Heathrow baggage handlers and Eurostar train drivers have said they are ready to join British Airways cabin crew and strike in the lead-up to Christmas. Following a breakdown in talks with managers over pay, British Eurostar drivers announced they will go on strike on Friday and Saturday. Unite, the union representing BA cabin crew, said the 500 baggage handlers and check-in staff it covered at Heathrow and Aberdeen airports also planned to strike over pay from Tuesday 24th December, the same day that BA cabin crew are set to commence their 12-day strike action.

Meanwhile an operation is under way to recover the UK thousands of people left stranded after Flyglobespan, Scotland’s biggest airline, collapsed. After their parent company, Globespan, entered administration on Wednesday. Around 4,500 passengers were stranded by the airline’s collapse, mostly in Spain, Portugal, Cyprus and Egypt, with the Civil Aviation Authority expected to be repatriating about 1,100 of those stuck overseas.

A recent poll has shown that UK business leaders have become more gloomy about the recovery of the British economy over the last month, with only 36 percent of business leaders sensing that a financial recovery is in the offing, down from 49 percent in November.

The survey, taken in the five days after Finance Minister Alistair Darling’s pre-budget report last week, found the number of business leaders who had confidence in Darling had fallen five percentage points to 20 percent following the statement. Almost three-quarters of businessmen reckoned that Darling was "out of his depth" while less than a quarter believed he "understands business".

Public sector net borrowing in the UKs hit a record high of £20.3 billion in November, according to figures issued by the Office for National Statistics.

The public sector net debt as a percentage of overall UK economic output now stands at 60.2%, a considerably rise since the start of the financial crisis.

UK insurance companies also have little positive to report about, with worldwide premium income plunging 18% in 2008 to £215.3 billion, with 2009 also looking to be a fairly tough year. The financial crisis has had a definite effect on insurance rates, with premium income it falling almost 25% to £168.1 billion in 2008. The first nine months of this year, however, do show some promise. Long-term premium income was off 35% relative to the same period in 2008, but general insurance premiums gained 8% to £47.2 billion, mostly due to overseas business.

Virgin Group controlled by billionaire entrepreneur Richard Branson have announced the launch of a new company, designed to come to the rescue of consumers experiencing technical problems with their such as PCs as well as wireless networks not connecting. The opening of this new company, to be known as Virgin Digital Help, is Virgin’s up’s first new UK company in three years offers free online self-help guides such as "speed up" to make computers go faster, or "get connected" to fix links to printers or wireless networks .

Shareholders in Punch Taverns revolted on Wednesday over the pay for executives at Britain’s largest pub owner, voting against its remuneration policies, in one of the biggest shareholder protests over pay this year. 55 per cent of votes on the remuneration policies of the heavily indebted company were cast against them as shareholders objected to the scale of the awards given to executives in a year in which the group suspended dividend payments after its annual pre-tax loss quintupled to £406 million. While the vote on pay was advisory only, a spokesman for Punch announced that they are to conduct “a full review of the remuneration policy and its future implementation” in the wake of the result. The ABI, which represents shareholders that account for about 20 per cent of investments in the UK stock market, signalled its objection to the pay policies by issuing a “red top” alert to its members. Under a long-term incentive plan, Giles Thorley, chief executive, and three other executives were awarded shares worth 200 per cent of their base salary that would vest if total shareholder returns were in the top quartile of the company’s peers over three years. Mr Thorley earned a base salary of £525,000 during the 2008 financial year to August 23. The vote at the annual meeting came after the company warned slowing food sales and patchy trading at its leased estate were depressing profits. Punch shares fell 4.7 per cent to 77.3 pence.

Carphone Warehouse, broadband group TalkTalk and Channel 4 have opted into a joint venture between the BBC, ITV RTL’s AUDK.LU Five and BT to install internet video on television sets. The backing from all public service broadcasters and the UK’s two biggest broadband providers for the project to be known as Project Canvas will help it "secure the future of free-to-air broadcasting" in the Internet age. The venture partners will share an estimated £115 million in yearly costs over the next four years.

Rentokil Initial was among the talking points in the London market on Wednesday, with the stock registering its biggest gain since July.

