Rumours have it that Bank of England governor Mervyn King may have had some serious explaining to do Chancellor Alasdair Darling as to why the consumer prices index went shooting up to 3.5% added to the worst ever January figures on record with a first time deficit for the traditionally high income month. The deficit was a staggering £4.3 billion, largely due to higher government spending and considerably reduced tax receipts. Estimates were for a £2.6 billion surplus for the month. Income tax receipts were down a massive 20% on January 2009, while corporation tax receipts were 6% lower. The only plus was the 3% upturn on VAT receipts rose by 3% due to the rate hike. However total tax receipts for January still dropped by 9%.

It would appear that Royal Bank of Scotland Chief Executive Stephen Hester has decided to decline his 2009 bonus. According to reports, the bonus was to be around £1.6 million pounds, paid out under terms already announced by the bank. The terms were that the bonus payout would not be in cash, and deferred for three years.

Pressure has increased on both Hester and Eric Daniels, CEO of the Lloyds Banking Group, after top bosses at Barclays turned down their multi-million pound bonus payouts last week, despite the bank announcing bumper profits.

The ever optimistic Gordon Brown announced that the Government was continuing in their determination to invest in measures that will promote growth and preserve jobs in the industries of the future, adding weight to his backing of Chancellor Alistair Darling over his decision to delay spending cuts until next year.

Mr Brown, speaking at the Policy Network conference told the audience: "I say to the British people, this is not the time to put the economy at risk. This is the time to make sure that growth and jobs are secured. 2010 must be the year of growth. It must not be the year when the economy dips back into recession. Instead of admitting the mistakes of private banks and institutions in causing the recession, the well-financed right-wing are not only trying to blame governments for the crisis but trying to use legitimate concerns about deficits to scare people into accepting a bleak and austere picture of the future for the majority, and then to use what’s happening as a pretext for public services to be marginalised at precisely the moment they should become smarter and more personalised. "He summed up

Also on Brown and Darling’s side is UK Business Secretary, Peter Mandelson, who has told his senior colleagues that he intends to backs plans for a state-run investment bank that would use public funds and private capital to back small business and large-scale UK infrastructure projects. The new bank would be modelled on the KfW Bank in Germany, which provides funding for banks to loan to small businesses as well as capital for major projects. Apparently Mandelson has met senior KfW executives to discuss if such a bank could be feasible in the UK. Plans for such a bank are now being surveyed by a Treasury team. Hopefully some form of announcement of the formation of such a bank will be announced in the forthcoming Budget.

Overall Lord Mandelson has been increasingly seen and heard on the public stage these days. The UK Business Secretary was reported to have severely criticised monetarist economists for their involvement in getting Britain into its present economic "pickle". Mandelson has voiced his support for economists who have warned how "reckless" early spending cuts could hamper Britain’s fragile recovery. Mandelson’s comments come as Labour seeks to take advantage of the support for delaying spending cuts until 2011.

Also on the downward slope was mortgage lending with the council of mortgage lenders revealing that gross mortgage lending in January 2010 fell to its lowest level in ten years. Reasons given were that property buyers have been deterred by the end of the stamp duty holiday. Gross mortgages totalled £9.1 billion pounds in January, down almost a third from December 2009. These figures are despite a recent increase in mortgage availability, adding concern that poor market conditions would continue or even worsen as the government withdraws monetary support for banks between 2011 and 2014.

The trend for online purchases in the UK fell to its lowest level last month, according to recent figures. Electrical goods, clothes and holidays were the online sectors that recorded the biggest drop in sales, with monthly growth for January of just five percent compared with 19 percent for the same period in 2009.

On the business front, there appears to be increased optimism regarding lending. Research has shown that the number of private companies that anticipate finance to become more readily available has increased, with around 44 percent under the impression that finance would be more accessible this year, compared with eight percent with the same view in last year’s survey. However, despite rising confidence in the availability of finance, fewer businesses said their lender was more supportive than this time last year.

It now looks like BAA will be looking to sell off Glasgow Airport after new figures revealed it is lagging behind Edinburgh in customer traffic. The Glasgow branch has found it difficult to win new airlines who want to use the airport, and have lost a lot of passenger traffic, apparently around half a million a year after the collapse of Scottish airline Flyglobespan. Meanwhile a spokesman for Scotland’s capital has reported that Edinburgh has managed to fill the gap with new routes and extra flights added by air carriers in January, including Ryanair and Jet2. Their entry on the scene has already replaced the 400,000 Flyglobespan passengers a year that were passing through the airport. .

