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

The FTSE was at the centre of UK financial news with many of its major companies announcing or about to announce their half year results. Which till now have been mostly encouraging.

The UK companies owned by Spanish bank Santander saw their profits rise by a third in the first half of the year as bad debts showed a second consecutive quarterly decline.

Santander announced that their bad debt provisions in its UK business were £176 million pounds in the second quarter, up from £92 million pounds a year ago but still considerably less than the £189 million in the first quarter of this year. The first-half provision of £365 million pounds doubled from a year ago.

Most of the UK banks are expected to report a jump in bad debts when they report next week, while analysts and investors as one are looking for clues as to whether the levels of bad debt have been arrested

UK Profits for Santander, taking in includes Abbey, Alliance & Leicester and Bradford & Bingley were £790 million in the six months to the end of June, helping the bank’s Spanish parent to a net profit of 4.5 billion Euros, down 5 percent on the year but ahead of forecasts.

British Airways has reported a pre-tax loss of £148 million in the three months to the end of June, compared with a profit of £37 million in the same period last year, with revenues falling l 12.2% to £1.983 billion for the quarter.

Also falling deep into the red were German airline Lufthansa, Europe’s largest measured by turnover, who reported to a net loss of €216 million from a net profit of €381 million a year ago.

Leading airline chief executives have told the European Commission the industry on the ground as well as in the air is facing “the worst economic conditions on record”.

Meanwhile British Airports Authority (BAA) continue to make every effort to offload Gatwick Airport, but not at any price.

This example of possibly false bravado came as the UK’s largest airports operator revealed interim pre-tax losses for the six months to June 30 widened to £545.7 million from £135. 3 million

On one of the busiest results days of the year eight FTSE 100 companies released their half year results on Thursday including the BT Group which announced first-quarter adjusted earnings of £1.37 billion, larger than the £1.27 billion originally forecasted.

Pay TV operator BSkyB announced year end profits of £456 million an increase of £60 million. Company revenue rose by 8.2 per cent to £5.4 billion. BSkyB announced that during the last quarter It added a further 124,000 subscription holders.

Also rising was the FTSE 100, up 84 points to 4,631.6 and only seven points from away from its year high. The index has gained 9 per cent so far this month and is looking good to overtake its best monthly gain, reached in September 1992.

The FTSE 250 leapt forward 172.04 points to close on 7,934.63

Sterling was among the best performing of the major currencies against a generally weaker dollar, as rallying equity markets and better-than-expected housing data drove appetite for risk

Pound/US dollar 1.6516

Pound/Euro 1.1695

Pound/Japanese Yen 157.3943

Pound/Swiss Franc 1.7916

According to a prominent US financial regulator, the Obama administration’s plan to give US states more power to protect consumers from unfair banking practices would make it more difficult and costly for large lenders to operate across the country.

The regulator, Mr. John Dugan, head of the Office of the Comptroller of the Currency, who job it is to oversee national banks as comptroller of the currency, announced recently that the proposals to create a federal consumer protection agency and give states more leeway to crack down on unfair practices would have negative “ramifications for companies operating across state lines”.

On Wall Street the Dow Jones made a strong recovery on Thursday’s trading, up 83.74 to 9154.46 The NASDAQ also rose by 16.54 points to 1984.3

Japanese industrial output rose in June for its fourth straight month and it appears that they will be no looking back as electronics manufacturers, steel makers and chemical producers begin to climb back to full production…

Preliminary data has shown that in June industrial production was up 2.4 per cent from May, less than half the revised 5.7 per cent growth recorded the previous month but broadly in line with economists’ expectations.

However despite encouraging growth over the last quarter, production in June was still down 23 per cent compared with the same month of 2008.

A spokesman for Arcelor Mittal, has predicted that world steel demand will pick up by at least 10% next year, as emerging economies were coming out of the downturn “reasonably quickly” and that stimulus spending in the US and Europe was having an impact. Arcelor Mittal reported a second quarter net loss of $792 million, against a $5.8 billion net profit a year ago, causing their shares to fall 4.4% to €24.20.

Two of the world’s largest oil companies, Exxon Mobil and Royal Dutch Shell, have announced major profit setbacks in the wake of tumbling international oil prices and weaker demand.

Exxon, the largest US oil group, and Shell, the biggest in Europe, on Thursday unveiled post-tax profits for the second quarter that were roughly a third of those a year ago, with both companies attributing the blame to the continuing global economic crisis and softer demand for the collapse in their revenues..

Exxon’s profits dropped by two thirds $3.95 billion, the steepest fall in profits for more than a decade, and Shell’s 70 per cent decline in post-tax profit to $3.24 billion.

On the day US light crude was up $3.66, or almost 6%, to $67.01 a barrel, while London Brent was ahead by $3.68, at $70.21.

