After a nine-month run of steady increases, UK house prices were reported to have fallen in February, while the three-month rate registered a rise of 1.6 per cent. The three month property rise comparison chart was down from the 2 per cent increase seen in the three months to January as well as its peak of 3.7 per cent the three months to September 2009. According to the, prices fell by 1.0 per cent month on month in February,, although on a year on year level, house prices rose by 9.2 per cent against 8.6 per cent in January.

It now transpires that Britain’s escape from recession was stronger than previously thought in the final three months of last year, as the services sector bounced back.

According to the Office for National Statistics, the UK economy grew by 0.3% in the fourth quarter, rather than 0.1% as previously estimated, which marked the first time the economy had grown since the first quarter of 2008, when the UK’s deepest and longest postwar recession on record began.

City economists, who had predicted 0.2% growth, hastened to point out that the figures did not change the overall economic picture; with some of them even warning that the economy could even slip back into recession in the first three months of this year.

Before the weekend, the extent of the beating that the Lloyds Banking Group took through the acquisition of HBOS was revealed. The bank, who are partially owned by the UK public, revealed that no less than £30 billion had been set aside over the past two years to cover toxic debt hat Lloyds had inherited from the deal, with the bank indicating that they expect a further £12 billion of charges on HBOS loans this year, showing what a white elephant the bank had purchased for what then appeared to be a bargain price of £8 billion.

All these negative figures contributed to Lloyds announcing a worse-than-expected pre-tax loss of £6.3 billion for 2009. The figures make a somber contrast to those of Barclays and Royal Bank of Scotland who over the last ten days announced figures that beat market projections. Lloyds also came under a lot of stick over the issue of whether it had met lending targets agreed with the UK government.

Understandably shares in the bank fell heavily after having increased by 18 per cent in the previous nine days on what proved to be false optimism about its 2009 figures. In the event, Lloyd’s report of a series of unexpected bad debts for the fourth quarter sent their shares falling by 4.4 per cent to 52½ pence. Royal Bank of Scotland shares also faded 1.9 per cent to 37½ pence after analysts reduced their ratings which they claimed painted a too optimistic picture.

Financially troubled US insurer AIG are apparently on the brink of selling AIA, the US life group’s Asian business, to the UK’s largest insurer Prudential for about $35 billion in cash, shares and other securities The is deal expected to become official on Monday 1st March. The announcement will come after a weekend of talks, after which the AIG board decided to press ahead with the sale of AIA, one of the jewels in AIG’s crown, in preference to a planned partial listing of the unit. Under the terms supposedly being discussed, Prudential would pay about $25 billion in cash and the remaining $10 billion in shares and other securities for AIA. If the deal does go through, analysts prophesy that it would transfer would more than double the size of Prudential and mean that its business would be dominated by Asian sales and profits.

The UK’s oldest building society Chesham has agreed to merge with the Skipton Building Society, to create a mutual society with more than £15 billion. The merger brings to an end 165 years of high street presence for the society, although their name will continue to be used for the society’s existing share accounts and deposit accounts of assets. A spokesman for Chesham, who service over 20,000 members from their three branches, welcomed the merger, saying it would provide the security of being part of a larger group. In the past year Skipton Building Society, has seen annual profits increase to £63.5 million

According to a recent survey, the cost of car insurance jumped 12.7 percent in Britain in 2009 with the average quoted premium rising to £507 at the end of 2009 compared with £450 pounds a year earlier, The pace of the increase accelerated in the second half of the year, with prices rising by 6.3 percent in the final quarter alone. British car insurance prices have been held in check by stiff competition between providers, largely due to the spread of price comparison websites.

Write-offs at their troubled T-Mobile UK subsidiary helped to pushed Deutsche Telekom’s profits down by 77% in 2009, with profit slipping to €353 million from €1.5 billion in 2008, due to write-offs worth €2.3 billion on goodwill in T-Mobile. Deutsche Telekom and France Telecom have agreed to merge their UK mobile operations. They are awaiting regulatory approval for the deal, which will make the jointly-owned company the biggest UK mobile network operator with some 29.5 million subscribers.

Portsmouth Football Club have lost their battle to avoid entering administration as the Premier League side finally admitted defeat in their struggle to overcome a mountain of debt totalling £60 million, of which – g more than £12 million is owed to HM Revenue and Customs.

The process of administration automatically means that the club will be docked nine points by league bosses, making relegation almost certain and probably a welcome relief for the club’s supporters/ .

