For the first time in many a long while, Prime Minister Gordon Brown has been drawn to admit that he would have no option but to make some public spending cuts, and that they would be both considerable and imminent.

Brown, addressing a meeting of trade unionists announced that the government would have no option but to “cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets”. He went on to admit that a new pay austerity for the UK was on its way, hinting strongly that “realistic” public sector pay settlements were a must.

The Prime Minister’s comments were made at a meeting to the Trade Unions Council (TUC) held in Liverpool were obviously designed to pre-empt the forthcoming pre-Budget report due to be released in the autumn. The report will set out Labour’s plans for priority public spending and any cuts. Full details of departmental spending from 2011 are not expected to be included.

The suggestion that there me be public spending cuts is certainly radical, as Brown has steadfastly refused to admit the need for cuts in any form till now,

Not slow to take political advantage of Brown’s apparent turnaround was shadow chancellor George Osborne, who described the PM’s statement a “complete capitulation”.

The prime minister claimed the recession had thrown up some fairly major challenges and on each occasion the government had made the right choice: whether propping up the banks or cutting taxes to boost the economy.

Chancellor Alasdair Darling is expected to use the pre-Budget report to try to identify net cuts to accelerate the government’s plan to halve the deficit to 5.5 per cent by 2014. Never slow to criticise, Bank of England governor Mervyn King, says that the deficit cuts will be too timid.

Summing up his speech in Liverpool, Brown admitted that Britain was only just on the road to recovery – and conditions were “fragile”. He defended his governments over the last year by stating that they had rescued the banking system, saved up to half a million jobs and taken specific actions to help not business and home owners.

financial

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Tags: Bank, Banking, British Economy, British Pound, Budget, Credit Crunch, Economics, Economy, Financial News, George Osborne, Gordon Brown, Money, pre-Budget report, Prime Minister, Recession, spending cuts, Tax, Trade Unions Council, TUC, UK Banks, UK Economy, UK government, UK Recession

UK families who have just lost a loved one seem likely to be penalized if they are late in paying inheritance tax on their estate. It’s a move that is difficult to take on board even for the most cynical and which, at its best, will earn the Treasury a mere £10 million annually. One wonders if Brown and Darling’s public relations people are aware of this forthcoming legislation; if passed, it will do even more damage to their already tarnished reputation – and this with a general election looking increasingly likely for the spring of 2010.

Reports have it that the UK Government is set to levy a 3 per cent annual interest charge on inheritance taxes that are submitted later than a certain time scale after a person passes away and the estate has been dissolved. Additionally, the tax man will be living up to his heartless image by reducing the rate of interest traditionally paid when any overpayment of inheritance tax is returned to the estate.

Government critics were forming a line to condemn what they described as a desperate, heartless move by Brown’s obviously hard-pressed government. Currently the laws pertaining to inheritance tax stipulate that where estates have a value of £325,000 or more, the trustees must submit the inheritance tax within six months of the death, on the taxable residue. If they fail to do so, the estate is charged a minimal interest of 1% annually until the tax was remitted. The Labour government even displayed some unusual compassion by cutting the rate to zero, and as recently as March of this year, showed an understanding that most estates are based around properties which were and still are difficult to dispose of under the prevailing market conditions.

From the coming September, late payments are to be charged at 2.5 percentage points above the Bank of England base, which is now sitting on the historic low rate of 0.5 per cent, with the interest that HM Revenue & Customs due to pay on refunds scheduled to be one point below the Bank‘s rate, although it cannot go below the 0.5 percent level. It seems likely that many executors will find themselves with no option but to pay the interest rather than offload a property at below-market prices, which will be, for many, a bitter pill to swallow.

In the most recent figures available the Treasury announced that it expects to collect around £2.2 billion in inheritance tax for the current tax year, with late payment interest amounting to a mere £10 million.

What next, a nation asks, of Gordon and Alastair?

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Tags: Alastair Darling, Bank of England, British Economy, Economy, Financial News, Gordon Brown, HM Revenue & Customs, inheritance tax, Interest Rates, Money, Savings, Tax, UK government

One of the most painful aspects of the long drawn out economic slump is the effects that it has had on UK tax revenues. In June, Britain reported its highest budget deficit for a month for sixteen years, a massive 13 billion pounds, which was an increase of almost 50% from the same month in 2008.

