The top five UK banks have unanimously accepted the bankers’ pay reforms agreed at the G20 conference held in Pittsburgh earlier in the month.

Barclays, HSBC, Lloyds, RBS, and Standard Chartered have all agreed to comply with the Financial Services Authority Rule on remuneration, due to come into force on 1 January 2010. The rule will entail the banks making enhancements to current remuneration requirements surrounding disclosure, deferral, and also the controversial bonus "clawback" regulation.

The City is looking into the revival of some of its traditional methods of doing business by setting up a regulatory committee which will vet the appointment of directors to Britain’s banks. Expected to be involved in the committee are such leading to the process, experienced bankers such as Sir Brian Pitman, the former chief executive of Lloyds, and Sir Peter Middleton, a former Barclays chairman, have been lined up by the Financial Services Authority to serve on the committee. The Financial Services Authority, who are in charge of the process, aim to have the new panel in operation by the end of the year. Instigation of the system follows a recommendation included in the recently published Walker review on banking procedures.,

Royal Bank of Scotland are expected today announce that they have completed the appointment of two non-executives to the board. They are expected to recruited Philip Scott, outgoing finance director at insurer Aviva, and Penny Hughes, who formerly was employed by Coca-Cola.

The fourth quarter began like a damp squib with the FTSE 100 losing 86.09 points to close on 5,047.89.

Meanwhile the FTSE 250 dropped below the 9,000 points barrier dropping 107.81 to 8,956.47.

The pound fell below the $1.60 mark on Thursday’s trading as well as against all the leading currencies.

• Pound/US dollar 1.5877
• Pound/Euro 1.10921
• Pound/Japanese Yen 141.9619
• Pound/Swiss Franc 1.6513

The US stock market had a bad yesterday on the release of manufacturing output data that were weaker than had been expected. Experts had predicted that the purchasing managers index, from the Institute for Supply Management would actually rise in September to 54, but they actually fell, albeit slightly to 52.6 in September after Augusts’ index was on 52.9.

The news caused the Dow Jones index to drop by 2%, its biggest day fall since 2 July, closing 203 points lower at 9,509. The NASDAQ index fared little better, falling 65 points to 2,057

There were some long faces at the three major US car manufacturers who suffered a decrease in sales in September, a hangover from the winding up of the "cash for clunkers" scrappage scheme.

General Motors reported a drop in sales of 45% from the corresponding month of last year. Chrysler did equally badly, while Ford had a drop in sales of just 5% from September 2008.

The United States’ largest cable TV provider, Comcast, is reportedly in talks to acquire a majority stake-holding NBC Universal, the television and film company. NBC Universal owners of the NBC television network, Universal Pictures, cable networks CNBC as well as the Universal Studios theme parks are currently owned by General Electric (GE) and France’s Vivendi. GE has an 80 percent holding and Vivendi the rest. Reliable sources have it that under the new arrangement Comcast will buy 51% of the company, leaving GE with the remaining 49%.

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Tags: Aviva, Bank, Banking, Barclays, British Economy, British Pound, Chrysler, CNBC, Coca-Cola, Comcast, Currency, Dow Jones, Economics, Economy, Financial News, Financial Services Authority, Ford, FTSE, G20, General Motors, HSBC, Institute for Supply Management, Lloyds, Money, Money Markets, NASDAQ, NBC Universal, Penny Hughes, Peter Middleton, RBS, Recession, Sir Brian Pitman, Standard Chartered, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Universal Studios, US stock market

World leaders announced the Group of 20 nations is replacing the G-8 as the main forum for global economic coordination, reflecting a shift in power from rich countries to emerging markets. The G-8 is not due to be disbanded, instead it will focus on development and security matters. The transfer of influence to the broader group, whose membership ranges from the U.S. to China to Saudi Arabia, symbolizes the fact that the richest industrial nations now lack the sway to govern the world economy alone after their excesses sparked the turmoil that tipped the globe into recession. At the end of a two-day G20 summit, hosted by US President Barack, the world’s leading nations have agreed tough new regulations designed to prevent another global financial crisis. The measures will relate to the amount of money banks have to hold in reserve and to excessive pay for bankers. With a recovery now underway, leaders are trying to temper the excesses that helped trigger the worst financial crisis in seven decades and the deepest recession since World War II. At the same time, richer governments acknowledge they now lack the ability to govern the world economy alone as power shifts to emerging markets such as China.

