Iceland’s president has refused to sign a controversial bill to repay £3.1 billion previously promised to the UK and the Netherlands. The news came after Iceland’s President Olafur Ragnar Grimsson announced a change of a heart following public protest and instead the country will now hold a referendum on the bill, which was designed to compensate governments forced to bail out their savers with Icesave accounts following Iceland’s banking crisis.

Legislation to repay the money was approved by Iceland’s parliament in December, but the approval of the president is also required before it can be passed into law.

Things must be getting strained again between Alistair Darling and Gordon Brown who were reported to have contradicted each other once again and in public. The contradiction was on that hot potato over how to handle public spending. Darling was reported to have argued that revenue from stronger than expected growth should be used to cut borrowing in a bid to allay the concerns of bond market investors, while Brown was said to be of the view that strong recovery may help to sustain spending, warding off fears of significant cuts to public services. Government officials hastened to deny a split between Brown and the chancellor. But they would, wouldn’t they.

Kraft have announced that they expect to increase the cash proportion in their offer to Cadbury in an attempt to make their bid more attractive to shareholders. The cash will come from the sale of its North American pizza business, strangely enough bought by erstwhile takeover bid competitors, Nestle who paid over £2 billion for a slice (of the company) .Meanwhile and contrary to recent speculation, Nestle have announced that they do not intend to table a takeover bid for Cadbury,. The company having been linked to a possible offer following Kraft Food’s hostile bid for Cadbury that was announced in December.

As part of their new strategic review, the English Premier League is looking to increase its international reach by inviting companies to become an official technology partner, aimed at tapping global opportunities more successfully. With current sponsorship making up just five per cent of the Premier League’s one billion pounds annual turnover, from sponsors that including Nike, Lucozade, Wrigley, and EA Sports, Topps Merlin and Sporting iD and title sponsors Barclays Bank.

One of the companies brave enough to raise their prices to match the return of VAT to its previous 17.5 per cent rate are Apple, who have increased the prices of many products on the Apple Store, including Macs. On 1 Jan 2010 the VAT level in the UK returned to 17.5 per cent, up from the reduced rate of 15 per cent (VAT is the UK term for sales tax). The UK government temporarily reduced the rate of VAT during 2009 to add some life into the UK economy, and it was thought that many of the UK’s leading retailers would continue to subsidise the increase, at least for January.

However Apple’s move seems likely to prompt some discussion surrounding the pricing of Apple products in general, which has steadily increased in the UK over the last two years.

Encouraging evidence of better retail conditions with record sales over the Christmas and New Year period were provided by the John Lewis employee-owned department store and chain. The company reported sales strongly ahead of the last two years that in the five weeks to January 2. John Lewis’s performance offers hope to retailers as they begin to release figures on their trading in the crucial festive period on Tuesday. John Lewis said total sales rose 15.8 per cent in the five weeks to January 2, compared with the same period a year earlier, while sales based on stores open at least a year were up 12.7 per cent.

On the stock exchange, shares in partly-nationalised Royal Bank of Scotland rose 9.9%, helped by analyst’s predictions that the bank is liable to "outperform" in 2010.

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 chairman of the US Federal Reserve Ben Bernanke has blamed poor financial regulation for the financial crisis and defended the record of America’s central bank, whilst calling for urgent improvements to financial oversight to prevent a repeat of an economic storm that he said could ultimately prove to be "the worst in history".

In a recent speech, Mr Bernanke argued that low interest rates in the first five years of the new millennium were "appropriate" for the time and had not caused the "bubble" in US house prices. His reaction came after the Fed has recently come under criticism by certain US economists who argue that it kept rates too low for too long, encouraging an artificial property boom. The subsequent crash led to a surge in repossessions, leaving lenders with huge losses, causing a financial contagion that spread around the world.

On Wall Street, the Dow Jones Industrial Average closed on Tuesday up 144 points to 10,572, while the NASDAQ also rose 39 points to 2,308.71.