To support these shortfalls, the Treasury has no option but to borrow, and this they have been doing, and in some style. In the first quarter of the UK financial year, which started in April, public sector borrowing reached £41.2 billion, the highest quarterly figure since records began in 1946.

China Investment Corp, (CIC) China’s sovereign wealth fund has acquired 1.1 per cent of the Diageo drinks group for £221million, which makes the fund the UK-based groups’ ninth-largest investor. Shares in Diageo were up 2.4 per cent to 906p after the announcement

CIC manages $200 billion of the country’s $2,132bn held in foreign exchange reserves also holds a 0.5 per cent stake in Tesco, Britain’s largest retailer.

Domino’s Pizza reported a double-digit increase in sales and profits for the six months to the end of June and raised its interim dividend by almost a third.

Continuing to be one of the few consumer-facing companies to defy the recession, the Domino’s Pizza chain, the UK’s largest pizza delivery service with more than 500 outlets, said it expected to beat full-year profit forecasts thanks to unrelenting demand for their takeaways. Domino’s Pizza U.K. & Ireland advanced 7.2 percent to 235.25 pence.

On the FTSE U.K. pub owner and brewer of Old Speckled Hen ale Greene King Plc, added 3.1 percent to close on 432.75 pence.

Food retailers were also among the rising stars shares in Wm Morrison Supermarkets up 8.2 per cent to 274pence after the announcement that they expected full-year profit to exceed current guidance as it reported strong volume growth over the first half.

Sainsbury also added 3.1 per cent to 326p, while Tesco climbed 1.4 per cent to 375p.

The retail sector showed mixed results with fashion retailer Next despite raising their profit forecast for the first half, retained a cautious outlook. On the news shares in Next fell by 1.6 per cent to 1618 pence.

Shares in the Home Retail Group, owners of Argos and Homebase, gained 1.3 per cent to close on 293 pence

London equity markets overcame an early bout of profit taking on Tuesday to extend their winning run to seven sessions.

The benchmark FTSE 100 was up 38 points to 4,481.17, while the FTSE 250 gained 75.95 points to 7,742.58.

The pound lost ground on Tuesday as concerns grew over the health of the UK government’s finances.

• Pound/US dollar 1.6422
• Pound/Euro 1.1578
• Pound/Japanese Yen 153.8127
• Pound/Swiss Franc 1.7553

Testifying before the House Financial Committee in his twice-yearly report on monetary policy, chairman of the US Federal Reserve, Ben Bernanke announced that US interest rates are likely to remain "exceptionally low" for some time. He went on to explain that low interest rates and a stimulus plan had buoyed the economy.

US stocks lost some of its Monday’s impressive gains on Tuesday, after rising during the morning, but then falling back as Ben Bernanke, addressed Congress about the future of US Federal Reserve policy.

On Wall Street , the Dow Jones continued its steady rise, rising 45.05 points to 8893.2 while the NASDAQ rose 3.55 points to 1912.84.

Sharply falling tax revenues are also beginning to have their effects across the US. Of the 50 states45 reported budget shortfalls and overall tax collections dropped by 11.7 per cent, the largest fall on record.

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Tags: Argos, Bank, Banking, Ben Bernanke, Britain, British Economy, British Pound, China Investment Corp, Credit Crunch, Diageo, Domino's Pizza, Dow Jones, Economics, Economy, Financial News, FTSE, Global Credit Crisis, Greene King Plc, Homebase, House Financial Committee, Money, Money Management, Money Markets, Morrison Supermarkets, NASDAQ, Old Speckled Hen, Recession, Sainsbury, Tax, tax revenue, Tesco, Treasury, US Federal Reserve, Wall Street

…a malfunctioning pension scheme
Something that was hovering in the air for a long time, and has been swept under the carpet a little as a result of the ongoing credit crunch is the fact that most UK citizens can afford to become old or worse still, to retire.

A recent report issued jointly by the Help the Aged and Age Concern charities has discovered that around two thirds of the baby boomers are no looking at a normal retirement as at best a forlorn hope, and have come to grips with the reality that their “golden years” will be a lot tougher than they worked for and in the majority of cases also deserved.

Families who have always been savers are seeing their nest eggs deflated by low interest rates, property prices devaluing at a pace and intensity that they may never recover from for at least the next decade or so. To make matters worse, their pension scheme has been knocked very hard by the decline in stock market share values, on which their pension plans were based.