Before setting of for Pittsburgh, Chancellor of the Exchequer Alistair Darling, announced the appointment of Stephan Wilcke as chief executive of the Asset Protection Agency (APA) The APA has been established to oversee the £585 billion toxic asset insurance scheme, reckoned to be the biggest and perhaps riskiest deal the government has signed:

Wilcke, a former management consultant and private equity boss, will lead a team of up to 50 staff to enforce ensure that Britain’s part-nationalised banks properly manage their impaired loans. Expectations are that Mr. Wilcke’s task will be complicated, not least because the banks have trouble explaining how some of the exotic assets work, due to the fact that many of the officials who agreed the loans left the banks long ago. RBS agreed earlier this year to insure £325 billion of toxic assets while Lloyds aimed to include £260 billion of loans; Lloyds is now trying to raise private capital to limit its participation.

Total business investment in the UK dropped a seasonally adjusted 10.2% sequentially in the second quarter, better than a 10.4% fall estimated previously. Economists expected the decline to be 10.4%. In the first quarter, investments were down a revised 8.9%. In the manufacturing sector, business investments fell 16.2%, faster than a revised 4.6% fall in the first quarter. In the non-manufacturing sector, investments fell 9.5%, more or less the same fall than in the first quarter of 2009. On a yearly basis, business investments fell 21.8%, more than the 18.4% drop that had been estimated, and considerably more than the revised 9.8% fall in the first quarter. Economists expected the decline to remain at 18.4%.

An 18-month high for British Sky Broadcasting helped keep the FTSE 100 steady on Friday, rising 2.4 per cent to 359¾ pence, making them the top blue-chip performer for the week.

Meanwhile, ITV closed 3.5 per cent lower at 44 ¾ pence after refusing to meet the pay demands of prospective chief executive Tony Ball.

JJB Sports, which narrowly avoided administration this year, revealed that first-half losses had almost tripled after problems with stock took a heavy toll on sales and profit margins.

The sportswear retailer struggled to convince suppliers to keep trading with it after breaching its banking covenants last year. The lack of goods in stores saw sales fall 43 per cent to £178.6 million. This translated into a rise in pre-tax losses from £14.8 million to £42.9 million. Shares in the company fell by 2.5 percent to 38.5 pence. .

Shares in 3i Group declined 3.1 percent to 279 pence after the pace of new investments dropped as a lack of debt financing nearly brought the buyout market to a halt. The company have invested £155 million pounds (in the five months through August, compared with the £622 million in the same period of 2008.

British Airways sank 4.3 percent to 220 pence as brokers announced that heir mid-cycle share-price valuations were reached “far earlier than expected.”

Europe’s largest discount airline Ryanair Holdings Plc had their shares slide by 3.4 percent to 3215 pence as the company lowered their estimate for passenger growth while maintaining its earnings forecast.

The FTSE 100 made a minor upward adjustment by an impressive 2.93 points to close on 5,082.20, giving the index a 1.8 per cent decline for the week, while the FTSE 250 continued its free fall on Friday, down 32.58 points to 9060.44.

The pound has hit a four-month low against the dollar, a day after Mervyn King the head of the Bank of England stated this less than welcome opinion that a weak currency was "helpful" to the economy. The pound fell as low as $1.5917, the lowest since early June and then edged back to $1.5939. The pound is still well above the levels hit early in the year when it traded below $1.50 against the dollar. The pound also dropped to a fresh five-month low against the Euro. Another factor hastening the decline in sterling value was renewed fears that interest rates would remain low as G20 leaders announced that their stimulus measures would remain place well into 2010.

• Pound/US dollar 1.5939
• Pound/Euro 1.10858
• Pound/Japanese Yen 143.0041
• Pound/Swiss Franc 1.639

Wall Street on Friday made its biggest weekly loss since July after a surprise drop in the sale of durable goods prompted a sell-off in the industrials sector.

New orders for long-lasting goods, from fighter jets to washing machines, fell 2.4 per cent in August, adding to investor concerns over the pace of economic recovery.

Analysts had been expecting a modest rise of 0.4 per cent compared to a 4.8 per cent gain in July, when car sales were boosted by the cash-for-clunkers scheme.

After opening in negative territory, stocks were lifted by data showing consumer confidence was higher than expected this month. Disappointing new home sales soon renewed investors’ concerns and Wall Street gave up its fleeting gains

The Dow Jones Industrial Average continued to fall going into the weekend down 42.25 points to 9,665.19. The NASDAQ also dropped by 16.69 point to close on 2090.92.