Portsmouth has already changed hands four times this season and has been at the bottom of the Premier League for most of it. .

On the foreign exchanges, the pound continued to fall . At close of trade Friday it was $1.5117, while standing at 1.1121 against the Euro.

As the markets closed for the weekend, the FTSE 100 was up 76.3 points, to 5,354.52. The rise erased most of the week’s trading losses, and made for a gain of 3.2 per cent for February.

According to revised figures, the US economy grew at an annual rate of 5.9% in the last quarter of 2009, higher than the first estimate of 5.7%.

According to economists, the rise was down to an increase in manufacturing output rather than stronger consumer spending; with the figures confirming that the world’s largest economy is moving rapidly away from recession.

On Friday, the Dow Jones Industrial Average continued to creep upwards, but at a much slower pace. It rose just 4.23 points to close on 10,325.26 while the NASDAQ Composite also rose by 4.04 points to close on 2,238.26

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Tags: AIG, Barclays, British Economy, British Pound, car insurance, Chesham, Dow Jones, Economics, Economy, Financial News, FTSE, HBos, Lloyds, Money, NASDAQ, Office for National Statistics, Property Prices, Recession, Royal Bank of Scotland, Skipton Building Society, Stocks and shares, T-Mobile, UK Banks, UK Economy, UK government, UK Recession

According to a recent report by the Centre for Economics and Business Research (CEBR) UK house prices are liable to rise by about a fifth in the next four years. The forces that will push property prices up are increased lending levels by the banks and interest rates remaining at a low level.

Home values will rise 6.5 percent in 2010 and will have gained around 20 percent by the end of 2013, according to CEBR radically altering their forecast of October 2009, which house prices would increase by only 2.6 percent this year.

CEBR’s announcement strengthens reports from the Nationwide Building Society that showed house prices have begun rising again after the economy returned to growth. However their optimism was dashed by news that potential UK house buyers could soon face a chronic shortage of credit that will see mortgages ‘rationed’.

According to the Council of Mortgage Lenders (COML) as government schemes to keep mortgage lending afloat are due to dry up in 2014, their fears that a funding gap to the tune of £300 billion will open up. COML predicted in their recent report that the UK is at risk of a chronic under-supply of credit, bringing with it the rationing of mortgages for customers that will continue for many years. Before the financial crisis, the funding gap, meaning the difference between what banks took in savers’ deposits and what they lent out, was always covered by the wholesale market in mortgage debt.

As a result of lower oil and gas prices, oil giant BP have reported a 45% drop in annual profit Its replacement cost profit for 2009 was £8.75 billion, compared with £15.39 billion in 2008. The company said that its oil and gas production increased more than 4% in 2009 and its reserves had grown for the 17th year in a row. Profits during the final three months of 2009 were up 33% from the same period a year ago.

However, the fourth quarter results fell short of analysts’ expectations, causing BP shares to fall more than 4% in early trading.

Shares in Northumbrian Water surged 12 percent after press reports that the Ontario Teachers’ Pension Plan may bid £1.7 billion ($2.7 billion) for the company. The water utilities market in the UK is liable to benefit if the speculation on Northumbrian Water is confirmed as it will establish a higher trading range for the other water stocks. On the news, Northumbrian Water rose by 12 percent to close on 289 pence. The Ontario pension fund already owns 27 percent of the U.K. water company and wants to buy the remaining stake.

Severn Trent caught the wave and added 4 percent to 1,170 pence while United Utilities gained 2.8 percent to 551.5 pence.

South Korea’s National Pension Service, the world’s fifth biggest pension fund, will next week take a 12 per cent stake in Gatwick airport, stressing that investment in Britain will play a significant role in quadrupling its international exposure. The NPS, which is aiming to expand its overall portfolio, came to the attention of Britain’s financial community last year when it bought the headquarters of HSBC in Canary Wharf for £773 million. Gatwick airport was sold late last year to Global Infrastructure Partners, an infrastructure fund backed by Credit Suisse and General Electric, for £1.51 billion.

The longest running saga in recent UK takeover history drew to a happy close as US firm Kraft Foods sealed their takeover of Cadbury after shareholders in the UK chocolate maker voted in favour of the deal.