Worrying but typical statistics that are coming out of the crisis, as unemployment begins to sore, is that percentage wise, the number of people in their fifties upwards who are being laid off is very high.

According to official figures released by the Office for National Statistics unemployment among people aged 50 or above has risen by 47% within the last twelve months, with the chances of these people returning to the job market looking extremely bleak for the foreseeable future. This means either retraining which takes time or money or digging into the already rapidly devaluing family next egg.

Those fortunate to stay in work face an uncertain future, especially those without a well funded pension plan. They will be forced to live the rest of their lives walking a financial tight rope, in fear of redundancy and hoping that they can continue to work for as long as possible, even well into the years when they should have been sitting in the park, feeding the pigeons.
While the pension shortfall problem exists all over the Western World, financial analysts state that it is especially acute in the UK.

A recent report from the National Institute of Economic and Social Research found that accumulated wealth, pension levels and assets if realized will still be too low on average to allow a quality of life equivalent to current standards for most UK retirees, and there is little that can be done to change the situation for most people who will reach retiral age over the next two decades.

For those of us who are in that trap it appears that the only solution appears to work longer. If the UK government would raise the retirement age to 70 for men and 65 for women it would be realistic and would allow an increase in retirement income by around 30%, most financial analysts estimate.

For those people who see that retirement is still a long way off, the news is that setting money aside for pensions should begin as early as possible, no matter how far off it seems.

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Tags: Pensions, Savings, Tax, Taxpayers, UK government, Unemployment

To be fair to UK Chancellor Alistair Darling it was fairly obvious that he was uncomfortable imposing a top tax rate of 50% on the country’s top earners, With a national net debt close to three quarters of a trillion pounds and not getting any smaller, Darling was hopeful that the successful and the famous would play their part in reducing the deficit. With all the fuss that Darling’s tax band increase has caused, it is worth taking into account that if everyone who is still earning lots of cash and pays up willingly, all that will trickle into the Government’s fast depleting coffers will be around two billion pounds annually. Just about enough to pay two weeks interest on the national debt!

And that is on the assumption that everyone pays up, or is around to do so. So far indications that the new tax band will succeed in driving some of the UK’s finest entrepreneurial talents to other shares, where the tax rates may be kinder. The UK treasury might have been labouring under the misconception that loyalty to the flag would entice some of the UK’s wealthy to set their personal welfare and desire to get even richer aside, if just for a while, and remain in the rain soaked, recession haunted British Isles and repay some of the country’s debts that they might even have been part of incurring. But that doesn’t appear to be the nature of the beast, and in today’s world of mobility and split second communication technology , it is possible to run a business in the UK from anywhere in the World.

Is yet to be seen that some of the threats issued will actually take place, but if they do some of the best-known figures in commerce and industry will be taking leave of the British Isles till this unpopular taxation rate becomes history. It is possible to argue the moral applications of their, what can be seen as, desertion in times when the country needs them, or at least their tax income. However as long as Greta Britain remains great, there is nothing that anyone, even Alistair Darling, can do to stop them.

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Tags: Alastair Darling, British Economy, Credit Crunch, Financial News, Tax

In a move reminiscent of the that famous British World War Two classic ” A Bridge too Far” will the imposition of a 50% tax band on salaries of £150,000 and over prove to be the last straw for an already disillusioned British public signalling the end of their eleven plus years stay in power at the earliest possible opportunity. Whilst the opposition parties continue to make a lot of noise, as any financial analyst will tell you, Chancellor Darling had absolutely no alternative but to apparently “soak the wealthy” in his desperate need to earn tax income.

Rumours are rife in fact that the 50% tax band is just the beginning, and as long as the Labour Government remains in control of the tax strings, they will continue to pull them even tighter around the throats of these who are in the upper income bracket, despite that fact that Alistair Darling has insisted that 50% is as high as he will go.

According to Treasury estimates, a mere 300,000 people will become liable to pay a large percentage of their income at the 50% tax band from next year onwards. However, continuing to display their perennial yet apparently unfounded optimism, Darling’s crew estimate that more than three quarters of a million UK citizens could find themselves in the comfortable situation over the next ten years. Immediately although accountants believe the figure will rise to around 750,000 people over the next decade. There is a kind of perverse argument around that as more people find themselves in this upper income bracket, they will leave the country to settle in places where the tax system is more compassionate. Whilst this is possible in today’s global economic climate, the chances are that the majority will have created a situation for themselves where their UK business is immovable and they will have no option but to pay the higher taxes.

