipped back slightly after an impressive run, dropping 7.75 points to close on 1967.76

Like two aging Aunties clinging together for support, Yahoo and Microsoft have announced that their long rumoured cooperation on the internet search market is eventually going to happen. The move is planned as a slip on the wrist for these naughty boys at Google. Under the deal, Microsoft’s Bing search engine will power the Yahoo website and Yahoo will handle all aspects of selling advertising for Microsoft’s Bing search engine.

Yahoo, who have been struggling to make profits in the last few years, rejected several overtures from Microsoft to acquire the company, preferring to go it alone. This move seems like an ideal compromise situation, although the market was less enthousiastic, with Yahoo shares closing down 12.1% on the day, while Microsoft shares moved up by a mere 1.4%.

The price of crude oil has continued to drop after figures showed a continued increase in US oil stockpiles amid uncertainty in the American manufacturing sector.
US light crude fell $3.96, almost 6%, to $63.27 a barrel. London Brent dropped $3.24 to $66.64 a barrel.

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Tags: Bank of England, Bay Restaurant Group, British Economy, Cadburys, Economics, Economy, Financial News, Mortgage, Mortgages, Recession, Skipton Building Society, Slug & Lettuce, UK Banks

It’s a well known fact, that for the good or the bad, what- ever the new trend that emanates from the United States eventually makes it to our shores. And the next best thing making its way to us low cost, privately owned rental housing. And it may be just what the British home seeker is looking for. Despite the fact that property prices have dropped by around 15% in the last two years, for many couples the hope of ever owning a property of their own is looking increasingly remote. Also many of the baby boomers who are interested in down- sizing are afraid to do so because they cannot guarantee themselves that they will find a suitable property to replace the one that they may be selling.

In the US these have become common problems, and are being dealt with through the launch of rental homes projects that are of a high standard , can be produced relatively cheaply through utilizing the most modern methods of mass production.

The projects are rising throughout the US as a result of the Obama government’s call for greater institutional investment in the residential market.

One of the first bodies to rise to the call were the Aviva insurance group, who are about to launch an investment fund , funded by up to £1 billion to construct build to rent residential property. The property management will be handled in partnership with CB Richard Ellis, a well known international property consultancy firm who are currently very active in similar projects in the UK as well as the US.

Already one venture in the UK is under scrutiny by the partners. The plan is to build 100 units in residential blocks, which will be situated in a yet to be named town in the south-east England. All that is known is the units will be situated near the large transport centers in an area where property prices are particularly high.

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Tags: Aviva insurance, Credit Crunch, Debt, Economics, Financial News, Money, Mortgage, Mortgages, Obama, Property Prices, rental housing, Richard Ellis

Signs are beginning across the Atlantic that consumers are beginning resurrect the practice of borrowing their way out of trouble. A recent surge in consumer debt defaults in the US could well spread to the UK, according to a recent report issued by the International Monetary Fund (IMF).

The IMF have forecasted that of the almost £1.5 billion of credit card debt currently held in the UK, around seven percent of that, or around £100 million may need to be written off. Confirmation of the sad facts is expected to be released next week when UK banks begin reporting their first-half results. Some of them have already warned that a sharp increase in credit card debts will need to be taken into account.

House prices in the U.K. continue to solidify, expected to hold their value for a third consecutive month in July. While the credit squeeze and the recession continues to prevent the property market from improving the average cost of a home in England and Wales was stable at £155,600 pounds, which was still almost eight percent lower than in July 2008.

The National Express takeover saga continues. The company announced that they are liable reject the Cosmen family takeover bid, which only values the group at around £500 million.

It is expected when National Express present their interim results towards the end of the week, they will explain to their shareholders that their desire to remain independent, and become profitable through cutting costs and reducing their debt burdens. Steps that should make the company far more attractive for takeover in the future. ,

Two potential suitors for National Express have been turned away as they have offered around 325 pence per share, while National Express are looking for 400 pence, giving the company a value of around £620 million.

The Cosmen family are National Express’s largest single shareholder, with an 18.5 per cent holding, and Jorge Cosmen is its deputy chairman. Shares in the company have risen since Friday when the Cosmen family in partnership with CVC confirmed their interest.

It was carnival time on the FTSE as the market equaled its record of eleven consecutive positive session

Among the best performers was Lloyds Banking Group who added 6.9 per cent to close on 88.33 pence. Analysts expect shares in Lloyds to reach as high as 100 pence in anticipation of the bank’s half year results to be announced on Wednesday.

The FTSE 100 index closed up by only 9.52 points to 4586.13, taking e index’s gains over the past 11 sessions to 10.6 per cent which is a new record, beating the 7.1 per cent in 1997.

Meanwhile the FTSE 250 recorded its first reverse for a while down 61.58 points to 7,876.86

The pound gained a little ground on Monday against the leading currencies.

Pound/US dollar 1.6464

Pound/Euro 1.1573

Pound/Japanese Yen 156.5371

Pound/Swiss Franc 1.7634

Chairman of the US central bank Ben Bernanke rushed to defend the US bail-out plan of which he was among the principal architects. Bernanke admitted that his fears that the UK were heading into a second Great Depression had helped him to decide to back the stimulus plan which has so far cost the US taxpayer around $700 billion. Bernanke went on to point out that the bailout had widely benefitted the US economy and that no one should be surprised if further capital might be required to prop up the system.

Seemingly unfazed, the Dow Jones continued its steady rise, up by 15.27 points to 9108.51. The NASDAQ made a small gain, up a mere 1.93 points to close on 1967.89.

Recent reports have revealed that the annual rate of new home sales in the United States has risen by more than ten percent in June, further signs that the property sector is over the worst.

The US Department of Commerce announced that sales of new properties have hit a seasonally-adjusted annual rate of 384,000 in June, against 346,000 in May.

Whilst June’s figures were the strongest seen since November 2008, the average sale was down 5.8% from May and 12% lower than a year ago at $206,200 (£125,000),

On Monday Commodities made a strong start to trading, continuing last week’s gains. Prices of European crude rose beyond the $70-a-barrel mark while base metals staged a broad advance, led by copper that

jumped to its highest level in almost 10 months in the London, New York and Shanghai markets. The commodities are always an excellent barometer to gauge the extent of the global economic recovery.

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Tags: Bank, Bank of England, Banking, Ben Bernanke, British Economy, British Pound, Cosmen, Credit Card, credit card debt, Credit Crunch, Currency, Debt, Dow Jones, Economics, Economy, Financial News, FTSE, House Prices, IMF, International Monetary Fund, Lloyds Banking Group, Money, Money Management, Money Markets, Mortgage, Mortgages, NASDAQ, National Express, property market, Recession, UK Recession