Alistair Darling, UK Chancellor of the Exchequer has announced that he is open to discussion on the possibility of scaling back on the interest rate charges which Iceland is required to make on the £3.4 billion pound losses from failed online bank Icesave. After talks between the governments in London, Darling was reported as saying that although British taxpayers "must get their money back" the Treasury could be willing to negotiate terms. The Treasury is considering two options to scale back interest rate charges while insisting that both options must see debts being fully recouped. The Icelandic government is seemingly eager to arrive at a more flexible compromise as opinion polls in the country suggest the initial deal that was hammered out would be more than likely rejected in a forthcoming referendum.

According to a very recent survey, the UK personal computer (PC) market saw fourth quarter growth for the first time in a year, despite a fall in sales from the business sector. Holding the top spot were Acer with 19.1 per cent market share, with HP hot on their heels with an 18.9 per cent market share. Dell was in third place with 16.5 per cent, followed by Toshiba and Samsung with 10.4 per cent and 6.5 per cent respectively. The total UK market in terms of shipments in the fourth quarter of 2010 was 3.8 million units. A market analyst reported that the personal computer market in the UK was becoming increasingly dependent on laptops (mobiles), which accounted for 70 per cent of the total PC market, with growth in demand reaching 24 per cent in the fourth quarter of 2009. However, the report did state that despite the overall growth, the professional PC market declined by 25 per cent in the fourth quarter of 2009.

The much loved general interest magazine Reader’s Digest UK has been forced into administration after failing to gain support from the UK pension’s regulator over an agreement for funding their £125 million pension deficit. The UK subsidiary of U.S. Reader’s Digest Association have recently brokered a deal with trustees of its pension plan and the Pension Protection Fund. The deal would have seen a capital payment alongside the transfer of a one-third interest in the equity of the UK business to the UK pension scheme trustees. The UK is the only branch of the multiple national Readers’ Digest Association with a large pension shortfall. The parent company said the UK insolvency is not liable to have a material impact on its other global operations.

Legal & General (L&G) has revealed plans to supply "longevity insurance" to pension funds, in a move which will see the insurer compete against the major European insurance companies. The launch of the new insurance product by L&G will precede similar plans by others in the insurance sector including Prudential, who are also considering moving into this market. A spokesman for L&G emphasised that the provision of longevity swaps will "develop alongside and not necessarily compete with" L&G’s bulk annuity business. Babcock International and RSA were reported to be the first companies to take out longevity protection in 2009.

Private equity group HgCapital Trust is seeking to raise more capital from investors by preparing a share issue to shore up its finances, amid expectation of a rise in new investments. Industry sources suggest the London-listed group could raise as much as 50 million pounds. As one of the best-performing listed private equity groups with a market capitalisation of 210 million pounds, HgCapital is hoping to appeal to investors from its position of strength by making a placing of ordinary shares with subscription shares attached. A spokesman for the company projected that HgCapital will invest more than it sells, as the market conditions present bargains.

Shares in Barclays were up 2.9 per cent to 302 pence on a positive response to their recent results. Ahead of their results due to be issued next week, Lloyds Banking Group rose 3.2 per cent to 50½ pence and Royal Bank of Scotland took on 1.9 per cent to 34 pence.

Sterling continued to slip against both the Euro and the Dollar. It closed at $1. 5392 while settling on 1.1409 against the Euro.

Overall, the FTSE 100 added 32 points to 5,307.85, meaning that it has risen for seven of the last eight sessions.

According to a report released on Thursday, certain of the states of the U.S. look like facing a total shortfall totaling no less than $1 trillion in their funds for employees’ pensions and retirement benefits. The state of Illinois is reported to be in the worst shape, with only 54 percent of its pension obligations funded, according to the report, taken into account only the fiscal years up to June 2008. That fact makes the picture even less than rosy as the downturn that began in the final six months of 2008 and continued till the end of 2009 – was when many funds’ investment portfolios suffered their most serious devastation. Regardless of stock market fluctuations, pension funds were destined to fall down a budget hole, the non-profit research center who prepared the report pointed out.

The US Federal Reserve has predicted that the US economy is still on target to grow strongly during 2010, but unemployment will remain high, has warned. In its latest forecast, the Fed said that the economy would expand between 2.8% and 3.5% in 2010, with the unemployment rate expected to remain between 9.5% and 9.7% in 2010.

Encouraging January housing starts, better-than-expected earnings and receding fears on the European sovereign debt situation boosted risk appetite prompted Wall Street stocks to rise moderately for the second consecutive session. The Dow Jones Industrial Average was up 93 points to 10,392.9 while the NASDAQ Composite rose 15 points to 2,241.71

Hewlett-Packard (HP) has raised its outlook for its financial year after strong sales over the Christmas period lifted its profits by 25%.

Higher demand for its personal computers and servers saw its net profit for the three months to 31 January total $2.32 billion (£1.48 billion).

This compares with $1.86 billion for the same first quarter period a year earlier. HP’s revenues for the quarter were up 8% to $31.2 billion, as its results came in ahead of market expectations.

The price of oil has risen sharply as the dollar, the currency in which the commodity is priced, weakened against the pound and the euro.