US light crude slumped $3.88 on Wednesday after figures showed a rise in US oil stockpiles, indicating too much supply in relation to demand

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Tags: Abbey, Alliance & Leicester, Arcelor Mittal, BAA, Bank, Banking, Bradford & Bingley, British Airports Authority, British airways, British Economy, British Pound, BskyB, BT, Credit Crunch, Currency, Dow Jones, Economics, European Commission, Exxon, Financial News, FTSE, Gatwick Airport, John Dugan, Lufthansa, Mobil, Money, Money Markets, NASDAQ, Obama, Oil, Recession, Santander, Shell, Stock Markets, Stocks and shares, UK Banks, Wall Street

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

Figures released by the Office for National Statistics show that unemployment levels are rising as fast as they did in the recession n of the early 1980s, and even faster than that of the early 1990s. Unemployment figures show that the number of UK residents who are claiming benefit rose by 1.3 percent to 7.1 per cent in the last quarter.
Barclays Bank continues to impress, by announcing that they are in talks with several companies about selling their asset management arm Barclays Global Investors (BGI). The bank hope to bring in around for about $10billion for the sale, with US money manager BlackRock apparently keen to conclude the purchase. Barclay’s cash raising move comes on the heels of their sale at auction of iShares, BGI’s exchange-traded funds unit to buyout group CVC for $4.2billion last month.

It might have been a coincidence but Barclays was among the top performers yesterday on the FTSE, up 4.2 percent (0 pence to 253) Standard Chartered was up 8.1 per cent (95 pence to 1197) and the Royal Bank of Scotland also added 4 per cent (1.6 pence to 39.5)

A spokesman for the National Grid announced yesterday that that company expects to strengthen its financial position this year, despite the fact that they are planning a further £1billion debt to fund a necessary investment programme.

The FTSE 250 index rose by 43.56 points to close on 7,472.33
While the FTSE 100 finished the session up 13 points, higher at 4,375.58
Sterling fell slightly against the dollar and rose against the strengthening Euro as well as the Japanese Yen and the Swiss Franc:

· Pound/US dollar 1.5235

· Pound/Euro 1.1198

· Pound/Japanese Yen 145.03

· Pound/Swiss Franc 1.6844

US equities broke their losing streak on Thursday following three consecutive days of selling as investors shrugged off negative unemployment data and took encouragement from the retail sector, allowing for a mixed day on trading on Wall Street
The Dow Jones Average rose 46.43 points to close at 8331.32. Nasdaq did well rising 25.02 points to 1689.21

The Obama administration is expected to roll out the next phase of its financial rescue plan any day now. The phase is scheduled to deal with toxic “legacy assets”, with senior administration officials keen to discover new private/public marketplaces for these bubble-era loans and securities. Their hope is by doing so banks can clean up their balance sheets and attract the almost £49 billion in equity they need to meet their stress test targets.
Sports clothing giant, Nike has announced their intention to cut about 1,750 jobs, making for the largest headcount reduction in its history, amounting to about 5% of Nike’s 35,000 global workforces. Nike is striving to cut costs after a recent sales decline due to the economic downturn, particularly in Europe.

It was announced yesterday that the German economy has suffered its largest contraction for the first quarter of 2009 since reunification/
Gross domestic product (GDP) dropped by 3.8% from the previous quarter, due to sharp falls in exports and investment. The French economy fared a little better for the same period down 1.2%

The Spanish economy also shrank, this time by 1.8% for the same quarter, making it the highest rate of decline for nearly 40 years.
In Asia, Toyota Motors, still reeling from their first loss making year in history, announced their plans for one of the most drastic management overhauls in its 70-year history. The ball is expected to begin rolling next month Akio Toyoda, grandson of the company’s founder, takes over at the helm as chief executive of the Japanese car maker.

The company intend to replace almost half of their senior managers as well as reorganising its key North American business.
After a few days of rises, crude oil prices fell yesterday after the International Energy Agency (IEA) said global demand would shrink by 2.56m barrels a day to 83.2m in 2009.
The IEA said eight out of the world’s 10 largest oil consuming countries were likely to see a “marked fall” in oil demand as their economies slowed or contracted. Despite that gloomy forecast, crude prices actually rose around 10 cents a barrel to average $58.69.
Gold was down $2.00 an ounce at $926.40, while copper also fell to $203.50

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Tags: Barclays, Barclays Global Investors, Dow Jones, Employment, FTSE, Obama, Toxic Debt, UK unemployment figures

If nothing else is gained by today’s G2O conference, one thing that it appears likely to do is to signal the ending of unfettered capitalism. What those world economic leaders will be trying to achieve over the next couple of days is to set the global economy back on track. Everyone knows that the best way to put out this fire is to throw money at it, and while Brown and Obama are convince that this is the only option, there are a few others who are reluctant to follow suit.

