The Organisation for Economic Co-operation and Development (OECD) has predicted that the recovery and growth seen in the second half of 2009 is expected to continue in 2010. Their recent figures show that its 30 member countries, including the US and UK have more than doubled its growth projections for next year. However a spokesman from the OECD warned the developed nations not to expect a smooth ride and that "growth was being held back by still substantial headwinds" and would be restrained for some time in the near future. They went on to explain that some of the very measures that were being used to help the richer nation’s economies to recover might return like a boomerang upon them. The feeling was at the OECD was that the UK, needed to come up with a concrete plan to ease concerns about the stability of their public finances, and that the results that could be achieved through continuing the country’s quantitative easing programme remained uncertain. The UK, which now has overall debt of £825 billion, is set to borrow a record £175 billion over the next two years with further details of how and why due to be set out in Chancellor Darling’s pre-Budget report on 9 December.

US investment bank JP Morgan have announced that they are to complete their take-over of UK stockbroker Cazenove. Morgan are reported to be paying a further £1 billion ($1.67 billion) for the remaining 50% of Cazenove that is not in their hands. JP Morgan and Cazenove reached a joint venture agreement in 2004, where they merged their investment banking operations.

The news that Marks and Spencer have chosen Marc Bolland, current head of Wm Morrison, as its new chief executive, saw a dramatic and immediate shift in fortunes for both companies, at least in stock market terms. Shares in M&S rose 6 per cent to close on 390 pence while Morrisons’ fell by 5 per cent to 281 pence, making for a combined £600 million swing”.

Dutch born Bolland’s appointment puts a long awaited end to the speculation of who will replace incumbent chairman, Sir Stuart Rose, who will remain with the company as part-time chairman until mid-2011.

ITN were expected to reveal the first trading first-ever loss on Thursday as the company launched a set of austerity measures which will be required to put the company back on track. ITN, who produce news bulletins for ITV, as well as for Channel 4, is owned by four media companies, ITV Daily Mail & General Trust, United Business Media and Thomson Reuters, each of whom hold a 20 percent share, except ITV who hold 40 percent. Reasons given for the drop in sales and profit were mainly the recession, which has affected advertising revenues on all commercial broadcasters, and the closure of Setanta Sports News, the news channel operated by the Ireland-based sports channel network that went into administration this year. Revenue from Setanta made up approximately 5 per cent of ITN’s sales in 2008. ITN made a profit of £4.1 million on turnover of £105 million.

Postal and parcel delivery company UK Mail, who only this moth adopted their new trading title from Business Post, have announced a rise in their interim profits, despite of a fall in revenues caused by a recession driven fall in demand. A spokesman for the company pointed out that their parcel business, which holds around a 7 per cent share of the UK market, has witnessed an upturn is sales during the period of postal strikes, as the public began to seek alternatives to Royal Mail’s service. However the company, which also handles around 17 million items of mail a day, said the strikes affected the volumes of mail handled by the company much less significantly than they had hoped for. UK Mail, who relies on the Royal Mail for “last mile” delivery of its sorted post, pointed out that the impact the strikes had been less severe than anticipated.

Sterling lost some of its gains against the major currencies in midweek trading.

• Pound/US dollar 1.6636
• Pound/Euro 1.1163
• Pound/Japanese Yen 148.0862
• Pound/Swiss Franc 1.6881

The UK’s benchmark FTSE 100 index lost the bulk of its early gains for the week, down 78 points to 5,267.70. The FTSE 250 took its usual midweek tumble down 165 points to 9,237.

New home construction in the US have taken a surprise drop fall in October, down 10.6% to an annual rate of 529,000 homes, making for the lowest level in housing starts since April of this year, Reasons for the decrease in demand was put down to .a fall in demand for both single and family housing.

On the news, the Dow Jones average slumped 105 points to close on 10332.42. The NASDAQ also took a tumble, but for reasons of its own and finished the day on Thursday on 2156.92.

Internet giant America on Line (AOL) have announced that they are to lay off more than 2,000 of their staff , representing one third of their entire work forces when it completes its spinoff from Time Warner, with whom they have been in partnership since 2001. Representatives from Time Warner have stated that the separation will be completed by the end of 2009.

Also cutting jobs are Air France-KLM who plans to cut their work force by cut 1,700 during 2010. Their decision comes after the airline posted a worse than predicted third quarter loss of 147 million Euros (£131 million) the job losses are in addition to the 3,000 already cut in 2009.

Silver, platinum, palladium and copper have reached fresh highs for the year while gold continued to extend its record-breaking run breaching the $1,150 mark, seen as the next key milestone in the rally, to reach a record $1,152.74 an ounce, before easing back to $1,148.