Cadbury said it had received valid acceptances of the offer from investors representing 71.7% of the firm. Kraft chief executive Irene Rosenfeld celebrated the takeover by announcing: "I warmly welcome Cadbury employees into the Kraft Foods family." Despite the warm welcome, Cadbury employees staged protests in London calling for government support to guarantee jobs

Budget airline Ryanair has raised its full-year profit forecast as passenger numbers continue to rise. The company announced that it said it expects full-year net profits of about 275 million Euros, whilst reporting a 10.9 million Euro; (£9.5 million) loss in fourth quarter of 2009, a considerable improvement on the 101.5 million Euro losses for the same period in 2008.

Ryanair said the result had been helped by a 37% fall in fuel costs and passenger numbers increased by 14%, which had offset a 12% drop in fares.

Europe’s second- largest tobacco company Imperial Tobacco Group Plc have announced a “good start” to the year with business “in line” with company expectations, despite the weak economic climate. Despite the news, their shares declined 1.2 percent, to 2,002 pence. The Royal Bank of Scotland Group Plc are to allow its top performing employees to convert a large portion of bonuses given in shares into cash within 12 weeks of receiving them, according to a letter sent to investors yesterday. On the day RBS shares rose 7.9 percent, to 34.86 pence.

The pound closed down at 1.5977 against the dollar, while the Euro traded at 1.1438

The FTSE 100 dropped 4.1 percent in January as the U.S. government called for limits on risk-taking by banks and China moved to restrict lending and cool economic growth. The gauge is still 49 percent higher than in March after governments and central banks around the world sought to encourage growth by maintaining low interest rates and committing more than $12 trillion to stimulate the economy.

The benchmark FTSE 100 Index added 35.9 points to reach 5,283.31 at the close of trading in London.

US President Barack Obama has announced a $3.8 trillion (£2.4 trillion) budget plan for 2011, which includes increased spending for job creation, but cuts in other areas.

He also forecast the US deficit would rise to a record $1.56 trillion this year.

He scrapped plans to send astronauts back to the Moon and will seek to save $250 billion by capping a range of domestic spending programmes for three years.

Congress must approve the budget for the financial year starting on 1 October for it to take effect.

Mr Obama blamed the huge deficit on the decisions of President George W Bush, previous Congresses and his administration’s moves to prevent an economic collapse.

Stocks continued to extend gains after reports showing the U.S. manufacturing sector expanded more than forecast. The Institute for Supply Management’s factory index showed U.S. manufacturing expanded in January at the fastest pace since August 2004, spearheading the recovery from the worst recession since the nineteen-thirties.

On the news, the Dow Jones rose sharply, to close on 10284.91, while the NASDAQ rose 38 points, to finish on 2185.32

Gold lost some of the previous day’s sharp gains, dropping 0.1 per cent to $1,105. Oil rose 0.5 per cent to $74.81 a barrel.

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Tags: Banking, Barack Obama, British Economy, Cadbury, Centre for Economics and Business Research, Council of Mortgage Lenders, Credit Suisse, Dow Jones, Economy, Employment, Financial News, FTSE, Gatwick Airport, General Electric, George W. Bush, Global Infrastructure Partners, HSBC, Imperial Tobacco Group Plc, Kraft Foods, Money, NASDAQ, Nationwide Building Society, Northumbrian Water, Oil, Ontario Teachers’ Pension Plan, Property Prices, Recession, Retail, Royal Bank of Scotland, Ryanair, Severn Trent, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession

The last and most positive item of news that hit before the UK financial community went into New Year mode was that data released by the Nationwide Building Society indicated that U.K. house prices had raised again in December by 0.4%, taking the growth for the year to 5.9%. December’s rise was for the eighth consecutive month. To take some edge from the optimism, Nationwide pointed out that there remained high levels of uncertainty over the outlook for property prices in 2010.

Other good news came from the Bank of England, who pointed out that the FTSE market has recorded the third biggest rise since 1693, over the last nine months. Predictions are that of January carries on at roughly the same pace, the market will have enjoyed its largest sustained rise for 317 years. Someone should point out to the BOE that the FTSE had to fall more or less on its knees in order to make such a dramatic recovery. Not that anyone is not grateful!

The UK statisticians seemed to be competing against each other this festive season to see whose figure could look the most positive.

Just before Christmas, the Office for National Statistics reported that unemployment had fallen 6,300 in a single month, hastening to add some icing to the Christmas Cake by pointing out that in no postwar recession has unemployment ever fallen so quickly. To be positive, unemployment in the UK has been less severe than most analysts expected. Expectations are that jobless levels will certainly carry on rising in 2010, but will eventually level out at around 1.25 million.

