After a nine-month run of steady increases, UK house prices were reported to have fallen in February, while the three-month rate registered a rise of 1.6 per cent. The three month property rise comparison chart was down from the 2 per cent increase seen in the three months to January as well as its peak of 3.7 per cent the three months to September 2009. According to the, prices fell by 1.0 per cent month on month in February,, although on a year on year level, house prices rose by 9.2 per cent against 8.6 per cent in January.

It now transpires that Britain’s escape from recession was stronger than previously thought in the final three months of last year, as the services sector bounced back.

According to the Office for National Statistics, the UK economy grew by 0.3% in the fourth quarter, rather than 0.1% as previously estimated, which marked the first time the economy had grown since the first quarter of 2008, when the UK’s deepest and longest postwar recession on record began.

City economists, who had predicted 0.2% growth, hastened to point out that the figures did not change the overall economic picture; with some of them even warning that the economy could even slip back into recession in the first three months of this year.

Before the weekend, the extent of the beating that the Lloyds Banking Group took through the acquisition of HBOS was revealed. The bank, who are partially owned by the UK public, revealed that no less than £30 billion had been set aside over the past two years to cover toxic debt hat Lloyds had inherited from the deal, with the bank indicating that they expect a further £12 billion of charges on HBOS loans this year, showing what a white elephant the bank had purchased for what then appeared to be a bargain price of £8 billion.

All these negative figures contributed to Lloyds announcing a worse-than-expected pre-tax loss of £6.3 billion for 2009. The figures make a somber contrast to those of Barclays and Royal Bank of Scotland who over the last ten days announced figures that beat market projections. Lloyds also came under a lot of stick over the issue of whether it had met lending targets agreed with the UK government.

Understandably shares in the bank fell heavily after having increased by 18 per cent in the previous nine days on what proved to be false optimism about its 2009 figures. In the event, Lloyd’s report of a series of unexpected bad debts for the fourth quarter sent their shares falling by 4.4 per cent to 52½ pence. Royal Bank of Scotland shares also faded 1.9 per cent to 37½ pence after analysts reduced their ratings which they claimed painted a too optimistic picture.

Financially troubled US insurer AIG are apparently on the brink of selling AIA, the US life group’s Asian business, to the UK’s largest insurer Prudential for about $35 billion in cash, shares and other securities The is deal expected to become official on Monday 1st March. The announcement will come after a weekend of talks, after which the AIG board decided to press ahead with the sale of AIA, one of the jewels in AIG’s crown, in preference to a planned partial listing of the unit. Under the terms supposedly being discussed, Prudential would pay about $25 billion in cash and the remaining $10 billion in shares and other securities for AIA. If the deal does go through, analysts prophesy that it would transfer would more than double the size of Prudential and mean that its business would be dominated by Asian sales and profits.

The UK’s oldest building society Chesham has agreed to merge with the Skipton Building Society, to create a mutual society with more than £15 billion. The merger brings to an end 165 years of high street presence for the society, although their name will continue to be used for the society’s existing share accounts and deposit accounts of assets. A spokesman for Chesham, who service over 20,000 members from their three branches, welcomed the merger, saying it would provide the security of being part of a larger group. In the past year Skipton Building Society, has seen annual profits increase to £63.5 million

According to a recent survey, the cost of car insurance jumped 12.7 percent in Britain in 2009 with the average quoted premium rising to £507 at the end of 2009 compared with £450 pounds a year earlier, The pace of the increase accelerated in the second half of the year, with prices rising by 6.3 percent in the final quarter alone. British car insurance prices have been held in check by stiff competition between providers, largely due to the spread of price comparison websites.

Write-offs at their troubled T-Mobile UK subsidiary helped to pushed Deutsche Telekom’s profits down by 77% in 2009, with profit slipping to €353 million from €1.5 billion in 2008, due to write-offs worth €2.3 billion on goodwill in T-Mobile. Deutsche Telekom and France Telecom have agreed to merge their UK mobile operations. They are awaiting regulatory approval for the deal, which will make the jointly-owned company the biggest UK mobile network operator with some 29.5 million subscribers.