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Tags: 3i Group, Alistair Darling, Asset Protection Agency, Bank, Bank of England, Banking, British airways, British Economy, British Pound, British Sky Broadcasting, cash for clunkers, Credit Crunch, Currency, Dow Jones, economic recovery, Economics, Economy, Financial News, FTSE, G20, G8, Global Credit Crisis, ITV, JJB Sports, Lloyds, Mervyn King, Money, Money Markets, NASDAQ, RBS, Recession, Ryanair Holdings Plc, Stephan Wilcke, Stock Markets, Stocks and shares, Tony Ball, UK Banks, UK Economy, UK government, UK Recession, Wall Street

Signs are growing stronger daily that the Bank of England is about to cut the umbilical cord on the UK economy, with the first stage being to cease the purchase of bonds when its current £175 billion pound plan draws to a close. News from the Confederation of British Industry (CBI) states that gross domestic product will rise 0.3 percent in the third quarter, reversing their June prediction for a drop of the same size. The CBI have forecast a 0.4 percent growth for the last quarter, and also predict that the central bank will begin to raise their benchmark interest rate during the first half of 2010.

Peer Steinbrueck, the Finance Minister of Germany has accused the UK of blocking tougher financial rules ahead of the G20 summit. According to Steinbrueck "There clearly is a lobby in London that wants to defend its competitive advantage tooth and claw. Both Germany and France have led calls for more restrictions on banks, which have been resisted by the US and UK.

JD Sports, who made their first foray into Europe with the for £7.2 million purchase of French footwear chain, Chausport in May are said to be considering further deals in Europe after increased interim profits increased its cash holdings.

The company’s focus on young shoppers, apparently less affected by the recession than the older home-owning generation , has allowed it to outperform most of its rivals, who have been beset with trading woes.

On the news that the Royal Bank of Scotland (RBS) are looking to launch a rights issue, their shares dropped 5.2 percent to 53.4 pence. Experts predict that RBS hope to rise between three to five billion pounds. Lloyds Banking Group Plc lost 2.8 percent to 107.6 pence on widespread reports that the lender is likely to participate in the U.K. government’s asset protection plan.

The U.K.’s largest shopping-center owner Liberty International Plc have announced plans to issue more than 56 million new shares in order to kick start their investment programme in shopping centers. Their shares rose 5 pence to 564 pence on the news.

National Express Group Plc, the U.K. rail company have apparently received a written undertaking from the Cosmen family to subscribe to a rights offer of at least 300 million pounds. This in the event its bidding group fail to make 500 pence a share offer for the company. National Express’s east coast franchise is to be seized by the UK government. On the news, shares in the company fell 0.2 percent, to 475 pence.

The U.K.’s largest publicly traded water supplier, United Utilities Group Plc announced that they were “on track” to deliver results in line with previously outlined expectations. Despite that encouraging news, their shares slipped 2.2 percent to close on 455.4 pence.

On the news that the Vodafone Group Plc, who are currently the world’s largest mobile phone company are about announce a whole new range of services today, their stock rose by 1 percent, to 141 pence.

The services are aimed to capitalize on the increasing popularity of Internet surfing through mobile phones.

The FTSE 100 made a minor downward adjustment, down 3.23 points to close on 5,139.37, while the FTSE 250 fell by 31.66 points to close on 9,217.01.

Sterling rallied sharply on Wednesday after the Bank of England’s monetary policy committee quashed rumours of a possible extension of its quantitative easing programme.

• Pound/US dollar 1.6345
• Pound/Euro 1.1107
• Pound/Japanese Yen 148.7512
• Pound/Swiss Franc 1.6817

A spokesman for the US Federal Reserve has suggested that despite the fact that economic activity is "picking up" interest rates will be held close to zero for an "extended time". The comments from the Fed. came as they confirmed that interest rates will remain at their current record low level current level of between 0% and 0.25%, where they have been held since December 2008. Economists continue to predict that the rate will stay at this level throughout the rest of this year, and perhaps well into 2010.

The Dow Jones Industrial Average took a tumble yesterday down 81.32 points to 9,748.55. The NASDAQ lost most of its recent gains, down 14.88 points to 2131.42

Ahead of the forthcoming G20 meeting of world leaders, the US dollar has fallen to a one-year low against the euro the dollar dropped to $1.4840 against the euro as well as against most of the leading currencies. Foreign exchange traders have been switching to rival currencies as signs of economic recovery continues to grow stronger.

Gold rose to $1,012 a troy ounce, as investors awaited the dollar’s reaction to Wednesday’s US Federal Reserve meeting.

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Tags: Bank, Bank of England, Banking, British Economy, British Pound, CBI, Chausport, Confederation of British Industry, Cosmen, Credit Crunch, Currency, Dow Jones, Economy, Financial News, FTSE, G20 summit, JD Sports, Liberty International Plc, Lloyds Banking Group, Money, Money Markets, NASDAQ, National Express Group Plc, Peer Steinbrueck, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, U.K. government, UK Banks, UK Economy, UK government, UK Recession, United Utilities Group Plc, US Federal Reserve, Vodafone Group Plc

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

Royal Bank of Scotland, 70 per cent taxpayer owned, has begun to act in that manner by announcing that they will be halving some of their draconian fees for customers who find themselves overdrawn.