According to the Bank of England, quarterly credit conditions saw British banks reported a rise in the availability of secured credit to households, driven partly by an improved economic outlook. Unsecured credit availability to households continued to decline, but banks expected it to stabilize in the coming quarter.

Meanwhile cold Icelandic hearts have appeared to thaw just a little, with the news that Iceland’s parliament has approved plans to repay £3.4 billion to savers in the UK. The repatriations will go to the British as well as the Dutch governments, both of whom partially compensated savers when the Icesave online bank failed in 2008, with more than 320,000 savers losing their savings when the bank collapsed. Not that there weren’t ulterior motives behind the Icelanders generosity. In fact a special bill on the measure, was only narrowly approved against strong opposition, and was seen as crucial to Iceland’s bid rebuild its economy and gain a key to eventually being accepted as members of the EU.

A recent survey of UK adults has come up with the interesting discovery that that around two-thirds had made it a point of keeping track of their financial situation much more than they did two years ago, and were increasingly concerned about whether their bank was safe. Despite that, the survey did discover that far fewer consumers were less willing to make an effort to protect themselves, with only around half making an effort to reduce their debt levels and even less attempting to save than they were at the start of the recession.

More slightly bitter sweet news announced before the end of the year was that the number of repossessed homes that were sold by auction in the UK has fallen by more than half during the past 12 months. The number of repossessed homes sold at auction during 2009 totaled 3,998, compared with 8,222 sold during 2008, with the number of repossessed homes sold at auction in the last quarter falling even more dramatically to just 941 homes compared to 2,941 during the same period in 2008.

Sterling jumped to a 10-day high against the dollar on Thursday as year-end position adjustments led to a broad sell-off in the U.S. currency, with thin trading sparking exaggerated price movements.

The pound also extended gains against the euro as month- and year-end flows as well as technical factors supported the currency, helping lift rise to a 10-day high.

• Dollar 1617
• Euro 1.1285

The benchmark U.K. FTSE 100 rose 0.3% to 5,412.88 on Thursday, bringing its year-to-date gains to 22.1%, its highest gain since a 24.7% return in 1997. Despite the good news, overall the noughties were not great for the.

FTSE that declined 21.9% for the decade, worse than the Dow Jones Industrial Average that fell just 8% and the 14% retreat for the German DAX.

Wall Street ended the day and the decade in the red after encouraging jobs data on Thursday renewed concerns over interest rate hikes.

The number of Americans filing fresh claims for unemployment benefits last week dropped to the lowest level in about 17 months. Analysts had been expecting initial jobless claims to show a modest increase.

A late sell-off left stocks near their lows of the day, pushing the Dow Jones Industrial Average down 1.1 per cent to 10,428.05 and the NASDAQ to 2,269.15.

Commodity markets ended 2009 on a high with US crude oil touching the $80 a barrel mark in the final trading session, while white sugar extended its record-breaking run and copper, lead and zinc all enjoying price gains of more than 100 per cent over the year.

Oil prices maintained their upward momentum over the Christmas period amid ongoing tensions in Iran between opposition supporters and the government and by cold winter weather in the US, which has boosted demand for heating oil.

Gold ended 2009 just below the $1,100 mark at $1,096.35 a troy ounce, up 24.8 per cent over the year.

Gold hit a record $1,226.10 an ounce in early December and the bull market for bullion has now lasted for nine years.

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Tags: Bank, Bank of England, Banking, British Economy, British Pound, copper, Credit Crunch, Currency, Dow Jones, Economics, Economy, Employment, Financial News, FTSE, German DAX, Gold, Icesave, lead, Money, Money Markets, NASDAQ, Nationwide Building Society, Office for National Statistics, Oil prices, Property Prices, Recession, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK financial community, UK government, UK Recession, UK unemployment, US crude oil, Wall Street, zinc

The Royal Institution of Chartered Surveyors (RICS) has predicted that house prices are unlikely to rise by much more than one to two percent in 2010. The nation’s chief surveyors’ body did however raise the possibility that more properties would change hands in 2010. In their report, RICS pointed out that the housing market had come through the past year in better shape than many had predicted but said it believed several factors would limit price rises.

According to figures issued by the British Chambers of Commerce (BCC), the UK economy shrank by 0.2% between July and September, which is less than the previous estimate of a 0.3% contraction. While the news confirms that the country is not yet out of the recession, it does add weight to predictions that fourth quarter figures will show the economy is finally returning to growth.