Sterling enjoyed mix fortunes on Fridays trading. It closed up 0.012 against the dollar at $1.54692 while falling to 1.1374 against the Euro.

Overall, the FTSE 100 added a further 51 points to 5,358.175, before the close of business on Friday.

In US forex trading, the dollar hit a nine-month high against the euro of $1.3477, whilst also rising against a basket of currencies. The rise came after the US Federal Reserve’s surprise increase in interest rates for emergency bank loans, to 0.75%, from 0.5%. Analysts saw the move as a sign that the Fed could soon raise its other key lending rate.

US stocks fell in early trading as investors feared any further rate rises could slow the economic recovery.

The Dow Jones Industrial Average was up another 9.45 points to 10,402.35 while the NASDAQ Composite also crept up another 2.16 points to 2,243.87 on Friday’s trading.

US consumer prices rose by less than expected in January, easing concerns about growing inflationary pressures. According to the Labor Department, prices increased by 0.2% last month, with analysts forecasting a rise of 0.3%.

The rise was largely driven by energy prices, which rose for the ninth consecutive month. Over the last 12 months, US energy costs have risen by close to 20 percent. Excluding food and energy, prices fell by 0.1% in January – the first monthly drop since December 1982.

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Tags: Alasdair Darling, BAA, Bank, Bank of England, Banking, Barclays, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economics, Economy, Employment, Financial News, Flyglobespan, FTSE, Glasgow Airport, Gordon Brown, KfW Bank, Labor Department, Lloyds Banking Group, Mervyn King, Money, Money Markets, NASDAQ, Peter Mandelson, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, US forex

While the UK and with it almost all of Western Europe and the West Coast of the US are caught in the grip of the longest running and most severe cold spell that it has seen for close to thirty years without a break in the foreseeable future, many analyst are now scratching their heads and asking themselves "what will this do to the price of oil?"

Since the weather began to turn incredibly difficult about a week ago the price of oil has risen steadily from the around $78 to $82 within the space of one week, the highest price it has been all of 2009, and to those of you who may have forgotten, sat on a low of $32 a barrel towards the end of December 2008. With the news that the major economies, and especially China, were starting to build up stockpiles of oil, hopes were that prices would begin to fall and settle around the ideal figure of between $68 to $72 a barrel.

Analysts fear that if the span weather persists, and predictions are that at least in the UK it could continue to the end of January, and the increase in demand could push the price up oil even further, as stocks diminish. Meanwhile leading bodies in UK industry bodies have asked head- teachers to minimize snow-linked school closures to reduce levels of absence from the workplace. Although 61 percent of 200 companies surveyed by the British Chambers of Commerce said less than one in 10 employees was absent, the Federation of Small Businesses warned that childcare-related absences following school closures would become a serious problem. The cold snap looks likely to cost the economy close to £700 million pounds a day, meaning total financial damage of £14.5 billion pounds if, as expected. The bad weather lasts a further three weeks.

As expected UK interest rates will remain unchanged at 0.5%, meaning that the cost of borrowing has remained at a record low since March 2009. Economist are not expecting to see a rates increase s in the near term, despite expectations that the UK will finally have exited recession in the last quarter of 2009.

Formula 1 boss, Bernie Ecclestone is looking to buy a Saab, not the car but the company, and intends to do so in partnership with the Luxembourg-based private investment company, Genii Capital, which recently invested in Renault’s Formula 1 team.

Ecclestone’s dramatic announcement came shortly after the deadline for expressions of interest in the company closed without any public bids.

As well as Ecclestone’s offer, a second bid s also emerged, from the Dutch sports car maker, Spyker Cars.

U.S. food giant Kraft has received a ticking off from the principal shareholder Warren Buffett who has also thrown a spanner in the works of their proposed transaction. The Buffett-owned holding company Berkshire Hathaway who Hold 9.4% of Kraft’s stock announced that they will be voting against it is the proposal to issue up to 370 million shares to facilitate the Cadbury deal.

A spokesman for Kraft reacted to Buffet’s statement by saying that "Mr. Buffett is our largest investor and one of the most respected investors in the world. We take his opinion very seriously. We agree Kraft shares are deeply undervalued. We would not do anything to hurt shareholder value and we intend to remain disciplined in this process." Shares fell 7 pence, or 0.9 percent, to 772 pence on trading.