From the beginning of October, fees for paying an item will be cut in half to £15 a day while see the fee for returning a cheque, direct debit or standing order cut to £5 from £38.

Brian Hartzer, new chief executive of RBS’s retail bank, is believed to be behind this refreshing change in attitude from the bank.

Signs of rampant chauvinism in the UK financial sector abound with reports that female employees are not getting their fair share on pay and bonus packages, with a considerable number receiving around 80 percent less in performance-related pay than their male counterparts, according to a recent report from the Equality and Human Rights Commission.

According to the inquiry female employees in the financial sector earned an average of £2,875 in performance-related pay per year, compared to an average of £14,554 for men, making a gender pay gap of 80 percent,.

The finance sector has long been known as showing the highest overall gender pay gaps in the UK economy, with women working full-time jobs earning 55 percent less than men, compared to a pay gap of 28 percent for the general economy.

Results from a recent survey shows that the British consumer is still feeling the pressure of the recession, the survey suggest that in spite of official data to the contrary, UK households remain cautious about spending.

The survey held on behalf of the British Retail Consortium has shown that strong demand for consumer goods that was seen earlier in the summer flagged during August, with only food sales increasing

Overall, total sales rose 2.2 per cent in August from July, down from rises of 3.6 and 3.2 per cent in the two previous months.

T-Mobile and Orange plan to merge their UK businesses, creating a mobile phone giant with a client base of 28.4 million customers.

If completed, a deal between Deutsche Telekom’s T-Mobile and Orange owner France Telecom would see a firm with sales of £8.2 billion. (9.4 billion Euro)

The new company will be the UK’s largest provider of mobile phone services, with about 37% of the UK market.

Spokespeople for both Orange and T-Mobile said that the deal would "bring substantial benefits to UK customers", and promised expanded network coverage, better network quality and improved customer services.

However, it is likely that competition authorities in the UK and EU will probe the deal which is due to be signed in November.

Recession-hit customers flocking to discount clothing chain Primark helped its parent Associated British Foods lift its profit forecasts on Monday.

ABF said it expected Primark to achieve an annual like-for-like sales rise of seven percent in the second half of Primark’s financial year to September 12.

Primark’s momentum is in stark contrast to retailers in the middle price range market, who have reported declines in sales for the first half of this year.

Primark’s sales had been boosted not only by consumers being more price conscious during the recession, but also by good weather and a more fundamental shift shopping at discount retailers.

Shares in Yell, the directories group struggling under a £3.8 billion debt burden, continued on its amazing recovery on Tuesday shares in the company rose a further 21.5 per cent to 65 pence, making their gains in the past month 113 per cent.

There was a little less excitement around the FTSE 100 index as the news from Cadbury began to calm down. The index rose by 14.16 points to close on 4947.34. Meanwhile the FTSE 250 continued to climb on Tuesday, up 98.87 points to close on 9,035.33.

The pound recovered against the dollar, yet continued to fall against the Euro.

• Pound/US dollar 1.6494
• Pound/Euro 1.1382
• Pound/Japanese Yen 152.2926
• Pound/Swiss Franc 1.727

Figures released by the US Federal Reserve have shown that showed consumer debt has been reduced by a record amount in July. Reasons given ranged from rising job losses and uncertainty about the stability of the economic recovery.

Consumer credit fell by $21.6 billion (£13.1 billion) from the previous month June, considerably more than analysts expected. Debt reduction in June was also considerable, $15.5 billion from $10.3 billion in May.

Trading on Wall Street returned briskly to life after the Labour Day holiday. The Dow Jones Industrial Average looked refreshed up 56.07 points to 9497.34 while the NASDAQ Composite also climbed 18.99 points to close on 2037.77.

Due to concerns over its reserve status, the US dollar slumped to its lowest level in almost a year on Tuesday. The feeling amongst analysts was that the dollar was suffering from data suggesting the global economy was recovering.

The dollar index, which tracks its progress against a basket of six leading currencies, fell to a low of 77.093, its weakest level since September 2008.

For the first time in six months, the price of gold, which has risen 13.6% in value this year, has reached and passed the $1,000 an ounce marker. In early morning trading in London, spot bullion traded as high as $1,005, up one per cent on the day. It is the third time since March 2008 that gold has moved above the key level.

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Tags: Associated British Foods, Banking, Brian Hartzer, British Economy, British Pound, British Retail Consortium, Cadbury, Credit Crunch, Currency, Dow Jones, Economy, Equality and Human Rights Commission, Financial News, FTSE, Money, Money Markets, NASDAQ, Orange, Primark, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, T-Mobile, UK Economy, UK government, UK Recession, US Federal Reserve, Wall Street, Yell

Regulators have agreed tough new regulations designed to put into action the proposals agreed by the G20 group of nations over the weekend. If they come into force, the regulations could force many of Europe’s top banks to raise tens of billions of Euros in capital in coming months.