According to expert analysts, the US public pension system faces a higher-than-expected shortfall of more than $2,000 billion that will increase pressure on many states’ strained finances and crimp economic growth. Recent estimates of aggregate funding requirement of the US pension system have ranged between $400 billion and $500 billion, however recent speculation has concluded that public funds would need to find more than $2,000 billion to meet future pension obligation

Commodities prices are set to rise further this year as the global economy expands faster, according to an International Monetary Fund forecast, following the biggest annual price increase for raw materials in nearly four decades in 2009

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Tags: Alistair Darling, Apple, Apple Store, Bank, Banking, Barclays Bank, British Economy, British Pound, Cadbury, Credit Crunch, Currency, Dow Jones, EA Sports, Economy, English Premier League, Financial News, FTSE, Gordon Brown, House Prices, International Monetary Fund, John Lewis, Kraft, Lehman Brothers, Lucozade, Money, Money Markets, NASDAQ, Nestle, Nike, North American pizza, Olafur Ragnar Grimsson, Peter Mandelson, Recession, Retail, Royal Bank of Scotland, Sporting iD, Stock Markets, Stocks and shares, Topps Merlin, UK Banks, UK Economy, UK government, UK Recession, US Federal Reserve, Wall Street, Wrigley

Regulators have agreed tough new regulations designed to put into action the proposals agreed by the G20 group of nations over the weekend. If they come into force, the regulations could force many of Europe’s top banks to raise tens of billions of Euros in capital in coming months.

The new rules are designed to force banks to improve the quality and extent of their capital buffers significantly in order to absorb shocks.

The new regulations will require banks to ensure that at least half of the capital held by banks must comprise of common equity and retained earnings. In addition the regulators have also decided to set specific limits on how much banks can borrow, expected to be around 25 times their assets.

Since the beginning of the financial downturn, investors in companies quoted on the FTSE, have become much more active and are turning up with increasing regularity at annual general meetings to make their feelings heard and their votes count. Evidence of their effectiveness has already been noted at meetings of firms such as Royal Dutch Shell and Royal Bank of Scotland (RBS), which resulted in proposed pay packages being rejected.

Cadbury are reported to be a little cheesed of with Kraft Foods, after having rejected a £10.2 billion takeover approach from them. The FTSE lived the idea and shares in the company rose by almost 40% after the announcement.

Spokespeople from Cadbury explained that the reason why they rejected the approach was that it basically undervalued the company, while analysts suspect that Kraft’s offer was just an opening salvo, and they will come in with an increased offer. Rumours have it that other "kings of confectionery" are waiting in the wings, among them Hershey and the Nestle Company.

All the news on the FTSE was not about Cadburys, with the Lloyds Banking Group adding 4.4 per cent to close on 106.31 pence. The rise in share value came on reports that the bank is interested in converting £7 billion of its existing e shares to equity at a premium. .

Sports Direct, after seeing their shares rise by 14 per cent on Friday, succeeded in adding a further 11.8 per cent to 114 pence in anticipation of a very positive update on the company’s position due to be released today.

The FTSE 100 index jumped again, driven by the news from Cadbury. It sweetened by 81.48 points to close of 4933.18.

Meanwhile the FTSE 250 continued to climb on Monday, up 2.18% or 190.61 141.05 points to close on 8,963.46.

The pound dipped against the major currencies on a weak days trading.

• Pound/US dollar 1.6351
• Pound/Euro 1.14
• Pound/Japanese Yen 152.096
• Pound/Swiss Franc 1.733

There was no trading on Wall Street on Monday for Labour Day. The Dow Jones Industrial Average stayed on 9441.27 while the NASDAQ Composite looked comfortable on 2018.78.

Joseph Stiglitz, the Nobel Prize-winning economist is bucking the trend by stating his doubts on the robustness and staying power of any US economic recovery, warning that the current economic downturn may be what is known as a "double dipper".

According to Stiglitz, who acted as chief economist for the World Bank, "the prospects of a robust recovery are very, very weak" and there was a strong chance that the economy collapse after a period of growth.

Germany’s industrial rebound is still gathering momentum, with reports that when manufacturing orders chalked up another strong rise in July. Europe’s largest economy however is still far from returning to its pre-crisis levels of activity.

Industrial orders rose 3.5 per cent in July, extending a 3.8 per cent increase in June, adding further evidence that economic growth in the third quarter would prove much stronger than could be hoped until even a few months ago. Production was still down 20 per cent than in the same month in 2008.

Trading volumes across commodity markets were lighter than usual on Monday because of the Labor Day holiday in the US. Gold rose 0.2 per cent to $995 a troy ounce, consolidating just below the $1,000 mark.

Crude oil prices steadied, at around $67.00 a barrel.

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Tags: Bank, Banking, British Economy, British Pound, Cadbury, Credit Crunch, Currency, Dow Jones, Economics, Economy, financial downturn, Financial News, FTSE, Hershey, Joseph Stiglitz, Kraft Foods, Lloyds, Money Markets, NASDAQ, Nestle, RBS, re-capitalisation, Recession, Royal Bank of Scotland, Royal Dutch Shell, Sports Direct, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK Recession, US economy, Wall Street, World Bank