The UK recession, which began in the second quarter of 2008, has seen the UK economy contract by 6%. Meanwhile the Confederation of British Industry (CBI) has forecast that in 2010 recovery for the UK economy will be at best ‘fragile’. The CBI confirmed that the UK economy was likely to come out of recession in the fourth quarter this year, driven by increased spending from consumers looking to buy before the January VAT increase. However, they went on to warn that economic growth would be weak, at around 0.3%, for the first two quarters of 2010, with wage freezes continuing into spring and job losses until the autumn

Lehman Brothers, one of the first major investment banks to collapse during the current financial downturn are back to their old ways, is hiring new staff on fat salary/bonus packages as well as paying generous bonuses in London to existing staff, to stop them from defecting. The bank is reportedly recruiting middle and back office staff in order that their administrators PwC can wade through the millions of transactions that must be reconciled with clients and trading partners to determine what is owed or can be claimed. Meanwhile the judge overseeing Lehman’s US bankruptcy in New York last week approved an extra $50 million (£30 million) in bonus pay-outs to some 230 derivatives traders working to help to untangle the dead bank’s $10 billion portfolio. The bonus pay-outs come as bankers face anger and derision over probable bonuses at the end of this year.

British Telecom (BT) are reported to by pushing forward the launch of its super fast broadband network to make sure that the infrastructure is completed in time for the 2012 Olympic Games in London. Britain’s broadband speeds lag behind those of many industrialized countries and BT is under pressure to fix the problem. The company is planning to spend £1.5 billion on a new broadband network based on optical fiber, but it will run past only 40 per cent of homes, mainly in towns and cities. BT originally pronounced that it could take until March 2013 to build the urban-focused network, but, following successful trials, it now appears that the project will be completed by June 2012, with the Olympics beginning the following month. When it does get going, the new network is designed to increase broadband download speeds 10-fold, to about 40 megabits per second, to cope with the rise of bandwidth-hungry services such as high-definition video.

BAA has won its appeal against the Competition Commission but remains unsure whether the judgment means the company will have to sell airports in London and Scotland. In March of this year, the UK’s largest airport operator was ordered to sell three of its seven airports: Gatwick, Stansted and either Glasgow or Edinburgh. The company won their appeal on a number of arguments, one of them that a decline in passenger numbers should have been considered in the decision

The Competition Commission (CC) has finally cleared the merger of ticket agent Ticketmaster and concert promoter Live Nation. The UK regulator has confirmed that the merger would "not result in a substantial lessening of competition in the market" in the UK.

CC’s decision marks a reversal from their provisional ruling, where they vetoed the merger, stating that they were concerned about its ramifications.

The US Justice Department is also investigating the proposed merger, which was originally closed in February.

According to a new poll by the Auto Trader magazine, the Ford Focus has been voted the UK’s most popular car of the decade. The small family car beat our sports cars, SUVs and city cars to take first place. Despite the company being rocked by financial issues in the past ten years, Ford has retained its place as an iconic motoring brand, with two of its other models, the Fiesta and Mondeo, ranking high in the list of most loved cars by the British public. The Auto Trader poll, designed to analyse the key motoring trends over the past ten years, also looked at categories including ‘greenest’ car and ‘best value for money’ car.

Sterling was seen to be weakening in mid week trading against the dollar and the Euro.

• Dollar 1.5956
• Euro 1.111922

On the FTSE house builders edged higher after analysts announced that the sector valuation was looking brighter after a period of under performance that left them trading below book value. Forecasts are that UK house prices are to fall by 5 to 10 per cent as unemployment peaks in the second quarter of 2010, and saw rising interest rates damping the recovery for the next two years. Despite the less than encouraging forecasts, Taylor Wimpey was up 4 percent to 35¾ pence while Barratt rose 1.7 per cent to 116 pence. However, Redrow fell 0.2 per cent to 131½ pence.

The FTSE 100 gained for a second day, adding 34.67 points to close on 5,328.66, just 54 points off its 2009 high.

Official figures show that the US economy grew by less than originally estimated in the third quarter, with the latest estimate showing an annual growth pace of 2.2%, the figure was down from the previous estimate of 2.8%. In any case, July- September was the first quarter in which the US economy returned to growth, after four quarters of decline.

