Signs are growing stronger daily that the Bank of England is about to cut the umbilical cord on the UK economy, with the first stage being to cease the purchase of bonds when its current £175 billion pound plan draws to a close. News from the Confederation of British Industry (CBI) states that gross domestic product will rise 0.3 percent in the third quarter, reversing their June prediction for a drop of the same size. The CBI have forecast a 0.4 percent growth for the last quarter, and also predict that the central bank will begin to raise their benchmark interest rate during the first half of 2010.

Peer Steinbrueck, the Finance Minister of Germany has accused the UK of blocking tougher financial rules ahead of the G20 summit. According to Steinbrueck "There clearly is a lobby in London that wants to defend its competitive advantage tooth and claw. Both Germany and France have led calls for more restrictions on banks, which have been resisted by the US and UK.

JD Sports, who made their first foray into Europe with the for £7.2 million purchase of French footwear chain, Chausport in May are said to be considering further deals in Europe after increased interim profits increased its cash holdings.

The company’s focus on young shoppers, apparently less affected by the recession than the older home-owning generation , has allowed it to outperform most of its rivals, who have been beset with trading woes.

On the news that the Royal Bank of Scotland (RBS) are looking to launch a rights issue, their shares dropped 5.2 percent to 53.4 pence. Experts predict that RBS hope to rise between three to five billion pounds. Lloyds Banking Group Plc lost 2.8 percent to 107.6 pence on widespread reports that the lender is likely to participate in the U.K. government’s asset protection plan.

The U.K.’s largest shopping-center owner Liberty International Plc have announced plans to issue more than 56 million new shares in order to kick start their investment programme in shopping centers. Their shares rose 5 pence to 564 pence on the news.

National Express Group Plc, the U.K. rail company have apparently received a written undertaking from the Cosmen family to subscribe to a rights offer of at least 300 million pounds. This in the event its bidding group fail to make 500 pence a share offer for the company. National Express’s east coast franchise is to be seized by the UK government. On the news, shares in the company fell 0.2 percent, to 475 pence.

The U.K.’s largest publicly traded water supplier, United Utilities Group Plc announced that they were “on track” to deliver results in line with previously outlined expectations. Despite that encouraging news, their shares slipped 2.2 percent to close on 455.4 pence.

On the news that the Vodafone Group Plc, who are currently the world’s largest mobile phone company are about announce a whole new range of services today, their stock rose by 1 percent, to 141 pence.

The services are aimed to capitalize on the increasing popularity of Internet surfing through mobile phones.

The FTSE 100 made a minor downward adjustment, down 3.23 points to close on 5,139.37, while the FTSE 250 fell by 31.66 points to close on 9,217.01.

Sterling rallied sharply on Wednesday after the Bank of England’s monetary policy committee quashed rumours of a possible extension of its quantitative easing programme.

• Pound/US dollar 1.6345
• Pound/Euro 1.1107
• Pound/Japanese Yen 148.7512
• Pound/Swiss Franc 1.6817

A spokesman for the US Federal Reserve has suggested that despite the fact that economic activity is "picking up" interest rates will be held close to zero for an "extended time". The comments from the Fed. came as they confirmed that interest rates will remain at their current record low level current level of between 0% and 0.25%, where they have been held since December 2008. Economists continue to predict that the rate will stay at this level throughout the rest of this year, and perhaps well into 2010.

The Dow Jones Industrial Average took a tumble yesterday down 81.32 points to 9,748.55. The NASDAQ lost most of its recent gains, down 14.88 points to 2131.42

Ahead of the forthcoming G20 meeting of world leaders, the US dollar has fallen to a one-year low against the euro the dollar dropped to $1.4840 against the euro as well as against most of the leading currencies. Foreign exchange traders have been switching to rival currencies as signs of economic recovery continues to grow stronger.

Gold rose to $1,012 a troy ounce, as investors awaited the dollar’s reaction to Wednesday’s US Federal Reserve meeting.

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Tags: Bank, Bank of England, Banking, British Economy, British Pound, CBI, Chausport, Confederation of British Industry, Cosmen, Credit Crunch, Currency, Dow Jones, Economy, Financial News, FTSE, G20 summit, JD Sports, Liberty International Plc, Lloyds Banking Group, Money, Money Markets, NASDAQ, National Express Group Plc, Peer Steinbrueck, RBS, Recession, Royal Bank of Scotland, Stock Markets, Stocks and shares, U.K. government, UK Banks, UK Economy, UK government, UK Recession, United Utilities Group Plc, US Federal Reserve, Vodafone Group Plc

After the traumas it has gone through over the last year or so, it appears that the Lloyds Banking Group Plc, still the U.K.’s biggest mortgage lender is making strides to relive itself of some of the stigmas attached to it as the UK banking industry almost imploded in autumn of last year. The bank has reached an agreement with the U.K. government to guarantee half the risk on a portfolio of its existing short-term loans to companies, The billion pound deal will be dependent on Lloyds agreeing to increase their business lending.