In their annual Christmas trading statement, Majestic Wine announced a rise in sales of 11.7 percent between Nov. 3 and Jan. 4 in the UK, with champagne sales regaining their seasonal appeal over Christmas. While champagne sales grew 11 percent, fine wine sales climbed 30 percent and online trading rose by 20 percent.

Family-owned brewer Fuller Smith & Turner also managed to increase its profits, sales and dividend in the six months to September, largely bucking the trend prevalent in the brewery sector. With members of the controlling families owning more than half of the company equity and 60 percent of the voting rights, executive chairman Michael Turner pronounced the effect that company’s long-term, risk-averse strategy was paying dividends.

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 U.K.’s largest home builder by market value Persimmon Plc has announced that they completed the sale of 8,976 new homes in 2009 with a total value of around £1.4 billion pounds. On the news their shares gained 1.2 percent, to 469 pence. Wolseley Plc, the world’s largest supplier of heating and plumbing gear seemed to be moving in a positive direction, with their shares added 4.7 percent, to 1,361 pence.

The Vodafone Group PLC expects to be able to offer Google Inc.’s Nexus One smart phone to its U.K. customers in the next few weeks, with their rivals reported to be already in advanced talks with the Internet giant about the device.

Vodafone, the world’s biggest mobile operator, is also in early discussions with Google about supporting the phone in France, Germany and Spain, a Vodafone spokesman told Dow Jones Newswires Wednesday, and hopes to offer it across the rest of Europe through the course of 2010.

JD Sports Fashion Plc, the U.K.’s second- largest sportswear chain said sales at stores rose 6.6 percent in the five weeks up to the Ist of January .2010. On the news their shares jumped 6.2 percent, to 550 pence.

Marks & Spencer Group on Wednesday reported a small increase in third-quarter sales, despite not slashing prices in the run-up to Christmas, as customers snapped up cashmere sweaters and clothing for kids. But the company cautioned that trading will remain challenging this year.

Group sales at the iconic British retailer rose 2.6% in the three months to Dec. 26. In the U.K. same-store sales rose 0.8%, with general merchandise up 1.2% and food up 0.4%. Underlying sales returned to growth for the first time in two years.

Still, the results missed the consensus forecast for a 1.2% increase in same-store sales, partly because this year’s trading period excluded the first day of the company’s post-Christmas sales, when it typically sees a surge in revenue. Online sales increased 32% and international sales climbed 6%

Britain’s Home Delivery Network said it would buy DHL’s UK parcel delivery operations, DHL Domestic, from Deutsche Post DHL (DPWGn.DE), growing its market share in a sector profiting from a boom in online shopping.

With many of the UK s leading retailers, among them John Lewis and Next reporting significant online growth, companies such as Home Delivery Network have felt the impact.

The parcel delivery company, headquartered in Merseyside, northwest England, said the combined businesses would have annual revenues of more than £600 million pounds, delivering over 180 million parcels a year, with a combined market share of 17 percent.

Britain’s currency recovered slightly over the last two days

• Dollar 1,5992
• Euro 1.1198

The FTSE100 finished trading on Thursday in a fairly static position at 5526.72 barely moving on the week’s trading.

On Wall Street, the Dow Jones Industrial Average closed on Thursday up a further 24 points to 10,607 while the NASDAQ also dropped 8 points to 2,300.71.

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Tags: Bank, Banking, Bernie Ecclestone, British Chambers of Commerce, British Economy, British Pound, Cadbury, Currency, DHL, Dow Jones, Economics, Economy, Federation of Small Businesses, Financial News, Freezing Britain, FTSE, Fuller Smith & Turner, Genii Capital, Home Delivery Network, Interest Rates, JD Sports Fashion Plc, John Lewis, Kraft, Lehman Brothers, Majestic Wine, Marks & Spencer, Michael Turner, Money, Money Markets, NASDAQ, Nexus One, Oil, Persimmon Plc, Peter Mandelson, Recession, Saab, Spyker Cars, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Vodafone, Wall Street, Warren Buffett, Wolseley Plc

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

Official figures released this week have confirmed that the current recession is the most severe Britain has suffered since World War Two. More businesses have gone bust in this than in any previous recession, with more than fifty companies closing their doors every day.  Estimates are that around 27,000 have closed since the economic crisis began, compared with 24,000 during the early 1990s recession and 9,500 in the downturn of the early 1980s.

