Alistair Darling increased the levels of his undoubted popularity with the UK public by announcing some interesting cuts and about turns in his pre-budget cuts. The first was that VAT cut to 15% as recently as March in the Budget, is to be reversed as of 1 January 2010. Income tax bands are to be tampered with, meaning that people who earn £43,000 or more will feel the pain that little bit earlier. On the plus side national insurance bands are to be reduced downwards by a further 0.5% from April 2011, meaning that those earning less than £20,000 will no longer need to pay any contributions. State pensions and child benefits are also set to rise in April of next year.

Meanwhile it has been reported that U.K. consumer confidence stayed close to the highest level in the past eighteen months in November as shoppers have become more hopeful for the economy’s prospects in the coming year. 2010. The proportion of shoppers expecting the economy to worsen in the next six months fell to its lowest level since the survey began in 2004.

As expected, the Bank of England has held UK interest rates at the record low of 0.5%, whilst announcing that there are to be no changes to its programme of pumping newly-created money into the economy – so-called quantitative easing (QE). The Bank cut interest rates to 0.5% in March of this year in an attempt to boost the recession-hit economy while in November; they announced that another £25 billion would be injected into it, taking the total planned under QE to £200 billion. The bank is expected to wait until the current QE programme runs out in January before considering whether it should be expanded. As Chancellor of the Exchequer Alistair Darling announced earlier this week that he would rather suffer criticism for removing economic support too late than too early, Bank of England policy makers are waiting for the final quarter results to see if Britain has finally escaped the recession, and if the £200 billion spent to aid growth has finally brought some results..

Meanwhile in his pre-budget cuts speech, Darling appeared to back away from the bank bonuses issue, by announcing that there will be no windfall tax on banks, but they will pay a one-off levy of 50% on any bonus above £25,000

The number of loans approved for house purchase rose to 55,300 in October, up 9 percent from September and 43 percent higher on a year ago, the Council of Mortgage Lenders said on Thursday. According to an industry body, the amount of buyers has risen from its lowest point in January 2009 when only 23,000 loans were advanced. The number of loans for remortgaging remained weak, however, unchanged from September’s level of 33,000, one of the lowest levels since the series began in 2002.

Nokia have announced that they are to close their flagship store on London’s Regent Street, as a result of slow sales and poor customer traffic. The remainder of the company’s UK stores are to remain open. Nokia were reported to have spent £4 million creating the Regent Street store that was launched in February 2008, and will close in the first quarter of 2010, Seven other of Nokia’s UK stores, including its Heathrow Terminal 5 outpost, are set to receive a revamp.

Shares in Barclays Plc fell 3.2 percent, to 287.5 pence after allegations that they were withholding a “secret” $5 billion windfall profit from its purchase of Lehman Brothers Holdings Inc.’s North American brokerage, despite the fact that the gain was publicly disclosed before the sale closed 15 months ago.

Sterling continued to lose ground against the dollar on Thursday whilst rising slightly against the Euro, as implications of the UK government’s pre-Budget report weighed on the currency,

• Pound/US dollar 1.6278
• Pound/Euro 1.1058

After the UK finance minister forecast that the UK economy will shrink by 4.75 percent this year, rather than the earlier prediction of a 3.25 percent to 3.75 percent decline, the FTSE 100 fell by 0.37 percent to 5,203.89, while the FTSE 250 dropped by 1.24 percent to 8,919.49.

The US trade deficit unexpectedly narrowed in October as exports rose to their highest level in almost a year, official figures have shown.

The deficit fell to £20.2 billion ($32.9 billion), 7.6% lower than September’s downwardly revised $35.7 billion figure.

Helped by the weaker value of the dollar, US exports increased by 2.6% to $136.8 billion, led by civilian aircraft, cars and computer chips.

Imports rose 0.4% to $169.8 billion. Analysts had predicted the deficit to expand to $36.8 billion.

The value of US exports was the highest since November 2008, the figures from the Commerce Department showed.

The trade deficit is now expected to widen again in 2010 as the US economy continues to recover and consumers buy more imported goods.

On close of trading, the Dow Jones Industrial Average was up 120 points to 10,405.83 and the NASDAQ also rose 21 points to close on 2,190.86.

According to the latest figures from the Australian Bureau of Statistics, Australia’s unemployment rate fell in November to 5.7% from 5.8% in November, The figures came as a surprise to many analysts who had expected an increase to 5.9%. Australia is one of the few developed economies not to have fallen into recession like its counterparts throughout the world. The Australian economy has benefited from an increase in commodity prices, while exports have received a boost due to demand from China for its iron ore and other raw materials.

Official figures have revealed that orders for Japanese machinery orders fell by 4.5% in October compared with the previous month, with analysts expecting a fall of just 4.3%. The figures come just a day after the Cabinet Office revealed that the Japanese economy grew at a far slower rate in the third quarter than previous estimates showed.

Meanwhile, the price of crude oil dropped on new data from the US Energy Information Administration showing that gasoline stockpiles grew last week while demand declined. The price of oil dipped below $70 a barrel, falling to a two-month low, amid continuing concerns over demand.

US crude for January delivery fell 84 cents to $69.81 a barrel, before settling at $70.13 as it lost ground for the seventh consecutive day.

London Brent crude fell 81 cents to $71.58 a barrel.

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