Figures released by the Office for National Statistics show that unemployment levels are rising as fast as they did in the recession n of the early 1980s, and even faster than that of the early 1990s. Unemployment figures show that the number of UK residents who are claiming benefit rose by 1.3 percent to 7.1 per cent in the last quarter.
Barclays Bank continues to impress, by announcing that they are in talks with several companies about selling their asset management arm Barclays Global Investors (BGI). The bank hope to bring in around for about $10billion for the sale, with US money manager BlackRock apparently keen to conclude the purchase. Barclay’s cash raising move comes on the heels of their sale at auction of iShares, BGI’s exchange-traded funds unit to buyout group CVC for $4.2billion last month.

It might have been a coincidence but Barclays was among the top performers yesterday on the FTSE, up 4.2 percent (0 pence to 253) Standard Chartered was up 8.1 per cent (95 pence to 1197) and the Royal Bank of Scotland also added 4 per cent (1.6 pence to 39.5)

A spokesman for the National Grid announced yesterday that that company expects to strengthen its financial position this year, despite the fact that they are planning a further £1billion debt to fund a necessary investment programme.

The FTSE 250 index rose by 43.56 points to close on 7,472.33
While the FTSE 100 finished the session up 13 points, higher at 4,375.58
Sterling fell slightly against the dollar and rose against the strengthening Euro as well as the Japanese Yen and the Swiss Franc:

· Pound/US dollar 1.5235

· Pound/Euro 1.1198

· Pound/Japanese Yen 145.03

· Pound/Swiss Franc 1.6844

US equities broke their losing streak on Thursday following three consecutive days of selling as investors shrugged off negative unemployment data and took encouragement from the retail sector, allowing for a mixed day on trading on Wall Street
The Dow Jones Average rose 46.43 points to close at 8331.32. Nasdaq did well rising 25.02 points to 1689.21

The Obama administration is expected to roll out the next phase of its financial rescue plan any day now. The phase is scheduled to deal with toxic “legacy assets”, with senior administration officials keen to discover new private/public marketplaces for these bubble-era loans and securities. Their hope is by doing so banks can clean up their balance sheets and attract the almost £49 billion in equity they need to meet their stress test targets.
Sports clothing giant, Nike has announced their intention to cut about 1,750 jobs, making for the largest headcount reduction in its history, amounting to about 5% of Nike’s 35,000 global workforces. Nike is striving to cut costs after a recent sales decline due to the economic downturn, particularly in Europe.

It was announced yesterday that the German economy has suffered its largest contraction for the first quarter of 2009 since reunification/
Gross domestic product (GDP) dropped by 3.8% from the previous quarter, due to sharp falls in exports and investment. The French economy fared a little better for the same period down 1.2%

The Spanish economy also shrank, this time by 1.8% for the same quarter, making it the highest rate of decline for nearly 40 years.
In Asia, Toyota Motors, still reeling from their first loss making year in history, announced their plans for one of the most drastic management overhauls in its 70-year history. The ball is expected to begin rolling next month Akio Toyoda, grandson of the company’s founder, takes over at the helm as chief executive of the Japanese car maker.

The company intend to replace almost half of their senior managers as well as reorganising its key North American business.
After a few days of rises, crude oil prices fell yesterday after the International Energy Agency (IEA) said global demand would shrink by 2.56m barrels a day to 83.2m in 2009.
The IEA said eight out of the world’s 10 largest oil consuming countries were likely to see a “marked fall” in oil demand as their economies slowed or contracted. Despite that gloomy forecast, crude prices actually rose around 10 cents a barrel to average $58.69.
Gold was down $2.00 an ounce at $926.40, while copper also fell to $203.50

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Tags: Barclays, Barclays Global Investors, Dow Jones, Employment, FTSE, Obama, Toxic Debt, UK unemployment figures

Falling fast in the footsteps of HSBC who enjoyed some fabulous success with their recent rights issue, it looks like 2009 will be the year of the rights issue in the UK. So far, seventeen British companies have been successful in rising close to £25billion through share issues, twenty times more than raised in the first three months of 2008 through rights issues.

The state of the UK economy still is giving cause for concern with a recent report stating that it could remain in a state of decline for another twelve months, requiring a further two years to reach some form of full recovery.

Comparisons to the economic slowdown of the early1980s. could only be drawn, as well recent admissions from Chancellor Alistair Darling that the Treasury had miscalculated both over the length of the recession and its severity. The report stated that the UK economy had contracted by over 4.2% since May 2008.

Manufacturers’ output fell 0.9 percent between January and February, although the pace of the drop was the slowest in half a year, according to a UK government statement.

The current fall in output left it 13.8 percent lower than a year ago with the biggest drops coming in the transport equipment industry and the nonmetallic mineral products sector.

News that the BOS is to cut up to 9,000 jobs worldwide will come as no surprise. The cuts, the largest in any of the major UK banks in overheads conscious 2009, will come in areas such as technology and call centres. The BOS, now mostly owned by the UK taxpayer, has already made around 3,000 job cuts and with the proposed layoffs will mean the bank will have laid off around eight percent of their workforce. The layoffs are part of a major cost cutting plan, which entails cutting overheads by 14% over the next three years.

BOS will be sure to looking at employees’ pensions, following in the wake of news that one of the world’s largest insurance brokers is cutting its contributions to its workers’ pensions by up to half in its UK operations. The company, insurance broker Aon announced that they would be the first UK major company to cut payments to its workers’ defined contribution schemes. The move will mean Aon employees having to increase their current contributions by up to three times to keep matching payments at existing levels.

Spiralling pension costs are rising to the top of corporate agendas as employers struggle to cope with the deepening recession with experts estimating that Aon which employs 5,000 people in the UK, could encourage many other employers to follow suit.

In the FTSE, HSBC, Europe’s biggest bank, took a few steps backwards after their rights issue success. Their shares fell by 3.3 percent (14 pence to 427.5)

The UK’s largest hedge-fund manager Man Group reported their fifth weekly decrease in net asset value. Shares in the company fell 4.2 percent (9 pence to 216.5)

The dollar advanced on Tuesday despite renewed concerns over concerns that the International Monetary Fund (IMF) was about to raise their forecast of the total global toxic debt. It is now estimated that the toxic debt, held by banks and insurers across the globe is over $4,000billion almost double the $2,200billion that was estimated at the beginning of the credit crunch.

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Tags: British Economy, Economics, Financial News, HSBC, Toxic Bank, Toxic Debt