Portsmouth Football Club have lost their battle to avoid entering administration as the Premier League side finally admitted defeat in their struggle to overcome a mountain of debt totalling £60 million, of which – g more than £12 million is owed to HM Revenue and Customs.

The process of administration automatically means that the club will be docked nine points by league bosses, making relegation almost certain and probably a welcome relief for the club’s supporters/ .

Portsmouth has already changed hands four times this season and has been at the bottom of the Premier League for most of it. .

On the foreign exchanges, the pound continued to fall . At close of trade Friday it was $1.5117, while standing at 1.1121 against the Euro.

As the markets closed for the weekend, the FTSE 100 was up 76.3 points, to 5,354.52. The rise erased most of the week’s trading losses, and made for a gain of 3.2 per cent for February.

According to revised figures, the US economy grew at an annual rate of 5.9% in the last quarter of 2009, higher than the first estimate of 5.7%.

According to economists, the rise was down to an increase in manufacturing output rather than stronger consumer spending; with the figures confirming that the world’s largest economy is moving rapidly away from recession.

On Friday, the Dow Jones Industrial Average continued to creep upwards, but at a much slower pace. It rose just 4.23 points to close on 10,325.26 while the NASDAQ Composite also rose by 4.04 points to close on 2,238.26

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Tags: AIG, Barclays, British Economy, British Pound, car insurance, Chesham, Dow Jones, Economics, Economy, Financial News, FTSE, HBos, Lloyds, Money, NASDAQ, Office for National Statistics, Property Prices, Recession, Royal Bank of Scotland, Skipton Building Society, Stocks and shares, T-Mobile, UK Banks, UK Economy, UK government, UK Recession

City minister Lord Myners, in a recent speech played down suggestions that Britain might follow in US President Barack Obama’s footsteps in introducing radical reforms to the UK banking system.

Myners stated that the UK had already taken sufficient measures to address the problems in its banking industry.

"President Obama came out with a solution to the idiosyncratic problems that he sees in the American banking system, based particularly around the investment banking" pointed out Milner "It’s worth remembering that proprietary trading, hedge funds, private equity, these were not at the heart of the difficulties that Northern Rock, or Royal Bank of Scotland or HBOS experienced." He summed up.

Alistair Darling, UK chancellor, was also reported to be against duplicating Obama’s moves to split commercial and investment banks.

Meanwhile U.K. Prime Minister Gordon Brown is expected to announce details of the release of £125 million pounds of venture capital aimed towards "low-carbon" businesses. The move is aimed to support his argument that the government should continue spending to bolster the UK economy.

The first slice of money from the Innovation Investment Fund will be released on Jan. 26th, according to an announcement on the prime minister’s official Web site.

“On Tuesday our new innovation investment fund will show our commitment to the industries and the technologies that will create the skilled jobs of the future,” Brown promised. “What is increasingly clear is that determined and active government can and does make a difference.” He continued

Public sector borrowing for December in the UK was lower than forecast,, However the government’s hopes of meeting its deficit target for the fiscal year still remain dependent on January’s tax receipts. However tax income for January, which is a key month for self-assessment, capital gains and corporation tax income, is expected to be down. This is due to reduced income and capital gains for 2008-09, when the UK economy was in the midst of recession. On a positive note UK financial analysts have pointed to the fact that recent receipts were stronger than predicted, with December’s income only 0.4 percent down on the previous year, favourable when compared with the average of 8.1 percent decline for 2009.

The Royal Bank of Scotland (RBS) plans to sell its U.S. trading business for $2 billion to JPMorgan could be in doubt following President Obama’s recent ban on banks trading on their own account. RBS has been urgently trying to complete the sale of their a 50 per cent stake in RBS Sempra Commodities, by the end of next week which would have been bound to create a much more positive view of their annual results due to be released by Feb. 25th. On the news of the positive standoff, RBS, saw their shares fall 0.64 pence to 34.68 pence

Northern Rock and the Post Office have announced cuts to their mortgage rates believed to be in response to Skipton Building Society’s shock increase to its standard variable rate, which rose from 3.5 per cent to 4.95 per cent. A spokesman for the Skipton quoted "exceptional circumstances" had forced them to renege on promises that their lending rate would not rise more than three per cent above the Bank of England base rate.