The new rules are designed to force banks to improve the quality and extent of their capital buffers significantly in order to absorb shocks.

The new regulations will require banks to ensure that at least half of the capital held by banks must comprise of common equity and retained earnings. In addition the regulators have also decided to set specific limits on how much banks can borrow, expected to be around 25 times their assets.

Since the beginning of the financial downturn, investors in companies quoted on the FTSE, have become much more active and are turning up with increasing regularity at annual general meetings to make their feelings heard and their votes count. Evidence of their effectiveness has already been noted at meetings of firms such as Royal Dutch Shell and Royal Bank of Scotland (RBS), which resulted in proposed pay packages being rejected.

Cadbury are reported to be a little cheesed of with Kraft Foods, after having rejected a £10.2 billion takeover approach from them. The FTSE lived the idea and shares in the company rose by almost 40% after the announcement.

Spokespeople from Cadbury explained that the reason why they rejected the approach was that it basically undervalued the company, while analysts suspect that Kraft’s offer was just an opening salvo, and they will come in with an increased offer. Rumours have it that other "kings of confectionery" are waiting in the wings, among them Hershey and the Nestle Company.

All the news on the FTSE was not about Cadburys, with the Lloyds Banking Group adding 4.4 per cent to close on 106.31 pence. The rise in share value came on reports that the bank is interested in converting £7 billion of its existing e shares to equity at a premium. .

Sports Direct, after seeing their shares rise by 14 per cent on Friday, succeeded in adding a further 11.8 per cent to 114 pence in anticipation of a very positive update on the company’s position due to be released today.

The FTSE 100 index jumped again, driven by the news from Cadbury. It sweetened by 81.48 points to close of 4933.18.

Meanwhile the FTSE 250 continued to climb on Monday, up 2.18% or 190.61 141.05 points to close on 8,963.46.

The pound dipped against the major currencies on a weak days trading.

• Pound/US dollar 1.6351
• Pound/Euro 1.14
• Pound/Japanese Yen 152.096
• Pound/Swiss Franc 1.733

There was no trading on Wall Street on Monday for Labour Day. The Dow Jones Industrial Average stayed on 9441.27 while the NASDAQ Composite looked comfortable on 2018.78.

Joseph Stiglitz, the Nobel Prize-winning economist is bucking the trend by stating his doubts on the robustness and staying power of any US economic recovery, warning that the current economic downturn may be what is known as a "double dipper".

According to Stiglitz, who acted as chief economist for the World Bank, "the prospects of a robust recovery are very, very weak" and there was a strong chance that the economy collapse after a period of growth.

Germany’s industrial rebound is still gathering momentum, with reports that when manufacturing orders chalked up another strong rise in July. Europe’s largest economy however is still far from returning to its pre-crisis levels of activity.

Industrial orders rose 3.5 per cent in July, extending a 3.8 per cent increase in June, adding further evidence that economic growth in the third quarter would prove much stronger than could be hoped until even a few months ago. Production was still down 20 per cent than in the same month in 2008.

Trading volumes across commodity markets were lighter than usual on Monday because of the Labor Day holiday in the US. Gold rose 0.2 per cent to $995 a troy ounce, consolidating just below the $1,000 mark.

Crude oil prices steadied, at around $67.00 a barrel.

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Tags: Bank, Banking, British Economy, British Pound, Cadbury, Credit Crunch, Currency, Dow Jones, Economics, Economy, financial downturn, Financial News, FTSE, Hershey, Joseph Stiglitz, Kraft Foods, Lloyds, Money Markets, NASDAQ, Nestle, RBS, re-capitalisation, Recession, Royal Bank of Scotland, Royal Dutch Shell, Sports Direct, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK Recession, US economy, Wall Street, World Bank

The Financial Services Authority has banned Royal Bank of Scotland from making repayments on bonds worth £920 million pounds next month. They are doing so as a result of concerns that the partly nationalised bank is too reliant on billions of pounds of taxpayer’s money to remain afloat. RBS is in advanced talks with the European Commission (EC) to decide the nature of fiscal restraints to be imposed on the bank in return for its government funding. Among other measures, the EC is likely to force the bank to cut its share in the small-business banking market.

The British Chambers of Commerce (BCC) has predicted that the UK economy should bounce back next year. They did hasten to add that the risk of the economy relapsing still remains high. The BCC announced in a recent statement that they expect the economy to grow 1.1% in 2010, almost double their previous forecast of 0.6% made as recently as June. According the report, unemployment will peak at around 3 million, fewer than the 3.2 million forecast previously.