As far as the high street us concerned, Lloyd’s Halifax building society unit is currently review the licensing agreements they currently hold, entailing running some 300 outlets situated in real-estate agents, lawyers and financial consultants. They have already implemented a decision to shut down 26 of the situated in independent banks. Lloyds are also reported to be interested in selling off their branches of Lloyds, TSB and the Cheltenham & Gloucester Plc in Scotland. Lloyds Banking Group is considering more job losses as the bank plans to close more than 300 “agency” counters run by its Halifax subsidiary in the offices of estate agents, solicitors or financial advisers.

The 43% state controlled banking giant has already paid off 7,500 people in 2009 so far. On the up side, Lloyds recently announced it was reviewing its decision to close down its 160 Cheltenham & Gloucester (C&G) branches,

Less than cheery forecasts from insolvency specialists are beginning to emerge that a second wave of corporate restructurings are due to break this month as bankers and investment houses begin to face problematic customers. .

September has always been regarded as the second important crunch date in the year for companies and lenders, as companies involved in retailing and distribution draw heavily on working capital to stock up in anticipation of what might not be the greatest of Christmas seasons.

On a difficult day for the FTSE, Lloyds bank’ stock rose 6.3 percent, to 111.34 pence on news of their reorganisation plans.

Shares in the U.K.’s largest self- storage operator Safestore Holdings Plc also rose by 8.3 percent, to 131 pence, in anticipation of improved third-quarter earnings.

RSA Insurance fell 4.8 per cent to 124 pence following reports that the company was considering a £1 billion rights issue to reduce their debt burden

The FTSE 100 closed at a low, having been under pressure all day after market strategists recommended clients to cut their allocation of UK equities.

The FTSE returned from it August Bank holiday break to find itself not in the best of shape. The FTSE 100 dropped to 89.20 points close on 4819.70 while the FTSE 250 fared even worse, dropping 2.24 % or 197.83 points to close on 8,619.68

Sterling also continued to struggle against the major currencies

• Pound/US dollar 1.6126
• Pound/Euro 1.1349
• Pound/Japanese Yen 149.5807
• Pound/Swiss Franc 1.7207

It would appear that scrapping incentives has not had too much of an effect with new cars sales generally on the increase around the world in August according to some preliminary data. Car sales in Japan rose for the first time in more than a year, while several auto manufacturing groups in Asia and Europe reported higher sales volumes than for the comparable month last year.

On Wall Street, markets continue to struggle due to continued uncertainty in the Chinese economy. The Dow Jones Industrial Average plummeted by 185.68 points to close on 9310.6 while the NASDAQ Composite index dropped below the 2,000 mark yet again, down 40.17 points to close on 1968.89.

For the first time since February 2008, US manufacturing output grew according to the Institute of Supply Management’s purchasing managers. Their index rose to 52.9 points last month, up from 48.9 in July.

Any number above 50 indicates an expansion in manufacturing output, making for another significant sign of recovery in the US economy.

In a long anticipated move, the internet phone company Skype has been sold off by online auction site owners in a transaction worth about £1.2 billion

Skype will now be owned by a group of private investors, including Netscape co-founder Marc Andreessen and private equity firms, in partnership with EBay who will retain a 35% stake in the firm, which it has been trying to sell for some time. The deal values Skype at $2.75bn. EBay bought Skype for $2.6bn in 2005.

Unemployment levels Euro 16 countries was reported to have hit a 10-year high in July, as despite declarations to the opposite, the impact of the recession continues to be felt.

The number of unemployed across the eurozone region in July was reported to have reached more than 15.1 million, making for a seasonally-adjusted rate of 9.5%. The unemployment figures were the worst in terms of monthly percentage since May 1999 and compares unfavourably with the numbers of unemployed with all the 27 member states of the European Union which was a total of 21.8 million, or 9%.

Crude oil prices have fallen this week as news out of China continued to raise doubts about its petroleum demand, with prices falling below the $70 a barrel mark again.

Economic concerns have hit China where the benchmark Shanghai Composite index fell 6.7 per cent in its worst one-day decline since June 2008, halting the ongoing increase in crude oil prices, which have risen steadily in 2009, after falling as low as $33 a barrel.

