The announcement made before the weekend that that 121,000 Royal Mail staff had voted overwhelmingly for national strikes over jobs, pay and working conditions had UK business owners and managers in a sweat. Companies fear that national action, on top of the regional strikes that have been taking place over the past three months, will cause widespread disruption to postal deliveries and hinder their long awaited and much needed economic Christmas rush. The Communication Workers Union announced that their members had backed nationwide walkouts by a three to one ratio in protest at the “imposition” of changes to working practices as well as cuts in pay and job losses. Dave Ward, deputy general secretary of the Postal Workers Union, said that representatives of the union were due to meet on Monday to agree its next step and would give the Royal Mail a “final opportunity” to resolve the dispute over the next week or so.

According to Britain’s business secretary, Lord Mandelson Britain is unlikely to accept Magna International’s plan for the takeover of Vauxhall/Opel unless certain “shortcomings” are addressed. In explaining Britain’s role in “signing off” on the deal, Lord Mandelson stated that an impact plan should be agreed even before talks on how much Britain will contribute to the ($3.1 billion ) €4.5 billion) of loan guarantees needed to restructure Opel can begin. While Germany is due to supply most of the loan guarantees, the British government is being called upon to supply €400 million in guarantees. In return Mandelson expects assurances on the fate of Vauxhall’s two UK plants, in Luton and Ellesmere Port, which employ about 5,000 workers between them, before giving the green light.

According to a report from a leading UK global ratings agency, The recent gains in house prices are likely to prove only a temporary respite before a further steep fall next year, The agency has forecast that they expect UK property prices to fall by about 30 per cent in total from their October 2007 peak, despite the fact that property prices have improved for the last three months leading to hopes of a sustained recovery. However prices still remain 13 per cent below their peak in 2007.

Carphone Warehouse, whilst raising their target for the number of residential broadband customers it hopes to capture in 2009/2010 have taken the opportunity to disclose that the number of subscribers that they had hoped to take on board during their recent acquisition of Tiscali UK, were considerably less than the figures quoted. No fewer than 160,000 than the 1.45 million that Tiscali boasted before the acquisition. On the discovery, Carphone Warehouse has announced that they will be renegotiating the £236 million price it agreed to pay for Tiscali UK.

JJB Sports have announced that they are planning to instigate a share placing and open offer that they hope will rise close to £100 million, more than the total market value of the sporting goods retailer. Shares in JJB, who narrowly avoided administration in April, are likely to be priced below 25 pence, a significant discount to Thursday’s close of 34½ pence. On the news, shares fell sharply on Friday’s trading, down 6.5 per cent to 32¼ pence. On the upside, demand for the new shares has been so high that the company expects to rise significantly more than its current market capitalisation of £86.5 million with analysts predicting that it could even reach more than double that amount. .

On the FTSE 100 Friday, Unilever was among the risers on Friday up 2.7 percent to 1816 pence after industry data showed sales of product lines such as ice-cream and deodorant has been very buoyant since July. Confectionary giant Cadbury fared worse on announcement that their sales had fallen sharply below company targets since July, despite that fact that that the company has increased the number of promotions running after they fell into an unwelcome spotlight after last month’s bid from Kraft. Cadbury closed flat at 785 pence. Shares in Whitbread the brewer added 1.6 per cent to 1269 pence in anticipation of positive results due to be issued on Tuesday.

The FTSE 100 continued its steady rise, this time by 7.23 points to close on 5161.87. The index rose 3.5 per cent on the week, thanks largely to the falling US dollar.The FTSE 250 held its ground before closing for the weekend, up a mere 3.86 points to close for the day on 9,377.30

The pound lost some of its pace against the leading currencies, as well as again creeping below the $1.60 mark.

• Pound/US dollar 1.5843
• Pound/Euro 1.10757
• Pound/Japanese Yen 142.1499
• Pound/Swiss Franc 1.634

According to figures issued by the Commerce Department, the US trade deficit shrank unexpectedly in August as the weak dollar boosted exports.

The deficit, representing the difference between US imports and exports, fell to $30.7 billion (£19.3 billion) from a revised estimate of $31.9 billion in July.

Exports rose slightly on the back of the weak dollar while imports fell.

The dollar has slipped recently, with traders moving into other currencies as the global economy begins to recover. The sharp fall in the US dollar is giving ammunition to the critics of the Obama administration and fuelling broader concerns about the erosion of America’s reserve currency status.

The Dow Jones index closed strongly for the weekend up 78.07 points to 9864.94. The NASDAQ index continued its consistent rise, up a further 15.35 points to close on 2139.28.

In an unexpected development, but one which is expected to positive implications to the US economy, it was announced on Friday that President Barack Obama has been awarded the Nobel Peace Prize. The award has been granted for the President’s efforts to reduce the world’s stockpile of nuclear weapons and working for world peace. The first African American to hold the country’s highest office, Obama has consistently called for disarmament and since taking office in January has been actively involved in attempting to revive the stalled Middle East peace process.

financial

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Tags: Banking, Barack Obama, British Economy, British Pound, Cadbury, Carphone Warehouse, Commerce Department, Communication Workers Union, Credit Crunch, Currency, Dave Ward, Dow Jones, Economy, Financial News, FTSE, GM, House Prices, JJB Sports, Kraft, Lord Mandelson, Magna International, Middle East peace process, Money, Money Markets, NASDAQ, Nobel Peace Prize, Obama administration, Opel, postal strike, Postal Workers Union, Recession, Retail, Royal Mail, Stock Markets, Stocks and shares, Tiscali UK, UK Banks, UK business, UK Economy, UK government, UK Recession, US economy, Vauxhall, Whitbread

Last week’s announcement of Lloyds Banking Group’s intentions mount a rights issue planned to raise up to £20 billion in a rights issue has caused no uncertain amount to Chancellor Alasdair Darling and his team as well as those private sector investors who have seen fit to buy some of the bank’s shares. .

