The Nationwide Building Society Nationwide have recently announced that they are to substantially increase the discount on offer for first-time home buyers that participate in the company’s mortgage reservation scheme with the offer applying to three-, four-, and five-year fixed-rate mortgages in the meantime. In addition, the Nationwide are offering a complementary combined reservation and legal fee option to borrowers who are planning to move home. These offers, as well as similar, have been designed to reduce the initial lay outs involved in acquiring a property. A spokesman for the Nationwide is the world’s largest building society and one of the largest mortgage lenders in the UK predicted that with these measures they have removed some of the barriers that may have prevented people from buying a property.

In a bid to satisfy European authorities, the Royal Bank of Scotland may have no option but to either close down or farm out 312 of its branches operating s in England and Wales under the RBS banner and serving more than one million small businesses. The EU competition commissioner, Neelie Kroes appears to be forcing the RBS ’hand as they EU looks for substantial disposals to compensate for billions of pounds of taxpayer support as well as to finance the bank’s involvement in the UK Treasury’s toxic asset insurance scheme. The bank’s proposals to the EU, which are not liable to involve the company’s NatWest branch network in England and Wales, are thought to be in a well advanced state of negotiation.

The Icelandic government have announced that they have reached a fresh agreement with the UK government over the reimbursing the 400,000 savers who lost money when Icesave owner Landsbanki collapsed, leaving debts of around £3 billion. The original ruling was rejected by the UK and Netherlands governments, meaning a new bill will go before Iceland’s parliament for final agreement some time today.

A number of UK based manufacturers are combining efforts to promote the ‘Buy British’ angle in their marketing campaigns. among them are amusement ride manufacturer Amusement Technical, who, among others, want to take full advantage of the low exchange rate between sterling and the Euro to increase their export activities. A spokesman for the company explained that the low value of Sterling created a considerable opportunity for UK manufacturers competing for business in the Eurozone. The obvious downturn is that products and raw materials imported from the same region will be considerably more expensive.

The pound continued to rise in a volatile week’s trading, climbing 0.4% against the euro and 0.2% versus the dollar.

• Pound/US dollar 1.6303
• Pound/Euro 1.10989
• Pound/Japanese Yen 148.2221
• Pound/Swiss Franc 1.6658

The FTSE 100 fell 32.71 points on 5190.24 on Friday’s trading. The FTSE 250 dropped also shed some of its gains before the weekend, down 58.97 points to close on 9,426.20.

Bank of America have reported net losses of £612 million ($1billion) for the three months from July to September, a figure much worse than analysts predicted. The figure compares with a net profit of $3.2 billion in the second quarter of 2009 and $1.2 billion for the same period of last year. Bank of America is the fourth major US bank to report their third quarter results which are the least impressive so far.

The Dow Jones index took a tumble on Friday’s trading, falling below the 10,000 points mark, achieved during the week’s trading. The index fell 67.03 points to 9995.91 while the Nasdaq Composite index dropped 16.49 points to 2,156.8

financial

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Tags: Amusement Technical, Bank, Bank of America, Banking, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, Global Credit Crisis, Icelandic government, Icesave, Landsbanki, Money, Money Markets, Mortgage, mortgage seekers, NASDAQ, Nationwide, Nationwide Building Society, NatWest, Netherlands government, RBS, Recession, Royal Bank of Scotland, Savings, UK Banks, UK government, UK Recession

Banks and buildings societies have silently slashed savings rates over the holidays, with many accounts returning a penny in the pound or 0.1% interest.

Lloyds TSB, Halifax, Abbey, Barclays, Alliance and Leicester, NatWest, Nationwide and Royal Bank of Scotland all reduced their rates on variable interest accounts.

Egg and Yorkshire Building Society have withdrawn fixed rate offers over the holidays.

Savers with £5,000 in a savings account paying 0.1% will pick up £50 interest per year – with £10 income tax deducted at source reducing the pay out to just £40.

“It’s bleak for all savers, and pensioners in particular,” said Ben Yearsley, an investment manager with advisory firm Hargreaves Lansdown. “We’ve reached a point where savings rates are lower than the rate of inflation.”

Individual Savings Account (ISA) rates are down too – as Halifax, Abbey, and Lloyds TSB have reduced cash ISA rates by 1%.

The Bank of England’s monthly interest rate setting meeting later this week is expected to lop at least a further 0.5% of rates, pushing the bank lending rate down to 1.5%, although some pundits believe the rate will follow the US cut to 1% or less.

Waterford Wedgewood goes in to administration

Waterford Wedgwood, the upmarket glassware and china maker, has gone in to administration after failing to secure new funding.

Famous for Waterford Crystal and Royal Doulton, the company has failed to raise up to £200m in fresh capital. Deloitte will be appointed as receiver and administrator.

Waterford Wedgwood employs about 1,000 people at Barlaston, Staffordshire, and 200 people at Waterford, Ireland. Wedgewood has traded for 250 years, but has had profits eroded by cheap imports and is one of the last in a long line of pottery firms to face trading problems in Staffordshire.

Principles, Karen Millen and Oasis cash fears

Fashion chains Oasis, Warehouse, Karen Millen and Principles, all owned by the Mosaic, are in dire straits over cash flow after poor Christmas trading.

Before Christmas, Mosaic made clear how bad the situation was for the group, which operates through more than 2,000 shops employing 13,000 staff. Mosaic is paying interest only on debts of more than £400 million to Icelandic investor Kaupthing. The company fears Kaupthing will call in the loan, giving them a controlling stake.

Kaupthing also has a major stake in Harrods owner and department store chain House of Fraser.

“It is the worst run-up to Christmas we have ever experienced. The likelihood is that there is too little time left for the majority of retailers to make up the shortfall from the past two months,” said a Mosaic spokesman.

Markets

On the first day of trading in the New Year, the FTSE 100 finished up 128.6 at 4561.8 from 4434.2 and in New York, the DOW gained 262.44 points to end the day at 9034.69 from 8772.25.

The pound was steady – up a cent from $1.45 to $1.46 against the US dollar and shifting from 1.032 to 1.047 against the Euro.

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