There is little doubt that the introduction of the 50% income tax band has become a bit of a hot potato not only among the rich and famous, but within the party itself. The comparatively unsubstantial income that the tax increases will bring may not for the serious backfire at the next general election.

A sign of the times in the UK is the news that in the last twelve months, sales of beer by the pint has fallen by over eight percent, equivalent to 150 million pints. At the same time it would appear that a trend is developing among the UK public to purchase beers and spirits at their local supermarket and drink along in their own home or with a few friends. It would appear that the British pub, so long a centre of traditional culture is on the way out. The government will need to be concerned about the fact simply because the levels of taxation for beers and spirits sold remain a serious source of income for them

Alistair Darling is expected to announce next month that the UK’s bigger banks will be required to maintain higher capital levels than what has been regarded previously as the industry average. This is being done in an obvious move to prevent or at least curtail future financial crises. The banks that are expected to fall under Chancellor Alistair Darling scrutiny are expected to include HSBC, Lloyds Banking Group, Royal Bank of Scotland and Barclays.

In anticipation shares in the banks took a drop yesterday, with d Royal Bank of Scotland falling by more than 4% ( 1.6 pence to 32.7), Barclays (2pence to 232) and Lloyds Banking Group (4.9 pence to 95.6).

Oil prices were under pressure, with BP reporting a considerable profit drop due to the rapid decrease in crude oil prices. The company announced that they will be making cutbacks to shore up their finances for the future which looks like being tricky not just for BP, but for all of the major oil companies.

The retail sector took a short step backwards after a few encouraging days. Home Retail Group was among the hardest hit, 4.6 per cent (11 pence to 270) in lieu of its full-year results due today.

Despite the recent increases imposed in the UK budget, tobacco stocks were on a slow climb. Imperial Tobacco crept up 1.8 per cent (28 pence to 1552) while British American Tobacco rose 0.8 per cent (15 pence to 1597).

Chocolates were in demand with Cadbury up 0.3 per cent to (3 pence to 508) in anticipation of announcements due Thursday, possibly that Cadbury’s US partner Hershey are a possible candidate for taker by industry giant Nestlé.

On the day, swine flu was the talk of the exchange causing the FTSE 100 to close down 70.61 points, at 4,096.4 points. The FTSE 250 index dropped by124 points to close at 7,155.18.
.
On the money markets, Sterling rose slightly against the dollar and the Euro as well as holding its own against the Japanese Yen and the Swiss Franc:
Pound/US dollar 1.4706
Pound/Euro 1.1143
Pound/Japanese Yen 142.65
Pound/Swiss Franc 1.6796

Wall Street shares had a steady day on trading with the Dow Jones Average dropping a mere 8.05points to close at 8016.95. Nasdaq fell 5.5 points on the day to close at 1673.81

Apart from swine flu, the main topic of conversation on the street was what will be with Chrysler. For certain to take place is the separation between car firms Daimler and Chrysler. Daimler seemed almost relieved when they announced the German carmaker has relinquished their 19.9% stake in the troubled US firm, and will also forgive repayment of the loans extended to Chrysler, already written off in the company’s 2008 financial statements.

Tomorrow marks the deadline where Chrysler needs to announce their restructure plans that will allow them a multi-billion dollar loan from the Government as well as to avoid entering bankruptcy protection.

Plans mooted include that the United Auto Workers’ union will acquire 55% of Chrysler with Italian giant, Fiat eventually acquiring 35% of the Detroit based The remaining stock will be split between Chrysler’s secured lenders and the US federal government.

Following in the footsteps of many of their global investment banking colleagues Deutsche Bank announced yesterday that they had returned into profit in the first three months of 2009, after a disastrous last quarter of 2008.

Better trading for many of Deutsche’s most important debt businesses helped it lift net income to €1.2billion compared with a net loss of €141million in the same period of 2008.

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Tags: Alastair Darling, Credit Crunch, Economy, Financial News, Tax

Has the 50% tax band provided the Labour Government the rope with which they will hang?