However the news from the business was offset by the news that sharp rises in public savings may leave the economy better set for recovery. Higher incomes have helped to push up the savings ratio to 8.6 per cent, making it the first time for more than a decade that savings have been higher than their long-run average, further suggesting that the UK economy may be closer to finding a proper balance.

With pressure mounting on state-owned banks to dispose of their non essential assets, the Royal Bank of Scotland (RBS) are said to be considering selling of parts of its estimated £15 million art collection, but only when the art market improves. The bank’s collection comprises works by artists LS Lowry, Anne Redpath, Jack Vettriano, Patrick Caulfield and Peter Howson. To try to drum ups some customers, the RBS is said to be considering loaning some of their paintings to public galleries next year.

The Office of Fair Trading (OFT) has finally admitted defeat over their two-year battle against high overdraft fees. Despite the fact, the OFT still intend to invite bank executives into meetings starting early next year to discuss plans to make fees clearer and apply pressure to launch new current accounts with low or no penalty charges. , Although it is unlikely they will phase them out altogether, banks reportedly are working on plans to lower overdraft and especially the controversial penalty fees. Among ideas being raised is to block clients from spending money within a close percentage of their agreed overdraft limit.

Business Secretary Lord Mandelson has reportedly contacted the Tata Group requesting that they review their decision to temporarily suspend operation at their Corus subsidiary’s Teesside Cast Products site at Redcar, which will result in the loss of 1,700 jobs. Tata Steel will need to stay ‘very firmly in touch with’ the government to honour a shared responsibility to look after the workforce and local community, according to Lord Mandelson. The recession has led to a sharp fall in production at Corus and the Tata Group has constantly stated that they cannot continue to operate the plant with insufficient orders or the support of a long-term strategic partner.

Sterling fell below the $1.60 level against the dollar for the first time in more than two months on Tuesday after a disappointing revision of UK third-quarter growth, adding to concerns over the UK economy which continues to grapple with ballooning deficits and rising unemployment

• Dollar 1.5955

• Euro 1.1106

The FTSE 100 closed 0.6 per cent higher at 5,402.41, the highest peak since September 2008. Trading wound up early for the holiday period and is due to resume on Tuesday December 29.  . 

According to figures issues  by the U.S. Commerce Department figures consumer spending increased in November by 0.5 percent, which was lower than the median estimate of economists and followed a 0.6 percent gain in October,. Incomes climbed 0.4 percent, the biggest increase since May

On Wall Street, the Dow Jones Industrial Average climbed 86 points to close on 10,521.1 while the Nasdaq Composite jumped 48 points to 2,285.69, as positive figures and festive spirits combined.

US senators have passed the final Senate version of a historic healthcare reform bill. The bill will provide cover to 31 million Americans who till now were uninsured and is liable to lead to the biggest change in US healthcare in decades.

President Barack Obama welcomed it as offering “real and meaningful” reform, saying it was the most important piece of social legislation since the 1930s.  However, it must still be reconciled with more expansive legislation passed by the House of Representatives. The process of reconciling the two bills is expected to begin in January and will require considerable and tough negotiations to see the bill passed.

Crude oil prices rose more than $2 a barrel on Wednesday following the latest US weekly inventories data, averaging around $76.00 a barrel. US crude stock levels dropped 4.9 million barrels last week, far more than the consensus forecast for a decline of 900,000 barrels.

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Tags: Alastair Darling, Bank of England, Financial News, Peter Mandelson, Recession, Royal Bank of Scotland, UK Economy, UK Recession

Royal Bank of Scotland is considering approaching the market for extra money to avoid handing more control to the government. The bank, now 70% owned by taxpayers, is preparing to join the government’s Asset Protection Scheme (APS) to stop some toxic investments going bad. But it is also considering asking shareholders to invest further to prevent the government’s stake rising to a possible 84.5% if it insured all its bad assets with the APS.

According to official figures released on Friday, the UK government posted a record budget deficit for an August as the recession continues to bite into government tax receipts, The Office for National Statistics said the public sector net cash requirement (PSNCR) stood at £10.379 billion in August. That was lower than the 12 billion pounds expected by analysts but still twice the level of the same month a year ago and a record for the month of August. July’s PSNCR was also revised up by some £1.5 billion. The government’s preferred accruals-based measure, public sector net borrowing came in at £16.119 billion s, also weaker than expected and a record high for August, versus £9.876 billion pounds in 2008.