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Tags: Air France-KLM, Alastair Darling, America on Line, AOL, Bolland, British Economy, British Pound, Business Post, Cazenove, copper, Credit Crunch, Currency, Daily Mail, Dow Jones, Economy, Financial News, FTSE, General Trust, Gold, ITN, JP Morgan, M&S, Marc Bolland, Marks and Spencer, Money, Money Markets, NASDAQ, OECD, Organisation for Economic Co-operation and Development, palladium, platinum, quantative easing, Recession, Retail, Royal Mail, Setanta, Silver, Stock Markets, Stocks and shares, Stuart Rose, Thomson Reuters, Time Warner, UK Banks, UK Economy, UK government, UK Mail, UK Recession, United Business Media, WM Morrison

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

The battle to keep General Motors production in the UK to the highest level seems to be gaining ground. Business Secretary Lord Mandelson announced that he had been given a “positive response” from the US government on a recent visit to Washington during which he held talks with US Treasury’s car industry bail-out team.
Lord Mandelson is confident that there is no deal yet on the overall future of GM’s European operations and for Vauxhall who employ 5,500 people in the UK.

As Vauxhall ponder their uncertain future, it appears that most of the spoils to be gained under the British government’s vehicle scrappage scheme are going to South Korea. Reports have it that the bulk of new car sales are going to the Hyundai Motor Company whose range of small family saloons are doing very well out of Lord Mandelson’ s 300 million-pound scheme that invites motorists to trade in cars more than 10 years old in return for a 2,000 pound subsidy. Government figures released early this week said that the scheme had generated orders for 60,000 new orders in the period within the last six weeks alone, with Hyundai selling 8,246 new cars. A company spokeswoman announced that the Hyundai i10 was proving to be a big seller.

Understandable when you consider that with the scrappage discount you can have an i10 on the road for less than 5,000 pounds.

Former chief executive of the Royal Bank of Scotland, the much maligned Sir Fred Goodwin has shown a side we never knew existed by agreeing to hand back more than a third of the lump sum pension he snuck out of the back door of the bank with last year.

The banker, as well as his family, has felt a major downturn in their personal popularity since then. They have been reported to have actually been in hiding since their Edinburgh home came under attack in March of this year by angry shareholders.

Troubled sports broadcaster Setanta finally gave up their last hope of retaining their rights to broadcasting the 46 live matches allocated to the company for the 2009/2010 season through failing to meet another payment of the £30 million it owes the English Premier League. Without any further ado, the Premier League will begin an auction to find a broadcaster for the 46 UK live matches for the 2009/10 season.

The mining sector who until Friday had performed badly, were the main climbers on the FTSE on Friday. Shares in Anglo American driven by renewed speculation that they might be a target for takeover by the Brazilian mining group, Vale. Market analysts predicted that Vale’s move for Anglo would allow it to diversify beyond iron ore and increase coal and copper assets. Anglo closed up 2.7 per cent.

The house building sector also gained after Taylor Wimpey announced an increase in stability. On the announcement shares in the company rose 9.7 per cent to 34 pence; Barratt Developments also saw their shares rise by 7 per cent on Friday to close on 153½ pence. The Berkeley Group climbed but less spectacularly. Their shares rose by 2.5 percent firmer to 773 pence.

The World’s largest cruise line operator Carnival Corp. rallied 6.2 percent, to 1,668 pence, extending yesterday’s 7.2 percent advance after reported second-quarter profit that beat analysts’ estimates…”

Carphone Warehouse Group Plc Europe’s largest mobile-phone and laptop retailer had their shares increase in value by 6 percent, to 162.5 pence after RBS upgraded them from “hold” to “buy” and raised its share price estimation to 230 pence.

Overall, the FTSE 100 rose as the weekend loomed, climbing 65.07 points to finish on 4,345.93. On Friday the FTSE 250 made a bit of a recovery after a few days of losses up 92.67 points to close on 7,334.34.

Sterling held its ground against the dollar, while slipping slightly against the other major currencies

Pound/US dollar 1.6494
Pound/Euro 1.1832
Pound/Japanese Yen 158.8075
Pound/Swiss Franc 1.7833

As Wall Street closed on Friday, the Dow Jones was down just 15.87 points on 8539.73, while the NASDAQ climbed 19.75 points to close on 1827.42

Steve Jobs iconic CEO of Apple boss announced that he had been the recipient of a liver transplant about two months ago and is expected to return to work later this month.
Jobs would be returning to his job on schedule, but may initially work part-time, after winding down his normal management role more than five months ago.

Oil prices continued above the $70-a-barrel mark all this week, helped by suggestions the Chinese economy was rebounding faster than expected.

Spot gold prices continued to drop, on Friday by 0.3 per cent to $935.20 a troy ounce as data showed US inflation being contained lessening the metal’s appeal as a hedge against inflation.

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Tags: Carphone Warehouse Group Plc, Economy, Financial News, General Motors, Hyundai Motor Company, Lord Mandelson, Retail, Royal Bank of Scotland, scrappage scheme, Setanta, Sir Fred Goodwin, Taylor Wimpey, The Berkeley Group

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.

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