At a weekend meeting of the G20 in London, finance ministers representing the world’s most powerful economies have reached agreement on a series of measures designed to regulate the global banking system.

The ministers are interested in implementing a system that will reward long-term performance rather than short-term risk-taking among the global banking community, without reaching agreement on specific limits on the amounts individual bankers get paid.

Britain, the US and Canada were reported to be against the proposal, which is due for further discussion at the summit of G20 leaders in Pittsburgh, Pennsylvania later this month.

The UK economy should bounce back next year but the risk of a relapse remains high, a business group has warned.

The British Chambers of Commerce expects the economy to grow 1.1% in 2010, almost double its previous forecast of 0.6% made in June.

It says unemployment will peak at just above 3 million, fewer than the 3.2 million forecast previously.

However, it said that sustaining the recovery would prove challenging given the UK’s debt burden.

Vodafone and O2 have both tabled bids of about £3.5 billion to buy T-Mobile UK from owner Deutsche Telecom, with a successful bid from either firm liable to make them the largest mobile phone operator in the UK.

High street retail chain, Wilkinsons have succeeded in filling a large part of the vacuum left when Woolworths closed their doors towards the end of 2008. The company reported annual sales up by 6.2 percent to 1.4 billion pounds in the year to the end of January, a record for the family-owned group. Wilkinsons have announced their plans for expansion, in which they will open 15 new outlets by 2009, as they drive to reach a target of at least 500 outlets by 2012.

The U.K.’s largest recruitment company Hays Plc retreated 3.7 percent to 96.1 pence on the announcement that their full-year profit had declined by 44 percent due to reduced hiring in the recession.

The U.K. developer of software for William Hill Plc’s Web-gambling site Playtech Ltd announced a 38% increase on pre-tax profits. Their shares rose in value by 13.25 pence to 346 on the news.

Shares in Premier Farnell Plc the U.K. electronic and industrial products distributor dropped 7.2 percent to 151.3 pence after they reported earnings and turnover and profit that fell behind analysts’ estimates.

The FTSE 100 index ended a further 54.95 points higher at 4,851.70. The index has now risen by 38 percent from its six-year low in early March, on hopes that the worst of the global recession is behind us in the UK.

Meanwhile the FTSE 250 rose again on Friday, up 141.05 points to close on 8,745.85.

The pound rose against the dollar, yen and Swiss franc, yet continued to falter against the Euro.

• Pound/US dollar 1.6398
• Pound/Euro 1.1449
• Pound/Japanese Yen 152.6881
• Pound/Swiss Franc 1.7361

The number of US workers claiming unemployment benefits has fallen last week but continued to be a cause for concern, with fears that unemployment figures will remain high even after the US moves out of recession.

New jobless claims fell by 4,000 to 570,000; however the number of workers continuing to claim unemployment benefits rose by 92,000 to 6.23 million.

Wall Street on Friday saw the markets continuing to rise, with the Dow Jones Industrial Average up 99.66 points to close on 9441.27 while the NASDAQ Composite index hurdled the 2,000 mark yet again, closing for the weekend on 2018.78.

The European Central Bank (ECB) remain cautious on the state of economy in the 16 nation Eurozone, forecasting that growth would be very gradual and is capable of being thrown into reverse again.

Evidence of the ECB’s continued wariness, was the news that they had left their main interest rate unchanged for the fourth consecutive month at 1 per cent, which is a record low.

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Tags: Bank, Banking, British Chambers of Commerce, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economy, Employment, European Central Bank, European Commission, Financial News, Financial Services Authority, FSA, FTSE, Global Credit Crisis, Money Markets, NASDAQ, O2, Playtech Ltd, Premier Farnell Plc, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, T-Mobile, UK Banks, UK Economy, UK government, UK Recession, Unemployment, Vodafone, Wall Street, Wilkinsons, William Hill, Woolworths

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

There were some glum faces yesterday at the Office for National Statistics on the announcement that consumer price inflation remained unchanged in July at 1.8 per cent in July, after forecasts that it would drop sharply for the month to 1.5 per cent.

Hopes were that after the Bank of England had extended its quantitative easing programme by £50 billion taking it up to £175 billion, that inflation figures would react accordingly. The fact that they didn’t points to signs that the recession is deeper than analysts have been calling till now. During the last 16 months inflation has proved higher than analysts predicted on no less than 12 occasions.

The Building Societies Association (BSA), the body appointed to represent Britain’s mutually-owned lenders, has issued a complaint to Europe’s anti-trust regulator. The complaint is regarding a planned restructuring of state-owned bank Northern Rock, that the organization claims would distort competition in the mortgage market.

BSA has requested from the European Commission to ensure that Northern Rock be made to pay financial penalties if the proposed overhaul goes ahead.