The flow of net lending to companies fell in July by the largest sum on record, according to a statement issued by the Bank of England on Friday. The figures provide further indication that more action may be needed to get credit flowing in the UK economy.

On a more positive note, mortgage approvals by major UK lenders rose in August for the seventh consecutive month to 57,000 from 53,000 in July. The net flow of lending to UK businesses fell £15.5 billion in July after a £3.6 billion pounds fall in June, making for the largest single decline since 1998.

UK Business Secretary Peter Mandelson has called on the European Union to intervene to prevent governments using state aid as a bargaining chip to protect jobs during Magna International Inc.’s takeover of General Motors Co.’s EU plants. Mandelson has joined the list of European politicians concerned that a German plan to provide €3 billion in loan guarantees to support the GM-Magna deal will sway the company. As the carmaker struggles with overcapacity, Magna has said it plans to cut about 10,500 jobs.

According to senior officials at the State Bank of India,(SBI) India’s largest lender, are looking at acquisitions of up to $1 billion in the UK and expect to maintain a 40 per cent growth rate in its UK business.

The bank’s overseas business plans, expected to be driven by both expansion and acquisitions, include the opening of 40 overseas branches, according to SBI chairman OP Bhatt. The bank was looking at all regions of the World, including the UK, for acquisitions. Besides the UK, the regions where the bank plans to open new branches include North America, Bangladesh and Nepal, where its subsidiary will set up 11 more outfits. It will open five more in branches in the UK by June next year and make London a hub for its European operations to boost international business. At present, the lender has seven branches in the UK and plan to open another, hopefully in October.Currently, the UK contributes over $3 billion to SBI’s turnover.

British Sky Broadcasting has accused the media regulator of making elementary errors in an official review of the pay-television market, and said that Ofcom, the independent regulator and competition authority for the UK communications industries, was exceeding its powers. BSkyB delivered its detailed response to the regulator’s findings that it should sell its most valuable content, including Premier League football and first-run films, to rivals at prices set by Ofcom. In the document, the broadcaster accuses the regulator of producing a financial analysis is fundamentally flawed, as well as challenging Ofcom’s right to even rule on the case, that has taken two years to decide. The pay-TV review was prompted by a complaint from four of BSkyB’s competitors, Top-Up TV, BT Vision, Virgin Media and the now defunct Setanta.

The biscuit group that makes Jammie Dodgers and Wagon Wheels, Burton’s Foods have been taken over by its lenders in a debt restructuring move that leaves Duke Street Capital, its private equity owner, nursing a considerable loss. The fate of Duke Street’s investment in Burton’s comes just over two years after its plans to close one of the biscuit maker’s factories caused the private equity group to be invited to a parliamentary inquiry for questioning.

On the FTSE Standard Life rose 1.8 per cent to 283 pence after Goldman added the insurer to its “buy” list.

Leading property stocks were higher. British Land gained 3.3 per cent to 528 pence after completing the sale of half its Broadgate development to Blackstone. Hammerson followed, gaining 2.6 per cent to 439½ pence.

The UK’s FTSE 100 index continued to climb but at a slower pace , rising 8.94 points to close at 5172.89, making for a 3.2 per cent gain for the week.

Meanwhile the FTSE 250 lost almost all of its previous day’s gains on Friday, falling 57.15 points to wrap up for the weekend on 9,306.93

The dollar fell to fresh one-year lows this week as rising risk appetite stemmed haven demand for the US currency. Continued improvement in sentiment encouraged investors to abandon the low-yielding dollar to seek higher returns elsewhere. The pound continued to lose value against the main currencies on Friday’s trading.

• Pound/US dollar 1.6271
• Pound/Euro 1.1059
• Pound/Japanese Yen 148.7878
• Pound/Swiss Franc 1.6751

Another two US banks have been closed by the federal regulator, taking the total number of American banking failures this year to 94.

The Federal Deposit Insurance Corporation (FDIC), which controls the banking sector, has shut Irwin Union Bank & Trust and Irwin Union Bank.

The move comes after their parent firm – Irwin Financial – was unable to meet an FDIC demand to boost their capital.

The failure of the two banks is likely to cost the FDIC £522 million.

The Dow Jones Industrial Average continued to move upwards towards the weekend , up 36.28 points at 9,820.2. The NASDAQ consolidated a little, up 6.11 points to 2132.86.

Gold dominated trading this week with bullion inching towards its record high of $1,030.80 a troy ounce set in March 2008.