Whatever happens, the recession will eventually wind down. Yet what remains highly uncertain is what will come in its place.

Once group who are offering what appears to be a reasonable solution to at least some of the problems is the GSM Association industry group?

GSMA certainly do span the global stage, represented in no less than 219 countries. Uniting more than 750 of the world’s mobile operators, GSMA represents the interests of the worldwide mobile communications industry. ,

Executives of GSMA firmly believe that the global telecoms industry have all the tools at their disposal to help push the world out of the current depression, and intend to create 25 million jobs over the coming five years to do so. All they ask in return is that current industry regulations are to become less invasive on the privacy of the industry’s clientele, which represents at least half of the world’s population. As the number of people who will be exposed to mobile technology is only expected to grow in leaps and bounds over the coming years, it will come as no surprise to discover that the GSMA intend to put their money where their mouth is, by undertaking to invest 380 billion pounds in building mobile broadband networks. To give an indication of the seriousness and massive scale of this offer is to understand that the sum will represent, between 3 percent to 4 percent of the World’s GDP over the five year period.

The GSM Association industry group foresees a golden future for mobile telecommunications and has set themselves a target to link up around two and a half billion people to the mobile grid across the globe. They intend to bring communications to areas of the planet where currently there is no possibility of connecting entire populations due to the unfeasibility of putting down land lines. Mobile telecommunications will undoubtedly change the World and the more people exposed to it the better it can only be for economies of the developing nations and consequently the G20 nations, who are currently thinking how did it all go wrong..

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Tags: Credit Crunch, G2O conference, Global Credit Crisis, Gordon Brown, Obama, UK Recession

Those Scotsmen who were complaining that not enough Government money was finding its way north of the border had little to complain about yesterday when the news broke that the Nationwide Building Society will be taking over what remains of what was Scotland’s largest building society.

Nationwide will take over various divisions of the Dunfermline that are operable on the condition that the UK treasury invests the tidy sum of £1.6 billion to freeze up the society’s “toxic debts”

Chancellor Alistair Darling, showing a touch of heartwarming humility pointed out that the Darling children had saving accounts at the Dunfermline, but this was not the reason that the government had intervened to save the society, which had a rich history going back 140 years. What made their failure inevitability was the usual formula of taking risks in search of paper profits which turned into losses of of more than £24 million in 2008.

To show that you don’t have to be banker to run a bank, and in some cases it would be better if you weren’t, was the announcement that Tesco, the UK largest supermarket chain intend to get into the banking business, with plans to open thirty in-house branches throughout the UK, and by the end of 2009. The markets showed their skepticism by pushing their share value down by 4.1 percent (13.6 pence to 317.5)

Other news on the FTSE was not positive with banks and commodities standing still. The U.K. mobile phone retailer Carphone Warehouse Group saw their shares rise a modest 1.4 percent (1,75 pence to 125.75) on news that they were about to enter the bidding for Tiscali’s SpA UK operations.

The James Halstead Plc group also moved forward on news of increased income and profits. Their shares rose by 2.1 percent (8.25 pence to 399.25)

The largest owner of shopping malls in Britain, Liberty International Plc who are currently negotiating with Peel Holding Plc regarding the possible purchase the Trafford Centre in Manchester enjoyed a share increase of 2.1 percent on the day (8.75 pence to 433).

Also on the high street, Marks and Spencer Plc, still the UK’s largest clothing retailer were under a cloud yesterday, with uncertainty abounding as to whether the company will be hiring an independent chairman. Their shares fell by 1.3 percent (3.5 pence to 265.25)

On the day, the FTSE 100 index rose by 3.14% or 118.26 points to 3881.17 while the FTSE 250 finished the session 1.53 per cent, or 95.08 points to reach 6,319.36

Sterling rose slightly against the dollar and teetered downward against the Euro and whilst holding its own against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4308
Pound/Euro 1.075
Pound/Japanese Yen 141.10
Pound/Swiss Franc 1.6284

Wall Street shares had a bad day on trading as uncertainties, especially in the car industry, began to emerge.

The Dow Jones Average dropped 254.16 to close at 7522.02. Nasdaq also dropped 43.4 points to 1501.84

Understandably shares in General Motors dropped like a stone after President Obama proved once again that he is not only charismatic but also a pretty tough cookie. GM’s boss, Rick Wagoner knows that now as he was sent packing, as Obama has cut the credit line for those who will not toe the line in getting the US car industry back on track. In Asia, the Hong Kong Hang Seng index fell by almost five percent on the news,

With the Nikkei also taking a turn for the worse, down 4.5%.

Overall fears for the short term future of the car industry was a key factor in pushing stock markets down across the board yesterday.

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Tags: Bank of England, Banking, British Economy, Credit Crunch, Financial News, General Motors, Money, Nationwide Building Society, Obama, President Obama, Recession, UK Banks, UK Recession