The pest control-to-package delivery group bounced 4.8 per cent to 105 pence ahead of its relegation from the FTSE 100 next week, with Rentokil management already hinting of a further £150 million of cost savings expected for next year.

Shares in the U.K.’s second-largest drug-maker AstraZeneca Plc climbed 0.5 percent to 2,843 pence after they won a U.S. panel’s backing to expand use of the cholesterol pill Crestor in the prevention of heart disease, a move that, if allowed, could add up to £300 million in annual sales.

Imperial Tobacco Group Plc Europe’s second- largest publicly traded cigarette company, lost 1 percent to 1,894 pence on threat that Japan, the fifth-largest tobacco market, are about to announce further tax increases on cigarettes . U.K. furnishings and clothes chain known for floral pattern Laura Ashley Holdings Plc added 3.8 percent to 13.75 pence, after analysts predicted a better 2010 for the company.

Barclays, Britain’s second-largest bank, slid 6.2 percent to 273.85 pence. HSBC Holdings Plc, Europe biggest, fell 3.5 percent to 684.1 pence.

Lloyds, the 43 percent government-owned bank, lost 8.1 percent to 51.1 pence, the steepest slump since May. Royal Bank of Scotland Group Plc fell 3.5 percent to 30.74 pence.

Sterling lost ground against the dollar and improved against the Euro in sluggish mid week trading.

• Pound/US dollar 1.6167
• Pound/Euro 1.1273

The benchmark FTSE 100 Index slid 102.65, or 1.9 percent, to 5,217.61. The index has rebounded 49 percent since March and is heading for its biggest annual gain since 1997 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy

As had been widely expected, the Federal Reserve have announced that US interest rates will be kept on hold at between 0% and 0.25%, despite continuing signs that the US economy is recovering. The central bank reiterated that rates would stay at the low level for an "extended period".

The Fed’s hand was strengthened by official data showing earlier on Wednesday that US inflation remains under control, rising by just 0.4% in November, as had been predicted.

With inflation continuing to be low, the Fed is not under pressure to increase interest rates as a means to tackle any inflationary pressure.

On close of trading, the Dow Jones Industrial Average had dropped more than 130 points to 10, 33.61 while the NASDAQ also dropped to 2,183.55.

financial

• California Scheming I've always liked the Mamas and Papas song "California Dreamin."...
• Debt Management Companies in the UK The market for debt management companies in the UK can...
• Investing 101: Indexes (Welcome once again to my ongoing feature, Investing 101.  This...

Tags: Alistair Darling, AstraZeneca Plc, Bank, Bank of England, Banking, Barclays, British airways, British Economy, British Pound, cabin crew, Carphone Warehouse, Christmas, Civil Aviation Authority, Credit Crunch, Crestor, Currency, Dow Jones, Economics, Economy, Eurostar, Financial News, Flyglobespan, FTSE, Globespan, Heathrow, HSBC Holdings Plc, Imperial Tobacco Group Plc, Interest Rates, Laura Ashley Holdings Plc, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, Office for National Statistics, Punch Taverns, Recession, Rentokil Initial, Richard Branson, Royal Bank of Scotland, Royal Bank of Scotland Group Plc, Stock Markets, Stocks and shares, TalkTalk, UK Banks, UK Economy, UK government, UK insurance companies, UK Recession, Virgin Digital Help, Virgin Group

It appears likely that the UK government will not agree to underwrite the Lloyds Banking Group’s proposed rights issue. This development, if it transpires, could potentially stall the partially state-owned bank’s efforts to raise sufficient capital to allow them not to participate in the government backed toxic asset insurance programme. In the long term, the government is expected to participate in the planned rights issue, although chancellor Alistair Darling, chancellor is keeping tight lipped on the subject, for the meantime. Analysts have predicted that Darling would not be interested the government would not be willing to underwrite the rights issue, so as not to be seen to be making a commitment to buy any shares that remained unsold. However the feeling in the markets is that Darling and co has to be seen to be backing the issue, in order not to send out a negative impression

Britain’s largest pub owner Punch Taverns, have announced a £406 million annual loss, largely attributed to the writing down the value of its recession-hit property portfolio by 11 per cent. A spokesman for the company also stated that trading was not showing significant signs of improvement for the first seven weeks of its new financial year, a fact that should have a negative effect on the company’s future. On the announcement., shares in Punch plummeted by 16.6 per cent to close at 96.65p.Punch owns more than 7,500 pubs, that are principally leased to semi-independent publicans who are obliged to buy all their beers through Punch as well as paying them rent.