The Commission is due to deliver its verdict in the autumn, with a negative verdict liable to cause a major setback in the British government’s efforts to restore Northern Rock to financial health and sell it back into private ownership

Spiralling costs seems to be hitting home everywhere, with the news that the cost of running the Houses of Parliament has reached almost half a billion pounds in 2008-9 being another example. The costs of operating the UK seat of government is proving to be an increasingly expensive pastime, with costs up

more than £12 million from 2008 arriving at close to £400 million, a sum that includes salaries, allowances and pensions for MPs and their administrative staff. One the upside, the costs of maintaining the House of Lords dropped by almost a third from £152.5 million to £106.5 million. There must be a message there, somewhere.

The news that the Royal Bank of Scotland Group PLC is close to putting its asset management business up for sale, will be good news for most, but not for those who bank at Coutts, the private bank owned by RBS, renowned as an adviser to the Queen, that will be included in the package and may well fall into foreign hands.

On the FTSE, shares in African Minerals, the iron ore mining company, managed by Regal Petroleum founder Frank Timis, rose 1.6 per cent to 312 pence on news that the company had embarked on takeover talks with Eurasian Natural Resources Corporation (ENRC).

Shares in the Sierra Leone-based group have risen 13-fold this year amid speculation of interest from several parties including ENRC.

In the retail sector Tesco’s shares were the weakest, falling 0.5 per cent to 363 pence after industry data for July showed a poorer month.

Credit checking agency Experian inched 0.4 per cent higher to 517 ½ pence after suggestions from the US Federal Reserve that lending supply was improving.

The FTSE 100 made up for most of yesterday’s reverses rising 40.77 points to close on 4685.78. The FTSE 250 recovered after a major collapse on Monday, rising 80.39 points to close on 8,354.48

According the BOE Governor Mervyn King the pound’s biggest five-month rally in 24 years may be stuttering to an end, largely due to the Bank’s flooding the U.K. economy with newly printed cash.

Sterling soared in value by 23.5 percent from March 10 to Aug. 5 on speculation U.K. assets would rise as the worst financial crisis in six decades eased. The rally appeared to be petering out and the pound has slumped 2.6 percent since Aug. 5 to last week’s $1.6543 close. However on Tuesday, the pound improved a little on figures showing inflation proving far more resistant to recession than economists had expected.

• Pound/US dollar 1.6353
• Pound/Euro 1.169
• Pound/Japanese Yen 156.3554
• Pound/Swiss Franc 1.777

In the US, news that construction starts of new homes had fallen in July, after three straight months of increases caused no little construction.

The number of new properties sold for last month fell 1% to an annual rate of 581,000.

US wholesale prices also recorded an unexpectedly large fall last month, down 0.9% from June, and by 6.8% from July 2008.

The Dow Jones Industrial Average recovered part of the previous day’s losses rising 82.6 points t to close on 9217.94. The NASDAQ moved up 25.08 points to close on 1955.92.

The ongoing weak demand for personal computers and printer ink has seen Hewlett-Packard (HP) Revenue fell by 2% to $27.5 billion, not encouraging but better than Wall Street estimates.

Like most technology firms, HP has suffered in the global downturn as consumers trim their spending.

Meanwhile that perennial optimist the International Monetary Fund (IMF) has woken up to remind us that the world has indeed begun to recover from recession, adding that the process will not be simple.

A chief economist for the IMF warned that the recession had "left deep scars, which will affect both supply and demand for many years to come"

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Tags: Bank of England, Banking, British Economy, British government, British Pound, BSA, Building Societies Association, Coutts, Credit Crunch, Currency, Dow Jones, Economics, Economy, Eurasian Natural Resources Corporation, European Commission, Experian, Financial News, FTSE, Global Credit Crisis, Hewlett-Packard, House of Lords, Houses of Parliament, HP, IMF, Inflation, International Monetary Fund, Mervyn King, Money, Money Markets, mortgage market, Mortgages, NASDAQ, Northern Rock, Office for National Statistics, RBS, Recession, Retail, Royal Bank of Scotland, Stock Markets, Stocks and shares, Tesco, Tesco's, UK Banks, UK Economy, UK government, UK Recession, US Federal Reserve, Wall Street

UK unemployment has risen to its highest level in 14 years despite all the indications that the recession has begun to recede

Recent reports indicate that in the second quarter through June, the number of people seeking work rose from 2.22 million to 2.44 million, an increase of 220,000 making for the highest level of unemployment since 1996. According to the Office for National Statistics, claims for jobless benefit climbed by 24,900 in July to 1.58 million.

A separate statement issued by the Bank of England predicted that unemployment will keep climbing even after the recession is recognized is over, which will hamper the pace of recovery. To soften the unemployment burden, BOE Governor Mervyn King announced that the bank will to expand its bond-buying program.

