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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

One of the good things that have come out of the global economic downturn is the unparalleled fall in greenhouse gas emissions. A recent study sponsored by the International Energy Agency (IEA) has stated that the recession has in fact provided a “unique opportunity” to move the world away from high-carbon growth,

In this first major study of the impact of the recession on climate change, the IEA found that CO2 emissions from burning fossil fuels had undergone “a significant decline” in 2009, more than in any year since the late nineteen sixties. The decrease well exceeds the drop in greenhouse gas emissions that occurred after the 1981 recession.

Whilst falling industrial output is largely responsible for the plunge in CO2, there are other factors that have played a role, including the shelving of many plans for new coal-fired power stations owing to falling demand and lack of financing.

Rights issue speculation led Severn Trent lower on Monday Severn, Britain’s second-largest water company, lost 1.8 per cent to 993 pence. Severn has been widely rumoured to be looking at a fund-raising after July’s tougher than expected draft pricing review from Ofwat, the industry regulator. Severn’s options look likely to include a dividend cut and a rights issue to raise around £400 million. No decision is expected before November; when Ofwat is due to give its final determination.

The British Government has announced that they will grant a £10 million loan to Indian car maker Tata Motors to finance the electric car manufacturing project in the UK.

The loan, which will be part of a scheme backing low carbon technology in the motor industry, will support a £25 million pound investment by Tata Motors in its West Midlands base.

In July, Tata Motors had threatened to scrap plans to build electric cars in the UK if it did not receive the £10 million pound loan.

Tata almost said ta-ta to officials from Mandelson’s Business Department after being told that they needed more time to find out if the venture will be considered for the loan, taking the total waiting time to six months.

In a £50 million deal, the UK Atomic Energy Authority agreed to sell their wholly-owned commercial subsidiary UKAEA Ltd. to the defence and energy support services firm Babcock International.

UKAEA oversees nuclear clean-up work at three sites in Britain as well as providing consultancy services worldwide, Lord Mandelson said; “The sale will allow the company, as part of Babcock International, to continue its development and take advantage of new opportunities in the nuclear industry.”

UKAEA, which has been playing an active role in nuclear energy since for close to fifty years, has an annual-turnover worth around £32 million and employs more than 200 people.

Marks and Spencer was among the few companies to shine on the Footsie yesterday, in anticipation of positive second-quarter figures to be released next week. The high street retail chain was up 1.6 per cent to 374 ½ pence.

Slipping into reverse was the van hire group Northgate, whose shares dropped 2.1 per cent to 27 pence after the company admitted that they had made an “internal administrative error”, which meant that that their debt burden was £32 million more than previously reported.

The UK’s FTSE 100 index made its first reverse for a few days, down 38.53 points to close at 5,134.36.

Meanwhile the FTSE 250 continued to reverse last week’s gains, down yesterday by a further 86.28 points to close on 9,220.65

The pound continued to lose value against the main currencies on Monday’s trading with the notable exception of the Japanese Yen, where markets were closed for a public holiday.

• Pound/US dollar 1.6245
• Pound/Euro 1.1038
• Pound/Japanese Yen 149.188
• Pound/Swiss Franc 1.6721

The Dow Jones Industrial Average took a minor spin backwards after the weekend, down 41.34 points to 9,778.86. The NASDAQ continued to consolidate, up 5.18 points to 2138.04.

Computer giant Dell is buying IT services provider and fellow Texan firm Perot Systems for £2.4 billion ($3.9 billion)

Dell announced that the takeover, which it hopes to conclude between November and January, will help to provide a wider range of services to its customers.

The all-cash deal will see Perot shareholders receive $30 per share, making a 68% premium on the company’s closing share price on Friday.

Perot is owned by billionaire Ross Perot who twice ran as an independent candidate for the US presidency.

Oil prices have fallen by almost $3 on fears that energy demand may not be as strong as once thought.

The price of US crude was down to less than $70 a barrel. The price reduction confirms the findings of a report issued by the Centre for Global Energy Studies forecasting that there was unlikely to be a sustained rise in prices until the global financial recovery was well established.

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Tags: atmosphere, Babcock International, British Economy, British government, British Pound, climate change, CO2 emissions, coal-fired power stations, Credit Crunch, Currency, Dell, Dow Jones, Economy, emissions, Financial News, FTSE, Global Energy Studies, greenhouse gas, high-carbon, IEA, International Energy Agency, Lord Mandelson, Marks and Spencer, Money, Money Markets, Northgate, nuclear energy, Ofwat, Perot Systems, Recession, Severn Trent, Tata Motors, UK Atomic Energy Authority, UK Economy, UK government, UKAEA Ltd