On Wall Street, the Dow Jones Industrial Average gained 0.8 per cent to 10,414.14 while the Nasdaq Composite was 1.2 per cent higher at 2,237.66, a welcome recovery after losses last week as the dollar strengthened and concern grew over the prospect of a tighter monetary policy.

A report issued by the National Association of Realtors (NAOR) showed new home sales in the US rose 7.4% in November, apparently spurred on by government incentives. NAOR also announced that property sales rose in the month to an annual rate of 6.5 million, making for the highest level in more than two years.

On Tuesday the OPEC oil cartel provided its strongest indication yet that it aims to keep oil prices at $70-$80 a barrel next year as it tries to support the economic recovery. As a first step, the cartel, which controls more than 40 per cent of the world’s oil output, agreed to leave its production levels unchanged at least until the end of the first quarter of 2010.

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Tags: 2012 Olympic Games, Auto Trader, BAA, Bank, Barrat, Barratt, Barratt Developments, BCC, British Chambers of Commerce, British Economy, British Pound, British Telecom, BT, CBI, Competition Commission, Confederation of British Industry, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, Gatwick, House Prices, Lehman Brothers, Money, Money Markets, Mortgage, Mortgages, NASDAQ, National Association of Realtors, OPEC, Property Prices, Recession, Redrow, RICS, Royal Institution of Chartered Surveyors, Stansted, Taylor Wimpey, Ticketmaster, UK Banks, UK Economy, UK government, UK Recession, US Justice Department, Wall Street

The dwindling supply of property and an improving market confidence have combined to boost the average UK house price, with the price climbing to £156,100 up 0.2% from August but remaining 5.6% below the level of September 2008. In August, the average house price bumped 0.1% from July and 6.7% from the year before. Questions still remain as to whether the recent surge in activity will continue, despite the talk of general improvement in property and equities.

According to the International Monetary Fund (IMF), the global economy has begun to expand again and financial conditions have improved significantly. However, in their most recent World Economic Outlook, the IMF has forecast that the pace of recovery is expected to be slow and unemployment is liable to remain at high levels for a long time. The IMF has cut their previously pessimistic forecast of the amount that banks are likely to lose in bad loans and investments. The revised total for the period between 2007 and 2010 is now $3.4 trillion, down from its previous estimate of $4 trillion. The reduction is attributed to the improved outlook for the global economy.

The squeeze on government finances will be so tight that outsourcing of catering services in the public sector is likely to rise sharply and that catering giant Compass are likely to benefit. A spokesman for the company forecast that mounting pressure on public bodies to cut spending has provided an opportunity for the industry to expand. Compass, the world’s largest industrial catering company have already enjoyed solid performances in its education, healthcare and defence divisions had helped to offset weakness in more discretionary sectors. In a recent trading update, the company announced that rising unemployment had hurt turnover at both their business and industry and sports and leisure divisions.

Despite a recent increase in sales, men’s formal wear retailer Moss Bros failed to prevent first-half losses, that increased by more than 35 percent. Moss Bros., who also own the Hugo Boss brand, were encouraged by increased sales over the last two months, after they had fallen by 2.6 per cent in the six months to the end of July. First-half revenue dipped from £61.1 million to £60.8 million while the company’s pre-tax loss widened from £2.2 million to £3 million.

It appears that with the completion of a debt-for-equity swap with its lender HSBC, high street camera retailing chain, Jessops, have succeeded in staving off insolvency The agreement, which will protect 2,000 jobs in Jessop’s 115 stores in the UK and Ireland, will see investors share a one-off payment of £100,000, equating to five per cent of their current estimated market value. Jessops arrived at the understanding with HSBC after some of its agreements coming in to the Christmas trading period were cast into doubt by the lack of certainty over its future.

The FTSE 100 closed down 25.82 points at 5,133.9, wrapping up the third quarter having risen by 21 percent, making for the largest quarterly gain in its history. Meanwhile the FTSE 250 fell back 62.21 points to 9,153.76 on the day’s trading. During the third quarter, the FTSE 250 has also risen, this time by more than 18 percent.

The pound was still steadily rising against the major currencies on yesterday’s trading. Sterling advanced against the dollar, rising to $1.6015 after an above-forecast jump in September UK consumer confidence.

• Pound/US dollar 1.6015
• Pound/Euro 1.10996
• Pound/Japanese Yen 143.953
• Pound/Swiss Franc 1.666

The Dow Jones Industrial Average continued to weaken on Wednesday’s trading, dropping 29.92 points to close on 9,712.28. The NASDAQ remained stable, dropping just 7.19 points to 2122.42.