It reached $1,023.85 on Thursday but was back to $1,012 on Friday, up 0.7 per cent on the week. It found support from dollar weakness and concerns about the outlook for inflation.

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Tags: APS, Asset Protection Scheme, Bank, Bank of England, Banking, British Economy, British Pound, British Sky Broadcasting, BskyB, BT Vision, Burton’s Foods, Currency, Dow Jones, Duke Street Capital, Economy, FDIC, Federal Deposit Insurance Corporation, Financial News, FTSE, General Motors, GM-Magna, Irwin Financial, Irwin Union Bank, Magna International Inc, Money, Money Markets, NASDAQ, Ofcom, Office for National Statistics, Peter Mandelson, PSNCR, RBS, Recession, Royal Bank of Scotland, Setanta, State Bank of India, Top-Up TV, UK Banks, UK business, UK Economy, UK government, UK Recession, US Banks, Virgin Media

After an inquiry found they had taken unreasonably large rewards from the now bankrupt car maker MG Rover Group Ltd, UK Business Secretary Peter Mandelson is seeking a ban on the investors involved in the collapse from running other companies

A recently released 800-page government-commissioned report into the demise of MG Rover, who went belly up in 2005 with debts amounting to £1.3 billion states that directors of Phoenix Venture Holdings, Peter Beale, John Edwards, Nick Stephenson, John Towers and Kevin Howe had drawn a combined 42 million pounds in pay and benefits over five years.

About 6,000 people lost their jobs when the car maker collapsed.

Lord Mandelson, business secretary, has also announced his confidence that following the sale of General Motors’ European business to Magna International, a Canadian car-parts supplier, and Russia’s Sberbank jobs were safe at Vauxhall’s plants in the UK. GM’s decision to sell Opel to the Canadian and Russian partnership ended months of uncertainty over the fate of the car maker.

Magna has already made a commitment to the German government not to shut any of its four factories there, however t there is still unease and uncertainty among Britain’s trade unions that either the Luton or Ellesmere Port plant, might be slated for closure by Magna. Without giving any specific reason why, Lord Mandelson, in a statement issued before the weekend. Said he was satisfied with the deal and that the immediate uncertainty about GM’s future in Europe has been removed.

The star of the show on the FTSE Friday was the rail maintenance group, Jarvis, whose shares jumped to their highest level in more than a year after the company reported an “extremely preliminary” takeover inquiry.

Their stock, which has been stuck below the 15 pence since a profits warning way back in November 2007 wiped 75 per cent off its value, has increased in value by close to 70 percent from 17 pence to 24 pence with two days of trading after the company released a statement to the markets on the approach

Analysts speculated that that any of the other companies involved the rail maintenance sector might be interested in the company, with others suggesting that an overseas buyer might also be a candidate.

The UK’s fourth-biggest supermarket group WM Morrison warned of lower sales growth on the back of more moderate rises in food prices, as it lifted profits and raised its interim dividend by 35 per cent.

Morrisons, who increased their underlying profits by 22 per cent, also announced that they are embarking on an expansion drive containing its fresh food shop within a shop concept, as it seeks expansion.

A spokesman for the company did warn that a natural reduction in comparative growth rates was liable to be caused by easing food price inflation, along with strong like-for-like sales growth. Shares in the group dropped by 0.8 pence to 283.7 pence.

As the market continued to digest news it was under investigation by the Serious Fraud Office and Office of Fair Trading over allegations of anti-competitive business practices, shares in Sports Direct International dropped 0.9 per cent to 107.9 pence.

The FTSE 100 index made it back over the 5,000 points, rising. 23.79 points to close at 5,011.47

The FTSE 250 rose again on Friday, up 82.18 points to close for the weekend to close on 9,207.89

The pound rose against the dollar yet took a minor tumble against the Euro on Friday’s trading, as well as the other major currencies.

• Pound/US dollar 1.616
• Pound/Euro 1.1433
• Pound/Japanese Yen 150.5651
• Pound/Swiss Franc 1.7281

According to a recent declaration by Treasury secretary Tim Geithner, the US is starting to pare back its emergency support for banks and financial markets, stating that the US financial system was no longer in need of extensive government prop-ups.

Almost a year since the collapse of Lehman Brothers, which triggered a financial panic that tipped the world into a deep recession, Geithner has announced that the time had come to ease the US economy from crisis to recovery mode.