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Tags: Banking, British Economy, British Pound, C&G, Cheltenham & Gloucester, Currency, Current Account, Dow Jones, Ebay, Economy, Employment, Financial News, FTSE, Halifax building society, Lloyds, Lloyds Banking Group Plc, Marc Andreessen, Money Management, Mortgage, NASDAQ, Netscape, Recession, Retail, RSA, Safestore Holdings, Skype, U.K. government, UK Banks, UK Economy, UK Recession, Unemployment, US economy, Wall Street

How many hints do we need before the penny drops and the UK public can finally reach the conclusion that the recession is finally over? The latest one comes from the Institute of Chartered Accountants who in a report released last week announced that confidence among business professionals has surged form a negative status to a positive one. Based on their findings, the institute predicts the UK economy will grow by 0.5% in the third quarter of 2009, a reverse on the 0.8% negative growth that the UK economy recorded during the second quarter of the year.

UK building societies continue to be under scrutiny, with the news that possibly five of the largest could be amalgamating over the next couple of years. The number of building societies reporting losses for 2008 is reportedly causing concern in Whitehall, and the latest annual review of performance released shows that since the summer of 2008, seven mergers have already taken place, out of framework of 59 building societies.

Seven months after the U.K. government made a commitment to offer up to £2 billion of loan guarantees for car makers and their suppliers, agreements have yet to be signed. According to the Department for Business, Innovation and Skills, car makers and suppliers, the aid was offered as car sales collapsed during the recession, declining for 14 consecutive months through June.

The Thames Valley property market, once regarded as the UK’s equivalent to Silicon Valley, look to be heading for their lowest rental incomes on record, as the recession continues to hammer the technology industries.

On the FTSE yesterday rising metals prices pushed mining stocks. Kazakhmys led the sector, gaining 5.8 per cent to 980 pence, while compatriot ENRC was up 5.3 per cent to 896½ pence.

Punch Taverns added 4.1 per cent to 107½ pence on strong volume in anticipation a positive trading update due to be released this morning. Analysts announced that they expect trading in the company to have stabilised and that profit pressures are on the wane.

The FTSE 100 was up 0.9 per cent, rising 45.34 points to 4,896.23 for its highest close since early October.

Moving forward at the speed of an express train, the FTSE 250 increased by a further 1.76 % or 153.06 points to close on 8,831.89

Currency markets continued to remain stable on Monday’s trading

• Pound/US dollar 1.6409
• Pound/Euro 1.1481
• Pound/Japanese Yen 154.7475
• Pound/Swiss Franc 1.7419

US stocks slowed down after four sessions of gains on Monday after a warning over future bank losses saw the markets erase early gains.

The NASDAQ Composite index closed down a mere 2.92 points at 2,017.98, while the Dow Jones Industrial Average found fractional gains to 9,509.28

On Friday General Motors eventually postponed their much awaited decision on whether Canada’s Magna International would be the winning bidder for its Opel brand.

Magna, the world’s third largest auto parts manufacturer, in conjunction with the Savings Bank of the Russian Federation, who trade under the title Sberbank, had submitted a joint bid in July to acquire a 55 percent stake in Opel, the troubled financially strapped group’s European division. Brussels-based financial investor RHJ International is the rival bidder.

At their meeting Friday, GM’s board of directors failed to come to a decision whether to accept the winning bid by the Canadian auto company and the Russian bank.

This week French banks announced their intention to lead the way in offering to reinforce rules ¬governing the payment and disclosure of bonuses to their officials. In meetings with Nicolas Sarkozy, president, and Christine Lagarde, the finance minister, bank officials announced the concessions, which will strengthen a code on pay agreed by French banks in February, Designed to curb excessive risk-taking. The announcement, will be undoubtedly be used to bolster France’s position at the forthcoming G20 meeting to be held in Pittsburgh next month.

Oil prices have risen to 10-month highs on fresh signs that the global economic recovery is gathering pace.

US light crude ended Monday up 48 cents to $74.37 a barrel, while London’s Brent crude advanced seven cents to finish at $74.26

The rise came after official figures showed that new industrial orders in the 16 nations that use the Euro rose more than expected in June.

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Tags: Banking, British Economy, British Pound, Christine Lagarde, Currency, Department for Business Innovation and Skills, Economy, ENRC, Finance, Financial News, FTSE, G20, General Motors, Global Credit Crisis, GM, Institute of Chartered Accountants, Kazakhmys, Magna, Money, Money Markets, NASDAQ, Nicolas Sarkozy, Opel, Punch Taverns, Recession, Savings Bank of the Russian Federation, Silicon Valley, Stock Markets, U.K. government, UK Banks, UK Economy, UK Recession, US stocks

UK unemployment has risen to its highest level in 14 years despite all the indications that the recession has begun to recede

Recent reports indicate that in the second quarter through June, the number of people seeking work rose from 2.22 million to 2.44 million, an increase of 220,000 making for the highest level of unemployment since 1996. According to the Office for National Statistics, claims for jobless benefit climbed by 24,900 in July to 1.58 million.

A separate statement issued by the Bank of England predicted that unemployment will keep climbing even after the recession is recognized is over, which will hamper the pace of recovery. To soften the unemployment burden, BOE Governor Mervyn King announced that the bank will to expand its bond-buying program.