The first two British banks to come under state control are looking increasingly likely to be merged, in a controversial change of direction by the EU in Brussels. The EU is apparently on the verge of approving the state aid package that Bradford & Bingley received from British taxpayers, opening the door for their buy-to-let mortgage book to be merged with Northern Rock’s so-called ‘toxic bank’. The merger, which UK government officials have been working on for several months, comes in the wake of public pressure to remove some of Northern Rock’s taxpayer-funded benefits, including the customer savings guarantees held in the "good of non toxic "part of the bank.

British Airways has issued some fairly heavy threats to their cabin crew who are threatening strike action. If they do so they stand to lose some of the traditional perks of the job, and on a permanent basis. These include the ability to book standby flights for themselves and nominated friends or family at a 90% discount , as well as the standard of hotels that crew are put up in overnight while they are away would be substantially reduced.

The airline says a strike would have serious financial implications leaving them with no option but to cut staff benefits.

British Telecom, in a move to woo broadband customers from rival operators, has unveiled an aggressive pricing strategy. The fixed-line telephone company is to offer consumers high-speed broadband based on optical fibre for £20 pounds, eight pounds cheaper than a comparable service offered by Virgin Media. An executive at BT’s retail unit, announced that the company goal is to attract "customers to come back to BT for all their services." BT’s optical fibre broadband will be predominantly based in towns and cities, and is expected to be capable of servicing more than 40 percent of UK homes by mid-2012.

According to BSkyB their High Definition marketing campaign was a Christmas marketing hit will full details due to be revealed in their forthcoming half year results due to be released this week. The results are expected to show that capitalising on the stay at home ethos typical of a recession was a shrewd move, with Sky offering a free HD box for customers who signed up for their film channels. City analysts are expecting the company to produce strong results, with turnover up by an estimated £2.8 billion, and a customer base up by around 300,000 new HD subscribers.

The fast food chain McDonalds are looking to create 5,000 new jobs in the UK in 2010 after seeing an 11 percent rise in sales over 2009. McDonalds currently operate close to 1200 outlets in the UK. The new jobs would come from the opening of up to 15 new branches in 2010 and the extension of opening hours in existing outlets. The UK jobs being created would take McDonald’s workforce to 85,000 in this country. A spokesman for the company announced that McDonald’s had increased UK like-for-like sales by 30 percent over the last four years.

Triumph, the UK motorcycle maker have announced an amazing upsurge in interest in their product with new bike sales for Triumph were up 26 per cent in 2009, at 7,450. This means that the company outperformed industry leader, the Japanese Kawasaki company for the first time since the early 1980s. Triumph has now captured 13 per cent of the British market and in the past year witnessed their global market share rise from 3.3 per cent to 4.4 per cent. Turnover in 2009 increased seven per cent to £304 million.

Sterling fell slightly against the dollar and the Europe before the weekend. The pound closed at 1.6118 against the dollar, with the Euro being traded at 1.1404

Shares in the FTSE 100 recovered some of their earlier falls closing on

Friday down by 0.6% at 5,302.99, Fears that the US President’s sweeping reforms would affect UK banks were seeing to recede.

In the US stock markets tumbled for a second consecutive day, over continued concern over President Obama’s plan to revamp the US banking industry.

The Dow Jones plunged by 216 points, to close at 10172.98, while the NASDAQ fell by 60 points, to finish at 2205.29.

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Tags: Alistair Darling, Bank of England, Barack Obama, Bradford & Bingley, British airways, British Telecom, BskyB, Dow Jones, FTSE, Gordon Brown, HBos, Innovation Investment Fund, JPMorgan, Kawasaki, Lord Myners, McDonalds, NASDAQ, Northern Rock, Post Office, RBS Sempra Commodities, Royal Bank of Scotland, Skipton Building Society, UK Economy, UK government, Virgin Media

Yet another of the UK’s leading building societies have come up with some encouraging trading figures as well as interesting statistics to add weight to the now undeniable fact that the future is looking increasingly brighter for the housing market in Great Britain.