Shares in National Express plunged more than 30 per cent on Friday after the Spanish-led consortium bidding for the bus and rail operator withdrew its £765m takeover offer. The Cosmen family, who already own an 18.5 per cent stake in National Express, along with the private equity firm CVC, had been due to make a formal offer.

The rise in UK unemployment slowed in the three months to August, showing signs that the job losses may be slowing down as the economy continues to show signs of recovery. The number of people out of work rose 88,000 to 2.47 million, compared with the previous three months, while the unemployment rate remained unchanged at 7.9 per cent of the total UK workforce. This figure contrasts well with 9.8 per cent in the US and the 9.1 per cent average in the European Union member countries.

The Pound continued it steady improvement against the major currencies.

• Pound/US dollar 1.6332
• Pound/Euro 1.10956
• Pound/Japanese Yen 149.048
• Pound/Swiss Franc 1.665

Two of the major Wall Street banks have announced profits for the third quarter that was above market analyst’s expectations.

Goldman Sachs’ announced profits for the period of £1.96billion, four times what they earned for the same period in 2008.

Profits for the Citigroup also grew. However their potential profits were of were dented by the poor results of their high street banking operation, reaching only £65 million for the quarter.

US stock markets hit fresh 2009 highs on Wednesday, with the Dow Jones Industrial Average reclaiming the 10,000 mark, after a smaller-than-expected decline in retail sales and strong earnings at a leading bank.

Financial, industrial and materials stocks boosted the market while the telecoms sector was a laggard.

The Dow Jones index continued to consolidate itself above the 10,000 points standard, up 47.08 points to 10062.94 while the Nasdaq Composite index rose 1.5 per cent to 2,172.2

Internet super –power Google has reported its highest quarterly profit, providing further indications that the online advertising market is in a healthy situation. Google reported a £1billion net profit for the third quarter, a rise of 27% for the same period in 2008.

Also on the up are US computer hardware giant IBM, who reported profits for the same period of around £2 billion, an improvement of 14% on last year.

US crude prices reached their highest levels for the year while gold extended its record-breaking run, passing the $75-a-barrel mark at one point during the day’s trading. This news came after analysts predicted that crude prices appeared ready to ready to increase after remaining consistent for the last six months. Forecasts are that demands for leading up to Christmas, will push oil prices up.

Meanwhile the price of gold reached a record $1,070.40 ounce later slipping back to $1,069.

financial

• How To Reduce A Trillion Dollar Deficit Stanford professor John Taylor had an alarming op-ed piece in...
• Using Your Credit Card Costs You! As a nation we've become addicted to convenience, and few...
• Profit Instruments Revealed Texas Profit Instruments posted a smaller-than-expected drop in quarterly profit,...

Tags: Alastair Darling, Banking, British Economy, British Pound, Citigroup, Cosmen family, Credit Crunch, Currency, CVC, Dow Jones, Economy, Employment, Financial News, Gold, Goldman Sachs, Google, IBM, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, National Express, Punch Taverns, Recession, Retail, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, UK unemployment, US stock market, Wall Street

How many hints do we need before the penny drops and the UK public can finally reach the conclusion that the recession is finally over? The latest one comes from the Institute of Chartered Accountants who in a report released last week announced that confidence among business professionals has surged form a negative status to a positive one. Based on their findings, the institute predicts the UK economy will grow by 0.5% in the third quarter of 2009, a reverse on the 0.8% negative growth that the UK economy recorded during the second quarter of the year.

UK building societies continue to be under scrutiny, with the news that possibly five of the largest could be amalgamating over the next couple of years. The number of building societies reporting losses for 2008 is reportedly causing concern in Whitehall, and the latest annual review of performance released shows that since the summer of 2008, seven mergers have already taken place, out of framework of 59 building societies.