Pointing to the evidence of a return to partial stability in global financial markets, Mr. Geithner announced that the US would allow their $2,500 billion guarantee for industry to expire as scheduled this month.

The Dow Jones Industrial Average faltered by just a little on Friday down 12.07 points to 9695.44 while the NASDAQ Composite rose by 0.2 points to close on 2080.9.

Fast-falling corporate inventories meant Japanese gross domestic product grew more slowly in the second quarter of this year than was initially forecast, according to government data released on Friday, but analysts stated that the world’s second largest economy’s recovery remained on track.

In the three months to June, GDP expanded 0.6 per cent quarter-on-quarter on a seasonally adjusted basis, revised data issued by the cabinet showed, down from the 0.9 per cent growth initially estimated last month.

Global oil consumption will contract less than previously feared this year and grow strongly in 2010, according to the International Energy Agency (IEA) the developed countries’ energy watchdog, another of the signs of optimism for the economic welfare of the World popping up on a regular basis these days.

The IEA now expect global oil demand to drop 1. 9 million barrels a day for 2009, less than the 2.3 million forecasts as recently as last month, making for the third revision since May, when the organisation forecast a contraction of 2.6 million barrels per day. .

Gold reached $1,011.55 a troy ounce on Friday, just 1.9 per cent below the record $1,030.80 reached in March 2008.

financial

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Tags: British Economy, British Pound, Dow Jones, Economy, Employment, Financial News, FTSE, GDP, General Motors, International Energy Agency, John Edwards, John Towers, Kevin Howe, Lehman Brothers, Lord Mandelson, Magna International, MG Rover, Money Markets, Morrisons, NASDAQ, Nick Stephenson, Office of Fair Trading, Peter Beale, Peter Mandelson, Phoenix Four, Phoenix Venture Holdings, Recession, Retail, Serious Fraud Office, Sports Direct, Stock Markets, Tim Geithner, UK Banks, UK Economy, UK government, UK Recession, US economy, WM Morrison

Business Secretary Peter Mandelson pointed out recently that the advantages of a weak pound for the UK economy far outweigh it disadvantages. Mandelson went on to explain that because of the pounds “competitiveness” since the beginning of 2009 , U.K. manufacturers are winning valuable export orders and help to soften the blow of the recession domestically.

“Exchange rates move up and down. At competitive levels that we have seen last year, we have seen growth.” Mandelson explained

The pound is currently trading against the dollar at 1.6524, almost sixteen percent less than a year ago. When sterling was at its peak in November 2007 it was being traded as high as $2.116, and in January of this year it had reached a low of $1.3503.

However the pound remains relatively strong against the Euro, which according to Government sources makes it more difficult to do business in Europe, which has always been a valuable export market for the UK. Overall exports fell by 17 percent in the quarter up to end May 2009, compared to the previous year, according to information from the Office for National Statistics.

While this figure is less than inspiring, it could have been so much worse if not for the weak pound.

So for the meantime, a weak pound that will continue to increase the competitiveness of British exporters and boosts UK exports sales is to be encouraged. With the US economy beginning to recover, the possibility to increase UK exports will become increasingly stronger. The problem is that importing raw materials with a weak pound can be problematic. One area where a weak pound is a real cash bonanza is in incoming tourism. And this year with better weather to help it along, tourists are flocking to the UK and keeping their currencies flowing into our cash registers.

So if the production lines can be kept rolling, and sun keeps shining, the weak pound will begin to pay for itself.

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Tags: Banking, British Economy, British Pound, Financial News, Mandelson, Money, Money Management, Peter Mandelson, Pound, Savings

Business Secretary Peter Mandelson is expected to announce on Wednesday the UK Government’s intention to launch a £150 million pound investment programme aimed towards small manufacturing companies specializing in areas where high levels of production and engineering skills are emphasized.

The program will be designed to benefit companies involved in high to medium tech manufacturing industries involved in the development of new technologies and designs.

Mandelson’s initiative comes as an extension of Prime Minister Gordon Brown’s package to help businesses access venture capital and loans.
Yesterday Mandelson along with Chancellor of the Exchequer Alistair Darling met with chief executives of the UK’s leading banks at Downing Street and told them to step up lending for small companies.
Those represented included the Royal Bank of Scotland Group Plc and Barclays Plc.

Veteran British banker Sir Win Bischoff is to become the new chairman of Lloyds Banking Group, taking over the reins in September from Sir Victor Blank who stepped aside after being blamed by investors for Lloyds’ disastrous takeover of HBOS. . The 67-year-old former chairman of Citigroup appointment comes despite objections from some investors who were less than happy about Sir Win’s handling of Citgroup’s problems during the financial turndown.