As the effects of the recession continue to be felt, the unemployment rate across the Eurozone has again risen. The seasonally adjusted rate for August rose to 9.6%, compared with 9.5% in the previous month according to official figures recently released, with the number of jobseekers in the Eurozone reaching 15.2 million. Economists insist that unemployment rates are liable to increase, despite the fact that most of the economies in the region are moving out of the recession.

Crude oil prices rose by more than $1 a barrel ahead of the latest US inventories data while gold regained the $1,000 level and base metals staged a broad advance as sentiment towards commodity markets found support from renewed dollar weakness.

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Tags: Banking, British Economy, British Pound, catering company, Crude oil, Currency, defence, Dow Jones, Economics, Economy, education, Eurozone, Financial News, FTSE, healthcare, HSBC, Hugo Boss, IMF, International Monetary Fund, Jessops, Money, Moss Bros, NASDAQ, Property Prices, Recession, UK Banks, UK Economy, UK Recession, World Economic Outlook

For a bank that succeeded in breaking the UK record for corporate losses within a financial year, you would think that the Royal Bank of Scotland Group (RBS) would keep a low profile when it comes to making financial predictions. But not the RBS. And the prediction that they have come up with is nothing less than controversial, as well appearing to be far away from what actually appears to be happening on the UK street.

It appears that a recent survey ordered by the RBS, and paid for by the UK taxpayer, predicts that U.K. house prices will plunge by a further 12.7 percent before reaching rock bottom.

UK properties, which have already plummeted in value by 15 percent since the global economy collapsed in October 2007, to an average of around £220,000, will fall a further £20,000 if RBS’s survey is to be taken seriously.

It goes without saying that the RBS survey contradicts just about every report and survey commissioned during the last quarter, as well as physical evidence showing that the number of mortgage applications is on the increase, as the UK economy slowly but surely pulls itself out of the worst financial downturn the country has seen since World War Two.

According to the Nationwide Building Society, property prices rose for a third consecutive month in July to a fourteen month high, while the highly objective and respected Royal Institution of Chartered Surveyors announced earlier this month that prices will actually increase this year.

In the U.S., where the subprime mortgage collapse actually sparked the global recession, the housing market is already on the increase, with sales of existing homes jumping 7.2 percent in July, to the highest level since August 2007, according to the National Association of Realtors.

The question still remains: Who do you believe?

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Tags: British Pound, Credit Crunch, Economy, Financial News, Global Credit Crisis, Money, Mortgage, Mortgages, National Association of Realtors, Nationwide Building Society, Property Prices, RBS, Recession, Royal Bank of Scotland, Royal Institution of Chartered Surveyors, subprime, U.K. house prices, UK Banks, UK Recession, UK taxpayer

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

U.K. home sellers lowered asking prices in August by the most in eight months as banks continued their credit squeeze.

The average cost of a home fell 2.2 percent to around £225,000 after gaining 0.6 percent in July. Prices in London dropped 3.8 percent, while in the East Midlands the asking price by sellers fell by the highest level, averaging 9 percent.

The number of new homes on the market was reported to be almost half of what they were before the financial crisis began. ,

Further evidence that the traditional UK high street banks catering manly to the private individual is about to be come scarcer over the coming years was provided in a recently published report. The reports points out that the major British banking groups are considering closing down a third of their branches in a drive to reduce cost and restore profitability. During the recession, retail banks lost money in droves as the public drew in their belts and in future retail banks will not be able enjoy profits personal loans and overdraft that they did during the so called “ boom years”..

Despite all the hooing and hahing on the subject, bonuses for the top directors of major UK companies remained at an unacceptably high level in 2008, showing that the trend is far away from disappearing, despite the country still being in the depths of a recession, and companies that succeed in making profits still reducing their dividends. A recent report showed that some of Britain’s largest companies were still voting to pay their senior executives around half of the bonuses they were receiving before the financial downturn began, around two years ago. A fact that has not been well received by company investors.

Bradford & Bingley plc has released its interim financial report, covering the first six months of the year and the figures are less than inspiring.

The company made pre-tax losses of £160 million, and bucking the UK trend they were substantially worse than the same period in 2008, when the bank succeeded in only losing £26.7 million.

As the financial crisis hit its peak late last year, Bradford & Bingley was nationalised, and has since been sold of to Spanish banking giant Banco Santander.