Seven months after the U.K. government made a commitment to offer up to £2 billion of loan guarantees for car makers and their suppliers, agreements have yet to be signed. According to the Department for Business, Innovation and Skills, car makers and suppliers, the aid was offered as car sales collapsed during the recession, declining for 14 consecutive months through June.

The Thames Valley property market, once regarded as the UK’s equivalent to Silicon Valley, look to be heading for their lowest rental incomes on record, as the recession continues to hammer the technology industries.

On the FTSE yesterday rising metals prices pushed mining stocks. Kazakhmys led the sector, gaining 5.8 per cent to 980 pence, while compatriot ENRC was up 5.3 per cent to 896½ pence.

Punch Taverns added 4.1 per cent to 107½ pence on strong volume in anticipation a positive trading update due to be released this morning. Analysts announced that they expect trading in the company to have stabilised and that profit pressures are on the wane.

The FTSE 100 was up 0.9 per cent, rising 45.34 points to 4,896.23 for its highest close since early October.

Moving forward at the speed of an express train, the FTSE 250 increased by a further 1.76 % or 153.06 points to close on 8,831.89

Currency markets continued to remain stable on Monday’s trading

• Pound/US dollar 1.6409
• Pound/Euro 1.1481
• Pound/Japanese Yen 154.7475
• Pound/Swiss Franc 1.7419

US stocks slowed down after four sessions of gains on Monday after a warning over future bank losses saw the markets erase early gains.

The NASDAQ Composite index closed down a mere 2.92 points at 2,017.98, while the Dow Jones Industrial Average found fractional gains to 9,509.28

On Friday General Motors eventually postponed their much awaited decision on whether Canada’s Magna International would be the winning bidder for its Opel brand.

Magna, the world’s third largest auto parts manufacturer, in conjunction with the Savings Bank of the Russian Federation, who trade under the title Sberbank, had submitted a joint bid in July to acquire a 55 percent stake in Opel, the troubled financially strapped group’s European division. Brussels-based financial investor RHJ International is the rival bidder.

At their meeting Friday, GM’s board of directors failed to come to a decision whether to accept the winning bid by the Canadian auto company and the Russian bank.

This week French banks announced their intention to lead the way in offering to reinforce rules ¬governing the payment and disclosure of bonuses to their officials. In meetings with Nicolas Sarkozy, president, and Christine Lagarde, the finance minister, bank officials announced the concessions, which will strengthen a code on pay agreed by French banks in February, Designed to curb excessive risk-taking. The announcement, will be undoubtedly be used to bolster France’s position at the forthcoming G20 meeting to be held in Pittsburgh next month.

Oil prices have risen to 10-month highs on fresh signs that the global economic recovery is gathering pace.

US light crude ended Monday up 48 cents to $74.37 a barrel, while London’s Brent crude advanced seven cents to finish at $74.26

The rise came after official figures showed that new industrial orders in the 16 nations that use the Euro rose more than expected in June.

• Natural Gas Powered Vehicles paying $0.87 per Gallon? It would seem T. Boone Pickens and his Pickens Plan...
• The True Cost of Coffee Every morning, from as far back as I can remember...
• Frugal Friday Week 9 As many bloggers do, I read other blogs on the...

Tags: Banking, British Economy, British Pound, Christine Lagarde, Currency, Department for Business Innovation and Skills, Economy, ENRC, Finance, Financial News, FTSE, G20, General Motors, Global Credit Crisis, GM, Institute of Chartered Accountants, Kazakhmys, Magna, Money, Money Markets, NASDAQ, Nicolas Sarkozy, Opel, Punch Taverns, Recession, Savings Bank of the Russian Federation, Silicon Valley, Stock Markets, U.K. government, UK Banks, UK Economy, UK Recession, US stocks

As part of the Digital Britain programme outlined in a report presented yesterday by Culture Secretary Ben Bradshaw to the UK Parliament, every British home with a fixed-line phone will be hooked to broadband internet within the next two years. That’s the good news, but the bad news is that a small fixed levy of 50 pence per month to spread the cost of providing the service to the peripheries of the country.