Europe’s largest short-haul airline Ryanair have announced a strong increase in their first-quarter profits which they attributed largely due to the steep decrease in fuel costs. Despite the fact, Ryanair’s share price fell by nine per cent or 20 pence to close at 400 pence, on warnings that their full-year earnings would be lower because of the need to cut air fares due to extreme competition.

Lower oil prices have affected the profitability of BP in the second quarter, in fact halving from the same period a year ago. This year’s results showed profits of a still commendable £1.9 billion
The results took BP’s half-year profits to around £3.2 billion, down 57% from the same period in 2008.

The situation at National Express, the bus and rail operator ,became even more complicated after their UK based competitor Stagecoach announced that they were in talks with the consortium led by Spain’s Cosmen family and CVC Capital over a possible asset trip operation if the group were successful in their take- over attempt.
Representatives of Stagecoach also hinted that they even consider making a bid of its own for the whole of National Express.
This latest development only strengthens speculation that the board of National Express will reject the takeover approach from the Cosmen and CVC consortium.
News of Stagecoach’s interest sent shares in National Express 6.4 per cent higher in mid-morning trading to 368 pence, while shares in Stagecoach were 2½ pence lower at 135 pence.

As was widely expected, the FTSE 100 failed to extend its winning streak to a record-breaking 12th straight session as profit taking began to set in.
The blue chip index sank 57.3 points, or 1.3 per cent, to 4,528.8,
The FTSE 250 recorded a further reverse this time down 145.70 points to 7,731.16

The pound continued to stutter on Tuesday against the leading currencies.
Pound/US dollar 1.6421
Pound/Euro 1.1591
Pound/Japanese Yen 154.7119
Pound/Swiss Franc 1.7659

The Dow Jones faltered slightly on a flat day’s trading, down 11.79 points to 9096.72 The NASDAQ made another small gain, up 7.62 points to close on 1975.51

Deutsche Bank has reported a 67% rise in quarterly profits, boosted by its investment banking arm.
Germany’s largest bank announced a net profit of £950 million (1.1 billion Euros) for the second quarter of 2009, compared to £550 million (645 million Euros) profit for the same period last year.

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Tags: Alastair Darling, Financial News, Gordon Brown, Goverment, Lord Mandelson, Peter Mandelson, Small Businesses, UK government, UK Small Business

At the end of a torrid first quarter, there are those that are reading into some of the recent statistics issued towards the end of this month and saying that there are some positive signs around.

Depending on which angle you are looking from the fact that house prices are continuing to fall should mean something. In March, house prices were almost ten percent lower than they were for the corresponding month of last year; however they only dropped by as low a percentage than in any of the ten previous months, according to a recent report.

This can mean two things, for those who are property owners, they can take some comfort in knowing that the value of their property is decelerating, and for those who want to get (back) into the property market, prices are becoming attractive and in easier reach.

Statistics are showing that the average price of a property in the UK is now sitting at just over £150,000, less than one thousand pounds down from February 2008.

Property owners were beginning to feel the benefits of reduced mortgage payments evidenced by an increase in consumer spending, proof that the treasury efforts to keep the economy running were beginning to bear fruit.

Another positive sign was the constant increase in mortgage approvals so far this year. The number of approvals rose to close to 40,000 in February and while there are no figures available for March as yet, indications are that the positive trend has continued for the month

The infusion of taxpayer’s money into the banking system has generated no little controversy, with many taxpayers feeling hard done to, especially in the light of the recent bonus controversies. However there are those that say that the government had no option but to support the banking system, and iron out its flaws for the future.

During his recent trip to South America, in which he was a member of Prime Minister Gordon Brown’s entourage, U.K. Business Secretary Peter Mandelson strongly suggested that the ongoing criticism of the British banking system should be allowed to ease off, as it was vitally important that the public regain some of their confidence in the system. Mandelson, who was the first UK minister of authority to speak out in such a direction, pointed out that while the banks have been the butt of some very harsh disapproval from the UK public as well as the government, yet it was time now to look forward.

Mandelson added that a situation had now been created where banks should succeed and go on to serve the British economy and society in a much more effective manner.

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Tags: Financial News, Gordon Brown, Mandelson, Mortgage, Mortgages, Peter Mandelson