British Sky Broadcasting has expressed their “serious concerns” regarding the recent actions of the Project Canvas trust. Project Canvas is behind the plan to establish an internet-connected successor to Freeview, the free-to-air digital TV service that will compete with Sky.

Since February, the Trust has been conducting an assessment to ascertain whether Canvas, comprising the partnership of BBC with ITV, BT and Five, is doing justice to UK licence fee payers. Canvas was intended to be the blue-print for assessing and progressing on-demand video from the PC to the television. The introduction of a smarter set-top box would strengthen the competition from free-to-air broadcasting for pay-TV operators such as Sky and Virgin Media.

Trading was slow in the city with the only rising star being GlaxoSmithKline who gained 0.8 per cent to close on 1167½ pence after analysts advised investors to buy shares in anticipation of the news that the company’s long awaited cervical cancer vaccine is likely to win US regulatory approval early next month.

Also in the news were the world’s largest water company Veolia Environment SA who were rumoured to be selling £500 million-pound stake in its U.K. water business to either the Blackstone Group LP or the Goldman Sachs. On the news, Veolia shares fell 2.5 percent to 22.74 pence.

The FTSE 100 continued to indicate that profit taking was rife, dropping 68.96, points to close on 4645.01. The FTSE 250 collapsed by 2.84 percent on the day, meaning a 241.74 point fall to close on 8,274.09.

Sterling had another mixed day on pre-weekend trading yesterday’s markets, falling against the major currencies, apart from the Japanese Yen.

• Pound/US dollar 1.6386
• Pound/Euro 1.1606
• Pound/Japanese Yen 155.4618
• Pound/Swiss Franc 1.7624

US stocks suffered their worst day since the beginning of July on Monday after the global share sell-off caused the market to fall. Concerns over the health of the US consumer were at the forefront of investors’ minds after last week’s weak retail sales and consumer confidence figures. .

The Dow Jones Industrial Average plummeted 186.06 points on an edgy market to close on 9135.34 with the NASDAQ faring little better down 54.68 points to close on 1930.84. .

Japan’s economy grew by 0.9% in the April-to-June quarter meaning that the country has joined the fast growing list of industrialised nations to come out of recession.

The rise has been attributed to the Japanese Government’s huge stimulus package. The test for the Japanese economy will come when their stimulus package will come to an end and the economy will require standing alone.

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Tags: Banking, Bradford & Bingley, British Economy, British Sky Broadcasting, Credit Crunch, Dow Jones, Economy, Financial News, FTSE, GlaxoSmithKline, Global Credit Crisis, Goldman Sachs, Money, Money Markets, Mortgages, NASDAQ, Project Canvas, Property Prices, Recession, Santander, UK Banks, UK Banks, UK Recession, Veolia Environment SA, Virgin Media

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

Property sales are at their lowest level since 1978, according to the latest figures from the Royal Society of Chartered Surveyors.

Estate agents all over the UK reported property sales down for November – with most selling only 10 properties in the three-month period leading up to the survey – that works out at less than one a week..

Most estate agents reported having large numbers of houses for sale on their books – and the good news that 14% more prospective buyers signing up this quarter than last.

Sales were double the rate at the start of 2008, before the credit crunch started to drive prices down due to buyers facing difficulties in raising mortgages.

“Many are starting to see the current market as an opportunity to purchase a previously unaffordable property despite the worsening economic picture,” said RICS spokesman Jeremy Leaf.

“Unless people feel relatively confident about their job prospects, they’re unlikely to even try to obtain mortgage finance unless of course trading down or seeking to release capital.”

“Sellers still have to accept the inevitable fact that house prices are falling and re-price their property to suit current market conditions.”

“The rise in interest reflects both the drop in asking prices and recent cuts in interest rates.”

The lowest level of sales in the past three months was in London, with just seven homes per estate agent, followed by Wales and East Anglia.

With sales still slumping there has been a continued downward pressure on prices.

RICS found that 76.5% more of its members had seen prices fall locally than rise, only slightly better than the previous months’ negative balance of 81%.

Both the Nationwide and Halifax, two of the UK’s largest mortgage lenders have also recently reported falling house prices in November. The Nationwide index showed prices down at 0.4% and the Halifax down at 2.6%. The variance is due to different sampling methods.

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

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Tags: Credit Crunch, Halifax, Jeremy Leaf, Nationwide, Property Markets, Property Prices, RICS