The UK’s fifth largest mutual society, the Skipton Building Society reported an increase of 23 percent in house sales in the first six months of 2009 compared with 2008. On the down side, Skipton announced that their profits had more than halved from £43.1 million to £17 million in the first half of 2009, largely due to bad debts that had jumped £14.2 from £7.9 million to £22.1 million in the comparable period last year.

Overall, it was reported that U.K. mortgage approvals had reached levels as high as they had been since April 2008, with banks granting 47,584 home loans in June, compared with 44,169 in May according to statistics issued by the Bank of England.

And it seems that those who aren’t buying properties are blowing their cash on chocolate. This certainly seems to be the case with chocolate giants Cadbury, who have announced a 12% increase in turnover for the first six months of 2009. Despite their increased revenues, Cadburys announced a drop in pre-tax profits of £22 million, down from £134 million last year to £112 million in 2009. However a spokesman for Cadburys announced that one-off costs of over £200 million had prevented them from reporting a trading profit of £262 million, which could be translated to a 24 percent increase in true terms. Cadburys attributed their turnaround to not only increased demand for their products but also a policy of cost cutting across the board, and particularly in their advertising costs.

The Bay Restaurant Group, who own, among others the Slug & Lettuce pubs and the La Tasca restaurant chain, have announced that they have succeeded in finding additional sources of finances allaying fears of possibly closure. This is the second time 18 months that the company, which operates about 190 outlets, has required to refinance their operations. This time they secured a new three-year £150 million pound loan package with Commerzbank) of Germany and Iceland’s Kaupthing.The refinancing deal gives the company, which has twice switched owners in the last two years, “secure financial footing” for the future,

The publishing group Informa has announced a sharp decline in their interim profits. The company, publishers of the Lloyd’s List, reported an increase in turnover of just one percent at £636.3 million in the six months to June 30, while their pre-tax profits fell £27.8 million (£32.2 million from £60 million). A spokesman for the company announced that their overheads included one of restructuring and reorganisation costs of £15.8 million.

The group, announcing that its events and training business was “experiencing the most severe downturn ever in this area” as companies cut back on spending, warned that trading remained difficult and the outlook for 2010 for the company looked “uncertain”.

In London yesterday, the FTSE 100 succeeded in getting back on track, rising 18.69 points to 4647.53, while
the FTSE 250 reversed some of its losses from the previous day, up 31.43 points to close on 7,762.59

The pound continued to stutter on Wednesday against the leading currencies, falling against the dollar whilst rising against the Euro, Yen and Swiss Franc.

Pound/US dollar 1.6381
Pound/Euro 1.662
Pound/Japanese Yen 155.6911
Pound/Swiss Franc 1.782

According to figures issued by the Federal Reserve, economic activity in the US has “begun to stabilise. Whilst the economy “continued to be weak going into the summer”, with sluggish retail activity and weak labour markets being key factors, signs are that t the pace of decline moderated over the last month.

However this little item of optimism failed to lift stock markets after earlier figures showed an unexpected fall in orders for US manufactured goods.

The Dow Jones closed down 26 points to 9070.72 The NASDAQ slipped back slightly after an impressive run, dropping 7.75 points to close on 1967.76

Like two aging Aunties clinging together for support, Yahoo and Microsoft have announced that their long rumoured cooperation on the internet search market is eventually going to happen. The move is planned as a slip on the wrist for these naughty boys at Google. Under the deal, Microsoft’s Bing search engine will power the Yahoo website and Yahoo will handle all aspects of selling advertising for Microsoft’s Bing search engine.

Yahoo, who have been struggling to make profits in the last few years, rejected several overtures from Microsoft to acquire the company, preferring to go it alone. This move seems like an ideal compromise situation, although the market was less enthousiastic, with Yahoo shares closing down 12.1% on the day, while Microsoft shares moved up by a mere 1.4%.

The price of crude oil has continued to drop after figures showed a continued increase in US oil stockpiles amid uncertainty in the American manufacturing sector.
US light crude fell $3.96, almost 6%, to $63.27 a barrel. London Brent dropped $3.24 to $66.64 a barrel.

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Tags: Bank of England, Bay Restaurant Group, British Economy, Cadburys, Economics, Economy, Financial News, Mortgage, Mortgages, Recession, Skipton Building Society, Slug & Lettuce, UK Banks