In a move reminiscent of the that famous British World War Two classic ” A Bridge too Far” will the imposition of a 50% tax band on salaries of £150,000 and over prove to be the last straw for an already disillusioned British public signalling the end of their eleven plus years stay in power at the earliest possible opportunity. Whilst the opposition parties continue to make a lot of noise, as any financial analyst will tell you, Chancellor Darling had absolutely no alternative but to apparently “soak the wealthy” in his desperate need to earn tax income.

Rumours are rife in fact that the 50% tax band is just the beginning, and as long as the Labour Government remains in control of the tax strings, they will continue to pull them even tighter around the throats of these who are in the upper income bracket, despite that fact that Alasdair Darling has insisted that 50% is as high as he will go.

According to Treasury estimates, a mere 300,000 people will become liable to pay a large percentage of their income at the 50% tax band from next year onwards. However, continuing to display their perennial yet apparently unfounded optimism, Darling’s crew estimate that more than three quarters of a million UK citizens could find themselves in the comfortable situation over the next ten years. Immediately although accountants believe the figure will rise to around 750,000 people over the next decade. There is a kind of perverse argument around that as more people find themselves in this upper income bracket, they will leave the country to settle in places where the tax system is more compassionate. Whilst this is possible in today’s global economic climate, the chances are that the majority will have created a situation for themselves where their UK business is immovable and they will have no option but to pay the higher taxes.

There is little doubt that the introduction of the 50% income tax band has become a bit of a hot potato not only among the rich and famous, but within the party itself. The comparatively unsubstantial income that the tax increases will bring may not for the serious backfire at the next general election.

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Tags: Alastair Darling, Economics, Financial News, Tax

All eyes are on budget predictions, and how far will Chancellor Alastair Darling veer away from his Pre-Budget Report made last November. He has already hinted strongly that his forecast that the economy would contract by less than 2% in 2009, now looks to be almost double that figure. He also announced during the same report that the government could raise £1.6 billion through introducing an income tax rate rising to 45% on incomes above £150,000, to begin from April 2011. In light of the fact that the Treasury needs to raise income and soon, economic pundits appear to be united and unwavering in their opinion that the increase would be “difficult to avoid”

However they also appear to agree on the fact that the Government’s plans to raise income tax rates are highly unlikely to raise the much needed £1.6 billion, and indeed may create an opposite effect.

According to a recent study, increased taxation may well bring a spiral of tax avoidance and/or people from reducing their taxable income

The report also points out that even if the Treasury has judged the situation correctly in how the UK’s largest earner will respond to the rate increase, the reform is liable to only raise around one third of the desired amount, taking into account the loss indirect tax revenues.

The report goes on to point out that the optimal figure that the Treasury could expect to raise would be around one billion pounds, and only if they raised the tax rate to a flat 54%. Simply by increasing the marginal tax rate on incomes above £150,000 would be around £900 million, and that would require an income tax rate of 54%.

Taking history into account and recent history at that, the Treasury needs look no further than the late 1980s. It was discovered then that the 45% band actually reduced revenue for the Government, albeit slightly. Then as now, imposing a 40% income tax rate was found to be the niche that generates the most revenue.

There are no shortages of ways to reduce the levels of income tax to be paid, with many people turning to working less, contributing more to a tax-free private pension among others. Higher, or some may even say prohibitive tax rates might even lead to migration, especially in these days of global economies, or even earlier retirement. Or a mixture of both.

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Tags: Alastair Darling, British Economy, Budget, Economics, Financial News, Tax, UK Recession

If you really want to save money, then possibly the best approach is to take a long hard look at your lifestyle, see where your hard-earned money is going and then see if you can make some savings.

And there are so many ways you can do this, but lets have a look at some of the best ways to make a difference.

Firstly, where does your money go? You get paid and first with their hand out is the Government. Now, most people pay tax via the Pay As You Go scheme, meaning that your tax is calculated for the tax year and you pay per month. Not much you can do about that you might think, but when it comes to paying tax, have a quick look to ensure you are not paying too much. Employers and tax inspectors are known to make the odd mistake. Also, many people now claim tax benefits (such as working tax credits, child tax credits), so just make sure they’ve got you right and that you are claiming for all the benefits you can.

Right, where next does your money gravitate? Usually, it’s on the house in the forms of a mortgage, or rental payment. If it’s a mortgage, have a look at the rate you are paying. If you move it to another firm (and at the time of writing the re-mortgage market is a little sticky), then you could possibly reduce your payment by a significant amount. If you rent, are you paying a fair rent, especially, at the time of writing, the economy is heading from bad to worse. It may pay dividends to think of upping sticks and moving to another house, maybe close by, but with a more competitive rent. And even if you politely let your landlord know that you are considering this, it may well be that he re-negotiates your rent anyway.