According to the International Labour Organization, overall UK unemployment rose to 7.8 percent between April and June, compared with 9.4 percent in the U.S. in July, 9.4 percent in the euro region in June and 5.4 percent in Japan.

According to the UK’s Financial Service Authority (FSA) an end to the practice of awarding non performance related bonuses appears to be in the offing at long last. From 2010, UK financial institutions will be disallowed for paying their staff guaranteed bonuses out with the current financial year. Exempt however are senior bank employees who can still have their bonuses spread over two or three years.

Lloyds TSB have announced that its Insight asset management business is to be sold off to the Bank of New York Mellon (BNY) for £235 million.

Analysts say the deal may mark the start of a phase of consolidation and disposals among mid-sized asset management groups facing increasing margin pressure.

BNY Mellon beat off several competitors in the auction for Insight, whose revenues in both 2006 and 2007 were around the £125 million. 2007.

The Lloyds group, 43.5 per cent taxpayer owned is known to be consolidating their activities, in anticipation of talks to be held with the European Commission about state aid approval. Lloyds surged 6.4 percent to 96.83 pence.

Also on the offload trail are RBS who are well into the process of selling or shutting down its businesses in two-thirds of the 54 countries where it has been operating, in the aftermath of suffering the largest trading loss incurred in British corporate history last year.

As part of their campaign, RBS have announced a £53 million deal to sell off 99.4 percent of the Banks branches in Pakistan to the privately owned Muslim Commercial Bank, the country’s biggest lender by market value. The deal is not yet official, requiring regulatory approval which, according to analysts will be a formality. Royal Bank of Scotland Group Plc, the biggest bank owned by the U.K. government, added 5.4 percent to 45.15 pence.

Independent Television Corporation (ITV) the hard pressed and profit starved UK commercial network broadcaster has received a long overdue boost in the shape of a positive recommendation of better times ahead to investors from their bankers. The news pushed their shares up towards its target price of 50 pence, for the first time in a long time.

The U.K.’s largest publicly traded residential landlord Grainger Plc were among the stars on the FTSE on Thursday as their shares shot up by 16 percent, (33.5 pence, to 243.5 ) on news that that they had succeeded in reducing their debt burden by £100 million pounds since March, through disposal of real estate.

The FTSE 100 to a new 10-month high on Thursday, making for an increase of more than a third since early March, as reports of a global economic recovery gains impetus.

The FTSE 100 continued to make up for losses earlier in the week, up 38.70 points to close on 4,755.46. Meanwhile the FTSE 250 took another giant step forward, rising 131.73 points to close on 8,483.66

Sterling has a mixed day on yesterday’s markets, ring slightly against all of the currencies, with the notable exception of the EURO.

• Pound/US dollar 1.6575
• Pound/Euro 1.1605
• Pound/Japanese Yen 158.3223
• Pound/Swiss Franc 1.7751

In the US retail sales fell in July, following two months of rises, as fears of job security appear to have put a block on consumer spending.

The figures proved to be an unpleasant surprise for analysts, who had been expecting a rise of 0.7% in overall sales last month.

On Wall Street, US stocks reached new highs for the year, with the Dow Jones index rising 36.58 points to close on 9398.19, while the NASDAQ again passed the 2,000 point mark, up 10.63 points to finish the day on 2009.35

The big news coming out of Europe was that both the French and German economies have announced an end to the year-long recessions in both of Europe’s strongest economies.

Stronger exports and consumer spending, as well as government stimulus packages, contributed to of 0.3% between April and June

However economic activity in the eurozone fell by 0.1%, a sign that the region is still in the throes of the recession.

The Volkswagen / Porsche takeover deal has finally been finalised. Volkswagen is to pay €3.3 billion for a 42% stake in Porsche’s main production division. Between the lines, the takeover was closer to a rescue for debt-laden Porsche, which will amount to a complete merger of VW and Porsche SE during 2011

Crude oil prices rose by more than $1 a barrel as commodity markets rallied after better-than expected economic data fuelled hopes that the eurozone’s recession was close to ending.

Gold rose 1 per cent to $956 a troy ounce, bolstered by dollar weakness

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Tags: Bank of England, Bank of New York, Banking, BNY Mellon, British Economy, British Pound, Crude oil, Currency, Dow Jones, Economics, Economy, Financial News, Financial Service Authority, FSA, FTSE, Gold, Grainger Plc, Independent Television Corporation, International Labour Organization, ITV, Lloyds TSB, Mervyn King, Money, Money Markets, NASDAQ, Office for National Statistics, Porsche, RBS, Recession, Royal Bank of Scotland, U.K. government, UK Banks, UK Recession, Unemployment, US retail, Volkswagen, Wall Street