According to the International Labour Organization, overall UK unemployment rose to 7.8 percent between April and June, compared with 9.4 percent in the U.S. in July, 9.4 percent in the euro region in June and 5.4 percent in Japan.

According to the UK’s Financial Service Authority (FSA) an end to the practice of awarding non performance related bonuses appears to be in the offing at long last. From 2010, UK financial institutions will be disallowed for paying their staff guaranteed bonuses out with the current financial year. Exempt however are senior bank employees who can still have their bonuses spread over two or three years.

Lloyds TSB have announced that its Insight asset management business is to be sold off to the Bank of New York Mellon (BNY) for £235 million.

Analysts say the deal may mark the start of a phase of consolidation and disposals among mid-sized asset management groups facing increasing margin pressure.

BNY Mellon beat off several competitors in the auction for Insight, whose revenues in both 2006 and 2007 were around the £125 million. 2007.

The Lloyds group, 43.5 per cent taxpayer owned is known to be consolidating their activities, in anticipation of talks to be held with the European Commission about state aid approval. Lloyds surged 6.4 percent to 96.83 pence.

Also on the offload trail are RBS who are well into the process of selling or shutting down its businesses in two-thirds of the 54 countries where it has been operating, in the aftermath of suffering the largest trading loss incurred in British corporate history last year.

As part of their campaign, RBS have announced a £53 million deal to sell off 99.4 percent of the Banks branches in Pakistan to the privately owned Muslim Commercial Bank, the country’s biggest lender by market value. The deal is not yet official, requiring regulatory approval which, according to analysts will be a formality. Royal Bank of Scotland Group Plc, the biggest bank owned by the U.K. government, added 5.4 percent to 45.15 pence.

Independent Television Corporation (ITV) the hard pressed and profit starved UK commercial network broadcaster has received a long overdue boost in the shape of a positive recommendation of better times ahead to investors from their bankers. The news pushed their shares up towards its target price of 50 pence, for the first time in a long time.

The U.K.’s largest publicly traded residential landlord Grainger Plc were among the stars on the FTSE on Thursday as their shares shot up by 16 percent, (33.5 pence, to 243.5 ) on news that that they had succeeded in reducing their debt burden by £100 million pounds since March, through disposal of real estate.

The FTSE 100 to a new 10-month high on Thursday, making for an increase of more than a third since early March, as reports of a global economic recovery gains impetus.

The FTSE 100 continued to make up for losses earlier in the week, up 38.70 points to close on 4,755.46. Meanwhile the FTSE 250 took another giant step forward, rising 131.73 points to close on 8,483.66

Sterling has a mixed day on yesterday’s markets, ring slightly against all of the currencies, with the notable exception of the EURO.

• Pound/US dollar 1.6575
• Pound/Euro 1.1605
• Pound/Japanese Yen 158.3223
• Pound/Swiss Franc 1.7751

In the US retail sales fell in July, following two months of rises, as fears of job security appear to have put a block on consumer spending.

The figures proved to be an unpleasant surprise for analysts, who had been expecting a rise of 0.7% in overall sales last month.

On Wall Street, US stocks reached new highs for the year, with the Dow Jones index rising 36.58 points to close on 9398.19, while the NASDAQ again passed the 2,000 point mark, up 10.63 points to finish the day on 2009.35

The big news coming out of Europe was that both the French and German economies have announced an end to the year-long recessions in both of Europe’s strongest economies.

Stronger exports and consumer spending, as well as government stimulus packages, contributed to of 0.3% between April and June

However economic activity in the eurozone fell by 0.1%, a sign that the region is still in the throes of the recession.

The Volkswagen / Porsche takeover deal has finally been finalised. Volkswagen is to pay €3.3 billion for a 42% stake in Porsche’s main production division. Between the lines, the takeover was closer to a rescue for debt-laden Porsche, which will amount to a complete merger of VW and Porsche SE during 2011

Crude oil prices rose by more than $1 a barrel as commodity markets rallied after better-than expected economic data fuelled hopes that the eurozone’s recession was close to ending.

Gold rose 1 per cent to $956 a troy ounce, bolstered by dollar weakness

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Tags: Bank of England, Bank of New York, Banking, BNY Mellon, British Economy, British Pound, Crude oil, Currency, Dow Jones, Economics, Economy, Financial News, Financial Service Authority, FSA, FTSE, Gold, Grainger Plc, Independent Television Corporation, International Labour Organization, ITV, Lloyds TSB, Mervyn King, Money, Money Markets, NASDAQ, Office for National Statistics, Porsche, RBS, Recession, Royal Bank of Scotland, U.K. government, UK Banks, UK Recession, Unemployment, US retail, Volkswagen, Wall Street