In an understandable nut possibly ill timed attempt to reduce the reliance on the UK government, Lloyds’ management began to test the water on the concept that the terms of its participation in the government’s asset protection scheme (APS) might be open to re-negotiation after their second-quarter results were much more positive than analysts anticipated.

However it does appear that the bank will not be met with too many friendly faces when they set about convincing Darling to take a second look at the basic terms of the scheme after several months of highly complex negotiations have been put to bed. ..

Chancellor Darling’s long held standpoint on the APS as the international model for cleaning up toxic assets is believed to be untouchable. In addition, government officials are reported to be of the opinion that raising Lloyd’s ability to raise sufficient capital is questionable, and any attempts to sidestep the scheme would be not only be unwise, infeasible or sufficient to satisfy regulators.

The financial implications of Lloyds opting out of the APS could be fundamental, with the bank having to rise between £30 billion and £40 billion in capital to satisfy the regulator’s stress test. In addition, the UK government could be entitled to demand compensation for carrying £575 billion of the banks liabilities since March of this year.

The Financial Services Authority reported yesterday that the number of new financial companies seeking UK regulatory authorisation have risen by ten per cent during the second quarter, making for the first increase since early 2008.

Independent financial advisers, including those who offer life assurance and other retail ¬products were reported to comprise the single largest group.

Next in line were financial advisory services, private equity shops and corporate finance boutiques. Cottage financial service industries that have been established by ex-city financiers who fled the mainstream banks during the recent turmoil in the financial sector.

The number of firms cancelling their authorisation with the FSA also slowed by 18 per cent in the three months to June, according to another recent study.

On the FTSE yesterday, shares in the BT Group were very much in demand after positive analyst reports.

The reports stated that BT’s broadband business looked set to benefit from Tiscali’s exit from the UK and Vodafone’s failure to capture a share of the market. Shares in BT rose 2 per cent to 134 pence.

Banks led the fallers amid the growing debate about whether Lloyds Banking Group should pursue their controversial rights issue scheme.

Lloyds fell 4 per cent to 98 pence, while shares in Royal Bank of Scotland dropped 3.6 per cent to 45 pence and Barclays also lost 1.8 per cent to close on 358½ pence,

Enterprise Inns slid 1.9 per cent to 172 pence after two of the company’s senior directors took advantage of their share’s rebound.

Ted Tuppen, group chief executive, raised more than £500,000 after selling 300,000 shares at 167 pence each, while CEO Simon Townsend cashed in 67,500 shares for 173 pence. Enterprise share values have jumped by more than three times since December, when both directors increased their shareholdings.

Shares in IT services group Logica were up 1.3 per cent to 113 pence after claims that the company was a potential bid target for BAE Systems.

BAE, 1.5 per cent higher at 325½ pence have been known to be actively on the lookout for acquisitions in an attempt to expand their security operations currently focused on the defence sector, making Logica’s public service operations a credible target..

There was unexplainably strong volume in instrument maker Spectris, whose shares closed 2 per cent higher at 576 pence.

The FTSE 100 drifted from its high of the year, losing 9.36 points, or 0.2 per cent, to 4,722.2.

Meanwhile the FTSE 250 closed just half a point down on 8,421.46

The pound stepped backwards against the other major currencies.

• Pound/US dollar 1.6483
• Pound/Euro 1.1654
• Pound/Japanese Yen 159.6125
• Pound/Swiss Franc 1.7853

The news that the US banks stand to collect a record $38.5 billion in overdraft fees this year has left a bitter taste in the mouths of many. Even more so when considering that the bulk of the revenue will come out of the pockets of already financially stretched consumers, struggling to keep their heads above water during the current financial downturn.

Overdraft fees have almost doubled during the last decade, and seem inappropriate when considering the political pressure applied to banks to ease the burden on after being bailed out by taxpayers.

The Federal Reserve is working on rules on overdraft fees, and rules on customer charges could be a priority of the Obama administration’s proposed Consumer Protection Agency if approved by Congress.

US stocks drifted from last week’s highs on Monday, with investors looking to bank profits even as several experts gave a relatively bullish analysis for equities.

However sellers far outnumbered buyers on Monday’s trading

On trading Monday, the Dow Jones index eroded a little down 32.12 points, to close on 9,337.95. The NASDAQ also dropped below the 2,000 mark again, down 8.01 points to close at 1992.24.

Latest reports prior to President Obama’s visit are that Mexico has moved into its deepest recession of modern times.

Figures to be announced on gross domestic product in the second quarter is expected to report a 10.4 per cent fall, following a first-quarter drop of 8.2 per cent, according to the finance ministry.

The International Monetary Fund predicts that, for the full year, the economy will fall by 7.3 per cent, the worst performance in Latin America.

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Tags: Alasdair Darling, BAE Systems, Bank, Banking, British Economy, British Pound, BT Group, Credit Crunch, Currency, Dow Jones, Economics, Economy, Federal Reserve, Financial News, Financial Services Authority, FTSE, International Monetary Fund, Lloyds, Lloyds Banking Group, Logica, Money, Money Markets, NASDAQ, Obama administration, Recession, Royal Bank of Scotland, Simon Townsend, Stocks and shares, Ted Tuppen, Tiscali, UK Banks, UK government, UK Recession, US Banks, Vodafone, Whitehall