So that’s tax and benefits and your property; now it’s the turn of the money spent on keeping yourself alive: utilities and food.

Your property is a fast consumer of money, so keep an eye on how much it takes to run it. Not much you can do about council tax, but when it comes to electricity, gas, or oil, you have two courses of action. Use less of the stuff and also think about switching suppliers and getting a better deal. If you’re on a water meter (and this is good if you are), then use less of it (fewer baths, more showers for example).

As to food, choose this time to go on a diet and eat less. And think about where you buy your food. Drop the up-market stores and supermarkets, and head for the bargain shops, which most probably have the same brands anyway, they just don’t have all the fuss, and you could save a fortune.

Next up is entertainment. Still going out on a regular basis to restaurants, the pub, or the cinema. Enjoying yourself in the U.K. is a costly business, so go out less and spend more time amusing yourself at home with food and drink from the supermarket, and a rented film.

Right, so that’s halfway, five things have been covered: 1. tax and benefits; 2. mortgage, or rent; 3. utilities; 4. food; and, 5. entertainment.

In the next five you can tunnel down into the specifics, starting with credit cards, but moving onto the telephone, the mobile, the insurances you have and finally, the creating money. 

Your credit card can be your best friend, or your worst enemy. Use with care. Start to pay it off and if you can, put it away in a drawer, or, more drastically, cut it up. You could always switch to a new card company for a better rate, but read the small print first. Don’t fall for the low, or no interest for six months and then, when you want to move again, find you can’t as things have got tougher.

Your landline telephone needs some respect. These things eat money like a London taxi cab. Look around for a better deal and don’t be so chatty on the phone unless, of course, someone has called you.

Mobiles have become indispensable, or so we think. Do you really have to tell the wife and kids that you’re on the train? Is the call, and the subsequent cost, really necessary? And if you are on a mobile contract, think about switching to pay-as-you-talk. You’ll be very pleasantly surprised how much money you’ll save.

Finally, look around the house. Can you raise some funds by say selling some of your unwanted possessions. Would a bit of trading on one of the online auction sites provide some cash. Also, look at some of the freelance work sites – could you at night do some extra work and earn some more money.

Okay, where’s there’s a will, there’s a way. If you really want to save money you can, you just have to exercise some self-discipline.

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

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Tags: Accounts, Credit Card, Mortgages, Savings, Tax, Tax Payer

Trading in Woolworth’s shares was suspended today as the company is locked in talks over debt restructuring that may see the high street favourite go in to administration.

Woolworth’s employs almost 30,000 at stores all over the UK.

Another 1500 jobs are in jeopardy at fitted furniture firm MFI is also teetering on the brink of administration in a row over unpaid rents with landlords. 

Other big names in trouble are the UK’s biggest tile and wooden flooring retailer Topps Tiles.

The 320-store chain has seen like-for-like sales fall 18.3% in the past seven weeks. The company has quoted a 27% fall in profits and axed dividends. Topps shares fell 2.5p to 18. Eighteen months ago they were changing hands at 300p.

Bosses at Hull’s KCOM – famous for the city’s cream telephone kiosks – put the company up for sale after shares slumped 80% in the past year, valuing the company at £65 million. When the city council floated the company in 1999, giving local residents share priority, the business was valued at £180 million.

The Government now owns about 58% of the Royal Bank of Scotland at a cost of £2.7 billion to the taxpayer after plans to raise cash from shareholders stalled.

Royal Bank shares closed at 53.6p, a 2.8p, or 5.5%, rise on the day.

The taxpayer is also footing the bill for 43% of the Lloyds TSB group

Lloyds TSB, which is fund-raising at 173.3p a share, closed up 13.3p, or 9%, at 160.9p.

The US Federal Reserve pumped another $800 billion in to the mortgage and credit markets boosting confidence in the economy.

The markets on both sides of the Atlantic closed up yesterday – with the FTSE100 ending up 18 point at 4171 and the DOW up 36 pts at 8479.

The Pound finished the day at £1.535 against the US Dollar and £1.185 against the Euro.

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

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Tags: British Pound, Current Economic Situation, FTSE, Shares, Tax, Tax Payer