Another example of the “good news, bad news” was presented by the Culture Secretary Bradshaw during the same report, but this time the bad news applies only to the BBC.

Part of Bradshaw’s vision for Digital Britain is that a percentage of the revenue gained from license fees will no longer be for the exclusive use of the BBC. Instead a percentage will also be allocated to the ITV to pay for regional news; with 3.5% of the annual fee looking like it could be going to the ITV as well as other public service broadcasters from the year 2013.

The heavily indebted pub group Punch Taverns announced that they will be to coming to terms with the problem through the launch of a £375 million share placing, with proceeds from the placing to be set aside to meet a critical £215 million bond repayment due early 2010.

With the English Premier League currently on hold, the drama seems to have moved from the football field and into the boardroom. The Premier League’s management has increased the pressure on cash strapped Setanta, who look like being default to meet a £10 million payment on Friday as part of its existing license agreement. The Premier League have passed the ball back to Setanta by emphasizing that if the payment is not met, then the contract will be terminated. To rub a little more salt in the wound, the Premier League have announced that they will be issuing a tender to cover the group’s 46 football matches promised for season 2009/2010, stating that whilst they “would like to provide Setanta with as much time as possible to rearrange its finances” the start of the season was now less two months away and they needed to ensure that these matches would be covered.

The UK’s largest retailer, Tesco pointed out that strong growth in Asia and the US has helped them to offset a steadier rate of growth at home, whilst pointing out some tentative improvement on their UK performance compared with their previous quarter’s results.

Matalan, the discount retail chain have seen sales and profits increase as bargain-hunting British shoppers beat a path to their door.
.
A spokesman for the company announced that sales for the financial year to February 28 had risen by two percent to £1.04 billion, while profits had increased to £102 million.
As the global economic downturn, the trend for discount retailers such as Matalan to outperform the high street appears to be gaining momentum.

Yesterday was a better day on the Stock Exchange. The FTSE 100 rose, but just by a smidgeon, 2.56 points to finish on 4,328. 57, a big improvement on Monday’s free fall. The FTSE 250 continued to drop but not as much as in previous days’ trading. The day’s trading closed with the FTSE 250, down just 9.92 points on 7,483.60

Sterling rose slightly against the dollar, Euro and Swiss Franc, while losing ground slightly against the Japanese Yen.

Pound/US dollar 1.6398
Pound/Euro 1.1852
Pound/Japanese Yen 158.1283
Pound/Swiss Franc 1.7856

In the US, the Federal Reserve announced yesterday that industrial production had fallen by 1.1% in May from April, a figure which was considerably higher than had been hoped for.

On Wall Street share prices continued their fall, with signs that profit taking was the cause, rather than lack of confidence. The Dow Jones dropped 107.46 points to close on 8504.67, while the NASDAQ dropped another 20.2 points to close below the 1800 mark on 1796.18

The number of new US house starts in May rose considerably when compared to April’s record low, according to a spokesman from the Commerce Department.
Housing starts rose to a seasonally adjusted annual rate of 532,000 units in May, up from April’s figure of 454,000, making for an increase of 17.2% on the month, while still down 45.2% from May last year.

Commodities prices were mixed on Tuesday with oil rising above $71 a barrel at one point as a weaker dollar lured investors back into the energy market after a sharp sell-off on Monday.

The European Central Bank (ECB) has issued a warning that Eurozone banks face additional losses of more than $283 billion in 2009 and 2010 as continental Europe’s severe recession continues and even intensifies, placing tremendous strains on the financial sector,.
As part of a report issued by the ECB on Monday proclaimed that the fates of the eurozone economy and its banks have become increasingly interlinked,” with banks losses expected to be focused on their loan exposures.

• Learning How to Make a Budget For many of us, spending comes all too easily and...
• Ten Things I Think I Think (and Personal Finace Links) Steven Wright Performance and a Financial Joke - I've been...
• Finding the Right Bank A big portion of how you handle your finances will...

Tags: BBC TV’s, Ben Bradshaw, British Economy, Digital Britain, English Premier League, Financial News, ITV, Matalan, Punch Taverns, Setanta, Tesco