US light crude rose by $3 to $ $77.01 with London Brent settling at $75.68 a barrel.

financial

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Tags: Alistair Darling, Babcock International, Banking, Barclays, British Economy, British Pound, Credit Crunch, Currency, Economy, Financial News, FTSE, Hewlett-Packard, HgCapital, Icesave, Legal & General, Lloyds Banking Group, Money, NASDAQ, Reader's Digest Association, Recession, Retail, Royal Bank of Scotland, RSA, Savings, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Wall Street

After the traumas it has gone through over the last year or so, it appears that the Lloyds Banking Group Plc, still the U.K.’s biggest mortgage lender is making strides to relive itself of some of the stigmas attached to it as the UK banking industry almost imploded in autumn of last year. The bank has reached an agreement with the U.K. government to guarantee half the risk on a portfolio of its existing short-term loans to companies, The billion pound deal will be dependent on Lloyds agreeing to increase their business lending.

As far as the high street us concerned, Lloyd’s Halifax building society unit is currently review the licensing agreements they currently hold, entailing running some 300 outlets situated in real-estate agents, lawyers and financial consultants. They have already implemented a decision to shut down 26 of the situated in independent banks. Lloyds are also reported to be interested in selling off their branches of Lloyds, TSB and the Cheltenham & Gloucester Plc in Scotland. Lloyds Banking Group is considering more job losses as the bank plans to close more than 300 “agency” counters run by its Halifax subsidiary in the offices of estate agents, solicitors or financial advisers.

The 43% state controlled banking giant has already paid off 7,500 people in 2009 so far. On the up side, Lloyds recently announced it was reviewing its decision to close down its 160 Cheltenham & Gloucester (C&G) branches,

Less than cheery forecasts from insolvency specialists are beginning to emerge that a second wave of corporate restructurings are due to break this month as bankers and investment houses begin to face problematic customers. .

September has always been regarded as the second important crunch date in the year for companies and lenders, as companies involved in retailing and distribution draw heavily on working capital to stock up in anticipation of what might not be the greatest of Christmas seasons.

On a difficult day for the FTSE, Lloyds bank’ stock rose 6.3 percent, to 111.34 pence on news of their reorganisation plans.

Shares in the U.K.’s largest self- storage operator Safestore Holdings Plc also rose by 8.3 percent, to 131 pence, in anticipation of improved third-quarter earnings.

RSA Insurance fell 4.8 per cent to 124 pence following reports that the company was considering a £1 billion rights issue to reduce their debt burden

The FTSE 100 closed at a low, having been under pressure all day after market strategists recommended clients to cut their allocation of UK equities.

The FTSE returned from it August Bank holiday break to find itself not in the best of shape. The FTSE 100 dropped to 89.20 points close on 4819.70 while the FTSE 250 fared even worse, dropping 2.24 % or 197.83 points to close on 8,619.68

Sterling also continued to struggle against the major currencies

• Pound/US dollar 1.6126
• Pound/Euro 1.1349
• Pound/Japanese Yen 149.5807
• Pound/Swiss Franc 1.7207

It would appear that scrapping incentives has not had too much of an effect with new cars sales generally on the increase around the world in August according to some preliminary data. Car sales in Japan rose for the first time in more than a year, while several auto manufacturing groups in Asia and Europe reported higher sales volumes than for the comparable month last year.

On Wall Street, markets continue to struggle due to continued uncertainty in the Chinese economy. The Dow Jones Industrial Average plummeted by 185.68 points to close on 9310.6 while the NASDAQ Composite index dropped below the 2,000 mark yet again, down 40.17 points to close on 1968.89.

For the first time since February 2008, US manufacturing output grew according to the Institute of Supply Management’s purchasing managers. Their index rose to 52.9 points last month, up from 48.9 in July.

Any number above 50 indicates an expansion in manufacturing output, making for another significant sign of recovery in the US economy.

In a long anticipated move, the internet phone company Skype has been sold off by online auction site owners in a transaction worth about £1.2 billion

Skype will now be owned by a group of private investors, including Netscape co-founder Marc Andreessen and private equity firms, in partnership with EBay who will retain a 35% stake in the firm, which it has been trying to sell for some time. The deal values Skype at $2.75bn. EBay bought Skype for $2.6bn in 2005.

Unemployment levels Euro 16 countries was reported to have hit a 10-year high in July, as despite declarations to the opposite, the impact of the recession continues to be felt.

The number of unemployed across the eurozone region in July was reported to have reached more than 15.1 million, making for a seasonally-adjusted rate of 9.5%. The unemployment figures were the worst in terms of monthly percentage since May 1999 and compares unfavourably with the numbers of unemployed with all the 27 member states of the European Union which was a total of 21.8 million, or 9%.

Crude oil prices have fallen this week as news out of China continued to raise doubts about its petroleum demand, with prices falling below the $70 a barrel mark again.

Economic concerns have hit China where the benchmark Shanghai Composite index fell 6.7 per cent in its worst one-day decline since June 2008, halting the ongoing increase in crude oil prices, which have risen steadily in 2009, after falling as low as $33 a barrel.

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Tags: Banking, British Economy, British Pound, C&G, Cheltenham & Gloucester, Currency, Current Account, Dow Jones, Ebay, Economy, Employment, Financial News, FTSE, Halifax building society, Lloyds, Lloyds Banking Group Plc, Marc Andreessen, Money Management, Mortgage, NASDAQ, Netscape, Recession, Retail, RSA, Safestore Holdings, Skype, U.K. government, UK Banks, UK Economy, UK Recession, Unemployment, US economy, Wall Street